To date, the SFC said it had reached agreements with 25 distributors and non-distributors of such products, with a further two having been made in the past week.
This includes one agreement with Standard Chartered Bank (Hong Kong) which has agreed to pay back HK$1.489bn worth of Lehman-backed products to investors, around 95% of that it sold. The other agreement, announced earlier this month, was with Core Pacific-Yamaichi International which has agreed a repurchase wothr HK$9.6m.
The SFC said its approach to resolving the LB-related complaints has paved the way for the return of the collateral of LB minibonds. It described its approach as a “top-down investigation strategy” which has resulted in 16 distributing banks establishing "fighting funds" from which investors could recover their investment.
Details of the investigation have been published in the FSC’s bi-monthly report the Enforcement Reporter. The publication also gives an account of how recent decisions by the courts and the Sec Securities and Futures Appeals Tribunal upheld the SFC’s further action against market manipulators. In one of the cases, a broker was jailed for executing a client’s manipulative order instructions.
This issue also reports a recent development regarding the seeking of orders to disqualify listed company directors. For the first time, an alternate non-executive director has been disqualified for misconduct. In addition, the SFC has obtained an injunction to freeze suspected insider dealing proceeds amounting to nearly HK$400m.
To view a copy of the report please click here.
