RBC clients file lawsuit
Royal Bank of Canada joins the list of financial institutions sued by clients over the large losses associated with the credit crisis.
Royal Bank of Canada has been hit with a proposed class action lawsuit in New York alleging that it told clients that auction rate securities were safe short-term investments for anyone with at least $25,000 in available cash.
The auction rate market froze earlier in the year and issuance has since plummeted. (On a side note, Warren Buffett has confirmed he has used this market dislocation for a little cherry picking.)
Going forward, expect to see a lot of lawsuits a la 1990s Orange County – Robert Citron. It’s just getting started.
Update: Since I wrote this there have indeed been lots of lawsuits, particularly in the auction rate security area. See my label ‘Lawsuits‘ for more on those posts since.
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