A FINRA arbitration panel in Chicago, Illinois, has awarded damages of $5 million to three high net worth clients against Neuberger Berman and its broker Brian Hahn, over the sale of Lehman Brothers structured products.

The lawyers acting on behalf of the investors alleged that in 2008 Hahn solicited the customers to invest in the comBATS and XLF Lehman Brothers Structured Notes. One of the customers had also invested $1 million in Libertyview Credit Select, a Neuberger Berman private equity hedge fund that lent its assets to Lehman Brothers. Neuberger Berman was owned by Lehman Brothers until 2009, when it was bought out by employees.

According to Nicholas Iavarone, who represented the investors along with Alan Block, neither Neuberger Berman or Hahn “adequately disclosed the fact that the investments were actually Lehman Brothers debt instruments and not investments in the underlying indices.”

"The marketing of Lehman Brother structured notes targeted investors, especially high net worth individuals, in an effort to raise funds for Lehman Brothers under the guise of principal protected notes. When Lehman Brothers declared bankruptcy, the value of the structured notes became virtually worthless," said Iavarone.

“The award represents 100 per cent of the money the clients invested in the Lehman Brothers Structured Notes and in Libertyview Credit Select hedge fund," added Block.