Hong Kong regulator probes mis-selling complaints on Lehman Brothers Minibond
www.chinaview.cn 2008-09-25 01:08:57   Print

    HONG KONG, Sept. 24 (Xinhua) -- Hong Kong's security market watchdog announced on Wednesday that it has decided to probe whether Lehman Brothers-related retail structured notes have been misrepresented to local investors in the selling process.

    "Having conducted several meetings with Minibond investors in the last few days to hear their grievances, we have decided to conduct formal investigation into allegations of mis-selling by certain licensed intermediaries," said Martin Wheatley, chief executive officer of the Securities and Futures Commission (SFC).

    The SFC said it will look at the conduct of the three SFC-licensed distributors of Lehman Brothers-related retail structured notes.

    In addition, the SFC will examine whether any facts, matters or circumstances that should have been disclosed were not disclosed when the Minibond issuers and their advisers submitted offer prospectuses and marketing materials to the commission.

    The commission said it will not probe into the conduct of the 21 banks involved in selling Lehman Brothers-related retail structured products, which comes under the supervision of the Hong Kong Monetary Authority (HKMA).

    Nevertheless, it pledges to continue to assist and work closely with the HKMA.

    Lehman Brothers, one of the United States-headquartered investment banking giants, filed for bankruptcy protection on Sept.15, sparking a world wide financial tsunami. Hong Kong investors of Lehman Brothers-related retail structured notes suffered losses, and some have complained that they were not fully informed of the risks thereof.

    The SFC cited distributor statistics to say that Lehman Brothers-related retail structured notes sold in Hong Kong totaled15.64 billion HK dollars (2.01 billion U.S. dollars), most of which were distributed in 2006 and 2007.

Editor: Yan
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