At issue is a dispute over HSBC’s role in selling Kehman Brothers minbonds. Legislator Abraham Shek Lai-him openly wondered if HSBC had betrayed investors. “You made mud look like gold, and investors were lured,” Shek said. “You may not have been the designer of the plan, but you are an experienced bank, an international bank, you must have been aware that this was a product that could lead to the entrapment of retail investors.”
Faced with such a remark, we then see what HSBC’s legal team said. HSBC legal department deputy head Susan Sayers said the company was not involved in designing the minibonds and that, although the bank was in name the “director,” it was merely playing an administrative role.
“The company created to issue the bonds, known as a special purpose vehicle, was for all intents and purposes a creature of Lehman’s design,” Sayers said. “It is not our responsibility as a trustee to comment, or to have any view, on the product that is being sold.”
Perhaps that is a good line for HSBC to take relative to all products around the world. Taking such a stand would undoubtedly relinquish HSBC plc from anything HSBC Finance might be doing. It is perhaps clear that HSBC’s Susan Sayers might have received her training in one of the HSBC Finance divisions where “the fax never arrived” and “the payment was received late.” For instance:
“Investors — among them retirees who invested their life savings — have complained that bank salespeople were misleading and failed to fully explain the product’s connections to Lehman Brothers Holdings Inc., which sought bankruptcy protection in September.” Misleading? Failed to explain? Why does that sound like HSBC Finance, subprime, and many other HSBC shortcomings?
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