The Dubai Financial Services Authority (DFSA) has issued a statement this week, responding to the news that Lehman Brothers International (Europe), which had an operation located in the Dubai International Financial Centre, has been placed under administration in the United Kingdom.
The effect of that action, and parallel bankruptcy proceedings for the investment bank's US operations, was to place control of Lehman and all its operations, including its DIFC branch operation, under control of the Administrators, PricewaterhouseCoopers. Until and unless the Administrators determine otherwise, Lehman (including the DIFC branch) is precluded from conducting business.
Speaking on Tuesday, the DFSA said however that the events leading up to the appointment of Administrators were not connected with Lehman DIFC branch operations, and that Lehman had not been in breach of the DFSA’s requirements.
It confirmed that: "The difficulties encountered by Lehman relate to its operations elsewhere. The closure of Lehman does not result from any action of the DFSA. It is the legal consequence of administration proceedings instituted in the United Kingdom by Lehman itself."
The DFSA has also revealed that no client money is held by the DIFC branch of Lehman.
It was announced on Monday that Lehman's US operation intends to file a petition under Chapter 11 of the US Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York.
It is the fourth-largest US investment bank, and has had a presence on Wall Street for well over 150 years.
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