Hong Kong brokerage offers first full refund in misselling scandal
http://sg.biz.yahoo.com/090123/1/4lgo7.html
A leading Hong Kong brokerage has agreed to fully refund hundreds of investors who bought complex financial products at the centre of a misselling scandal, the city's market watchdog said. Sun Hung Kai Investments agreed to repay around 85 million Hong Kong dollars (11 million US) after the Securities and Futures Commission (SFC) reprimanded its sale of so-called minibonds backed by collapsed US bank Lehman Brothers. The deal covers around 300 investors, who be will be offered the full amount they invested in the minibonds, the SFC said in a statement. The value of the products collapsed after the the Wall Street icon went bankrupt in September, sparking a wave of protests by investors who lost large sums of money. The blanket refund is the first action of its kind in the city, which prides itself on its free market values. "We are very pleased with the outcome that has been achieved and we believe the approach adopted has produced a result which is in the best interests of the investors," SFC's chief executive officer Martin Wheatley said in the statement. Following an investigation, the SFC criticised the training given to staff who sold the products, the advice sales staff gave to investors, as well as record keeping. If Sun Hung Kai Investments do not improve its systems within six months, the SFC will suspend its licence to sell unlisted or structured products, the statement, released late Thursday, said. More than 40,000 Hong Kong investors put a total of 15.7 billion Hong Kong dollars (2.0 billion US) of their savings into minibonds and other complex products backed by Lehmans. The subsequent loss in their value sparked protests across the city and has led to a review of the city's regulatory system. A total of 21 banks and three brokerage firms were involved in the sale of minibonds, and regulators are continuing to investigate whether other institutions were involved in misselling.
http://sg.biz.yahoo.com/090123/1/4lgo7.html
A leading Hong Kong brokerage has agreed to fully refund hundreds of investors who bought complex financial products at the centre of a misselling scandal, the city's market watchdog said. Sun Hung Kai Investments agreed to repay around 85 million Hong Kong dollars (11 million US) after the Securities and Futures Commission (SFC) reprimanded its sale of so-called minibonds backed by collapsed US bank Lehman Brothers. The deal covers around 300 investors, who be will be offered the full amount they invested in the minibonds, the SFC said in a statement. The value of the products collapsed after the the Wall Street icon went bankrupt in September, sparking a wave of protests by investors who lost large sums of money. The blanket refund is the first action of its kind in the city, which prides itself on its free market values. "We are very pleased with the outcome that has been achieved and we believe the approach adopted has produced a result which is in the best interests of the investors," SFC's chief executive officer Martin Wheatley said in the statement. Following an investigation, the SFC criticised the training given to staff who sold the products, the advice sales staff gave to investors, as well as record keeping. If Sun Hung Kai Investments do not improve its systems within six months, the SFC will suspend its licence to sell unlisted or structured products, the statement, released late Thursday, said. More than 40,000 Hong Kong investors put a total of 15.7 billion Hong Kong dollars (2.0 billion US) of their savings into minibonds and other complex products backed by Lehmans. The subsequent loss in their value sparked protests across the city and has led to a review of the city's regulatory system. A total of 21 banks and three brokerage firms were involved in the sale of minibonds, and regulators are continuing to investigate whether other institutions were involved in misselling.
