RBS hit by FSA inquiry into Coutts
Saturday 07 August 2010
Coutts, the Queen's bank, is under investigation from the financial market watchdog over a fund it sold to customers including TV presenter Jeremy Clarkson, it emerged yesterday.
RBS, which owns Coutts, disclosed the Financial Services Authority (FSA) investigation during its interim results yesterday. This comes just days after the regulator issued RBS with a record fine.
The FSA notified the banking group in July that it had launched an investigation into Coutts' marketing of a money market bond fund from American Life Insurance Company – owned by troubled US insurer AIG – to customers between 2001 and 2008.
Top Gear presenter Clarkson and comedian Frank Skinner are believed to have invested in the fund, which ran into trouble during the credit crunch. AIG's subsidiary blocked withdrawals in 2008.
The bank would not comment further than saying it was "co-operating fully" with the investigations. A spokesman for the FSA confirmed the investigation, but declined to comment further.
Sir Keith Mills, who started Air Miles and Nectar cards, welcomed the FSA's move. He is suing Coutts for negligence after he was advised to invest £65m of his savings in AIG Life Premier Bonds. "I have long maintained that Coutts misrepresented the nature of the investments it sold to me and others," he said.
This comes just days after the FSA gave RBS a fine worth £5.6m over lax controls at RBS, NatWest, Ulster Bank and Coutts. The fine covers the period from December 2007 to 12 months later, when Sir Fred Goodwin was at the helm of RBS.
The regulator said RBS had failed to adequately screen its customers and the payments they made.
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