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FSA widens Lehman investigation

Simon Gompertz
Working Lunch

Bill Moist
Bill Moist lost 200,000 as a result of trusting a 'secure' deal.

Hopes were raised today for nearly 6,000 UK investors who have lost their life savings, after the Financial Services Authority widened its investigation into the affair.

The savings plans investors were sold featured a full or partial guarantee, but it turned out they had been backed by the doomed American bank, Lehman Brothers.

The FSA has told the Financial Ombudsman Service to suspend its work on complaints about the plans while it considers the issue under its "wider implications" process.

Wider implications

"This is an issue because more people have been affected than have complained to the Ombudsman," explained FSA spokesman, Adam Richards-Gray.

Bill Moist from Chester-le-Street is one of the many victims who approached BBC2's Working Lunch programme to ask for help.

It's a positive step and it shows they are taking it seriously.
Bill Moist

After selling his business, he put £200,000 into a plan packaged by a UK firm, NDFA, and sold to him by his bank, Lloyds TSB.

But after Lehmans collapsed last year it appeared that all the money could have been lost.

On the FSA's move, Bill said, "It's a positive step and it shows they are taking it seriously."

More complaints

Complaints have come in about other plan managers, including Defined Returns Limited, and financial advisers, one of them a leading firm, AWD Chase de Vere.

Some of the victims were told that their investments were "capital secure", others that they were "fully protected" or even "guaranteed".

Investigators are looking at the sales process and marketing of the Lehman-affected products.

Among the nest eggs affected are Individual Savings Accounts, redundancy payments and pension lump sums.

Scandalous

John Mcfall
John McFall called for an FSA investigation in March.

The chairman of the Treasury Select Committee, John McFall was horrified when he was shown some of the cases which had reached the BBC, calling the sales "scandalous".

The FSA and the Ombudsman have agreed that the regulatory options available to the FSA would be one way of reducing "consumer detriment".

The options include fining companies and making them offer redress or compensation to customers, although the FSA stressed that it will be at least three months before it reports any findings.

"Rather than looking at the issue on a case by case complaints basis, we believe that looking across the issue would be one way of finding a more wide-ranging solution," said Adam Richards-Gray.



SEE ALSO
MP calls for FSA investment probe
04 Mar 09 |  Working Lunch
A 'secure' investment is not 'guaranteed'
19 Feb 09 |  Working Lunch
Collapse of Lehman Brothers
15 Sep 08 |  Business
Shareholder sues Lehman Brothers
20 Jun 08 |  Business


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