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

The Hong Kong Monetary Authority (HKMA) announced today (Friday) that there are currently 108 Lehman-Brothers-related cases under disciplinary consideration. These are cases which have gone through detailed investigation by the HKMA.

"A number of cases are at a very advanced stage of the enforcement process. Before making a final determination in these cases, we have to go through due process to ensure fairness, including giving the subjects of investigation an opportunity to be heard," said by an HKMA spokesperson.

In addition, the HKMA referred to the Securities and Futures Commission (SFC) four cases involving complaints of alleged misconduct in respect of investment products related to Lehman Brothers yesterday for it to decide whether to take further action. The four cases, which are the twenty-eighth 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 449 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 to facilitate its investigations into banks.

The HKMA has, up to 14 May 2009, received 20,960 complaints concerning Lehman-Brothers-related products, of which 20,803 complaints have gone through the preliminary assessment process. As a result of the assessment, the HKMA is currently investigating 5,956 cases and seeking further information on 13,727 cases. A total of 1,012 complaints have been closed because there was no sufficient prima facie evidence found after the preliminary assessment process or no sufficient grounds and evidence found after the detailed investigation (Table summarising the complaints received so far is attached). "The closure of these cases will not affect the top-down investigations being undertaken by the SFC at the bank level," the HKMA spokesman said.

With a view to further enhancing understanding of the progress of the HKMA's investigation in Lehman-Brothers-related cases, the HKMA has prepared a flowchart to outline its enforcement process. This flowchart can be found at http://www.info.gov.hk/hkma/eng/new/lehman/enforcement_process.pdf.

Annex

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

Hong Kong Monetary Authority
15 May 2009