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RBS pays £3.6bn to settle crisis-era misdeeds

RBS-Building-2012-700x450.jpgThe Royal Bank of Scotland will pay its first dividend since the financial crash as it has agreed to pay $4.9bn (£3.6bn) to US regulators to settle claims it misled investors.

Yesterday, the US Department of Justice said the penalty is the record fine imposed on a bank for misconduct leading up to the financial crisis.

The fine was agreed in principle in May.

RBS has been trying to move on from allegations by US authorities it misled investors in underwriting and issuing residential mortgage-backed securities by understating the risks behind many of the loans.

These loans were underwritten and issued between 2005 and 2008, which the department said generated hundreds of millions of dollars for the bank.

According to a London Stock Exchange update, the settlement included a statement of facts based on calls and emails from RBS executives at the time, which demonstrate how investors were misled.

US Attorney for the District of Massachusetts Andrew Lelling says: “This resolution – the largest of its kind – holds RBS accountable for defrauding the people and institutions that form the backbone of our investing community.”

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