US bars RBS in rare warning to banks

New York

THE US government has prohibited Royal Bank of Scotland Group Plc (RBS) from managing 401(k) plans and other retirement funds - a decision that has little impact on its business but that could send a signal to other banks and hedge funds with criminal records.

RBS was required to seek special permission from the Labor Department to continue managing certain classes of US retirement and pension money after the parent company pleaded guilty to foreign-exchange collusion and a unit admitted to interest-rate manipulation. The Labor Department rejected the bank's waiver request in an Oct 6 letter obtained by Bloomberg, standing by a preliminary rejection it issued last year.