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

MP calls for FSA investment probe

MP John McFall is asking the Financial Services Authority (FSA) to look into claims by Working Lunch viewers that they were missold 'secure' investments.

Mr McFall, Chairman of the House of Commons Treasury Committee, told Working Lunch on Wednesday that he will write to the FSA about a Working Lunch investigation into the selling of 'protected' investments. Some of these schemes turned out to be backed by collapsed US bank Lehman Brothers but were sold as '100% secure'. Viewers have lost hundreds of thousands of pounds as a result.

The selling of these investments by banks and financial advisers was branded 'scandalous' by Mr McFall. 'What I'll do today as a result of this is write to the FSA and bring this to their attention,' he told the programme, adding: 'I think people have been misled and I would like the FSA to look into it urgently.'

Story from BBC