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

The Hong Kong Monetary Authority (HKMA) has today (Thursday) referred to the Securities and Futures Commission (SFC) four cases involving complaints of alleged misconduct in respect of investment products related to Lehman Brothers for it to decide whether to take further action. The four cases, which are the twenty-third batch of Lehman-Brothers-related cases referred in this way, involve alleged misconduct by one licensed bank in Hong Kong.

Since 17 October 2008 the HKMA has referred a total of 418 Lehman-Brothers-related cases, involving 16 banks, to the SFC for further action. These cases have been reviewed by the HKMA, which has determined that there are sufficient grounds for referring them to the SFC.

The HKMA has, up to 1 April 2009, received 20,642 complaints concerning Lehman-Brothers-related products, of which 20,443 complaints have gone through the preliminary assessment process. Apart from the 418 cases referred to the SFC so far, the HKMA has formally opened investigations on 5,354 complaints and is currently seeking further information on 13,966 complaints. Seven hundred and five complaints have been found to lack sufficient prima facie evidence to support further action (A table summarising the complaints received so far is attached).

Commenting separately on voluntary settlements between banks and their customers, an HKMA spokesperson said that, according to figures collected by the HKMA from the distributing banks, up to 25 March 2009, a total of 5,634 complaints about Lehman-related investment products have resulted, or will soon result, in voluntary settlement, including compensation either in part or in full, between the complainants and the banks concerned, following banks' own investigations. Of these voluntary settlements, 3,940 have already been concluded. Discussions about settlements are in progress in the remaining 1,694 further cases.

"While the HKMA welcomes settlements between banks and complainants, its investigations into allegations of mis-selling will not be closed simply because of settlements or withdrawals of complaint cases. The HKMA will, regardless of any terms of a settlement, continue its investigation into cases where evidence of mis-selling is revealed." the spokesperson added.

Annex

For further enquiries, please contact:
Peggy Lo, Manager (Communications), at 2878 1687 or
Hing-fung Wong, Manager (Communications), at 2878 1802

Hong Kong Monetary Authority
2 April 2009