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

The Hong Kong Monetary Authority (HKMA) announced today (Friday) that there are currently 610 Lehman-Brothers-related non-minibond cases under disciplinary consideration. These are cases which have gone through detailed investigation by the HKMA.

Up till now, 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 29 October 2009, received 21,730 complaints concerning Lehman-Brothers-related products, of which 7,767 relate to non-minibond products. Of the Lehman-Brothers-related non-minibond complaints, 7,724 cases have gone through the preliminary assessment process and, as a result, the HKMA is currently investigating 3,208 cases and seeking further information on 1,479 cases. A total of 2,427 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, 12,932 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. Nine hundred and sixty three 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 28 October 2009, 24,411 customers have responded to the repurchase offers, of whom 24,168 customers or 99.0% have accepted the offers. As of 15 October 2009, for customers who had accepted the offer, 99% of them already received payment from the banks concerned, while the remaining payments will be settled soon (in any case no later than 30 days after having received the duly completed acceptance forms from these customers). Separately, about 4,800 customers who had reached settlements with the banks prior to the introduction of the Scheme are eligible to the voluntary offer made by the banks, with a view to bringing them in line with the eligible customers who accept the repurchase offer under the Scheme. For customers whose previous settlement amount was less than 60% (for customers aged below 65) or 70% (for customers aged 65 or above) of the principal invested, 97% of them already received top-up payments from the banks concerned as of 15 October 2009.

"The repurchase offer has begun to expire since 6 October 2009. Customers who are still eligible to the offer 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:
Peggy Lo, Manager (Communications), at 2878 1687 or
Hing-fung Wong, Manager (Communications), at 2878 1802

Hong Kong Monetary Authority
30 October 2009

Last revision date: 1 August 2011
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