HSBC lost its appeal a record fine imposed by Hong Kong authorities for failures at its Swiss private bank, including the irresponsible sale of structured products linked to Lehman Brothers in the run-up to the financial crisis. The bank was fined HK$400 million after a tribunal upheld an earlier decision by Hong Kong’s Securities and Futures Commission accusing it of material systemic failings in its marketing and sale of derivative products. SFC had earlier demanded HK$605 million fine from the bank. The Securities and Futures Appeals Tribunal (SFAT) said HSBC’s actions put many clients at unnecessary risk of loss and indeed resulted in substantial losses for many. HSBC Private Bank (Suisse) will also lose its license to advise on securities for one year, while its license to deal in securities will be partially suspended for a year. The tribunal said the private bank continued to sell products linked to Lehman Brothers until as late as 3 September 2008 – just two weeks before the US investment bank collapsed – even though it was aware of Lehman Brothers’ deteriorating condition.
