Legislators: HSBC betrayed investors

31 December 2008

HSBC has been accused by lawmakers in Hong Kong of betraying investors by helping to sell Lehman Brothers bonds, it has been reported.

According to the Associated Press, investors have complained that they did not receive a full explanation of the connections between mini-bonds they had purchased and the failed Wall Street firm.

It is thought that some 40,000 people in Hong Kong purchased the Lehman-supported products, some of whom were retirees looking to invest their life savings.

During a legislative hearing held today (December 30th) in Hong Kong, lawmakers asserted that the company which was established to issue the mini-bond products was set up with directors provided by HSBC.

The bank also held the collateral that supported the mini-bonds, although other Hong Kong banks were responsible for selling the products to investors.

"It is not our responsibility as trustee to comment or have any view on the product that is being sold," said Susan Sayers, HSBC's deputy head of legal for the bank's Hong Kong unit.

The Times reported this week that Lehman Brothers bosses may have destroyed up to $75 billion of the group's value when it filed for bankruptcy in September.

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