HSBC Securities Canada is being sued for providing poor investment advice to a client. Aastra Technologies says HSBC advised it to buy almost $14M in third party asset backed commercial paper. Up until August, parking your cash in ABCPs was seen as a smart and more importantly safe bet. Now the market is in an actual freeze. Nobody wants to buy new paper. And holders of existing paper can’t cash out. And we’re not talking about an insignificant amount of cash. $35B is at stake here.
I spoke to Montreal lawyer Avram Fishman. He represents some of the holders of this dubious debt. He says investors who hold ABCPs are right to sue because it may be their only hope of getting their investment back. Also some holders of that debt can't afford to hang around for their notes to mature at a later, unspecified date. Investors bought the notes based on short maturity dates (as little as 30 days in some cases). Why should they have to wait longer for their money?
Fishman says more law suits are imminent.
1 comment:
Thanks for your post. This was helpful in an odd way as I was researching something.
Post a Comment