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

The Hong Kong Monetary Authority (HKMA) announced today (Friday) that there are currently 522 Lehman-Brothers-related non-minibond cases under disciplinary consideration. These are cases which have gone through detailed investigation by the HKMA.

Since 17 October 2008 the HKMA has referred a total of 334 Lehman-Brothers-related non-minibond cases (unchanged from last week) to the Securities and Futures Commission (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 17 September 2009, received 21,660 complaints concerning Lehman-Brothers-related products, of which 7,767 relate to non-minibond products. In respect of the Lehman-Brothers-related non-minibond complaints, 7,692 cases have gone through the preliminary assessment process and, as a result, the HKMA is currently investigating 2,586 cases and seeking further information on 2,964 cases. A total of 1,620 Lehman-Brothers-related non-minibond complaints have been closed as there was not sufficient prima facie evidence found after the preliminary assessment process or no sufficient grounds and evidence found after detailed investigations. Of the minibond complaints, 13,115 cases are eligible for the Lehman-Brothers Minibonds Repurchase Scheme ("the Scheme") or the voluntary offer made by the distributing banks to customers with whom they had reached settlements before the Scheme was introduced. Seven hundred and forty minibond complaints involving customers who are not eligible for, or have indicated that they do not accept, the repurchase offer under the Scheme or whose cases require clarification from the banks will continue to be handled by the HKMA if the complaints cannot be resolved by the enhanced complaint handling system introduced by the distributing banks as agreed by the regulators. (A table summarising the Lehman-Brothers-related complaints received so far is attached.)

"The HKMA has received 446 minibond complaints involving customers who are not eligible for the Scheme. The HKMA has referred these complaints to the distributing banks and required them to handle all these cases under the enhanced complaint handling system as soon as possible. Complainants do not need to re-lodge their complaints with the distributing banks as the banks will contact them directly and explain to them the arrangement of the system. If there is any case which cannot be resolved under the enhanced complaint handling system within one month since our referral, distributing banks are required to submit to the HKMA all relevant information in relation to such cases and the HKMA will then follow up these cases shortly," said an HKMA spokesperson.

Since 7 August 2009, 16 minibond distributing banks have begun the issue of repurchase offer letters to eligible customers (about 25,000 customers) under the Scheme. Up to 16 September 2009, 21,044 customers have responded to the repurchase offers, of whom 20,828 customers or 99.0% have accepted the offers.

"Eligible customers should consider carefully the terms of the offer and his or her personal circumstances before deciding whether to accept the offer from the distributing banks," added the HKMA spokesperson.

A set of questions and answers has been prepared to provide further details on the Scheme. It can be found at http://www.hkma.gov.hk/eng/other-information/lehman.shtml.

Table

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

Hong Kong Monetary Authority
18 September 2009