Major Belgium Lawsuit Against Citibank (NYSE:C) Started Friday

In the largest Belgium lawsuit in relationship to the financial banking crisis, 4,000 Belgium customers of Citibank (NYSE:C) have begun their attempt at recouping their savings after losing everything in where the prosecution says Citibank used “misleading information” and employed “tricks” to get Belgium banking customers to invest in highly risky products.

What the prosecutors are referring to are taking what the plaintiffs in the case say they believed were regular savings accounts, which were then changed into structured products issued by Lehman Brothers.

The trial, which has started on Friday, December 4, will focus on how the savings of the Citibank customers were lost because of the collapse of Lehman Brothers, which they seemingly had no idea they had had their money invested in.

The cases is predicated upon whether or not Citibank had communicated to their customers to the point they understood what the risks were regarding the products they had evidently acquired. If that is established to be the case, it looks like Citibank will lose this lawsuit.

According to Le Soir newspaper, Citibank customers were “surprised” when the U.S. bank collapsed and their accounts discovered as they were – structured products – rather than savings.

In all honesty, this seems like a difficult cased on both sides to me. Many people in countries almost completely unaware of what a structured product is or even that it exists, probably could be talked to for hours and would have no idea of what it was, as in their thinking any investment in something bank represents would be considered safe.

When I was working as a financial advisor in the past, even in America, where many of these risky products originate, most of the average bank customers wouldn’t have the slightest idea of what a structured product is and the risk associated with it. So you could imagine the difficulty in a country of people who aren’t aware of these types of risky securities in any way, and listen with the mindset which comes with thinking a bank is talking about savings, no matter what the investment is.

That sounds like what has happened in this case, and if nothing else, Citibank should have known better than to have offered these types of products to a people that had little if any understanding of what they were getting into. That’s the crux of the case, and whether Citibank wins or loses from a financial viewpoint won’t be that relevant if they lose the trust of the people of Belgium in helping them take care of their life savings.