Two Bank of China (Hong Kong) employees have been arrested on suspicion of fraudulently or recklessly inducing people to buy Lehman Brothers-related minibonds, in the first such arrests since the US investment bank collapsed in 2008.
The two women, aged 38 and 51, were arrested in Tsuen Wan and Yau Ma Tei yesterday in a case the police said involved eight clients and HK$3.5 million.
'The duo was believed to have separately misled and induced eight customers on various occasions to purchase structured products between 2005 and 2008' in contravention of the Securities and Futures Ordinance, police said.
The two women, said to be frontline employees, were released on bail of HK$5,000 each. No charges were laid. They must report back to police.
The case stems from more than 5,400 complaints of alleged mis-selling of so-called structured investment products received since Lehman Brothers' bankruptcy triggered the international financial crisis. The commercial crime bureau said yesterday others were still under investigation but did not say how many.
A representative of investors who lost money on such products said the police action was too little too late. A legislator called for details of the other investigations. A BOCHK spokeswoman declined to comment.
Minibonds were not corporate bonds, but high-risk, credit-linked derivatives. Hong Kong investors lost billions of dollars on minibonds guaranteed by Lehman Brothers when it went bankrupt.