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

The Hong Kong Monetary Authority (HKMA) announced today (Wednesday) that the format of its weekly statistics concerning complaints about Lehman Brothers-related investment products has been changed to give a clearer picture of the progress of the HKMA's disciplinary and complaint-resolution work as the handling of more and more complaints is completed. (The new format showing the position on 23 December 2009 is attached)

Under the new format, the numbers of complaint cases resolved by settlement agreements reached under section 201 of the Securities and Futures Ordinance, and through the enhanced complaint-handling procedures required by such settlement agreements, are reported separately. Up till now, 12,925 cases have been resolved by section 201 agreements (Note 1) and 471 through the enhanced complaint-handling procedures. Together with the 2,846 cases closed because insufficient prima facie evidence of misconduct was found after assessment or no sufficient grounds and evidence were found after investigation, the handling of 75% of the complaints received has now been completed.

Currently, 419 Lehman-Brothers-related complaint cases (including minibond cases) are under disciplinary consideration after detailed investigation by the HKMA. Proposed disciplinary notices are being prepared in respect of 120 such cases and proposed disciplinary notices or decision notices have been issued in respect of another 299 cases (Note 2). Adding the 419 cases to those the handling of which has already been completed, investigation work has finished in respect of 77% of complaint cases received.

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For further enquiries, please contact:
Peggy Lo, Manager (Communications), at 2878 1687 or
Natalie Wu, Officer (Communications), at 2878 8246

Hong Kong Monetary Authority
23 December 2009

Notes:

1. On 22 July 2009, the SFC, the HKMA and 16 distributing banks reached an agreement under section 201 of the SFO in relation to the repurchase of Lehman Brothers Minibonds from eligible customers and the HKMA has informed the banks that, since the agreement contains detailed arrangements for settlement of claims and the implementation of robust systems for selling unlisted structured investment products and dealing with related customer complaints in future, it is not the intention of the HKMA to take any enforcement action in relation to Minibond cases that involve eligible customers who accept the repurchase offer.
2. These are cases in respect of which (a) proposed disciplinary notices have been issued and representations were pending, (b) representations have been received and are being reviewed, or (c) disciplinary decision notices have been issued and the persons concerned have been given 21 days to consider whether to appeal to the Securities and Futures Appeals Tribunal.