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Fideres Hosts Seminar On The Current Framework For Securities Litigation In Germany
Yesterday, Fideres hosted a seminar on the current framework for securities litigation in Germany. The seminar covered the basis for claims (tort a...
European investors are taking joint action in suing The Royal Bank of Scotland (RBS) and Rating Agency Standard & Poor’s (S&P) in The Netherlands for damages suffered on investments in complex financial products known as CPDOs. This landmark case is the first group action of its kind in Europe for damages brought against a major investment bank and a ratings agency for conduct in the years leading up to the financial crisis. The group alleges that S&P negligently assigned the highest AAA rating to CPDOs, while heavily relying on misinformation supplied by RBS, the legal successor of the Dutch bank ABN Amro.
John Walker, Executive Director of Bentham IMF, one of the world’s largest litigation funders and the company underwriting the Dutch claim, said: “Rating agencies, by conferring AAA ratings on products they knew were incapable of accurate assessment, were a material cause of the mispricing of risk and misallocation of capital in global debt markets that became dysfunctional in 2007, heralding the GFC. Ratings were used then by investment banks to depict sows’ ears as silk purses. This action seeks to hold banks and rating agencies to account for their conduct prior to the GFC.”
London-based distressed asset specialist Fideres Partners LLP has been retained by Bentham IMF Ltd to identify and coordinate the affected institutional investors and to assist in gathering the complex information needed to support Dutch law firm BarentsKrans NV.
Steffen Hennig, lead partner on the case at Fideres said: “This is a landmark case in many respects. It’s the first time that a group action on structured products is brought in a European court by institutional investors. It is also the first time that a European court has been asked to take a stand on the responsibility of a Rating Agency for losses incurred on toxic financial products which received the highest credit ratings.”
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