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Pension funds hire Cherie Blair as they sue RBS over lost millions
Nicholas Cecil, Chief Political Correspondent16 Mar 2009
BANK chiefs including Sir Fred Goodwin are facing legal action led by Cherie Blair over hundred-million-pound losses.
Pension funds have hired Mrs Blair to sue the Royal Bank of Scotland over huge losses, The Times has reported today.
They are said to be alleging that Sir Fred, former chief executive of RBS, and the bank “falsely reassured” investors it was healthy when bad loans made it “effectively insolvent”.
The wife of former Prime Minister Tony Blair is working, in her professional capacity as Cherie Booth QC, for North Yorkshire and Merseyside council pension funds, which were hit by the collapse in the RBS share price.
She said the lawsuit was being brought because of the “massive losses” suffered by pension schemes in the UK and other institutions which had investments in RBS.
“It's also about the potential to protect investors in the future by significantly raising the standards for good governance in major UK companies,” she said.
The legal action is said to name Sir Fred, who caused outrage by refusing to give up his £700,000-a-year pension despite RBS being bailed out by the taxpayer, as well as its board of directors, including former chairman Sir Tom McKillop.
The lawsuit is being launched through a court in New York and reportedly accuses Sir Fred of “hubris” for maintaining a lending and acquisitions strategy which brought the bank to the brink of collapse, with a loss of £24 billion last year.
Mrs Blair is working with Californian law firm Coughlin Stoia Geller Rudman & Robbins, which secured £5 billion compensation for investors in Enron.
Further anger erupted against financial institutions today after it emerged that insurance giant AIG, which has been propped up by the American government, has paid bonuses of £118 million, according to the Financial Times.
Reader views (4)
Yep, isnt that a great message, everyone who lost their investment (which do go up and down you know) to sue the banks who in turn require more public money given to them.
- Dc, London, 23/03/2009 11:21
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The initiative of suing the Directors both exec. and non exec. is a justified move and will improve corporate governance in the future. The size of the losses means that the Directors and Officers Insurance will be inadeqate. Will the Bank i.e. the Government pick up the defence costs? I hope each director defendent has to contribute a part if not he should be left to conduct his own defence, a frightning prospect in the USA. No defence support should be offered to Sir Fred. Let him use his pension.
- Brazil Scot, Brazil, 17/03/2009 01:49
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Does'nt this mean she will be trying to take this pension money out of the Public Purse ?
- David., Chertsey.UK., 16/03/2009 17:48
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Thats interesting. It will be even more interesting when Tony Blair ,Gordon Brown and Alistair Darling are called to explain how they wrecked the economy by over spending and over borrowing - what was that I recall about no more boom or bust??. RBS may not have helped in the overall scheme of things but dont tell me they run the world or the UK economy.
- George H, London UK, 16/03/2009 15:41
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