Monday, April 20, 2009

Lehman Brothers Principal Protected Notes Hit Bank of Kaohsiung Hard

Dozens of clients of the Bank of Kaohsiung (BOK) yesterday gathered at the Kaohsiung City Council trying to claim compensation from the BOK for the losses they suffered from unknowing investments in the structured noted issued or guaranteed by the bankrupt Lehman Brothers. The BOK solicited some 780 clients to purchase close to NT$700 million worth of Lehman Brothers structured notes. But the investments finally amounted to nothing after Lehman Brothers filed for bankruptcy with the U.S. courts in September 2008.

The protesting investors said that the BOK originally introduced them to purchase “South African funds,” but actually what the bank purchased for them were structured notes issued or guaranteed by Lehman Brothers.

One of the investors suffered a loss of up to NT$80 million, making his life savings evaporate to nothing.

Nevertheless, the BOK has yet to take actions to settle their investment losses, forcing investors to form a self-relief team to demand compensations from the BOK run by the Kaohsiung City Government.

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