Travers Smith to lead review into NatWest’s handling of Nigel Farage account closure

Law firm will examine decision to shut former MEP’s Coutts private bank account and potential GDPR breaches

Coutts considered Brexit-backer Nigel Farage at higher risk of bribery and corruption Shutterstock

Travers Smith has been appointed by NatWest Group to review account closure processes at its private bank Coutts after it shut the account of former MEP Nigel Farage, in part because of his political views.

The decision sparked a crisis that wiped £1bn off NatWest’s share price and led to the resignations of NatWest CEO Dame Alison Rose and Coutts boss Peter Flavel.

The review will be carried out in two phases, the first looking at account closure policies and how they were applied in the case of Farage, as well as how details of Farage’s banking arrangements ended up being reported by the BBC. The second will review a sample of other Coutts’ account closures over the preceding 24 months.

The instruction is a major coup for London independent Travers Smith, which is best known for its private equity practice, but has been building up its disputes and investigations teams in recent years.

Lawyers at Travers Smith will review how Farage’s account was identified for closure and the steps that led to his case being considered by the bank’s reputational risk committee, as well as reviewing how any decisions were made and whether those decisions were made in accordance with relevant bank policies and processes. Travers Smith will also look at how the decision was communicated to Farage and review the roles of senior executives at NatWest and Coutts in the decision to close his account.

Coutts, which counted the late Queen Elizabeth among its clients, only accepts customers with at least £3m in savings or £1m in borrowings or investments. Farage did not dispute that he failed to meet this threshold, but claimed that the bank had not been bothered about that for the previous decade. 

An internal memo said that continuing to provide banking services to Farage was not compatible with Coutts given his political views were at odds with the private bank’s position as an inclusive organisation. It also classified Farage as a politically exposed person – somebody who is at higher risk of bribery and corruption.

The first phase of the review will also examine the circumstances around the BBC story and whether any confidential customer information was leaked or breach of GDPR occurred, as well as review actions taken by the bank in response to any potential breach.

The second phase of the review will then look at how policies have been applied to other account closures, including those designated as political exposed persons. The first phase of the review is expected to be completed within four to six weeks, with the second phase expected to be completed by the end of October. 

In March, a Travers Smith team led by finance partner Charles Bischoff advised NatWest on a £95m debt facility provided to motor finance fintech Carmoola. 

Recent high-profile investigations work secured by the firm includes advising listed healthcare software developer EMIS Group in relation to the Competition and Markets Authority’s investigation into its proposed £1.24bn acquisition by US multinational UnitedHealth Group. 

Key figures in its cross departmental investigations team include Tim Lewis, head of financial services and markets, Doug Bryden, head of risk and operational regulatory, and Rob Fell, head of dispute resolution.

This week, Travers Smith underlined its “resilience” after maintaining its profit per equity partner (PEP) at £1.1m against a 1% increase in turnover to £197.5m for its financial year ending 30 June.

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