View more on these topics

Northern Rock investors lose court case

Northern Rock investors have lost their court battle in which they tried to argue that the Government had purposely undervalued the bank.

Last month shareholders in the bank went court arguing that the Government had under valued their shares when it bought the bank in January 2008. They said their human rights had been affected, as they would receive nothing for their investment.

The judicial review was launched by the hedge funds SRM and RAB, along with the Northern Rock Shareholders Action Group, and Legal & General.

Lord Justice Stanley Burnton, one of the two judges presiding over the judicial review says: “We have come to the conclusion that the provisions made for the compensation of the shareholders of Northern Rock do not infringe their rights.”

Liberal Democrat Shadow Chancellor Vince Cable says:“This is a welcome judgement. The purpose of nationalising Northern Rock was not to bail out shareholders.

“A situation where taxpayers’ money is used to pay off shareholders would be entirely untenable. Northern Rock was effectively bankrupt when it was nationalised and although I have some sympathy for small shareholders who have lost money, we must remember that holding shares carries a risk.

“The two hedge funds who brought this case to the High Court deserve to lose their shirts. They bought Northern Rock shares on the cheap soon after the run on the bank in the hope of making a quick buck. We should not reward such cynical and reckless speculation.”

Recommended

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com