Royal Bank of Scotland chiefs cleard of fraud
The City watchdog today ruled out action against former bosses at Royal Bank of Scotland after finding no evidence of fraud or dishonest activity in the lead-up to the financial crisis.
The Financial Services Authority (FSA) cleared the firm and individuals, including former chief executive Sir Fred Goodwin, but warned that their competence would be taken into account in any future applications made by them to work at FSA-regulated firms.
In its investigation into the bailed-out bank, the FSA said RBS made a series of bad decisions in the years immediately before the financial crisis, most significantly the acquisition of Dutch bank ABN AMRO and the decision to aggressively expand its investment banking business.
But it added: "The review concluded that these bad decisions were not the result of a lack of integrity by any individual and we did not identify any instances of fraud or dishonest activity by RBS senior individuals or a failure of governance on the part of the board."
It said the findings of its investigation did not warrant taking any enforcement action, either against the firm or against individuals.
"However, the competence of RBS individuals can, and will, be taken into account in any future applications made by them to work at FSA regulated firms," it said.
The FSA launched its investigation into RBS in May last year after it became one of the UK banks to require partial taxpayer bail-out support. The review, carried out with help from accountancy firm PwC, considered if regulatory rules had been broken and what, if any, action was appropriate.
"The review was necessarily extensive and looked specifically at the conduct of senior individuals at the bank, the acquisition of ABN AMRO in 2007 and the 2008 capital raisings," the watchdog said.
The FSA's supervisory investigations into other banks that failed during the crisis are continuing.