Is regulation really worth it?

The recent judgement by the Financial Ombudsman against Meteor may have just looked like yet another ruling against another structured investments provider related to Lehman, but the potential consequences of the ruling could be far wider reaching.

Meteor issued product literature for a Lehman-backed plan in 2008 that correctly included the credit rating given to the bank then by a number of leading ratings agencies. At the time, Lehman was rated A+ by S&P or the equivalent agencies. However, by the time Meteor came to invest the assets in the plan, Lehman’s rating had changed. It had been marginally downgraded from A+ to A, although still carrying the same S&P risk assessment of default, and was part of a general downgrade of a section of US investment banks, including Morgan Stanley, carried out only by S&P at that time. Th...