HKMA to probe Octave Notes

HKMA to probe Octave Notes

http://www.thestandard.com.hk/news_detail.asp?pp_cat=1&art_id=83700&sid=24277507&con_type=1

The Hong Kong Monetary Authority is to investigate banks within two weeks over the sale of Octave Notes that have plunged in value.

Alfred Liu
Friday, June 19, 2009

The Hong Kong Monetary Authority is to investigate banks within two weeks over the sale of Octave Notes that have plunged in value.
An HKMA spokeswoman said after a meeting with the Democratic Party yesterday that the regulator will investigate how banks sold the credit-linked notes issued by Morgan Stanley.
The authority has received 665 complaints relating to Octave Notes, including those referred by the Securities and Futures Commission. About 550 cases are related to the bankrupt Lehman Brothers.
The HKMA is also investigating the alleged misselling of Lehman minibonds whose value fell sharply after the US investment bank collapsed.

The authority said it will stick to its target to complete investigations into 70 percent of the complaints amounting to 15,000 cases - both minibonds and Octave Notes - by March next year.
The Democratic Party has received 300 complaints linked to Octave Notes and three have been settled, according to legislator Kam Nai-wai.
Meanwhile, liquidators of Lehman Brothers Commercial Corp Asia secured more than US$200 million (HK$1.56 billion) for creditors from China real estate assets, accounting firm KPMG said.
Most of the deals involved the sale of loans to the original borrower or a compromise on repayment following extensive negotiations, KPMG said.