A private bank that counts the Queen among its clients was fined £6.3m by the City watchdog yesterday for misleading customers over a savings product linked to bailed-out US insurer AIG.
The Financial Services Authority has hit Coutts & Co, which is owned by Royal Bank of Scotland, with one of its biggest penalties to date for flouting regulations when giving risk advice to customers on the AIG Enhanced Variable Rate Fund.
The FSA said Coutts sold the fund to 427 high net worth customers from December 2003 to September 2008 with investments totalling £1.45bn. Investors saw their money frozen after AIG was bailed out by the US government during the financial crisis, prompting some, including the millionaire inventor of Air Miles Sir Keith Mills, to claim they had been mis-sold the bonds.
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