Lehman Brothers Investigation Backed By UK MPs

MPs back investigation into UK Lehman Brothers victims

MPs are rallying round to support the 6,000 UK investors who lost savings when Lehman Brothers collapsed. It is estimated some £200 million is savings was lost be investors who put their cash into structured products that guaranteed their capital.

The average age of the investors is 65. However, small print of the investments hid the fact that "there is a risk that the issuer may fail to meet its obligations". When Lehman Brothers went under all the investors' cash was lost.

The scandal has now reached the attention of MPs – hoping pressure on the government may resolve the problem. An Early Day Motion issued this week by MP Edward Vaizey, shadow minister for culture, calls for an investigation from the Financial Services Authority (FSA).

It states: "This House notes that more than 6,000 people invested more than £200 million of their savings in structured products backed by Lehman Brothers; further notes that such products were marketed as 100 per cent secure by the companies that sold them." Some investors were also unaware that their products were even backed by Lehman Brothers. The victims may be able to receive money by complaining they were missold or not warned of risks to the firms that sold the investments or the Financial Ombudsman Service (FOS).

Currently the FOS is looking at a handful of enquiries, with cases in very early stages.

Courtesy of MyFinances.com

Corrupt Equity Release Scheme - Landisbanki Aftermath

Deadline Landsbanki.

Victims of a “corrupt” equity release scheme run by the failed Icelandic bank Landsbanki face a strict deadline in a battle to save their homes. The failure of the scheme – a form of financial package already outlawed in the UK – has meant householders have racked up millions of Euros in debt after investments failed to perform and pay the interest on their loans as promised.

Now liquidators of the wholly-owned subsidiary Landsbanki Luxembourg, Franz Prost Deloitte SA, are forging ahead with plans to sell off any remaining assets from the deadline day – April 12th. However, Spanish lawyers acting for the Landsbanki Victims Action Group will use a legal team in Luxembourg to register claims against members’ property – making it clear that court action is underway in Spain for an alleged fraud and no action can be taken against the individuals. The action group believes Deloitte will not want a drawn out and expensive legal battle that threatens to dilute the remaining value of Landsbanki assets.

CRIME

And top lawyers Martinez-Echevarria Perez Ferrero – already acting for over 100 members of the action group – have launched a criminal case in Spain alleging the bank and financial advisors fraudulently mis-sold the scheme. The legal team is confident of winning an injunction under strict consumer protection laws to ‘ring fence’ property and have contracts with Landsbanki declared null and void.

Under the Landsbanki deal, asset-rich Europeans, many of them pensioners, were able to raise a loan against the value of their homes. They were able to take a quarter of the loan in cash and the remainder was invested in the bank’s Luxembourg subsidiary Lex Life. Sadly, it has become a poisoned chalice. Promised a loan for life with the investment paying interest on the loan and even providing an income, victims have seen the value of their holding shrink and debts rise.

This week Round Town News was told by action group coordinators John Hemus and Mike McInnes it was vital that anyone of the estimated 600 victims in Spain urgently get in contact and join the fight to save their homes. “This is the last chance saloon,” said John. “Anyone with any doubts at all must realise that unless they get in touch with us urgently, it will be too late.

BANK

“The bank has not told people of the deadline because they are trying to sell off remaining assets. “It is a matter of urgency – people must either decide to leave everything to chance – which means they have no chance at all – or get in touch.” Mike said there were Landsbanki victims in France who were also taking legal action against Landsbanki and financial advisors for fraud – although the case was presented differently because of the country’s different laws. “French lawyers are not only going after the bank to have the contracts declared null and void but are also seeking compensation for loss of earnings and the stress the whole thing has caused,” he said.

“I am following this up to see if we can do the same thing here in Spain.” Mike said the April 12th deadline was never communicated to the legal team in Spain and was only recently discovered. “It is quite serious because if claims are not submitted by that date, the liquidators will start saying certain assets were not disputed – those assets will be put in the pot for creditors.”

DIRE

“It means the consequences could be quite dire for victims – but everyone signing up will be taken care of by our lawyers. If there is anyone sitting on the fence, they should take action now.” He accused Landsbanki of being “very selective” in the information it communicated to clients and yet the bank and the administrations had been informed of legal action in Spain and France.

“It was not in the bank’s interests to impart this information to potential purchasers of the assets – obviously this will now change.” Mike alleged victims were dealing with “crooks and thieves” but now the reputation of Luxembourg’s banking system and its apparent lack of regulation was no on the line.

Written by Jack Troughton

Thursday, 26 March 2009

Courtesy of Round Town News