Wednesday, October 08, 2008

Hong Kong: Minibond investors demand full refund

Wednesday, October 08, 2008

Lehman Brothers minibond holders are demanding a full refund of their money following the government's proposal that banks buy back the failed US investment bank's minibonds from investors.

The Hong Kong government on Monday proposed that 19 distributor banks and brokerage firms buy back minibonds from clients at market value to shorten the painful process of individuals recovering their money and limit reputational damage to banks.

About 50 investors attended a Democratic Party meeting yesterday to discuss the proposal.

Some minibond holders said they would not be happy if they can only get back 60 to 70 percent of their investment and insisted on a 100 percent refund. They also blamed the government for lacking supervision of investment products.

The investors said they will continue to pursue legal action on the marketing practices of the banks promoting Lehman minibonds.

Undersecretary of Financial Services and the Treasury Bureau Julia Leung Fung-yee reiterated yesterday that banks "are not exempted from the investigation on marketing practices even if they are willing to buy back."

The government expects distributors to look at the proposal and assess its potential risks before deciding within a week on whether to accept.

Investors will separately meet Bank of China (Hong Kong) (2388) representatives and lawmakers at the Legislative Council today.


Anonymous said...

If you can prove that you have been miss-sold and misrepresented by the RMs you have the right to FULL return of your capital plus loss of opportunity. This means the RMs or the bank or both the RMs and the banks are responsible for the investment going sour.Under section 27 it is the responsibility of the RMs to recommend the product based on reasonable basis and it is supposed to be after a need analysis.As employee of the bank they are liable severally or jointly.
The documentary proof is in the fact finding form or Know Your cleint(KYC) form. If the RMs were product pushers , i don't think they were smart enough to cover up their tracks. Most of them are like insurance agents who push products and fill up the KYC as a after sale activity.You can definitely find a trail of self incriminating evidences to sue the RMs and the bank.This is the only way to get full return(not compensation)of your capital plus loss of opportunity.

Jay K

Anonymous said...

How to get FIs to admit?

Banks will stand by that their RMs or FAs are properly trained and everything was explained i.e. risk, how the money was invested, in event of early redemption, what is the consequences. The second layer of defence is investor should read the prospectus. I think the only point here is risk. Prospectus indicate high risk product while the buyer is likely to be low risk or moderate.

Worst if risk analysis was not done. This is going to be a up the hill task while I believe a class suit is better then individual visit to FIDReC.


Anonymous said...


Anonymous said...

雖然不是矛頭亂指的時候, 不過如果不在這個時候扶正過來,難道要等到下幾代在遇到同樣的事嗎?
上市公司(上市公司-因為無法自行擴張業務而需動用大眾的融資來擴張,以免被收購或淘汰)的高級管理層的每月工資是不是應該和上市公司的股票價值掛勾呢?如果上市公司有甚麼問題的話,不止單一投資者受牽連, 高級管理層的薪水也立刻受影響.

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