In an open letter to FSA chief executive Hector Sants, Labour MP McFall has attacked marketing literature which promoted the products as 100 per cent capital-secure. He highlighted products from NDFA and DRL. The letter says: “Customers must not lose their money if the information they were given was unclear or incomplete.”
Tory Shadow Treasury Financial Secretary Mark Hoban says: “I think there should be a review by the FSA. There has clearly been a problem with the way in which these products were sold.”
The FSA is looking into a number of issues on structured products arising from the Lehman Brothers collapse, including the naming of counterparties.
A spokesman for NDFA and DRL says: “McFall’s outburst constitutes an attack on the financial services industry at large and should give us all cause for concern. The FSA is already part of a Europe-wide project looking at the collapse of Lehman Brothers, to which both NDFA and DRL continue to contribute.”
Lowes Financial Management managing director Ian Lowes says: “Clearly, there is evidence that certain sellers of these contracts based in banks were selling these on an inapprop- riate basis with inappropriate explanation.”