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RBS Prepares To Seek More Money Out Of Goldman

Tyler Durden's picture




 

While the punditry debates whether the SEC settlement was or was not a win for Goldman (As Bloomberg's Jonathan Weil summarizes it best: "Here’s the real beauty of the SEC’s settlement agreement yesterday with Goldman Sachs. The next time Goldman Chief Executive Officer Lloyd Blankfein goes on television and is asked by some reporter if Goldman committed securities fraud, as the SEC alleged, he won’t be allowed to say no.") those wronged by Goldman are only just starting to flex their legal muscles. Reuters reports that one of the "big" winners from the settlement, UK's biggest nationalized bank RBS, is about to beg for more handouts (allegedly to cover its ongoing losses on sovereign debt holdings): "Royal Bank of Scotland may pursue Goldman Sachs for hundreds of millions of dollars to add to $100 million it got as part of a settlement over the marketing of a subprime mortgage product. RBS said on Friday it would "carefully consider all of its options" after Goldman agreed on Thursday to pay it $100 million as part of a $550 million settlement of civil fraud charges over how it marketed the subprime mortgage product. RBS's options include taking Goldman to court as
the U.S.
Securities and Exchange Commission said the penalty left the
door open for future civil suits.
" At this point the response by RBS, which is 83% state owned will likely depend on US treatment of BP, considering that "Former UK Prime Minister
Gordon Brown said in April that Goldman would have to pay back
"hundreds of millions of dollars" if the charges against it were
proven.
" The only question left is to define "does not admit or deny guilt."

Somewhat more ironically is that a major portfion of the restitution will go to a company, IKB, which went insolvent as part of its greedy stupidity to participate in precisely such deals. The winner will be acquiring company, Texas PE firm Lone Star:


RBS and IKB were the two of the biggest
losers of both the
controversial product marketed by Goldman and of the wider
financial crisis. Each needed billions of euros in state
bailouts to survive.

Edinburgh-based RBS paid Goldman $841 million in August 2008
to settle a claim on credit insurance provided by ABN AMRO, the
Dutch bank of which RBS had bought parts months earlier.

IKB was brought to the brink of collapse in
2007 in part
because of exposure to subprime-related products Goldman sold to
IKB's off-balance-sheet investment vehicle Rhineland Funding.

IKB, which required multiple bailouts and is now
majority
owned by Lone Star, declined to comment before it had a
chance to review the SEC settlement.

At least John Grayken, who renounced his US citizenship in 1999, will be happy.

 

 

 

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Fri, 07/16/2010 - 08:49 | 473136 Tense INDIAN
Tense INDIAN's picture

so GS pays RBS few hundred millions.......whats the point.....these banks are owned by the same people...arent they???

Fri, 07/16/2010 - 08:51 | 473140 snowball777
snowball777's picture

Check the smiles on the lawyers faces for your answer.

Fri, 07/16/2010 - 08:51 | 473143 Tense INDIAN
Tense INDIAN's picture

both sides are happy

Fri, 07/16/2010 - 09:05 | 473163 snowball777
snowball777's picture

I see the same N*100M moving around and lawyers taking a slice off each time it passes by.

So, yeah, they all get a turn at the trough.

Fri, 07/16/2010 - 08:49 | 473138 snowball777
snowball777's picture

Yes, jackals, devour each other.

Fri, 07/16/2010 - 09:03 | 473156 curbyourrisk
curbyourrisk's picture

If it means GS pays more...I am up for it.  Anything but taxing them......I hate seeing taxes go up on anyone.  Fine them to death (I wish), but don't raise taxes!!!!

Fri, 07/16/2010 - 09:04 | 473160 Dismal Scientist
Dismal Scientist's picture

Just another glorious day in the corps for GS. As for RBS, it'll be fun to watch if the new UK govt wants to have a row with Barry over this, or just offset it vs BP. My guess would be the latter too

Fri, 07/16/2010 - 09:06 | 473165 Frank Rizzo
Frank Rizzo's picture

As a UK taxpayer I would like RBS to pursue GS for every single penny ...

Fri, 07/16/2010 - 09:08 | 473167 Oh regional Indian
Oh regional Indian's picture

Circular events make no net outflows.

All of these large banks have a common lever, Da BIS.

The rest of this petty millions is just kabuki for us.

You cheated! You cheated.

Sorry Honey, I could not help myself.

Here's a 100 million!

ORI

http://aadivaahan.wordpress.com

Fri, 07/16/2010 - 10:20 | 473278 Ripped Chunk
Ripped Chunk's picture

I guess RBS is the next too big to fail that will disappear then. Do not fuck with the dark lord unless you are Luke Skywalker

Fri, 07/16/2010 - 11:13 | 473440 Chemba
Chemba's picture

If the SEC had a case against GS it would not have settled for $550 million and no mgmt resignations.

So, the SEC must not have had a case.

If the SEC did not have a case, then RBS likely does not have a case.

And even if RBS did have case, big deal.  Goldman Sachs could earn back any cash settlements within a few weeks.

Fri, 07/16/2010 - 11:23 | 473460 Chemba
Chemba's picture

What's more, good luck finding clients representing more than 0.5% of Goldman's net revenue who believe Goldman Sachs is not a victim of political persecution by the ObaMao administration, and will do less business with GS as a result.

Get over it.

Find a new scapegoat.

Fri, 07/16/2010 - 14:02 | 473947 Grand Supercycle
Grand Supercycle's picture

 

The DOW/SP00 leg down has started.

http://stockmarket618.wordpress.com

Mon, 07/19/2010 - 01:39 | 476599 Moonrajah
Moonrajah's picture

The Summer Blockbuster is about to be released for our viewing pleasure. Piranhas vs. Jaws, starring the IKB and RBS tag-team plotted against the GS behemoth. Brought to you in glorious QE3D.

Do NOT follow this link or you will be banned from the site!