Judge Blasts RBS, OKs Highland Lawsuit

May 29 2012 | 1:18pm ET

The latest round in the courtroom battle between Highland Capital Management and the Royal Bank of Scotland has gone to the hedge fund.

A British judge has rejected the bank's request for an injunction against Highland's lawsuit, filed last year in Texas. The hedge fund brought the complaint after losing to RBS in December 2010, when the same British judge, Justice Michael Burton, awarded RBS €22 million to cover the value of loans in a collapsed collateralized debt obligation deal.

But even in handing RBS victory, Burton was scathing, accusing the bank of "deception" and of running a "sham" auction. Highland picked up on those themes in its US$100 million lawsuit in July, accusing RBS, trader San Griffiths and lawyer Stewart Hall of fraudulent inducement, fraud and unjust enrichment.

Burton gave the green light to that action, saying that "there has been up to and including this last hearing improper conduct by RBS through Mr. Griffiths, and that it was serious." The judge added, for good measure, that Griffiths had "unclean hands" that were "relevantly grimy."

Burton cited two conversations involving Griffiths, one in which he told a senior RBS salesman that the auction in question "has to look authentic but it is effectively a pricing exercise," and an e-mail in which he called the process "awesome."

"We are making the bank rich," he wrote. The bank and himself: Griffiths was paid £2.2 million in bonuses in 2009 and 2010.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.