Fall out from Lehman Brothers continues

The combination of a Financial Services Authority investigation into structured finance products and the collapse of Lehman Brothers has led to the administration of investment company Arc Capital & Income.

Robin Davis, John Alexander and Melvyn Carter of accountancy firm Carter Backer Winter have been appointed administrators for ACI this week.

The FSA review looked at the UK's structured finance products market including any backed by collapsed company Lehman Brothers.

ACI conducted an assessment of their financial position in relation to claims by investors of Lehman-backed products and found if claims were upheld ACI would have no choice but to become insolvent.

The directors then decided to place ACI into administration.

Alexander said: “We are committed to working with the FSA and the Financial Services Compensation Scheme (“FSCS”) to protect the interests of both the investors and the creditors. In particular, we are working very closely with the FSCS, FOS and the FSA to ensure compensation will be paid to investors where due”.

"We are committed to protecting the interests of investors. On information reviewed to date it appears that their funds have been segregated from ACI’s own monies and our first priority is to confirm that this is the case. Until we ascertain this, no funds will be able to be returned,” he added.

The ACI produced financial products for the investment market, many of which were backed by Lehman Brothers. The distribution of these products has been subjected to FSA review.

The administrators said they will continue to work with the FSA and the Financial Services Compensation Scheme to help protect investors' interests.

Further reading:

Lehman Brothers anniversary timeline

PwC returns to court to fight for Lehmans plan