In the February 2001 issue of ombudsman news we included an example of a spread betting complaint we had received. Derivatives-related complaints, including those about spread betting, form a small but significant part of the caseload for the area of the investment division that deals primarily with investment management issues.

As we noted in February, derivatives are high-risk investments and not for the inexperienced. Two recent cases illustrate the problems which occur when such products are offered to investors who have little or no understanding of the nature of these investments.