Report: Hong Kong investors sue over Lehman buys

Investors in financial products tied to failed Wall Street investment firm Lehman Brothers have sued in a Hong Kong court, claiming they were duped by the local banks who sold the now worthless products, according to a media report Friday.

Lawsuits filed Thursday by five elderly investors in small-claims court are among the first legal actions taken against local banks in the territory's ongoing dispute over Lehman-linked products, the South China Morning Post reported.

The plaintiffs want the banks to refund at least part of the some 40,000 Hong Kong dollars (US$5,161) they each invested in derivatives issued or guaranteed by Lehman Brothers, the paper said. The court is expected to hear their cases next month.

Messages left with the three banks — Citic Ka Wah Bank, Mevas Bank and Wing Lung Bank — were not immediately returned Friday.

The lawsuits were filed with assistance from the Democratic Party after the banks involved allegedly failed to respond to the plaintiffs' requests for information about their investments.

Billions of dollars in souring debt forced Lehman Brothers Holdings Inc., once the fourth-largest investment bank in the U.S., to file for bankruptcy in September amid the world's worst financial crisis in decades.

Thousands of Hong Kong investors with Lehman-linked products have staged several demonstrations and sought help from lawmakers in the hope of recouping their losses.

Investors — among them retirees who invested their life savings — have complained that bank sales staff did not fully explain the products were linked to the bankrupt U.S. company, leading them to believe it was a low-risk investment.

The total outstanding value of the products is estimated at HK$20.2 billion (US$2.6 billion), according to the Hong Kong Monetary Authority.

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