In its Quarterly Report for October to December 2009 released at the end of February, the Securities and Futures Commission (SFC) in Hong Kong noted the conclusion of its investigations into the sale of Lehman Brothers Minibonds following the repurchase agreement reached with the last of the 19 distributors.

The report also described non-Minibonds agreements reached with two banks to repurchase Lehman Equity Index-linked Principal Protected Notes at 80% of the principal investment from over 500 customers who had bought such notes on or after 5 August 2008.

Other successful enforcement actions are also highlighted including jail terms of 26 to 30 months for four individuals who conspired to manipulate the share price of Asia Standard Hotel Group. This was the largest market manipulation case locally to date and the first indictable prosecution for this kind of offence under the Securities and Futures Ordinance (SFO).

• The report came out at the same time as the Financial Services Authority(FSA) in the UK revealed it was still conducting enforcement action over the sale of Lehmans Minibonds.


• The FSA confirmed it had fined a national financial advice firm £700,000 for failings relating to Lehman-backed structured product sales

The firm, RSM Tenon Financial Services Limited (Tenon), was fined for "significant failings in its advice and sales processes relating to Lehman-backed structured products, and for having poor systems and controls to prevent unsuitable advice in its structured product and pension switching business."

This is the first enforcement action resulting from the FSA's review of the marketing and distribution of structured products, particularly those backed by Lehman Brothers, concluded in October 2009. The FSA found that, in relation to its sales of Lehman-backed structured products between November 2007 and August 2008, Tenon failed to treat some of its customers fairly.

Margaret Cole, director of enforcement and financial crime at the FSA, said: "This is the first action we have taken for advice failings relating to Lehman-backed structured products following our recent review, and we acted swiftly and decisively in order to return money to investors as quickly as possible. We will continue to take tough action where we find evidence that firms are giving unsuitable advice to investors."