Britain’s regulatory agency that oversees financial markets is investigating a claim against some units of the Royal Bank of Scotland Group (LON: RBS) over compliance issues with certain money-laundering related allegations. The bank disclosed the allegations in a prospectus to its shareholders.
RBS, which is currently 70% owned by the British government, also announced that the government would be controlling bonuses as a condition for insuring its toxic assets, a move that could make employee retention and hiring more difficult for the firm.
The new prospectus released by RBS informed customers about the FSA probe into “certain aspects of the policies of, and training and controls within.” The investigation relates to a period between December 2007 and December 2008. The firm provided no additional information. A bank spokesperson said that the company and its units “are cooperating fully with the investigation.”
The bank said, “Depending on [the government’s] approach to recommendations made by the board in respect of that bonus pool, this requirement may adversely impact RBS’ ability to attract and retain senior managers and other key employees and thereby place RBS at a significant competitive disadvantage against its competitors as well as increasing the risks facing RBS and weakening management’s ability to deal with them.”
Shareholders will vote whether or not the firm should take place in the government’s Asset Protection Scheme on December 15th. If the vote is approved, the government’s take in the bank will increase to 84%.
