RBS Class Action Leon Kaye Solicitors, Should I pay £15 to join?

moos_mum

I have received a letter from Leon Kaye Solicitors asking for RBS shareholders who bought shares in the 2008 rights issue to join a class action suit in the US courts.

I am all for trying to boost the return on my now practically worthless shares, but this firm of solictors are asking for a £15 contribution to costs.

Has anyone else has this letter? (they obtained my details from public records at Companies House, they say) but the asking for money part is ringing little bells of alarm with me, just wanted to see what others think as I cannot find an existing post relating to this.

I would be glad of any thoughts on the subject.:cool:

Baldur

This item from thisismoney, relating to Leon Kaye Solicitors/B&B may be of interest.

barak

There is also an action group set up by Roger Lawson, Communications Director of the UK Shareholders' Association.

http://www.rbosaction.org/index.htm

I'm tempted to join one of these groups, but although it's pretty clear that the RBS board knew - or should have known - much more of their disastrous situation than was disclosed at the time of the Rights Issue, I wouldn't bet on shareholders getting any compensation.

sabretoothtigger

Buyer beware imo, rights issues are not a consumer product. Working lunch for example told people not to do b&b rights.

Telegraph right now says people should not do the Lloyds open offer. Their basic thinking being its a high risk venture and consumers would be gambling not investing, which is essentially correct
Doesnt mean a bet cant pay off but dont complain about it later

Bond holders have more rights as they are actually owed money by law but shareholders rely on the integrity of results given which if totally wrong would be a criminal matter I think

Financially I could only believe america would award money to shareholders like this. The directors might be responsible but they have limited liability, so whos going to overturn that

barak

sabretoothtigger wrote: »

Buyer beware imo, rights issues are not a consumer product. Working lunch for example told people not to do b&b rights....

Telegraph right now says people should not do the Lloyds open offer....

"Buyer beware!" of course, but I'm not quite sure what you mean by "rights issues are not a consumer product". They are something that small shareholders have to consider.

The B&B rights issue was months later than the RBS, by which time the market's attitude had completely changed, and small shareholders should have been put off.

In April 2008 there was no real clue of the chaos to follow and the Telegraph did nothing to put off small shareholders, but thought the RBS Rights to be attractive -

http://www.telegraph.co.uk/finance/markets/questor/2789022/Royal-Bank-of-Scotland-rights-issue-attractive.html

sabretoothtigger

RBS rights dragged on for months didnt it, in the end it was at a similar time to b&b I think

They dont completely miss the negatives in that article

Its global banking and markets arm, which at £4.92bn was the second largest profits stream last year, has been "acutely affected by credit market conditions".

Collins Stewart interpreted the bank's comments on the business line as a "profits warning" for the division.
In the UK, bad debts will almost certainly rise as the economic malaise sets in, further eroding profits. Panmure Gordon is even predicting further credit market write-downs this year and next.

The only solace for shareholders is that all UK banks will suffer and, having raised capital first, RBS is in a stronger position to withstand the approaching ill winds.

It is entirely possible, indeed likely according to Panmure Gordon's Sandy Chen, that the share price will drift back towards the 200p rights issue price.

Shareholders should take up their rights, which look a reasonable if not enormously attractive deal, but certainly not buy new shares at this price

They always say if you wouldnt buy at that price, it could be a good time to sell so their conclusion was never a great one

Incredibly, that looks expensive for banking stocks currently but reflects its potentially stronger capital position.

expensive for bank stocks but buy them anyway

barak

sabretoothtigger wrote: »

RBS rights dragged on for months didnt it, in the end it was at a similar time to b&b I think.

No, RBS closed 6th June, B&B 15th August.

I think the suggestion you quote was to take up the RBS rights at 200p, but not to buy NEW shares at 307p "a calculation of where the shares will trade after the discounted share issue".

The RBS Rights Issue in June 2008 was taken up by over 95% of shareholders. Less than 10% of shares were held by private shareholders - the vast majority being held by institutions, so they must have thought that it was a reasonable deal, after reading every word of the Prospectus.

Only 28% of the B&B Rights were taken up, an indication of how by then the serious nature of the banking crisis was becoming clear.

My point is that in June 2008, the RBS Rights Issue looked like a reasonable deal - by August 2008, the B&B one didn't.

smurf27

That is very strange! I also rec'd a letter from Leon Kaye today and they have asked for £100 to join the Action Group. Smacks of a scam to me? Why are they asking for different amounts from investors if it is legit?

moos_mum wrote: »

I have received a letter from Leon Kaye Solicitors asking for RBS shareholders who bought shares in the 2008 rights issue to join a class action suit in the US courts.

I am all for trying to boost the return on my now practically worthless shares, but this firm of solictors are asking for a £15 contribution to costs.

Has anyone else has this letter? (they obtained my details from public records at Companies House, they say) but the asking for money part is ringing little bells of alarm with me, just wanted to see what others think as I cannot find an existing post relating to this.

I would be glad of any thoughts on the subject.:cool:

sabretoothtigger

Tell them to take it from the winnings.
Would not surprise me if some random company was trying to shake down people for this fee just like you can win a million if you pay some admin costs first.
Check their bank details are the same as other people have

I think the suggestion you quote was to take up the RBS rights at 200p, but not to buy NEW shares at 307p "a calculation of where the shares will trade after the discounted share issue".

I think its the same thing. For lloyds, dont get 38p shares if 100p wasnt a 'good price'

Buying rights means increasing commitment and risk, the validity of the higher price seems to matter more if anything, then the rights. (in the rbs case it turned out not to have any rights discount in the end)

susanmcveigh

moos_mum wrote: »

I have received a letter from Leon Kaye Solicitors asking for RBS shareholders who bought shares in the 2008 rights issue to join a class action suit in the US courts.

I am all for trying to boost the return on my now practically worthless shares, but this firm of solictors are asking for a £15 contribution to costs.

Has anyone else has this letter? (they obtained my details from public records at Companies House, they say) but the asking for money part is ringing little bells of alarm with me, just wanted to see what others think as I cannot find an existing post relating to this.

I would be glad of any thoughts on the subject.:cool:

I have received a letter today from Leon Kaye 7/7/09 but the cost they want is £50 but I don't think I will bother I have already lost enough

JONJO

I received a letter from Leon Kaye last month and a'chaser' today requestin £100 to join the Acion Group with the 'enticer' remark that if I don't join then if the action is successful I might not receive compensation. Having lost so much ofr my original investment I am reluctant to 'throw good money after bad' and will keep my cheque book shut! Can't help thinking though that if the action is successful (and this seems most uncertain even unlikely as Big business always seems to have an escape route) then it must be judged that all the investors in that Rights Issue had been misled not just the members of the action group and therefore would be entitled to file for compensation too.