Hang Seng Bank fined US$8.5 million for investment product sales misconduct
The bank earned at least HK$22.4 million in excess fees and exposed some clients to “significant” losses
HONG Kong’s securities regulator said on Monday (Jan 27) it had fined Hang Seng Bank US$8.52 million for overcharging its clients while selling investment products.
The Securities and Futures Commission (SFC) said that between February 2014 and May 2023, the bank earned at least HK$22.4 million (S$3.86 million) in excess fees and exposed some clients to “significant” losses when it asked them to conduct frequent collective investment schemes (CIS) transactions with short holding periods.
“Hang Seng Bank’s internal controls were deficient in that they did not adequately supervise and monitor the sale of CIS to its clients,” according to the regulator.
The bank, a 63.1%-owned unit of HSBC, also failed to disclose trailer fee arrangements to clients trading in investment funds, the SFC added.
The issues were brought to the regulator’s attention by Hang Seng Bank’s reports, as well as findings from an investigation by the Hong Kong Monetary Authority, the regulator said.
The bank has compensated impacted clients and taken steps to strengthen its internal controls, according to the SFC.
Hang Seng Bank did not immediately respond to a request for comment. REUTERS
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