Update on legal action - January 2010

As you know, for the past year I have mounted a publicity campaign to persuade Coutts & Co., and its parent Royal Bank of Scotland, to stand behind customers who faced losses as a result of Coutts' advice to invest in AIG Life Premier Bonds

It is with disappointment, although not surprise, that I have to report that Coutts/RBS have ignored my campaign and instead have turned their back on their customers. Their callous and calculated strategy -- to abandon their customers after advising them to invest monies totalling hundreds of millions of pounds into AIG Bonds -- is hardly what you would expect from one of the UK's leading private banks.

In fact, Coutts' treatment of its clients simply does not live up to their own marketing pledge.

Coutts' Website January 2010:

"At Coutts, we believe that our reputation as a leading private bank rests firmly on our ability to build lasting relationships with each of our clients, by responding to their needs, wishes and aspirations. Of course, this kind of relationship depends on trust, which takes time to grow and we have consistently demonstrated that ability for over 300 years looking after clients from every walk of life"

In June last year, I decided that the only course of action left was to start legal proceedings. My lawyers submitted a formal legal claim the same month and we received the response from Coutts' lawyers in October. Since then we have been consulting with barristers and financial experts prior to filing a High Court lawsuit.

A decision on when we will file the lawsuit will be taken shortly. One of the determining factors is calculating the final size of the capital loss in the AIG Life Enhanced Fund. Over the last twelve months, the capital losses in the fund have decreased. While this is good news for bond holders, it makes it more difficult to determine what the final loss will be.

I will keep everyone posted on how the lawsuit is progressing via the Website.

Finally, I recently wrote to Hector Sants, Chief Executive of the Financial Services Authority, asking for an update on their investigation into Coutts' sales of AIG Life Premier Bonds. I met with Hector Sants in April last year and I am hopeful that the FSA's investigation is progressing.