SEC Grants Waiver to RBS from Being Ineligible Issuer under Rule 405, but Commissioner Stein Dissents

The SEC issued an Order granting a waiver to the Royal Bank of Scotland Group, Plc ("RBS") from being considered an ineligible issuer, pursuant to the definition of "ineligible issuer" in Securities Act Rule 405.

RBS submitted a letter on March 27, 2014 that constituted an application for the waiver, due to the entry on January 14, 2014, of a judgment against RBS Securities Japan Limited, which found RBS Japan guilty of felony wire fraud. Paragraph 2 of the definition of "ineligible issuer" in Rule 405 states that an issuer shall not be an ineligible issuer if the SEC determines, upon showing of good cause, that it is unnecessary under the circumstances for the issuer to be considered an ineligible issuer.

Commissioner Kara Stein issued a dissenting statement regarding the Order granting a waiver to RBS, stating that she fears "the Commission's action to waive our own automatic disqualification provisions arising from RBS's criminal misconduct may have enshrined a new policy – that some firms are just too big to bar."

See: SEC Order; Commissioner Stein's Statement.See also: Incoming Letter from RBS to SEC Requesting Waiver.