Non so blind as though who will not see

FSCS, obdurately rejects all arguments and claims that a repeated statement in NDFA's letters and its Brochure which unequivocally says that risk to loss of capital is limited by the possible fall of 50% of the FTSE100 and/or Eurostoxx50, over a 5-year period. NDFA said the same thing in media interviews. The investment by NDFA was with Lehmans, but was kept secret, because that was what Lehmans wanted, as it saw the impact of the Prospectus Directive as an obstacle to its marketing. The Directive is designed to let investors know who they are investing with, i.e the name, and who insures the investment, on a 'warts & all' basis. Lehmans insured itself, which FSA says must not happen. The risk warnings in compensated and rejected claims are identical. NDFA happily invested clients' money with Lehmans whilst the financial media and professional commentators and finacial indeces, were awash with reports and statistics making it as clear as day that Lehmans was in trouble, with its share price falling at an incredible rate. Lehmans were closing funds; and off-loading staff by the thousand. Who in their right mind would have invested in a US bank in early 2008, when the US financial industry was floundering amongst 'toxic' debt? Who would invest in a 5-year Plan in a bank which was collapsing like a pack of cards? I suggest that the answer is no-one, no-one who knew where their money was going that is. But FSCS claims that investors wer not entitled to know where their money was being placed. That's not the way I read the law- but perhaps FSCS knows better?I'm just a simple country boy, so what would I know?

Posted by: Pursuer

Badly handled by FSCS

FSCS made a poor judgement back in 2009/10 and has been trying to cover its tracks ever since. We now have some investors compensated, whilst others with exactly the same product have been denied compensation. Most don't even know they can claim, thanks to the FSCS announcement in October 2010 designed to discourage claims. Anyone with an interest in this, please visit the action group website missoldinvestments.co.uk

Posted by: Missold

Counsel's opinion

Well done Laura for ferreting out this most revealing information. What is needed now is for someone - a whistle-blower at FSCS, perhaps, dismayed at their employer's unjust treatment of ancient investors who have been cheated out of their ostensibly low-risk NDFA investment - to publish FSCS's counsel's opinion on which FSCS rely to justify their assertion that Capital-At-Risk investors received adequate and appropriate warnings in NDFA's literature of the possibility of counterparty failure. My suspicion is that this opinion will be flimsy indeed; how convenient it is, therefore, for FSCS and the IFAs who fund them that FSCS is exempt, under the Freedom of Information Act, from being obliged to disclose their reasoning if asked. How convenient for them, and how unfair to the investors they are paid to serve.

Posted by: Boyd Simpson

Saving a levy

Desperate to save another levy, someone at the FSCS came up with the counterparty idea, which their Counsel backed. So why are the FSCS compensating some "capital at risk" plans?. Someone did a sloppy job and the top brass do not have the honesty to put matters right.

Posted by: Oxo

Justice for the underdog

A big thankyou to Laura Miller for highlighting this information and in total contrast to the stance of the FSCS, who, for whatever flawed reasoning refuse to acknowledge the body of opinion, that all NDFA products were missold. For NDFA,s council to come rapidly to their decision is indicative of it,s obvious truth. The financial institutions involved were not sticking to the rules of the FSA and breached them on several levels, so it is incumbent on them to put things right and that means compensating the victims of these misold products.

Posted by: Maurice Vleugels

Investment Risks

If NDFA had explained the Risks in the way that Lehmans did in their EU required Prospectus, they would have been highly unlikely to have risked their money. The Issue is clearly not suitable for the 'private' investor as the product is extremely complex and lacks any guarantee as to Capital security. But, of course, investors did not read it, because they did not know that Lehmans was involved.

Posted by: Observer