SCMP:Lehman investors turn to US government

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3 December 2008
Paggie Leung

About 50 investors who bought Lehman Brothers-related products through Citibank marched to the American consulate yesterday to request an investigation into alleged mis-selling by the American bank.

The investors, who lost money after Lehman collapsed, petitioned the consulate, asking the American government to investigate Citibank's sales procedures.

"The US government recently injected so much money into Citi and has become the bank's key shareholder. Therefore, it should look into the matter," said Hui Shun-ngai, a representative of the group. The American government last week guaranteed US$306 billion of Citigroup's troubled assets and extended it US$20 billion in cash.

"The US government must also inquire into Citibank's authorised representatives responsible for the incident, including the tolerance of Citibank's mis-selling practices and lack of governance resulting in financial losses to Citibank's victims," the petition said.

Mr Hui said each protester had bought at least HK$500,000 in Lehman Brothers credit-linked derivatives from Citibank and they had not been informed of the high risk.

Meanwhile, 10 more investors filed lawsuits with the Small Claims Tribunal against six banks yesterday: Bank of China, Bank of Communications, Bank of East Asia, DBS, Wing Hang and Nanyang Commercial Bank. Their cases will be heard on January 29.