Judge finds that RBC had conflict on interest in Ambulance deal
I know this is common amongst investment banks, but it needs to stop.
A judge has ruled that a conflict of interests caused bankers at RBC Capital Markets to persuade Rural/Metro Corp. to accept a low offer of $438M from Warburg Pincus when the latter bought the national ambulance service in 2011.Judge Travis Laster found that the Royal Bank of Canada (RY) division misled Rural/Metro directors about the valuation of the company in order for the sale to be completed quickly. RBS also failed to disclose that it was looking to help Warburg finance the acquisition.Laster agreed with Rural/Metro's former investors that they should have received more money, although he has yet to decide how much RBC should pay in compensation. The ex-shareholders want $172M.
Write a strongly worded letter to Lloyd and Jamie. Be sure to post their responses on here.
Silly Canadians, eh?
Best part is Moelis settled and got away with a $5M settlement. "Moelis agreed last year to settle the case and to pay $5 million to shareholders, without admitting any wrongdoing. Rural/Metro's board settled for $6.6 million, also without admitting wrongdoing. RBC went to trial last year."
Seriously - this is KKR/Del Monte/Barclays all over again: http://dealbook.nytimes.com/2011/10/06/del-monte-and-barclays-settle-in…
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