SFC reprimands Sun Hung Kai Investment Services

On 21 June 2011, the SFC reported that it had issued a reprimand to Sun Hung Kai Investment Services Ltd (SHKIS) and fined it $4.5 million for failings relating to its sale of Lehman Brothers related equity-linked notes (ELNs) to its clients between May and August of 2008.

An investigation by the SFC found that SHKIS had failed to:

• perform adequate due diligence on the ELNs before selling them to clients;
• provide adequate training and guidance for its sales staff, which would enable them to fully understand the nature of ELNs, the risks involved in ELNs, and the suitability criteria; and
• disclose material information, including the product terms and conditions and the risks associated with ELNs, to its clients       

Further details are available here.