HKMA reports further on Lehman Mini Bonds

On Friday 23 October the Hong Kong Monetary Authority published further data about its ongoing work in relation to Hong Kong's biggest financial scandal from the credit crunch, the Lehman Mini Bond saga.  Banks in Hong Kong are regulated by the HKMA and upon receipt of a complaint from the public the HKMA will first review the facts before deciding whether to send the complaint on to the Hong Kong SFC for further investigation and to decide whether the case requires enforcement action.

The HKMA reported as follows:

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 22 October 2009, received 21,729 complaints concerning Lehman-Brothers-related products, of which 7,767 relate to non-minibond products.  Of the Lehman-Brothers-related non-minibond complaints, 7,720 cases have gone through the preliminary assessment process and, as a result, the HKMA is currently investigating 3,177 cases and seeking further information on 1,625 cases.  A total of 2,308 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, 12,898 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.  One thousand and 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.)