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The Financial Ombudsman (FOS) has put on hold all complaints related to Lehman-backed products sold by Meteor Asset Management while it investigates "a greater issue" around the firm and claims against it.
The FOS has been investigating complaints from some Prima Growth Plan 7 investors since 2009.
They claim Meteor's failure to keep them informed of the downgrade of the Plan's counterparty, Lehman Brothers, caused them a loss beyond the fall in global financial markets in 2008.
However the FOS has written to one investor who had over £100,000 in the Prima Growth Plan saying all complaints related the Plans and Meteor are being delayed because they form part of a "greater issue" the Ombudsman is investigating.
The letter dated 21 June 2011 states: "As your complaint forms part of a greater issue there is an ongoing delay in dealing with this matter."
A spokesperson for the FOS said the delay relates to a "number of cases with similar underlying issues related to an individual firm".
"The FOS must be consistent in its approach. The cases are being looked into," the spokesperson said.
The decision to put complaints on hold pending further investigation into Meteor comes after the service refusedl to fight a judicial review brought by Meteor into a ruling it made against the firm.
Meteor repaid a couple invested in its Prima Growth Plan 7 £20,000 in an out-of-court ex gratia payment last month, after the FOS ruled Meteor did not treat them fairly when it failed to inform them Lehman Brothers had been downgraded by Standard & Poor's from A+ to A.
Meteor disputed the claim and took the FOS to the High Court for a judicial review into its decision.
The case was withdrawn with the consent of both parties after FOS said it would not contest the review. Meteor then agreed to pay the couple in full on condition they did not go public with details of the matter.
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| Comment | FOS delays Lehman-linked Meteor claims due to wider probe |
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Disturbing
The shifting of ground on this matter,not least because of the potential impact on other providers of Lehman backed products is disturbing as are cases where 'gagging' orders appear to have been agreed. Why was Lehmans involvement kept secret? Beyond reasonable doubt had its frantic cash calls become public knowledge it would have adversely affected its, then, already unstable situation. How could it be defensible for investors to have been kept in the dark? How could any reasonable product marketer place client's money in an obviously shaky bank? In this age of professed transparency how can gagging orders be tolerated? Given that any judge would, beyond reasonable doubt, have ruled in favour of investors having been misled and/or have suffered a breach of common law duty of care, are there other influences at work behind the scenes working out the potential costs? But then I'm jsut a simple country boy, what would I know?
Posted by: Observer
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Why did Meteor proceed with Lehman?
The Meteor 7 brochure didn't mention Lehman, it simply said that the counterparty would have a certain minimum credit rating. So why did Meteor proceed with buying Lehman bonds 2 weeks after the downgrade when they could have procured an alternative counterparty that met the product spec? Similar question for "Meteor Prima Plus 2" and "Meteor Prima Plus Protected" plans. It would be good to get the FOS perspective on what happened with the JR. The IFA and complainant concerned are keeping quiet (apparently under agreement) and the only party to speak on the matter is Meteor itself. The proposed JR would have contested one FOS ruling relating to one couple's complaint, but might have had wider implications. Could it be that the couple withdrew their complaint and so there was no case to contest? Who knows! Let's see how the other FOS cases in the pipeline get on...
Posted by: Missold Investments