Canada's RBC withdrew from Alibaba IPO after employee's inadvertent comment
Royal Bank of Canada (RY.TO) said on Tuesday it pulled out of and forfeited fees in the Alibaba (BABA.N) initial public offering, after an employee commented on the deal during the quiet period before the world's largest IPO.
"An employee unrelated to the Alibaba IPO process inadvertently made a comment about the transaction on an industry webinar during the period leading up to the offering," the bank said in an emailed statement on Tuesday. "Consistent with our core values of putting our clients first and out of an abundance of caution, we voluntarily chose to withdraw from the IPO transaction."
"The comment did not impact the offering, and our decision to withdraw in no way reflects on either Alibaba or the IPO transaction," the bank said, without disclosing the comment.
The Wall Street Journal had earlier on Tuesday reported that the comment had come from John Taft, head of RBC Wealth Management in the United States, who spoke about the deal on a conference call with think tank The Institute for the Fiduciary Standard on Sept. 8.
RBC, Canada's largest bank, was one of 35 banks involved in the IPO, however it was not one of the lead underwriters on the deal and only set to pocket a relatively small portion of the over $300 million in fees.
Regulators and courts have been coming down hard on banks for running afoul of disclosure obligations.
The move to pull out of the IPO comes just weeks after a Delaware judge said RBC had to pay $75.8 million in damages to former shareholders of Rural/Metro because it failed to disclose conflicts of interest that tainted the $438 million buyout of the ambulance operator.