LONDON: Lawyers for Royal Bank of Scotland asked an ex-employee to destroy confidential documents, according to a letter seen by Reuters, in a move which the former staffer’s lawyer said put him at risk of legal action by the US government.
The letter, dated January 18 and signed by Herbert Smith Freehills, a British law firm acting for the bank, asked Victor Hong to “permanently destroy any confidential materials in his possession” obtained via litigation disclosures or during his employment in breach of his separation agreement with the bank.
A spokesman for the bank denied any wrong-doing, describing the action as “necessary and appropriate” and in line with standard practice.
Hong resigned from RBS in November 2007, less than two months after joining as a managing director for risk management and head of fixed-income independent price verification at the bank’s US division, Greenwich Capital.
Hong submitted evidence against RBS in a UK legal action brought by shareholders who believed they were misled about the bank’s true financial position when they were tapped for 12 billion pounds of emergency cash in April 2008. The bank narrowly avoided insolvency after accepting a £46 billion government bailout six months later.
In his witness statement for that case, Hong said he had repeatedly warned managers the bank was misrepresenting the values of millions of dollars of asset-backed securities on its books prior to the subprime mortgage crisis.
In documents filed by lawyers acting for RBS in 2016, the bank rejected those allegations, and denied that it should have repriced assets more promptly or that it misled shareholders over its finances.
RBS settled the case in May 2017, prompting HSF to request destruction of documents circulated among the case participants, including witness statements, emails and transcripts of interviews given by executives to regulators that shed light on how RBS valued these assets. — Reuters
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