Judge finds that RBC had conflict on interest in Ambulance deal


A judge has ruled that a conflict of interests caused bankers at RBC Capital Markets to persuade Rural/Metro Corp. to accept a low offer of $438M from Warburg Pincus when the latter bought the national ambulance service in 2011.

Judge Travis Laster found that the Royal Bank of Canada (RY) division misled Rural/Metro directors about the valuation of the company in order for the sale to be completed quickly. RBS also failed to disclose that it was looking to help Warburg finance the acquisition.

Laster agreed with Rural/Metro's former investors that they should have received more money, although he has yet to decide how much RBC should pay in compensation. The ex-shareholders want $172M.

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Comments (8)
  • Sylvia100
    , contributor
    Comment (1) | Send Message
     
    I am reacting to this by closing my accounts with this bank. We must stand against corrupt bankers.
    9 Mar 2014, 03:45 AM Reply Like
  • chopchop0
    , contributor
    Comments (5218) | Send Message
     
    Stick to credit unions. The megabanks are all garbage.
    9 Mar 2014, 05:31 AM Reply Like
  • Bossco
    , contributor
    Comments (375) | Send Message
     
    OH puhleeze. Close your accounts...LOL. Why are you reading Seeking Alpha if this is your level of financial sophistication? RBC Capital Markets is an excellent entity engaged well beyond capabilities of any credit union.
    9 Mar 2014, 07:53 PM Reply Like
  • Bossco
    , contributor
    Comments (375) | Send Message
     
    OH puhleeze. Close your accounts...LOL. Why are you reading Seeking Alpha if this is your level of financial sophistication? RBC Capital Markets is an excellent entity engaged well beyond capabilities of any credit union.
    9 Mar 2014, 07:53 PM Reply Like
  • Bossco
    , contributor
    Comments (375) | Send Message
     
    OH puhleeze. Close your accounts...LOL. Why are you reading Seeking Alpha if this is your level of financial sophistication? RBC Capital Markets is an excellent entity engaged well beyond capabilities of any credit union.
    9 Mar 2014, 07:53 PM Reply Like
  • Bossco
    , contributor
    Comments (375) | Send Message
     
    OH puhleeze. Close your accounts...LOL. Why are you reading Seeking Alpha if this is your level of financial sophistication? RBC Capital Markets is an excellent entity engaged well beyond capabilities of any credit union.
    9 Mar 2014, 07:53 PM Reply Like
  • nguyenvanphuoc
    , contributor
    Comments (388) | Send Message
     
    "RBS also failed to disclose that it was looking to help Warburg finance the acquisition."

     

    I'm guessing that was supposed to say "RBC"?
    9 Mar 2014, 08:10 PM Reply Like
  • Dr Joseph Haluska
    , contributor
    Comments (499) | Send Message
     
    I would be interested to know if the 2 RBC divisions that dealt with Rural Metro and Warburg were isolated from each other during this deal.
    I would also like to know if an investment bank can buy a new reputation for 172M, or if they can just keep getting new business after doing business like this. I would think a very public explanation is in order.
    9 Mar 2014, 08:42 PM Reply Like
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