Mills, who is the founder of the Airmiles and Nectar loyalty schemes, says the bank gave him “negligent” advice in December 2007 when it advised him to invest in the bonds, which were backed by the enhanced fund. Mills says the bonds were recommended by Coutts as a low-risk, easy-access investment. In September last year AIG Life closed the enhanced fund.
He says when he contacted the bank in March 2008 to express concerns about the investment, Coutts said it was “still not concerned with any risk to investors such as yourself”.
Solicitors Barlow Lyde & Gilbert served Coutts with a “letter of claim” on Friday on behalf of Mills, which is the first step before issuing negligence proceedings.
As part of his action, Mills says he will be seeking disclosure of commission paid by AIG to Coutts to sell its products.
He also wants details of the extent to which Coutts monitored the financial strength of AIG investment products.
Mills says: “What is astonishing is that Coutts continued to push the AIG bonds as its share price was collapsing. It was still recommending AIG premier bonds right up until AIG closed the fund, trapping hundreds of millions of pounds’ worth of Coutts’ customers’ money.”