RBS 2010 Annual Report Download - page 375

Other investigations
In April 2009, the FSA notified RBS Group that it was commencing a
supervisory review of the acquisition of ABN AMRO in 2007 and the 2008
capital raisings and an investigation into conduct, systems and controls
within the Global Banking & Markets division of RBS Group. RBS Group
and its subsidiaries co-operated fully with this review and investigation.
On 2 December 2010, the FSA confirmed that it had completed its
investigation and had concluded that no enforcement action, either
against RBS Group or against individuals, was warranted. RBS Group is
engaging constructively with the FSA with regard to the publication of a
report by the FSA relating to the supervisory review, subject to any
necessary commercial constraints.
In July 2010, the FSA notified RBS Group that it was commencing an
investigation into the sale by Coutts & Co of ALICO (American Life
Insurance Company) Premier Access Bond Enhanced Variable Rate
Fund to customers between 2001 and 2008 as well as its subsequent
review of those sales. On 11 January 2011, the FSA amended the date
range on which their investigation is focused and the investigation start
date is now December 2003. RBS Group and its subsidiaries are co-
operating fully with this investigation.
In the United States, RBS Group and certain subsidiaries have received
requests for information from various governmental agencies, self-
regulatory organisations, and state governmental agencies including in
connection with sub-prime mortgages and securitisations, collateralised
debt obligations and synthetic products related to sub-prime mortgages.
In particular, during March 2008, RBS Group was advised by the SEC
that it had commenced a non-public, formal investigation relating to RBS
Group’s United States sub-prime securities exposures and United States
residential mortgage exposures. RBS Group and its subsidiaries are co-
operating with these various requests for information and investigations.
The Federal Reserve and state banking supervisors have been reviewing
RBS Group’s US operations and RBS Group and its subsidiaries have
been required to make improvements with respect to various matters,
including enterprise-wide governance, Bank Secrecy Act and anti-money
laundering compliance, risk management and asset quality. RBS Group
is in the process of implementing measures for matters identified to date.
RBS Group may become subject to formal and informal supervisory
actions and may be required by its US banking supervisors to take further
actions and implement additional remedial measures with respect to
these and additional matters. Any limitations or conditions placed on RBS
Group’s activities in the United States, as well as the terms of any
supervisory action applicable to RBS Group and its subsidiaries, could
have a material adverse effect on RBS Group’s business, results of
operations and financial condition.
373RBS Group 2010
Financial statements