Hong Kong banks selling Lehman references to the mentally ill

"Hong Kong banks selling Lehman references to the mentally ill | AboutHK.Com - more information about HK"

Hong Kong banks sold notes, not in connection with Lehman Brothers Holdings Inc. for older, poorly educated and mentally ill people, according to a Central Bank study, the fuel demands for better protection of the town investors. The Legislative Council released previously blacked-out sections of a Hong Kong Monetary Authority annual report shows, 102 cases of "vulnerable" investors were sold, the credit-linked notes, which embedded in value after Lehman's Sept. 15 bankruptcy. The disclosure was requested by the HKMA to some of their findings, both private and follows almost daily demonstrations by older investors, who allege that the banks had securities with low risk. A total of HK $ 13.9 billion ($ 1.8 billion) of credit-linked notes issued by a local unit of Lehman were sold to Hong Kong people, according to the Securities and Futures Commission. “If more restrictions are placed on the sale of investment products it could add a lot onto banks’ operating costs,” said Paul Lee, an analyst at Hong Kong-based Tai Fook Securities Ltd. “Customers may also be more reluctant to invest because of all the extra documents they have to go through.” The central bank identified 102 cases in which complex and risky investments were made by the banks to "vulnerable" investors, according to information in the black-out of the HKMA report public at a hearing in the city's Legislative Council today. Investor interest Some investors have argued that banks and brokerage firms of the potential risks wrong in the sale of notes. “What’s important right now is what the HKMA is preparing to do to help investors get their money back,” said Chim Pui- chung, a legislator representing the financial services industry. “So far they haven’t offered much on this part.” The central bank had previously refused to disclose parts of the results, arguing that "contrary to public interest." It later agreed to reveal in closed meetings deleted parts of the report to legislators. Sun Hung Kai & Co., the city's largest local brokerage, market value, in February to pay back investors in the notes, making it the first vendor to decide for a full refund. It did not admit any liability or wrongdoing in the sale of products. BOC Hong Kong Ltd., Bank of East Asia Ltd., Wing Hang Bank Ltd. and Dah Sing Banking Group Ltd. were among the 19 firms that sold the notes, after the Hong Kong Association of Banks. Clarina Man, a spokeswoman for BOC Hong Kong, went to the HKMA report. Vera Lung, a spokeswoman for the Bank of East Asia, is not immediately return calls from Bloomberg commentary. Comments Please login to post comments or replies.