...plan documents make clear in both the investment risks and terms and conditions sections that payments are based upon the ability of the issuer of the securities within the plan to meet its obligations, and point out that the issuer might fail to meet its obligations.
Similar Lehman-backed structured products were sold by financial companies across the world and suffered an identical fate. In China, investors took to the streets to protest about their losses. But there, financial journalist Sophia Morrell says, the authorities have acted.
In Hong Kong recently two regulatory authorities decreed that 16 banks would have to buy products back from investors that they had been sold and there have been quite a few buy back programmes across Asia. In Switzerland as well Credit Suisse has made voluntary compensation offers to just shy of around 4,000 investors to buy back Lehman Brothers issued products which were capital guaranteed. There is an eligibility criteria associated with that. What's been interesting with almost all the banks that have bought back products in Switzerland or in Asia or anywhere else, as far as I'm aware, no one has admitted liability, largely they're being described as gestures of goodwill.
Gestures of goodwill that have yet to be replicated on a widespread scale either in the United States or here in the UK. We have learnt that in some cases Lloyds Banking Group has repaid customers who bought such products through its advisors in the UK. How many customers, we do not know, because Lloyds was unable to tell us and it would not explain why it's insisted on them signing confidentiality agreements in order to get their money back. All the company would say is that it deals with all customer complaints on "an individual basis" and it's confident that its advisors followed the appropriate sales practices and all the risks were clearly set out. About a third of these collapsed Lehman-backed structured investment schemes were sold though not by banks but by independent financial advisors.