The Financial Services Authority (FSA) is looking into the UK’s structured products market after the collapse of Lehman Brothers left thousands of savers out of pocket.
It is estimated some £200 million in savings was lost by investors who put their cash into structured products that purportedly guaranteed their capital when the bank collapsed last year.
MP Edward Vaizey, shadow minister for culture, called for an investigation from FSA this week.
His Early Day Motion states: “This House notes that more than 6,000 people invested more than £200 million of their savings in structured products backed by Lehman Brothers; further notes that such products were marketed as 100 per cent secure by the companies that sold them.”
The FSA stepped in today to investigate the scandal and see if future problems could be avoided.
It has the power to fine providers and seek redress for customers.
Structured products are often linked to share or stock market index performance and the capital may be guaranteed.
But investors may miss the small print, where there is a clause that admits a risk the issuer may fail to meet its obligations.
Twitter: My Finances
Join the conversation at #news_myfinances