In 2008, CITIC Pacific suffered catastrophic financial losses running into billions of dollars due to complex, highly leveraged unauthorized foreign exchange contracts tied heavily to the Australian dollar. The corporate executives had entered into these leveraged derivative structures to hedge currency exposures related to the massive capital expenditures of their Australian mining developments, but an unexpected and sharp depreciation of the Australian dollar triggered severe margin calls. The incident led to intense regulatory investigations by the Securities and Futures Commission of Hong Kong, resulting in subsequent legal proceedings concerning delayed profit warnings and market disclosure transparency.