UK's RBS cash call claims seen near 4 bln pounds

By Kirstin Ridley and Steve Slater

LONDON, May 15 (Reuters) - Hundreds more investors havejumped aboard an unprecedented group action against Royal Bankof Scotland, alleging they were misled during a recordrescue cash call in 2008, and are claiming damages of roughly 4billion pounds ($6.7 billion).

As Thursday's deadline loomed for lawyers to coralclaimants, four groups issued proceedings on behalf of both topinstitutions and thousands of small investors in the firstAmerican-style class action set to hit English courts.

Fred Goodwin, the former boss of now state-backed RBS, askedshareholders to stump up 12 billion pounds at the height of thecredit crisis to shore up the bank's capital position, whichfell dangerously low after it paid top dollar for parts of Dutchpeer ABN Amro and lost billions on U.S. credit market assets.

Under Goodwin, dubbed "Fred the Shred", RBS staged ameteoric rise to global prominence, expanding so aggressivelyinto wholesale banking that its near-failure at the height ofthe credit crisis threatened to fell the UK financial system.Shareholders lost around 80 percent of their investments.

"This is a novel and unique case - there has never beenanything quite like it in the English courts before," said CliveZietman, a partner at law firm Stewarts Law, which isrepresenting 313 UK and international institutional clients,including local authorities, pension funds and asset managers.

"The fact that thousands of claimants and hundreds ofsubstantial institutions are making a huge claim makes it theclosest thing we've ever had in this country to anAmerican-style class action," he said.

Goodwin, alongside former chairman Tom McKillop and twoother former executives, is likely to be called as key witnessesif the case goes to trial - although sources said that may nothappen until early 2016.

But any appearance will be eagerly anticipated. Stripped ofhis knighthood in 2012, Goodwin has kept a low profile since hisfall from grace.

NEW HELM

RBS is now being run by a new team and is 80 percent ownedby the government, which was forced to step in with a 45 billionpound taxpayer funded bailout.

Investors claim RBS failed to disclose how bad its capitalposition was, that its risk management and controls were"fundamentally flawed" and that the integration of ABN Amrobusiness was not going well.

The claims are likely to total between 3.5 billion and 5billion, according to estimates from several people involved.

Stewarts Law investors are claiming more than 1.3 billionpounds, while law firm Quinn Emanuel has filed claims on behalfof five of the biggest institutions - including top 10 investorsat the time Legal & General, Standard Life andPrudential - which are likely to total about 1.2 billionpounds.

The main uncertainty about the size of claims RBS faces dogsthe RBoS Action Group, which is the biggest group of smallshareholders. The group said it has signed up about 13,500retail investors and about 100 institutions, and has had a surgein claims in recent weeks as the deadline has approached.

It has put its potential claims at as much as 4 billionpounds, although that number has been questioned after claimswere put at just 392 million pounds by the group's lawyers inJanuary. One month later, a judge in the case criticised thegroup's lawyers over their "substantially fluctuating figures".

A fourth group represented by law firm Leon Kaye represents4,200 retail investors with claims worth 22 million pounds.

It remains unclear whether there will be an out of courtsettlement. But in the meantime, RBS dismisses allegations itsformer directors misled investors or acted illegally.

"These things will be set out in court rather than in anearly settlement, we have a good defence on this," RBS ChiefExecutive Ross McEwan said this month.

A London court hearing around early July will set out theroadmap for the rest of the case, including timing of the trial.

Thursday marked the sixth anniversary of the start oftrading in the shares sold in the rights issue, and RBS'slawyers have said they will not opposed claims up to this date.

($1 = 0.5960 British Pounds) (Editing by David Evans)