Progress of the HKMA's investigations in Lehman-Brothers-related cases

The Hong Kong Monetary Authority (HKMA) announced today (Friday) that investigation of over 99% of a total of 21,868 Lehman-Brothers-related complaint cases received has been completed. These include:

• 15,769 cases which have been resolved by a settlement agreement reached under section 201 of the Securities and Futures Ordinance (Note 1);
• 3,480 cases which have been resolved through the enhanced complaint handling procedures required by the settlement agreement;
• 2,528 cases which were closed because insufficient prima facie evidence of misconduct was found after assessment or no sufficient grounds and evidence were found after investigation;
• 36 cases which are under disciplinary consideration after detailed investigation by the HKMA, of which proposed disciplinary notices are being prepared; and
• 19 cases in respect of which investigation work has been completed and are going through the decision process to decide whether there are sufficient grounds for disciplinary actions or whether the cases should be closed because of insufficient evidence or lack of disciplinary grounds.

Investigation work is underway for the remaining 34 cases.

The above shows that other than a small number of outstanding cases some of which have been lodged recently, the handling of all Lehman-Brothers-related complaints was basically completed with 88% of the complaints resolved and the remaining 12% closed because of insufficient evidence or grounds.  With the majority of Lehman-Brothers-related complaints already completed, we have started to deploy resources to accelerate the handling of other non-Lehman-Brothers-related banking complaints.  To provide a broader perspective on banking complaints, we will report the progress of our handling of all enforcement cases (including both Lehman-Brothers-related and other non-Lehman-Brothers-related banking complaints as well as other cases referred by our banking departments and other regulators) on a monthly basis, starting from October 2012.

(A table summarising the progress of the disciplinary and complaint-resolution work in respect of Lehman-Brothers-related complaints is attached.)

Table

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Hong Kong Monetary Authority
28 September 2012

Notes:

1. These are cases where eligible customers accepted the settlement offers made by the distributing banks in respect of Lehman Brothers-related investment products in accordance with the agreements reached under section 201 of the Securities and Futures Ordinance.  The HKMA has informed the distributing banks that, since these agreements contain detailed arrangements for settlement of claims and the implementation of robust systems for selling unlisted structured investment products and dealing with related customer complaints in future, it is not the intention of the HKMA to take any enforcement action in relation to the Lehman Brothers-related cases that involve eligible customers who accept the settlement offers made by the distributing banks pursuant to these agreements.