Sponsored by: Investment Center

Something new in your business?  Click here to submit your business press release

Chamber Corner | Main Street News | Job Hunt | Classifieds | Calendar | Illinois Lottery 

HK unveils $800M plan to pay back Lehman investors

Send a link to a friend

[July 22, 2009]  HONG KONG (AP) -- Hong Kong banks agreed to return more than $800 million to investors burned by Lehman Brothers-backed products, potentially ending a nearly yearlong dispute that sparked street protests and exposed problems in the financial center's markets.

InsuranceThe 16 banks will return as much as 70 percent of the principal to thousands of investors, regulators said Wednesday. That could total $6.3 billion Hong Kong dollars, or nearly $810 million.

The banks will also set up a HKD$200 million ($25 million) fund to help pay legal costs of trying to recover collateral that was backing many of the investments, possibly increasing the payout for investors.

Martin Wheatley, chief executive of the territory's securities watchdog, the Securities and Futures Commission, called the deal a "watershed."

"This is a huge settlement," Wheatley told reporters. "It is unprecedented, certainly in Hong Kong and most other jurisdictions around the world,"

The dispute erupted in September after the collapse of Wall Street investment bank Lehman Brothers Holdings Inc., throwing into doubt the value of financial products it backed and channeled to Hong Kong investors, many of them retirees, through the territory's banks and brokerages.

Facing billions of dollars in possible losses, investors took to the streets. Meanwhile, authorities opened probes, lawmakers condemned regulators for failing to protect investors and banks were accused of deceptive selling practices.

Critics of the banks said they inaccurately portrayed the risky derivatives products -- most of which went by the wholesome sounding name of "minibonds" -- as safe investments.

[Associated Press; By JEREMIAH MARQUEZ]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.



< Recent articles

Back to top


News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries

Community | Perspectives | Law & Courts | Leisure Time | Spiritual Life | Health & Fitness | Teen Scene
Calendar | Letters to the Editor