Financial firms in administration

Lehman collapsed in September of last year

Two financial services firms affected by the collapse of US bank Lehman Brothers have gone into administration.

NDF and Defined Returns Ltd (DRL) both offered a number of structured financial products backed by Lehman.

The administrators said the 2008 collapse of Lehman meant that NDF and DRL were open to potential claims from customers who bought those products.

Affected NDF and DRL customers may be entitled to compensation from the Financial Services Compensation Scheme.

This scheme compensates people who lose money if their bank, insurance company or other financial firm goes bust.

'Protect investors'

Sister companies, NDF and DRL are based in St Albans, Hertfordshire.

Their move into administration comes as the financial watchdog, the Financial Services Authority, is due to announce the conclusion of its revenue in structured financial products by the end of this month.

Joint administrators, Andrew Hosking and Martin Ellis from accountancy firm Grant Thornton, said that together the two firms have 35,000 customers, of which around 10% had bought Lehman-backed products.

"We are committed to working with the FSA, the Financial Services Compensation Scheme and other bodies to help protect investors' and creditors interests as well as the assets of NDFA and DRL," they said.

Structured products are complicated investment policies offering a higher rate of return as a result of being invested in bonds or derivatives, bets on the future direction of investment markets, such as shares or commodities.

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