Forget fees: IPO sponsor boom risks fraud

The proliferation of sponsors on Hong Kong IPOs is not just lowering fees for investment banks. It is also exposing them to possible fraud.

Forget fees: IPO sponsor boom risks fraud

The proliferation of sponsors on initial public offerings doesn’t just lower fees for investment banks, it also encourages fraud, a gathering of bank executives and regulators heard on Tuesday.

Investment banks in Asia are getting whacked because deals are getting smaller and market valuations are not as big as they once were. The double whammy is that the number of banks chasing this shrinking pot is increasing.

The knock-on effects of the...

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