This is my translation of a Dutch-language article which appeared today in Belgian daily De Tijd. Let’s see if this news is picked up in the U.S.
Citibank Belgium never should have recommended the controversial Lehman Brothers investments to its customers. So states the writ of the Brussels public prosecutor on the case.
The collapse of Lehman Brothers lost more than 4,000 Citibank customers, 128 million euros. The public prosecutor accuses Citibank of a “conflict of interest". "The bank had apparently instructed a higher-level committee to work toward the wholesale transfer of ordinary savings account money to Lehman Brothers."
According to the prosecutor, this is the reason Citibank used "misleading" advertising and many other “tricks” to systematically sway customers to exchange their savings for Lehman products, concealing the bank’s true risks, returns and capital guarantees. The court now demands that Citibank pay back the full 128 million euros, plus interest and fees.
MP Hans Bonte (SP.A) is very pleased that the Brussels public prosecutor also came to the conclusion that Citibank sold investments of the now bankrupt Lehman Brothers in an "unfair and irresponsible manner.” "That is what we have charged for months and years," said the Socialist opposition figure. The most important thing for him now is that all victims be identified and if possible obtain compensation.
Better would be if Citibank itself took on its responsibility and reimbursed customers who lost their savings, Bonte said in reaction to the news.
He believes that the Government should draw lessons from the case. According to Bonte, it is clear that something wrong with the supervision of the banks by the Banking, Finance and Insurance Commission (CBFA). Immediately he called for legislation on the appeals claim, so that a lawsuit could be filed in this case for the 4,000 victims.
Commerce Minister Vincent Van Quickenborne (Open VLD) called on Citibank again to choose an efficient settlement instead of letting it come to a possibly long and damaging process. The Minister also notes that the victims who have yet to take civil action be informed of the impending trial, so they also can take part in the civil action.
He recalls that he last year he ordered the Economic Inspectorate investigate the way Lehman Brothers products were advertised and sold by Citibank . This dossier was turned over to the prosecutor in December.
Although the analysis of the Economic Inspectorate showed that there are about 4,000 potential victims, there are only 1300 who have reported to the Inspectorate or the prosecutor. At the request of the Minister, the prosecutor and Economic Inspection examined how the remaining 2700 known victims can be informed about their rights before the start of legal proceedings. They have now been notified by letter.
The trial starts in December. Van Quickenborne hopes that as many people as possible can file civil claim to be compensated for their loss. He immediately repeated his "resolute" call to Citibank to not let it go so far and to choose an efficient settlement.
Parket snoeihard voor Citibank – De Tijd