[Photo:  Kleczu / Wikimedia Commons]

Royal Bank of Scotland agreed to pay £800 million ($1 billion) in an out-of-court settlement over allegations it misled shareholders during a $15 billion fundraising at the height of the financial crisis. Investors lost around 80% of their money when RBS collapsed just months after the 2008 cash call and was rescued in a more than 45 billion pound government bailout.

The settlement, for about 20% of the original demand, was struck with 3 parties of institutional investors, who were among 5 separate claimant groups suing RBS for more than $5 billion for alleged omissions and misstatements. RBC is now trying to reach an agreement with the 2 other groups.

"It would have been nicer to get more. But there is a realization that getting something now has value," one said RBoS Shareholder Action Group, the largest of the claimant groups representing 27,000 retail investors.

John Greenwood - a 74-year-old former civil engineer who says he lost 80% of a £300,000 pound nest egg - fears that other small investors in the group may baulk at the costs of proceeding to lengthy trials and possible appeals on their own."RBS has played it quite well," he told Reuters by telephone. "They have split the opposition." He says that while his own retirement dream of buying a narrowboat and drifting down England's canals with his wife was ended by the RBS investment, many others "have passed away while this has been going on."