The U.S. Attorney’s Office in Massachusetts has settled with another banking giant for its role in the financial crisis. The court announced yesterday that will collect a payment of $4.9 billion from The Royal Bank of Scotland Group, resolving federal civil claims that RBS Group’s subsidiaries in the U.S. misled investors in the underwriting and issuing of residential mortgage-backed securities between 2005 and 2008. The penalty is the largest imposed by the Justice Department for financial crisis-era misconduct at a single entity under the Financial Institutions Reform, Recovery and Enforcement Act of 1989, which allows the Justice Department to seek civil penalties for violations of criminal statutes. These are allegations only, which RBS disputes and does not admit, and there has been no trial or adjudication or judicial finding of any issue of fact or law. “This resolution – the largest of its kind – holds RBS accountable for defrauding the people … [Read more...] about The Royal Bank of Scotland Pays Settlement for Financial Crisis-Era Misconduct
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UK sells 7.7 percent stake in Royal Bank of Scotland
0 View Comments LONDON (AP) — The British government sold a 7.7 percent stake in Royal Bank of Scotland on Tuesday, taking a tentative step toward returning the bank to private ownership almost a decade after it was bailed out at the height of the financial crisis. The government sold the shares for 271 pence each, raising 2.5 billion pounds ($3.3 billion), the Treasury said in a statement. That's 46 percent less than the 502 pence-a-share the government invested in 2008 and 2009, spurring criticism from opposition leaders who said taxpayers would "incur an enormous loss." The U.K. pumped 45.5 billion pounds into RBS as it sought to protect the nation's financial system during the financial crisis, ultimately acquiring more than 84 percent of the bank. The government still owns 62.4 percent of RBS, more than a year after the Treasury sold the last of its shares in rival Lloyds Banking Group. "This sale represents a significant step in returning RBS to full private ownership … [Read more...] about UK sells 7.7 percent stake in Royal Bank of Scotland
U.K. to Break Up Royal Bank of Scotland, Lloyds
Last Updated Nov 3, 2009 12:11 PM EST Unlike government officials in the U.S., the Brits aren't afraid of breaking up banking companies regarded as too big to fail. Under pressure from the U.K.'s Financial Services Authority and the European Commission, Royal Bank of Scotland and Lloyds Banking Group said today that each will sell portions of their respective branch networks. RBS, which is partly nationalized, also will unload its insurance division, part of a deal with the government for the company to secure an additional $41.6 billion in aid. While noting that the slimmed down RBS will remain strong, chief executive Stephen Hester made clear the company is divesting the units unwillingly. And in a statement he conceded that, well, RBS needs the money: The agreement in principle reached with the [European Commission] is clearly more material for the structure of our group than we had hoped, increasing risk to both execution of the plan and earnings dilution. But this is still an … [Read more...] about U.K. to Break Up Royal Bank of Scotland, Lloyds
Royal Bank of Scotland chairman to step down
LONDON - Philip Hampton, the chairman of the Royal Bank of Scotland Group, has announced that he's leaving the company and joining the board of GlaxoSmithKline to become chairman in 2015. Hampton has been chairman since February 2009, shortly after the onset of the financial crisis. Britain bailed out RBS, which remains 81 percent taxpayer-owned. The group said Thursday that Hampton's departure was in line with his intention to serve between five and seven years. Britain saved RBS with a $71 billion capital injection after CEO Fred Goodwin brought the bank to near-collapse with an aggressive global expansion strategy that included the ill-fated purchase of Dutch lender ABN Amro. But the problems didn't end with the rescue and the RBS leadership has struggled to unravel years of excess. … [Read more...] about Royal Bank of Scotland chairman to step down
Energy companies, banks lead a decline on Wall Street
NEW YORK - Energy companies are leading a broad decline on Wall Street on Friday as the price of crude oil turns lower. Banks also fell, led by a plunge in Deutsche Bank after the giant German bank said it wouldn’t settle with the Department of Justice over its handling of mortgage-backed securities in the run-up to the 2008 financial crisis. The Dow Jones industrial average lost 106 points, or 0.6 percent, to 18,107 as of 1:50 p.m. ET. The Standard & Poor’s 500 index lost 12 points, or 0.6 percent, to 2,135 and the Nasdaq composite lost 18 points, or 0.3 percent, to 5,232. The U.S.-listed shares of Deutsche Bank dropped $1.46, or 10 percent, to $13.30 after the bank said it did not intend to pay the $14 billion settlement that the U.S. government asked for. Federal regulators have been looking to settle with Deutsche Bank, as it has done with the other major Wall Street firms like Goldman Sachs and JPMorgan Chase & Co., for its role in the mortgage bubble and … [Read more...] about Energy companies, banks lead a decline on Wall Street