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European legal action launched on Lehmans-backed structured products

Investor rights group Deminor is launching legal action on behalf of people who have lost money through Lehman Brothers-backed structured products.

Deminor is claiming the Dutch-registered division of Lehmans issued bonds and structured products worth $34bn in Europe that were “unconditionally and irrevocably guaranteed” by the parent bank.

As a result of the Lehmans’ bankruptcy and the sale of business divisions, a large number of investors across Europe now face substantial losses on these products, according to Deminor.

Deminor says the products were sold in European retail banks without mention of exposure to a “highly leveraged American bank” and claims the banks were “inexact” in describing the risk profile of the products and how it changed over time, which it claims goes against MiFID rules.

It is taking action against the banks but also against financial intermediaries that distributed the products on the European market in order to recover investors’ losses.

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