Meteor settles first Lehman-backed product case

mimk.eu

Have a look at this: http://better-investments.blogspot.com

Posted by: lar

Likely to be the last

As I understand it, the claim was that the client would have cancelled the investment had they been made aware of the fact that the counterparty had been downgraded by one of the credit rating agencies. Given that after the minor downgrade, all the credit rating agencies still rated Lehmans as strong and capable of meeting its obligations I find this hard to believe. This is simply a case of a claimant looking for someone to blame for a failed investment and I very much doubt any similar claim would go in favour of the claimant if the case was heard by a court because the evidence from all the providers that have, in the past written to clients to advise them of a counterparty downgrade is that no one cancels their investment as a result. I think the client was lucky in this instance but I don’t expect further claims of this nature will be upheld. Ian Lowes StructuredProductReview.com

Posted by: Ian Lowes

honourable

Are they now going to do the honourable thing and compensate all identical claims or are they going to hid behind the behind closed door arrangement with the FOS?

Posted by: gordon

playing for time

Hundreds of others bought the same plan and similar plans. The FOS found that Meteor misrepresented the credit rating. Whether or not investors would have withdrawn when Lehman was downgraded is immaterial. It should have been the investors' choice. Had the JR been refused or lost, the consequences could have been more immediate and widespread. By withdrawing at this stage, Meteor gets more time and other savers have to stick with the FOS process which takes years.

Posted by: missold invesments

Message to Meteor

You now need to do the honourable thing and settle with all the victims of this sorry tale.

Posted by: Missold2

Self serving specualtion

It’s been very interesting to watch the endless steam of title tattle that has surrounded this case from people, and possibly advisers, who obviously have an exposure to Lehman’s via Meteor or another provider and are keen to explore any tenuous avenue they can to either exonerate themselves from blame or seek recompense. The facts I’ve ascertained from a distance are that the merits of this case hung on the detail contained in the product literature, whether there was a subsequent need to notify investors of the downgrade and then the leap that people would have definitely changed there minds had they been aware of the minor downgrading by one rating agency. From reading the details in the public domain it’s apparent that the regulators and ombudsman have both deemed the marketing literature to be compliant and indeed that it contained the appropriate caveats to cover a potential downgrade during the offer period. Furthermore, regulatory detail at the time stated that financial product providers could not place too much emphasis on the credit ratings of a singular agency and as such by communicating that one had been downgraded during the offer period would have flown in the face of the then regulatory practice. What this case does do is highlight the incompetence of the regulatory bodies that govern our industry, and in particular the lack of consistent delivery by FOS and the unfair weighting of balance in the consumers favour. The fact that Meteor had to threaten FOS with a Judicial Review to get them to retract their decision highlights the fact that there must be a significant number of brokers and firms who haven’t had the financial capacity to fight similarly flawed cases, who have had to simply accept the decision given by unqualified and incompetent adjudicators. Surely a radically altered ombudsman process is key to give everyone confidence, investor, provider and adviser alike. Finally, maybe the advisers relative to this case should stop looking for reasons to exonerate themselves of any blame and squarely accept that they should have provided their clients with a better quality of service, especially if the clients were so sensitive to such matters as ratings downgrades – after all there’s no-one better placed to understand their clients !!!

Posted by: Balanced commentator

Closing Ranks

I read with great interest the comments from Ian Lowes and from the outside looking in, it looks like the Structured Products Industry is closing ranks behind Meteor for one reason only. That being the last thing their Industry needs is another company going to the wall or any bad publiticy, so I would take little or no intrest in his comments. Then on to "balanced commentator " how on earth can he call himself that when he himself defends that industry with his, what ifs and lets again bash the IFAs again. To put a few things stright, the FSA and FOS did not at any stage say "the marketing literature to be compliant " and then goes on the bad mouth FSA and Fos and any other regulator he can. The bottom line is if there was no case to answer then, the simple question is , Why did Meteor pay out ? The answer is again is very simple to get to. They have gagged everyone that can make any negitive commeents so as to put only put their side of the story forward! So they win on that point at a cost of £20k plus. So lets watch this space as I am sure there will be other cases down the line were , I am sure , Meteor will use their checkbook again to control whats in the public domain.

Posted by: Real IFA

@Real IFA

If you are going to be critical of Ian Lowes, at least have the decency to post usiing your real name. A pseodoname being critical of another pseodoname is one thing, but if you are truly an IFA, then at least have the courage of your convictions and stand by your OWN name.

Posted by: Phil Castle

@ Phil Castle

I read with a little confusion as to why you need to know my name, I also note you have not commented on anything I have stated ? I wonder why that is as on previous posts you have quite a lot to say , almost defending Meteor in some cases. So pass comment on my post and I might disclose my name!

Posted by: Real IFA