Selling Lehman Brothers’ Certificates as safe old age investments will become costly to banks in Europe. Citibank and Hamburg Savings Bank pay Many people in Europe were sold junk bonds with a Lehman Brothers’ Certificate as a safe investment opportunity. The provisions paid to those banks that channeled it into the general public must have been quite high so that a lot of irresponsible advice was given. In Germany, the Hamburg Savings bank HASPA, who sold Lehmann Brothers certificates as secure investments to about 4000 consumers, especially elderly people, paid damages to exactly 1000 of them admitting bad advice. Many of the others have now filed law suits which are pending with the Hamburg courts. We will inform you. In Greece on 30 March 2009, the Minister of Development and the General Secretary of Consumer Affairs imposed a fine of 1.000.000,00 euros to Citibank for having violated the legal provisions of consumer protection in the banking sector. The provisions that have allegedly been violated are: art 9c (i.e. the respective art.5 of the Unfair Commercial Practices Directive) on "prohibition of unfair commercial practices", art. 9d (i.e. the respective art.6 of the UCPD) on "misleading actions' and art.9e (the respective art.6 of the UCPD) on "misleading omission' of Law 2251/1994, as modified by law 3587.2007 on consumer protection. According to the press release, 85 branches of Citibank sold, in the Greek market, complex bank products, i.e. structured bonds, which were being marketed by CITIBANK as products of "100% guaranteed-protected capital", issued by the today bankrupt American bank Lehman Brothers and of its affiliates. These products were sold during the period 2004-2008 through the retail banking net, targeting consumers who were simple depositors and not via the private banking net, which is targeted mainly to experienced and high-risk investors. All consumers were being assured that "it was a secured transaction of potentially high returns, but of zero investment risk as far as the initial capital was concerned, and that the investment was under the protection, not only Lehman Brothers itself, but also under the additional protection provided by the Investment Services Guarantee System of the Financial Services Authority in the UK, which provided for a 100% indenisation of the investor regarding his/her capital". ID: 42669 Author(s): iff Publication date: 08/04/09

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Created: 08/04/09. Last changed: 08/04/09.
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