The newsletter of GBRW Expert Witness
February 2017
(Some) bankers behaving badly
The 2008-2009 global financial crisis continues to cast a long shadow.
In November last year, RBS announced that it had set aside almost £400m to compensate small business owners who are claiming against its controversial Global Restructuring Group unit over the way in which their banking relationships were handled. While the Financial Conduct Authority cleared RBS of the most serious allegations, it found several lapses in conduct by GRG, including faulty processes and a “failure to support” small businesses.
In January two former HBOS bankers and four business associates were convicted of fraudulent trading, corruption and money laundering involving small companies in financial distress which were handled by HBOS’s impaired assets division. Lynden Scourfield, the senior banker heading this division, was found to have referred clients to Quayside Corporate Services, a small turnaround consultancy run by former banker David Mills, resulting in Mills and QCS demanding huge fees and in some cases taking over businesses for their own benefit.
The trading problems of many small businesses in the wake of the financial crisis were compounded by mis-selling of interest rate swaps – when interest rates fell sharply in the first quarter of 2009, the resulting “mark to market” exposures (the additional amounts payable by borrowers if they wished to terminate these swaps) created increased risk exposures for the banks, leading them in many cases to reduce the debt facilities which they were prepared to provide.
These developments will inevitably lead to an increase in civil claims against RBS and HBOS, which we expect to require expert evidence in a number of areas, including the conduct of banking relationships, the impact of IRS products and/or increases in loan interest rates, quantification of opportunity losses for borrowers and valuations of business at different points.
GBRW Expert Witness has provided experts for all of these areas, both for claimants and for defendants, and we are very happy to discuss any requirements.
Managing Director,
GBRW Expert Witness
February 2017
