A class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of The Royal Bank of Scotland Group plc ("RBS" or the "Company") (NYSE:RBS) American Depositary Shares ("ADSs") pursuant and/or traceable to a false and misleading registration statement and prospectus (collectively, the "Registration Statement") issued in connection with the Company's June 2007 initial public offering of 38 million Non-cumulative Dollar Preference Shares, Series S (the "Offering").

The complaint charges RBS and certain of its officers and directors with violations of the Securities Act of 1933. RBS is a holding company of The Royal Bank of Scotland plc and National Westminster Bank plc, which are United Kingdom-based clearing banks.

The complaint alleges that defendants consummated RBS's Offering pursuant to the false and misleading Registration Statement, selling 38 million Non-cumulative Dollar Preference Shares, Series S ("Series S ADSs") at $25 per share, for proceeds of approximately $950 million. The Registration Statement incorporated RBS's financial results for 2004, 2005 and 2006. RBS ultimately announced huge multi-billion pound impairment charges associated with its exposure to debt securities, including mortgage-related securities tied to the U.S. real estate markets, causing the price of RBS's Series S ADSs issued in the Offering to decline. The ADSs now trade at approximately $10 per share.

According to the complaint, the true facts that were omitted from the Registration Statement were: (a) defendants' portfolio of debt securities was impaired to a much larger extent than the Company had disclosed; (b) defendants failed to properly record losses for impaired assets; (c) the Company's internal controls were inadequate to prevent the Company from improperly reporting its debt securities; (d) the Company's participation in the consortium which acquired ABN AMRO would have disastrous results on the Company's capital position and overall operations; and (e) the Company's capital base was not adequate enough to withstand the significant deterioration in the subprime market and, as a result, RBS would be forced to raise significant amounts of additional capital.

Plaintiff seeks to recover damages on behalf of all purchasers of RBS Series S ADSs pursuant and/or traceable to the Registration Statement for the Offering (the "Class"). The plaintiff is represented by Coughlin Stoia, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.