SYDNEY, Dec 5 (Reuters) - Royal Bank of Scotland (LSE: RBS.L - news) andrating agency Standard & Poor's have been sued by a group ofEuropean institutional investors for damages of up to $250million suffered on complex financial products in the lead up tothe global financial crisis.
The claim is the first group action of its kind to belaunched in Europe against an investment bank and rating agencyfor their conducts prior to the crisis, litigation funderBentham IMF Ltd said in a statement on Thursday.
The group of 16 European institutional investors filed theclaim in Amsterdam on Wednesday for damages of up to $250million suffered on investments in CPDOs - or constantproportion debt obligations - that were rated AAA by S&P.
The case also follows the landmark judgement issued byAustralia's Federal Court in November 2012, which found S&P haddeceived 12 local government councils that bought the CPDOs.
The Australian judgement said a reasonably competent ratingsagency could not have rated the CPDOs at issue AAA, and that therating was misleading, deceptive and a negligentmisrepresentation to investors.
"Following the Australian Federal Court proceedings we havea comprehensive dossier of information and evidence that webelieve is compelling to put before the Dutch judiciary," saidGidget Brugman, the lawyer who is handing the case in theNetherlands.
- Royal Bank of Scotland
- global financial crisis