Tag: Financial Services

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RBS fined for LIBOR Manipulation; will lead to increased LIBOR Litigation

RBS was fined £87.5 million by the Financial Services Authority for manipulating the London Interbank Offered Rate (LIBOR), a key interest rate affecting trillions in derivatives contracts. This fraudulent activity, dating back to at least 2006, involved traders adjusting rates to benefit trading positions, causing losses to counterparties. This highlights serious cultural and oversight failures at RBS and other banks and will trigger increased LIBOR-related litigation.

The FSA’s definition of sophistication for swaps mis-selling reviews is complex and has caused confusion due to inconsistent communications. The original test deems a business sophisticated if it meets two of three criteria: turnover above £6.5m, balance sheet over £3.26m, or more than 50 employees. A new £10 million test modifies this for certain businesses, affecting their inclusion in the review. Clarification is expected from the FSA. Lexlaw offers expert advice to help businesses understand and navigate these rules. Contact Lexlaw for assistance with swaps claims.

What is Sophistication in the FSA Swaps Mis-selling Scheme?

The FSA’s definition of sophistication for swaps mis-selling reviews is complex and has caused confusion. The original test deems a business sophisticated if it meets two of three criteria: turnover above £6.5m, balance sheet over £3.26m, or more than 50 employees. A new £10 million test modifies this excluding them from the FSA review.

Here's an image depicting the FSA's pilot review findings for swaps mis-selling. It shows a scene with financial professionals looking concerned over documents, charts highlighting high mis-selling rates, and subtle visual cues indicating inadequate explanations, undisclosed costs, and over-hedging. The overall tone conveys seriousness and the implications of regulatory failure.

FSA Findings on Banks’ Pilot Swaps Mis-selling Review

The FSA’s pilot review of swaps mis-selling reveals over 90% of sales did not meet regulatory standards, highlighting inadequate risk explanation, undisclosed break costs, and over-hedging. Banks prioritised commissions over clients’ interests. The proposed review process raises concerns about reviewer independence and incomplete redress. Lexlaw advises court action before limitation periods expire.

Warren Buffett famously referred to derivatives as “financial weapons of mass destruction.” Lexlaw highlights the risks associated with derivatives and the importance of legal support for those affected by derivative mis-selling. If you have concerns about derivatives sold to you, contact Lexlaw for expert advice and assistance on protecting your interests.

Warren Buffett On Derivatives

Warren Buffett famously referred to derivatives as “financial weapons of mass destruction.” Lexlaw highlights the risks associated with derivatives and the importance of legal support for those affected by derivative mis-selling. If you have concerns about derivatives sold to you, contact Lexlaw for expert advice and assistance on protecting your interests.

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Financial Ombudsman Service Consults on Unprecedented Workload

The Financial Ombudsman Service (FOS) is preparing for an unprecedented workload in 2013/2014, driven mainly by 245,000 payment protection insurance (PPI) mis-selling cases. To handle this, FOS plans to increase staff significantly, including 1,000 new case workers and more ombudsmen. It will also raise individual case fees and increase the overall levy to support this expanded operation. Contact Lexlaw for advice on managing claims involving FOS processes and addressing complex financial disputes.

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Financial Ombudsman Service Decision Not a Bar to Further Court Action

A Financial Ombudsman Service (FOS) decision does not prevent claimants from pursuing further court action for additional compensation beyond the FOS award. In Clark v In Focus, the High Court ruled that the Ombudsman’s ruling is not legally binding and does not merge causes of action. This is important for bank swaps mis-selling victims who accepted FOS awards but seek further claims. Contact Lexlaw for expert advice on continuing litigation beyond FOS resolutions.

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Legal Comment on Green & Rowley v RBS [2012] EWHC 3661 (Swaps Mis-selling Judgment)

This judgment shows the complexity and fact-sensitive nature of swap mis-selling claims. The claimants were found to be experienced businessmen dealing with a straightforward swap, unlike many cases where claimants are less sophisticated and products are more complex. Key points include the importance of early document disclosure and careful handling of limitation periods. Specialist legal advice is essential to assess and manage swap mis-selling claims effectively. Contact Lexlaw for expert guidance and representation.

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Green & Rowley v Royal Bank of Scotland plc [2012] EWHC 3661 (QB)

Green & Rowley v Royal Bank of Scotland plc EWHC 3661 (QB) is a High Court case involving claims by John Green and Paul Rowley against RBS. The case deals with disputes related to financial transactions and banking practices. For detailed legal insights and advice regarding this case or similar banking disputes, contact Lexlaw Solicitors for expert guidance and representation.

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BBA Announcement on Major Banks’ Swaps Payment Suspension Policy

Major banks may suspend swap payments for financially distressed businesses while an independent review is conducted. Suspension is considered case-by-case and does not imply wrongdoing by the bank. Banks reserve their rights regarding suspended payments. Contact Lexlaw for expert help if you need support against UK Banks.

Libor Fraud UK Litigation Solicitors

Graiseley Properties Ltd (Guardian Care Homes) v Barclays Bank PLC – LIBOR Manipulation Test Case

This landmark case involves claims by Graiseley Properties and Guardian Care Homes against Barclays Bank, alleging mis-selling of interest rate derivatives linked to LIBOR manipulation. It was the first English court case to address alleged fraudulent misrepresentation by Barclays related to LIBOR fixing. The case established precedents on implied misrepresentation and involved extensive evidence, including senior Barclays management. Legal experts are available to advise clients affected by such financial product mis-selling.