21 Aug 2009
HONG KONG, Aug. 21 -- Hong Kong's securities regulator said Friday it won a court ruling that forces Lehman Brothers Asia Ltd., a subsidiary in liquidation of the now-defunct U.S. financial firm, to hand over minibond-related documents that it had deemed ''too privileged'' for disclosure.
Some 30,000 local investors claim they were scammed into buying the Lehman Brothers financial product, believing it had a low-risk nature and some invested their life savings.
The Securities and Futures Commission has been investigating the matter and as part of the investigation it has sought documents from Lehman's liquidator since last year that it said are related to the assessment of the minibonds.
The High Court handed down a ruling Wednesday ordering Lehman to hand over the documents in question because they ''were not subject to valid claims of privilege,'' according to a statement issued by the commission.
''It is unfortunate that the SFC would not have obtained any of these documents without having to take these proceedings against Lehman Brothers,'' said Mark Steward, the commission's executive director of enforcement.
A spokesman for the commission declined to say if it has received the documents from Lehman's liquidator yet.
Along with another regulator, the Hong Kong Exchanges and Clearing Ltd., the commission has been criticized by the minibond investors for acting too slowly in the investigation.
Sixteen banks responsible for selling the minibonds agreed last month to a settlement arrangement that will buy back at least 60 percent of the product's worth from eligible investors.
The outstanding value of the minibonds was estimated at about HK$12.6 billion ($1.61 billion).
U.S. securities firm Lehman Brothers Holdings Inc. filed for bankruptcy protection last September.
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