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HSBC Holdings Plc’s private-banking unit was fined a record HK$400 million ($51 million) over sales of structured products linked to Lehman Brothers Holdings Inc. in Hong Kong, Bloomberg News reported. HSBC Private Bank (Suisse) SA will have its license to advise on securities suspended for a year, while its dealing license will be partially suspended, the Securities and Futures Appeals Tribunal said in a ruling today, as it upheld previous findings by the Securities and Futures Commission (SFC). HSBC said that the suspensions won’t affect private-banking operations in Hong Kong. The SFC had originally imposed a HK$605 million fine, penalizing the private bank for alleged failures of its internal controls and sales practices in relation to the sale of Lehman notes and products in the five years leading up to the bank’s bankruptcy in 2008. The subsequent collapse of the Lehman investment products sold to individuals roiled Hong Kong, causing street protests and prompting banks to overhaul sales procedures. The HK$400 million penalty is a record sum, the SFC said on its website. “The bank’s failings were serious; they were systemic in nature, extended over a relatively lengthy period of time and not only put clients at risk but caused loss to many,” the tribunal said in its ruling. “Against that, however, it has to be recognized that the bank’s failings were not shown to be dishonest, they were not shown to be intentional or reckless.”

A motorcycle-products company controlled by Indianapolis-based business-holding firm LDI Ltd. LLC has filed for Chapter 11 bankruptcy after racking up about $440 million in debt. And its reorganization plan calls for replacing LDI as majority owner, the Indianapolis Business Journal reported. Motorsport Aftermarket Group (MAG) and its 18 affiliated companies filed the bankruptcy plans on Wednesday in Delaware. The Coppell, Texas-based company also disclosed a recapitalization plan that it says is expected eliminate about $300 million in debt. MAG is a manufacturer, distributor and online retailer of aftermarket products for the powersports industry. LDI has been involved with a MAG’s predecessor company since 1989 and took over majority ownership through a merger in 2014. LDI owns 59 percent of the company, according to bankruptcy documents.

Paintings by Marc Chagall, Wassily Kandinsky and the Italian surrealist Giorgio de Chirico were allegedly used by a New York art dealer to lure investors and collectors into paying hundreds of thousands of dollars for works he never owned or didn’t have a right to sell, Bloomberg News reported. At least three lawsuits filed this week against the dealer, Ezra Chowaiki, accuse him and the Park Avenue gallery in which he’s the president and a minority shareholder, of carrying out a variety of frauds. The gallery, Chowaiki & Co. Fine Art Ltd., filed for bankruptcy on Nov. 13. David Dangoor, the gallery’s Swedish director and majority owner, was also sued with buyers accusing him of knowing about Chowaiki’s frauds and failing to warn them.

After being cleared of wrongdoing in a case by the U.S. Securities and Exchange Commission, New York financier Lynn Tilton faces new claims over how she ran her distressed companies in a lawsuit by three funds she once created and managed to raise money for her portfolio, Bloomberg News reported. Tilton’s Patriarch Partners LLC last year stepped down as manager for the "Zohar" funds — securities known as collateralized debt obligations that held bundled loans for the companies — over disputes with a unit of bond insurer MBIA Inc. and minority investors about her performance. Since then, Tilton has failed to tell the funds that she was holding as much as $45 million on behalf of the portfolio companies, even after 20 of them defaulted on their scheduled payments to the Zohar funds, their attorney Jonathan Pickhardt said yesterday in federal court in Manhattan.

Island Air employees have been told by a bankruptcy judge that there is no guarantee they will receive their final paychecks, the Associated Press reported. Bankruptcy Judge Robert Faris on Wednesday approved a motion to convert the bankruptcy case to a chapter 7 liquidation from a chapter 11 reorganization. Island Air ceased operations on Friday. The employees have not been paid for the work they did this month. CEO David Uchiyama said earlier this week that pay period encompasses about 10 days.

Synchronoss Technologies Inc. is fighting back against bondholders who say the company breached its borrowing agreements through the $1 billion sale of its Intralinks Holdings Inc. subsidiary, WSJ Pro Bankruptcy reported. The sale of Intralinks to private-equity firm Siris Capital Group LLC closed this week. But creditors holding a majority of Synchronoss bonds have argued in letters to the company that the deal moved “substantially all” of its assets out of their reach without the buyer assuming their debt. Intralinks specializes in financial technology for the capital markets, providing secure data rooms critical for acquisition deals, capital raises and other types of disclosures between companies and investors. The $226 million in convertible bonds recently changed hands at 92.5 cents on the dollar, according to FactSet. Synchronoss said it would use the proceeds from the Intralinks sale primarily to retire other loans. The convertible bonds mature in 2019.

Commerce Secretary Wilbur L. Ross and the firm he founded were sued by three of his former colleagues who say WL Ross & Co. pocketed management fees from the general partnerships that handled its private-equity investments, the Wall Street Journal reported today. The lawsuit, filed yesterday in New York State court, claims that WL Ross covertly took management fees from general partner entities that the investment firm was only allowed to charge to passive, outside investors. David Storper, David Wax and Pamela Wilson said in the lawsuit they were required to invest their own money in return for stakes in those general partnerships, which they retained after leaving the firm. They said that their partnership interests were a “significant part” of their compensation packages but were diluted when the firm took fees it wasn’t entitled to. “These charges are barred by the limited partnership agreements governing the private-equity funds,” the lawsuit said. “The agreements allow management fees to be charged to fund investors, not the general partners.” The plaintiffs claim WL Ross reaped at least $48 million in management fees from the general partnerships that were “completely concealed” until the firm disclosed them on capital statements last year.