HKMA takes first action against individual over Lehman Bros related product
The Monetary Authority (MA) has suspended Miss LEUNG Wai Yu’s relevant particulars from the HKMA register maintained under section 20(1)(ea) of the Banking Ordinance for three months from 20 November 2009 to 19 February 2010. This is the first Lehman related case against an individual - but it will not be the last HKMA says.
The Hong Kong Monetary Authority’s (HKMA) investigation found that in March 2006, Miss Leung, an employee of DBS Bank (Hong Kong) Limited, in the course of selling a client Constellation Credit Linked Note, had:
- failed to diligently disclose and explain to the client the product’s risk, and
- failed to complete the risk disclosure statement for the client in accordance with the bank’s internal control procedures.
In determining the sanction, the HKMA took into account all the circumstances of the case, including the extent of the client’s losses and the fact that Miss Leung has no disciplinary history.
The action follows Miss Leung’s withdrawal of an appeal with the Securities and Futures Appeals Tribunal (SFAT) seeking to review the MA’s decision to discipline her.
Mr Raymond Li, the Executive Director of the HKMA responsible for Securities Enforcement said: "This is the first time the HKMA has taken disciplinary action against a relevant individual in connection with a Lehman Brothers-related investment product. There are other disciplinary cases which have reached an advanced stage and will be announced in due course." (emphasis added)
At the relevant time, Miss Leung was an individual whose name was entered in the register maintained by the Hong Kong Monetary Authority under section 20 of the Banking Ordinance as a person engaged by DBS Bank (Hong Kong) Limited in respect of Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities. Miss Leung is currently employed by another bank.
Lehman Brothers Holdings Inc. is one of the reference entities in the Note in respect of the occurrence of a credit event.
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