The Financial Services Authority, the UK regulator, is once more ready to hear complaints from customers who held Lehman backed structured products.

Many investors suffered losses when the bank collapsed last year. Although structured products offer protection on customer’s capital, Lehmans exposed buyers to its own credit risk by using its own bonds to make issues. It is alleged that many brokers of Lehman products did not disclose the name of the bank to their clients.

Although it has confirmed that some form of action will be taken, the FSA will not comment on the nature the action until October when it publishes a more detailed account of its findings.

According to a spokesman for the FSA the regulator is still examining the entire chain of production from issue through to marketing materials and the nature of advice given to clients by advisors.

“We know that around 5,600 investors held Lehman backed products at the time it went bust. Our aim was to form a view on sales and marketing practices that would have affected the investors holding Lehman backed products at that point in time,” said the spokesman.

However, while the review is not fully concluded, the FSA can confirm that serious failings have been uncovered and that the financial Ombudsman is now ready to hear individual customer complaints.

“This is a hugely complex area…In light of the progress we have made, we believe our regulatory action can now progress alongside the Ombudsman adjudicating on individual complaints without prejudicing either, so individual cases referred to the Ombudsman can now proceed,” said Dan Waters, retail policy director at the FSA.

The Wider Implication review is looking at promotional literature, clarity of information, quality of advice, sales systems and controls, involving plan managers, providers and advisors. When a number of problems are raised by a large event, such as the collapse of a bank, the FSA can suspend the complaints procedure while it conducts a review of the industry writ-large.