Editorial | Clients of Hong Kong banks seek value, not misconduct
Leading city bank is fined for serious misconduct in sale of financial products to clients for more than a decade
As a financial hub, it is imperative for Hong Kong to maintain a solid reputation and high standards for its banks. Sadly, one of its biggest and long-established banks has recently fallen short.
Hang Seng Bank has been fined for misconduct in selling financial products to clients during a period lasting more than a decade.
The Securities and Futures Commission has imposed a fine of HK$66.4 million (US$8.5 million) for supervisory failures and overcharging clients. The offences involved the sale of collective investment schemes (CIS) and derivative products from which the bank charged about HK$22.4 million in excess fees.
What is equally disturbing is the long period the misconduct covered, between February 2014 and May 2023. The watchdog did not mince words.
Describing the offences as “serious and systemic”, they especially singled out how the bank’s relationship managers exploited knowledge of clients’ financial status to engage them in frequent and excessive CIS transactions. At least 46 clients were affected between 2016 and 2017.