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

June 17, 2011‐ Hong Kong

In its press release dated June 17, 2011, the Hong Kong Monetary Authority (HKMA) detailed the progress of the HKMA's investigations in Lehman-Brothers-related cases.

The Hong Kong Monetary Authority (HKMA) announced today (Friday) that investigation of over 99% of a total of 21,799 Lehman-Brothers-related complaint cases received has been completed. These include:

14,383 cases which have been resolved by a settlement agreement reached under section 201 of the Securities and Futures Ordinance (Note 1);

2,590 cases which have been resolved through the enhanced complaint handling procedures required by the settlement agreement;

2,712 cases which were closed because insufficient prima facie evidence of misconduct was found after assessment or no sufficient grounds and evidence were found after investigation;

1,529 cases (including minibond cases) which are under disciplinary consideration after detailed investigation by the HKMA, of which proposed disciplinary notices are being prepared in respect of 747 such cases and proposed disciplinary notices or decision notices have been issued in respect of the other 782 cases (Note 2); and

462 cases in respect of which investigation work has been completed and are going through the decision process to decide whether there are sufficient grounds for disciplinary actions or whether the cases should be closed because of insufficient evidence or lack of disciplinary grounds.

Investigation work is underway for the remaining 121 cases.

(A table summarising the progress of the disciplinary and complaint-resolution work in respect of Lehman-Brothers-related complaints is attached.)

For general enquiries, please contact:
Dedicated hotline, at 8100 2314

Hong Kong Monetary Authority
17 June 2011

Notes:

1. These are cases where eligible customers accepted the settlement offers made by the distributing banks in respect of Lehman Brothers-related investment products in accordance with the agreements reached under section 201 of the Securities and Futures Ordinance. The HKMA has informed the distributing banks that, since these agreements contain 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 the Lehman Brothers-related cases that involve eligible customers who accept the settlement offers made by the distributing banks pursuant to these agreements.

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.

Source: HKMA Website

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