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Rbs Considers Suing Goldman Sachs Over Lost $841M

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Royal Bank of Scotland is mulling launching a civil legal action against Goldman Sachs after the US investment bank on Thursday settled a case with the US authorities relating to the misselling of complex debt products.

RBS was awarded $100m (£65m) by the Securities and Exchange Commission (SEC) as part of a $550m settlement reached by the US market regulator with Goldman Sachs, however the UK bank is understood to be considering its own lawsuit against the investment bank to recover potentially the full $841m it lost.

In a statement, RBS said it had been monitoring the SEC's case "closely", adding that it now "carefully consider all of its options".

Goldman Sachs has retained law firm Sullivan & Cromwell to represent it against any further legal action resulting from the misselling of a collateralised debt obligation (CDO) based on a pool of risky sub-prime mortgages.

RBS was not an actual investor in the product, but was exposed to losses on the bond following its acquisition of Dutch bank ABN Amro, which had insured the actual investors against any losses.

Goldman Sachs has neither admitted nor denied the SEC's allegation over its sale of the ABACUS 2007-AC1 CDO and lawyers for RBS will now have to decide whether the bank has a case.

Goldman Sachs said it had been "a mistake" not include in the marketing material for ABACUS the detail that the mortgages contained within the CDO had been picked with the guidance of hedge fund firm Paulson & Co, which took a short position against the bonds.

Are the parasites about to turn on each other?

As Fred said if your going to panic, panic first.

So it must be the same, if your going to sue, sue first.

Why should the UK taxpayer pick up the tab?

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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