HKMA refers 24 Lehman-Brothers-related cases to the SFC for further action

The Hong Kong Monetary Authority (HKMA) has today (Friday) referred to the Securities and Futures Commission (SFC) 24 cases involving complaints of alleged misconduct in respect of investment products related to Lehman Brothers for further action. The 24 cases, which are the first batch of Lehman-Brothers-related cases referred in this way, involve alleged mis-selling by two licensed banks in Hong Kong.

A HKMA spokesperson said that the cases had been reviewed by the HKMA, which had determined that there were sufficient grounds for referring them to the SFC in accordance with the mechanism established under the Securities and Futures Ordinance and the Memorandum of Understanding between the HKMA and the SFC. "The HKMA is satisfied that there are adequate justifications for referring them immediately to the SFC, which is the authority ultimately responsible for deciding whether a bank has been guilty of misconduct," the spokesperson said. "The SFC will review the evidence and will consult with the HKMA in determining what sanction, if any, is to be imposed," the spokesperson added. Sanctions that the SFC may impose on a bank include suspension or revocation of registration, reprimands, fines or prohibition orders.

The spokesperson said that the HKMA had, up to 16 October 2008, received 12,091 complaints concerning Lehman-Brothers-related products. Apart from the 24 cases referred to the SFC today, the HKMA had formally opened investigations on a further 95 complaints and was currently seeking further information on 783 complaints. A further 21 complaints had been found to lack sufficient prima facie evidence to support further action (A table summarising the complaints received so far is attached). "The HKMA will continue to work on the large number of complaints that still remain to be assessed as quickly as possible in a systematic and objective way, using the considerable staff resources it has mobilised and in accordance with its powers under relevant legislation," the spokesperson said.

Annex

For further enquiries, please contact:
Thomas Chan, Senior Manager (Press), at 2878 1480 or
Peggy Lo, Manager (Press), at 2878 1687

Hong Kong Monetary Authority
17 October 2008