2 State Pension Funds Sue RBS Over $123M Loss

Court records indicate RBS has not yet filed a response to the lawsuit.

The Mississippi Public Employees' Retirement System referred comment to the state attorney general's office, which acknowledged the litigation but refused to discuss the case. Mississippi PERS claimed it lost more than $50 million.

The Massachusetts pension system said it lost $73 million, though an attorney did not return a call seeking comment Friday.

The lawsuit alleges RBS misled prospective investors about its exposure to credit markets when it made the public offering in June 2007.

RBS offered to sell 38 million shares of stock at $25 per share for proceeds of approximately $950 million. The suit says a prospectus incorporated financial results for 2004 through 2006 and outlooks by then-CEO Fred Goodwin that were confident in the bank's growth potential.

"We are expanding our reach and making progress in all major economies we operate in. We believe that the strategic choices we have made, together with the prospects for continued growth in the world economy, position us well for 2007," Goodwin wrote in a chief executive review letter, according to the suit.