************************************************************
In response to press enquiries concerning the progress of settlement of Lehman Brothers-related cases, a spokesman for the Financial Services and the Treasury Bureau said today (April 17) that the Securities and Futures Commission (SFC) and Hong Kong Monetary Authority (HKMA) had increased their resources in handling the investigations.
"The Government and regulators have been actively following up the issue by conducting investigations into customers' complaints while encouraging banks in question to reach settlements with their clients," the spokesman said.
"The SFC has earlier completed its investigations of two SFC-licensed distributors of Minibonds and reprimanded them. These two SFC licensees have also reached an agreement with the SFC to make a voluntary offer to purchase from their eligible clients all outstanding Lehman Brothers Minibonds at a price equal to the principal amount invested by these investors in the Minibonds. The SFC has also commenced investigations on certain banks using a top-down approach, with the assistance of cases referred by the HKMA."
"Besides, there are about 6 000 cases in which voluntary settlements have been reached or soon to be reached between affected investors and the banks concerned. A substantial number of these cases involve elderly investors," the spokesman said.
"We encourage the banks to continue their initiatives in handling the complaints and reach a settlement with their clients.
"The two regulators separately submitted review reports to the Government at the end of last year. We have then formulated an action plan to follow up in phases the recommendations set out in the reports," the spokesman added.
The collapse of Lehman Brothers has aroused global concern over financial regulation. From the Minibonds incident, the Government has also noted that there is room for improvement in our regulatory arrangements, in particular certain issues relating to the sales of investment products by intermediaries.
The Legislative Council Subcommittee to Study Issues Arising from Lehman Brothers-related Minibonds and Structured Financial Products is now conducting a hearing on the issue. The Government and the two regulators are giving full support to the work of the Subcommittee.
The Government will continue to monitor the developments of the Lehman Brothers Minibonds incident and assist the investors through other channels.
"We have invited the Consumer Council, the trustee of the Consumer Legal Action Fund, to actively consider applications from investors for legal assistance," the spokesman said.
"So far, the Consumer Council has received some 80 applications. A total of eight applicants withdrew their applications at the last minute, after the Consumer Council completed detailed analysis of their cases and was ready to take a decision as to whether to grant legal assistance. Several other cases have also reached an advanced stage, and the Consumer Legal Action Fund will soon decide on them if by that time the applicants have yet to resolve their disputes with the relevant parties and continue to pursue their applications."
"The Consumer Council will continue to devote its best efforts in handling other applications. The Government pledges full support to the Consumer Council in this exercise and, for instance, will not hesitate in injecting funds into the Fund as soon as the need arises," the spokesman added.
Ends/Friday, April 17, 2009
Issued at HKT 21:03
NNNN
