The Securities and Futures Commission did not succumb to pressure from the government to speed up development of the investment products market at the expense of investor protection, its chief executive told lawmakers investigating the Lehman Brothers minibonds fiasco.
Martin Wheatley also suggested that some internal documents provided to the Legislative Council subcommittee by a former commission employee and whistleblower may have been obtained illegally.
'In the absence of being an employee, there is a serious question over the range of documents the subcommittee appear to have ... I believe you have a number of documents which possibly may have been obtained illegally,' Wheatley said. 'An ex-employee does not have access to our documents unless he has taken measures to obtain copies against our rules and possibly the SFO [Securities and Futures Ordinance].'
Early this year, Harold Ko Ping-chung, the commission's former head of insurance-related policies and products, told lawmakers that he believed different vetting standards used within the commission, lax supervision and staff inexperience contributed to the Lehman minibonds fiasco. Ko also alleged that former commission chairman Andrew Sheng had approached the investment products department looking for 'quick wins' to report to government officials.
Wheatley said former financial secretary Antony Leung had used the term 'quick wins' in a press release in June 2002. 'I don't believe that any quick wins could have been taken, which would have violated our core regulatory principles. But I don't have a record of what those quick wins that were sought in specific detail were,' Wheatley said.
The bankruptcy of Wall Street giant Lehman Brothers in September 2008 rendered worthless the minibonds linked to it. Minibonds are not corporate bonds but high-risk, credit-linked derivatives, marketed as proxy investments in well-known companies.