Pyrrhic Victory For RBS In Highland CDO Dispute

Dec 15 2010 | 1:42am ET

It took a few tries, but the Royal Bank of Scotland has won a collateralized debt obligation lawsuit against hedge fund Highland Capital Management.

A British court awarded the bank about £19 million, six months after first deciding in the bank's favor. Still, Justice Michael Burton failed to grant RBS everything it wanted; in September, the bank asked for about €40 million, what it claimed was the entire amount of its loss. RBS was also ordered to pay its own costs.

At issue was a CDO that did not close because of the "collapse of the financial markets" two years ago. The judge said that Highland should cover the difference between the amount of its outstanding financing for the failed CDO and the value of the loans its seized when it called in the financing.

But the judge also took aim at RBS, accusing it of "deception" and Sam Griffiths, head of European high-yield trading, of lying. RBS is now investigating Griffiths.

The bank remains embroiled in a lawsuit with Highland in New York, where RBS accused Highland of deceiving it into restructuring a CDO.


In Depth

Q&A: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Viking Manager In Rent Dispute

Aug 11 2014 | 4:14am ET

A hedge fund manager is demanding most of his money back from his former landlord...

Guest Contributor

Majority Of Inflows Go To Brand Name Hedge Funds

Aug 12 2014 | 9:00am ET

Since the market correction of 2008, a vast majority of hedge fund net asset flows...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note