RBS to pay $44 million to settle U.S. charges it defrauded customersStaff Writer |
Banking RBS accepted responsibility
Royal Bank of Scotland Group (RBS) agreed to pay more than $44 million and enter a non-prosecution agreement to settle a U.S. Department of Justice criminal probe of traders accused of defrauding customers on bond prices.
RBS will pay a $35 million fine, plus at least $9.09 million to more than 30 customers, including Pacific Investment Management Co, Soros Fund Management and affiliates of Bank of America, Barclays, Citigroup, Goldman Sachs and Morgan Stanley.
Prosecutors said that from 2008 to 2013, RBS cheated customers by lying about bond prices, charging commissions it did not earn and concealing the fraud in an effort to boost profit at the customers' expense. Some victims had received federal bailout money through the Troubled Relief Asset Program.
"For years, RBS fostered a culture of securities fraud," Daly said in a statement. "By entering into this agreement, RBS has admitted the seriousness of its past criminal conduct and made a clean break."
The settlement arose from a five-year federal crackdown on deceptive bond trading in which eight traders, including two from RBS, have been criminally charged.
According to settlement papers, RBS admitted and accepted responsibility for its misconduct.
Daly said RBS' "voluntary self-reporting and extraordinary cooperative efforts" were the reason it avoided criminal charges.
U.S. authorities sometimes use non-prosecution agreements to encourage cooperation. The criminal probe of individuals associated with RBS' trading will continue. ■
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