The bank officer selling the credit linked securities tells the investor that the product has low risk. This is done verbally.
But if many investors are able to sign a statement that they receive the same verbal statement from the bank officer, the collective evidence may carry weight in court.
It is important for the investors to get together and give their statement.
When my wife bought Minibonds from Maybank, the Relationship Manager did a risk profile analysis on her and rated her moderately aggressive and recommended Minibond Series 5 to her. In the same analysis, she stated that the product risk on credit default on the legal entities and underlying securities. Nothing was mentioned on the Swap Counterparty or guarantor. A copy of the risk profile analysis was given and am still holding it. Do you think it can use used as evidence of mis-representation?
ReplyDeletethanks,
Peter
Yes Mr Tan is right. Action speaks louder than words. So it doens't matter if you've signed away your rights and life with the numerous "cover-bank's-ass" documents if collectively investors can testify to the fact that they were told or led to believe that such products were low risk, the case is strong.
ReplyDeleteFrom what I know, if collective action is taken against the bank, there's a high chance that the bank may offer a out of court settlement.
I've seen banks doing that many times over in order to hush up bad publicity.
This is the email I got from my advisor before investing in Pinnacle Notes
ReplyDeleteDear Michele,
This Secured Credit-linked Note called Pinnacle Note Series 7, maybe of interest to your Mun, as it guarantees a 5% yearly interest.
The merits of this note are:
1)No upfront management fees to pay.
$5,000 is the minimun investable
2)Guaranteed 5% per annum to be paid on 6th July and 6th January yearly.
3)Bonus interest of 4%to be paid yearly.
4)To obtain the additional 4%, the underlying assets must perform 10% from the strike price.
5)The underlying assets are all triple A Rating.
These assets are A) Bank of America Corporation B)Citigroup Inc.
C)DBS D)Singapore Telecommunications Limited
E)OCBC E)UOB
6)Can only redeem after 18 months from issue date. No penalty charges will be levied.
7)The issuer will make the market for liquidity reason, but it will be in the region of 96% to 97% buy back.
8)At maturity, full 100% refunded and no management fee charge.
This Secured Credit-linked Notes is very much akind to a fixed deposit, except that it pays a higher interest of 5% yearly with the possibility of earning a additional 4% if all the underlying assets perform 10% from the strike price.
My company is one of the distributors and you can subscribe through me. No brokerage will be charged to you.
Regards
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"This Secured Credit-linked Notes is very much akind to a fixed deposit"
ReplyDeleteDon't sound a bit like fix deposit to me.......
Always, always, always get it in writing. Verbal communication can carry weight but not if there are no witnesses. Ask for materials in writing and ask for them to show you the specific language in the material.
ReplyDeleteThe rm at maybank who sold me the minibonds did not do a risk profile on me. It was definitely low risk funds. It was meant to be savings for my kid's education. The bank staff transferred it from the kid's savings account to the minibonds.
ReplyDelete