Drug Dealer?

"I have never thought that I would be a 'drug dealer'!" said an sales representative with over 30 years of experience, who was responsible for promoting Lehman Brother's minibonds.

A lot of us working at a bank aim at getting an extra two or three months salary as their year-end bonus, so some of us might not follow the correct procedures when promoting these products.

"30 of my long-time clients have bought the minibonds, they did not come back and complain to me, but that made me feel even worse. I feel extremely guilty and I don't know how to face them. I worry that some of them might end their lives because of this!" she said.

"I never had second thoughts when I got the information of Lehman Brother's minibonds in 2003," she said. "The company is rated AAA and has business relations with major companies and corporations all around the world. Everyone was confident in its products."

The minibonds became high-risk products in 2005 but they never understood why. The companies the minibonds are linked with are all large companies. It should be very safe.

The minibonds became a high-risked product because they are linked with many different companies and are then divided up. The accrual basis is unclear. At this moment, a lot of people are still confused with the way these minibonds operate.

"There are so many different products in the market and it is impossible to explain about each and every one of them to all our customers, especially the elderly," she said. HKMA has a regulation stating that for the clients aged over 65 request to add high-risked products into their portfolio, the request would have to go through specific procedures.

"We have to write a report stating that we have clearly explained to the client the risk of the product," she said. "The investment cannot be 100% of the portfolio's worth and we need to get our manager's approval before carrying on with the investment and have to send a copy of the investment portfolio to our headquarters to be put on file."

"Some people ignored these rules and skipped these procedures in this case," she said. "These policies came up during recent years so a majority of the investors purchased the minibonds when the regulations were not as strict."