* 2,160 low-risk customers to get money back plus interest
* Agreement to serve as guidance for future settlements (Adds details, quote)
HONG KONG, July 14 (Reuters) - DBS Hong Kong, a unit of Singapore’s DBS Group Holdings (DBSM.SI), will pay out a combined HK$651 million ($84 million) to some buyers of Lehman Brothers constellation notes, the territory’s financial regulator said on Wednesday.
Customers classified by the bank as having a low- to medium-risk profile would have their money returned plus interest that would have been payable had it been placed in a fixed-term deposit, Hong Kong’s Securities and Futures Commission (SFC) said in a statement.
“The SFC is determined to reduce the risk of mis-selling in our market,” said the commission’s chief executive Martin Wheatley.
“Resolutions like this reinforce the high cost to everyone if we don’t get it right in the future.”
Investors in Singapore, Hong Kong and Indonesia who bought the product had lost their money after the U.S. investment bank Lehman Brothers went under in 2008. The constellation notes are credit-linked notes related to the collapsed U.S. bank.
Some 2,160 customers that were classified as having a low risk profile by the bank will get their money back, while high-risk investors will be able to ask for a full review of their case.
The case will also serve as guidance for other banks that have sold constellation notes to its customers before the U.S. investment bank collapsed, the SFC statement said, pointing to other similar resolutions in the future. (Reporting by Kelvin Soh; Editing by Jacqueline Wong)