Ex-RBS Trader Loses Suit Over Movie Scheme That Cost His Job

(Bloomberg) -- A former Royal Bank of Scotland Group Plc trader lost his multi-million pound lawsuit over a fraudulent investment scheme that landed him in court and cost him a high-paid banking job.

Vincent Walsh, a former managing director at RBS, sued Greystone Financial Services Ltd. over his backing of several films over three years, saying Greystone advised him to invest and submitted false documentation to tax authorities in his name. Walsh was indicted because of the investment and lost his job, though he was later cleared of the charges.

Walsh sought at least 5.7 million pounds ($7.2 million), which includes his investments of about 1.1 million pounds and lost earnings he would have made if he had been able to keep working as a senior banker until retirement. He said it cost him 812,000 pounds to defend himself in the criminal case, according to the judgment.

“None of Mr. Walsh's claims succeed,” Judge Christopher Nugee said in his ruling Thursday, where he found Walsh was willing to go along with false information being submitted to the U.K. tax authority. “I am well aware that the consequences for him will be disastrous.”

It's unsurprising that Walsh blames a Greystone director for “everything,” the judge ruled, but he didn't find the director “guilty of deceit or deliberate concealment.”

The lawsuit is part of the fallout from an investing boom that swept through the U.K. after then-Chancellor of the Exchequer Gordon Brown unveiled expanded film credits in his 1997 budget. The government, seeing that the credit was being used mostly to lower tax bills, tightened the rules in 2007.

Walsh and his attorney didn't immediately respond to calls seeking comment. The ex-trader, who was dismissed for gross misconduct, was found not guilty of tax fraud by a London jury in 2015.

Walsh used to be “a successful and very highly paid equities trader,” the judge said in his ruling, and had “surplus cash to invest” because his only large outgoings were for mortgage interest and spending on holidays.

He put more than 1 million pounds into a series of film schemes designed to enable participants to cut their income tax. At first the plans generated “a number of substantial payments” from the U.K. tax authority, but in the end they were “nothing short of catastrophic for him,” the judge said.

The case is Walsh v Greystone Financial Services Ltd., HC-2016-001362, U.K. High Court of Justice, Chancery Division.

To contact the reporter on this story: Kaye Wiggins in London at kwiggins4@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser

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