RBS to pay $275m over US securities

The lawsuit dates back to 2008. Picture: Getty
The lawsuit dates back to 2008. Picture: Getty
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Royal Bank of Scotland has agreed to pay $275 million (£165m) to resolve a US lawsuit accusing it of misleading investors over the sale of mortgage-backed securities.

The settlement, which must be approved by a federal judge in New York, is the third-largest in a class action against banks that packaged and sold the securities, which were at the heart of the financial crisis. The lawsuit dates back to 2008. RBS said last month it had set aside £1.9 billion to cover a range of claims, primarily relating to litigation over mortgage-backed securities.

The agreement was announced as it emerged that RBS had suspended a senior currency trader in London – the third suspension since a global investigation into allegations of rigging reference exchange rates was launched last year.

The state-backed lender also agreed yesterday to sell part of its derivatives trading business to France’s BNP Paribas as it scales back its investment bank. RBS did not disclose a value for its structured retail investor products and equity derivatives business, but said the sale price was “not material” within the context of the group.

Subject to clearance from competition regulators, the deal is expected to go be phased in over two years.