RBS 'casino bank' fined £5.6m over misreporting

Double blow for bank after front-runner for Stephen Hester's job rules himself out

Nick Goodway,Jamie Dunkley
Thursday 25 July 2013 01:10
Comments

The City regulator bared its teeth against Royal Bank of Scotland again yesterday with a £5.6m fine for failing to report properly more than a third of its investment banking deals over five and a half years.

On what was another bad day for the state-owned bank, regulators issued the sanction just hours after one of the most highly regarded front-runners to replace the outgoing chief executive Stephen Hester, Mark McCombe, ruled himself out of the job.

Widespread misreporting of trades took place under the regimes of both the disgraced Fred Goodwin and Mr Hester. It even continued after the Financial Services Authority contacted the bank to complain in 2010.

A staggering 44.8 million transactions were not properly reported to the regulator, and 804,000 were not reported at all.

The FCA, like its predecessor the FSA, relies on accurate reporting of deals by investment banks so that it can pursue possible cases of insider trading or market abuse.

The regulator said much of the failure to report had resulted from RBS's disastrous and hugely expensive take–over of the Dutch investment bank ABN Amro in October 2007 under Mr Goodwin, which eventually led to the £45bn taxpayer bailout of RBS in 2008.

Tracey McDermott, the FCA's director of enforcement and financial crime, said: "Effective market surveillance depends on accurate and timely reporting of transactions. We have set out clear guidance on transaction reporting, backed up by extensive market monitoring, and we expect firms to get it right. "

Yesterday's fine is the 11th handed out by the FCA since it was created on 1 April, meaning a total of £23.9m in penalties has been imposed on individuals and financial institutions. It is also the latest in a stream of fines on RBS, including the £87.5m sanction earlier this year for its role in the Libor fixing scandal and £2.8m for the way it handled complaints over payment protection insurance.

Mr McCombe emailed colleagues at the fund management giant BlackRock yesterday morning, telling them that he would not be leaving, after he was named as the leading candidate for the RBS job.

The former Barclays executive David Roberts and National Australia Bank's Cameron Clyne are now the only serious external candidates. The internal frontrunner remains RBS's head of retail banking, Ross McEwan, followed by its corporate bank head, Chris Sullivan, ahead of Nathan Bostock, who is due to become finance director.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in