Standard Chartered Bank admitted yesterday it had used substandard methods to sell derivatives issued by bankrupt firm Lehman Brothers to some customers.
Benjamin Hung Pi-cheng, Standard Chartered executive director and chief executive officer, said the bank had concluded an initial investigation. Although it had not found any systemic problems, there were cases where sales methods had been below the bank's internal standards.
'The bank is willing to bear full responsibility and will handle [the cases] accordingly,' he said.
Meanwhile, Bank of China (Hong Kong) settled with two customers yesterday.
Standard Chartered customers have been complaining since September along with thousands of investors who bought Lehman-related products from other banks.
The bank sold Lehman-issued derivatives, but not minibonds, to 2,200 customers, 10 per cent of whom were elderly, Mr Hung said. It is initially dealing with customers aged 65 and over with little investment experience. Some elderly customers were financially well-educated, he said.
The bank had formed an independent group covering sales issues and would conduct individual and thorough investigations of each case. Mr Hung did not disclose the total amount invested, or what compensation, if any, had been agreed.
