Published October 18, 2008
HK refers 2 banks for possible sanctions

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(Hong Kong)
TWO banks were yesterday referred for possible sanctions in Hong Kong as part of an investigation into misleading sales tactics in connection with Lehman Brothers investments whose values are in doubt, authorities said. The Hong Kong Monetary Authority sent securities regulators 24 cases involving allegations of misconduct and 'mis-selling' against the lenders, the agency said.
The move came as the territory's banking association announced it agreed to a government proposal under which banks and other sellers of one type of Lehman-backed investments, known as Minibonds, would buy them back from investors.
The banks under investigation, which weren't identified, are the first to be referred for sanctions in the investigation. The cases involve products worth about HK$10 million (S$1.9 million) sold to retail investors. Regulators could impose fines and revoke the banks' licence, among other penalties. The Securities and Futures Commission, which decides what sanctions, if any, would be imposed, said that it was initiating an investigation into cases referred by the HKMA but wouldn't comment on them until after examining the evidence. -- AP