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 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 24 September 2009, received 21,708 complaints concerning Lehman-Brothers-related products, of which 7,779 relate to non-minibond products. In respect of the Lehman-Brothers-related non-minibond complaints, 7,680 cases have gone through the preliminary assessment process and, as a result, the HKMA is currently investigating 2,806 cases and seeking further information on 2,645 cases. A total of 1,707 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, 13,007 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. Eight hundred and seventy-one 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.)

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 23 September 2009, 22,152 customers have responded to the repurchase offers, of whom 21,937 customers or 99.0% have accepted the offers.

"The repurchase offer is open for 60 days from the date of the offer letter. Depending on the date of individual offer letters, the offer period will start to expire from 6 October 2009. Nevertheless, 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
Hing-fung Wong, Manager (Communications), at 2878 1802

Hong Kong Monetary Authority
25 September 2009