HSBC Private Bank (Suisse) SA is appealing a HK$605 million ($78 million) fine imposed by Hong Kong’s securities regulator in connection with its sales of structured products including Lehman Brothers Holdings Inc.-related notes between 2003 and 2008.
The appeal hearing began in the city on Wednesday after the Securities and Futures Commission previously alleged failures in internal controls and sales practices in relation to the sale of the Lehman notes and products called Leveraged Forward Accumulators.
Anthony Neoh, the bank’s senior counsel, told the hearing that the case featured “vanilla-type” products, and the penalty was excessive. The SFC had wrongly applied "retail standards" to a private bank, when it is a different type of business, with a particular relationship with its clients, he said.
The bank’s parent, HSBC Holdings Plc, is among global lenders that have been battered by fines for misconduct.
The hearing of the Securities and Futures Appeals Tribunal is scheduled to run during this week and next week.