I believe that the issuer or trustee of a structured product has a fiduciary duty towards the investors. A break of fiduciary duty is a criminal offence. I searched for an explanation of fiduciary duty and found the following:
Source: Wikipedia
The fiduciary duty is a legal relationship of confidence or trust between two or more parties, most commonly a fiduciary or trustee and a principal or beneficiary. One party, for example a corporate trust company or the trust department of a bank, holds a fiduciary relation or acts in a fiduciary capacity to another, such as one whose funds are entrusted to it for investment. In a fiduciary relation one person justifiably reposes confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires one to act at all times for the sole benefit and interests of another, with loyalty to those interests.
“ A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.”
A fiduciary duty is the highest standard of care at either equity or law. A fiduciary (abbreviation fid) is expected to be extremely loyal to the person to whom he owes the duty (the "principal"): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. The word itself comes originally from the Latin fides, meaning faith, and fiducia, trust.
In English common law the fiduciary relation is arguably the most important concept within the portion of the legal system known as equity. In the United Kingdom, the Judicature Acts merged the courts of Equity (historically based in England's Court of Chancery) with the courts of common law, and as a result the concept of fiduciary duty also became usable in common law courts.
When a fiduciary duty is imposed, equity requires a stricter standard of behavior than the comparable tortious duty of care at common law. It is said the fiduciary has a duty not to be in a situation where personal interests and fiduciary duty conflict, a duty not to be in a situation where his fiduciary duty conflicts with another fiduciary duty, and a duty not to profit from his fiduciary position without express knowledge and consent. A fiduciary cannot have a conflict of interest. It has been said that fiduciaries must conduct themselves "at a level higher than that trodden by the crowd" and that "the distinguishing or overriding duty of a fiduciary is the obligation of undivided loyalty."
The following might be of interest to all, taken from Channel NewsAsia Forum Index -> Market Talk:-
ReplyDeleteTo DBS Rajan Raju
Cc Francis Chan of SPH
The article that DBS would carry out an investigation on the High Notes has left a sour taste because...i feel there is no way an impartial internal department such as “DBS Investor Care” can carry out it’s duties to the public.
I would like to report an incident that transpired at DBS Shenton Way on 30 Sept 10am with the following pax
Paul Nah – Senior VP & Head DBS Franchise & Strategy Consumer Banking
Karen Looi – VP Business Director
Both the above are newly appointed to the “DBS Investor Care” but they are still holding to their primary role. They are grossly unsuitable to handle the new job as they are too aggressive of their position in the bank and not used to handle small investor like myself who has lost a tremendous amount of savings.
I was invited to DBS Shenton for a chat on the newly appointed group “DBS Investor Care” that is suppose to maintain an impartial view/investigation to the allegations to the misrepresentation of the High Notes series, but I was intimidated by Mr Paul Nah who defended DBS aggressively on all levels that there was nothing I can do about the matter and I should face the facts that I have lost all my investments in the High Notes 5 investment.
Our argument degraded to level of a “staring incident” between the senior VP Mr Nah and myself. Karen Looi can act as witness to the incident. My quote on the staring incident is “why are you staring at me Paul, do you think I am afraid of you?” and still he kept staring at me. I am now afraid to further confront DBS for the fear that my assets will be frozen. I do not know the implications that will transpire after my heated argument with the Senior VP.
If this is the level of professionalism in DBS customer care, I do not think any other investor should ever go into DBS anymore. Each small investor would be intimidated and bullied into submission by the newly head of “DBS Investor Care” or shall I renamed the group to “ DBS Investor Intimidation Group”
At this juncture, I would like to close my DBS account and respectfully hope that DBS return all my assets in the form of a check mailed to my address. I am currently fearful of venturing into DBS again.
Regards
Kenneth Tay