Deminor launches collective action for German retail investors who invested in complex Lehman Brothers financial instruments sold by Targobank
Lehman Brothers Treasury Co. B.V ("LBT"), a subsidiary of Lehman Brothers Holdings Inc. ("LBHI"), had issued bonds and structured financial instruments which were sold and distributed in various European countries, including Germany, for an estimated total amount of USD 34 billion. These bonds and products were unconditionally and irrevocably guaranteed by LBHI. Following LBHI's financial troubles, both the parent company and its European subsidiary were granted protection against their creditors in September 2008. As a result, many retail clients who had purchased these Lehman Brothers bonds and structured financial instruments have suffered substantial losses on a pan-European scale.
Many of the financial instruments issued by Lehman Brothers were placed with retail investors through the networks of European retail banks. In Germany, Targobank (formerly known as Citibank Deutschland) was among the retail banks involved in the distribution of those financial instruments which mainly consisted in complex structured financial instruments with a derivative component. Those financial instruments were clearly not suited nor appropriate for retail clients.
In addition, those financial instruments represented an investment in a highly leveraged American investment bank with an increasing risk exposure to the deteriorating real estate market and asset backed securities. The financial instruments were sold and distributed to German retail clients without those clients being properly informed of the financial situation of their debtor. German retail clients were also not kept informed about the worsening risk profile of Lehman Brothers throughout 2007 and 2008.
Retail banks including Targobank who had sold and distributed Lehman Brothers financial instruments failed to comply with essential business conduct rules that apply to financial intermediaries. This led to their retail clients suffering substantial losses.
Deminor has already started federating retail clients of Targobank in order to help them defend their interests in connection with their investments in Lehman Brothers financial instruments. The objective of Deminor's collective action is to obtain compensation for the losses suffered by its clients, either through a court decision or a settlement. The first court actions are currently being prepared. Deminor and its clients will be assisted by the German law firm Dittke, Schweiger, Kehl & Partner.
German retail clients having invested in Lehman Brothers financial instruments can register on-line in order to participate in Deminor's action through Deminor's secured website www.mydeminor.com.
Deminor is a leading company specialising in investor protection services for European investors.
Throughout its local offices in various European countries, Deminor assists investors in protecting their rights and recovering their assets. Deminor also offers corporate governance and active engagement services to institutional investors. It manages a focused corporate governance fund (DAGF) on behalf of private and institutional investors. It offers corporate finance services to minority shareholders in non-listed companies. For more information about our services and pending cases, please visit our web site www.deminor.com.