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Lehman investors fear redress setback

Lehman Brothers’ action group Spirit is concerned that investors will be put to the back of the compensation queue after structured product providers NDFA and DRL were declared in default and placed in administration.

Action group founder Peter Howard has pledged to continue lobbying the Government and opposition MPs if investors in structured product providers NDFA and DRL are not compensated within an acceptable timeframe.

He says that while in theory it is not right for some invest- ors to jump the queue in terms of the Financial Services Compensation Scheme, investors who lost money in Lehman-backed products have already waited a year just to get to this stage.

He says: “The worry is we go to the bottom of the pile. Within the next week, we should all get letters to say what is happening and that will be the indicator. If there is some indication on time, we will see whether this is acceptable. If it is not, I will be ringing up Conservative MP Ed Vaizey again because we have been hanging around for a year.”

FSCS limits for investment change from January 1, with cover increasing from £48,000 to £50,000.

Howard has £50,000 in a NDFA plan backed by Lehman Brothers and would like to be compensated once the changes have been implemented to avoid a £2,000 shortfall.

However, he says a speedier return would help other investors who have been starved of income from plans since the collapse of Lehman Brothers.

He says: “I think it would be nice for everyone to have their money back before Christmas.”


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  1. Sorry to post ANON, I don’t like doing it. My concern is that as Lehman’s is the counterparty, this as I understand it, is not covered by the FSCS, so Mr Howard is unlikely to get any money paid by the FSCS. If he complains that his adviser failed to inform him of the risks, then the FSA’s own “Factsheet” dated Feb 2004 which was a consumer facing Documents entitled “Capital at risk products”, did not even list counterparty risk as one of the “main risks”. It is impossible to explain every risk to someone, so if the FOS upholds a complaint against Mr Howard’s adviser, this would be morally indefensible as even the FSA did not highlight this as a risk to people dealing direct without an adviser. This should be used as an example case without involving the FOS and should proceed to the courts so that the court can decide on liability and NOT the F-pack who were complicit in these cases.

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