From the Associated Press / Picture from Straits Times.
HONG KONG – About 100 Hong Kong investors burned by complex financial products linked to failed U.S. investment bank Lehman Brothers protested Sunday, demanding securities regulators help them negotiate a settlement.
Tens of thousands of retail investors in this Chinese-ruled financial hub were hit by Lehman’s collapse in September. Hong Kong securities regulators announced a settlement deal last month for one group of investors who purchased certain Lehman-linked products through local banks, but the agreement did not cover products sold by Singaporean bank DBS Group Holdings.
Sunday’s protesters were demanding securities regulators step in to strike a deal for DBS clients.
The demonstrators bought so-called “Constellation” notes from DBS _ financial products that are linked to the credit ratings of a group of financial institutions, including Lehman. About 6,900 Hong Kongers bought HK$2.3 billion ($297 million) worth of the failed investments, according to K.C. Lok, an organizer of the disgruntled investors.
“DBS lacks a conscience,” “DBS is a swindler,” the protesters chanted at a park in Hong Kong’s downtown Central financial district.
Lok, who bought just over HK$100,000 ($13,000) in the Constellation notes, accused DBS of misleading its customers into believing the financial products were conservative investments.
“Many of the investors shifted their money from timed deposits,” Lok said.
DBS Hong Kong spokeswoman Glendy Chu said Sunday that the bank had explained the risks of the products and offered compensation to investors in cases where there was evidence of questionable sales practices.
Calls to the media office at Hong Kong’s Securities and Futures Commission went unanswered Sunday.
The deal announced last month would see 16 local banks returning 60 or 70 percent of the principal to thousands of investors in a payout that amounts to $6.3 billion Hong Kong dollars ($813 million).