Second investor group files claim against Fortis

Dutch shareholder association VEB is the second group to file a lawsuit against former Belgian-Dutch bank Fortis, now known as Ageas, for misleading investors in the beleaguered bank up to its collapse in 2008

VEB, the Dutch shareholder association that typically pursues claims against large institutions, filed a claim Wednesday 19 January against eight directors of former Dutch bank Fortis, five other banks, and the institution now known as Ageas.

It is the second claim to be brought against Fortis, accusing the bank of having misled investors about the extent of its liabilities in the run up to its collapse in 2008.

VEB accused Fortis of having issued misleading information on 24 September 2007, in which it estimated its exposure to the sub-prime mortgage market as Eur20m, when its actual impact was closer to Eur8bn.

Overall damage to investors is estimated by VEB to be Eur18bn.

The eight accused former Fortis employees, who appear in court in Amsterdam on 23 February 2011, include Maurice Lippens, Fortis co-founder and chair of its board until end September 2008, and Jean Paul Votron, previous chief executive of Fortis, who left in July 2008.

VEB said it chose the individuals due to the personal responsibility it believes they held for communication to investors about the bank’s financial health, which proved wrong.

VEB said it planned to pursue other Fortis employees, beyond its current claim.
Five other banks, aside from Ageas itself, are also accused. Merrill Lynch International, Fortis Bank SA / NV (now BNP Paribas Fortis), ING Bank, Rabobank and Fox-Pitt Kelton face court.

VEB’s claim differs from an earlier one brought by Stichting Investor Claims against Fortis Foundation in the Netherlands, a foundation created for institutional investors, those with more than 100,000 shares during the period in question, or custodians affected by the alleged misinformation.

Stichting is understood to be pursuing different individuals in its claim. It is also only pursing one of the five other banks allegedly involved – Merrill Lynch.

The foundation gained the backing of US securities law firms Grant & Eisenhofer and Barroway Topaz, with more than 140 institutional investors from Europe, the Americas (including the US) and Asia claiming they lost more than Eur2bn ($2.5bn) on their Fortis investments.

At the time, a further 2,000 individual investors expressed interest in joining the action.

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