From Business Times
Lloyds TSB was fined GBP 1 million (S$2.35 million) in 2002 by the Financial Services Authority (FSA) of the UK and had to set aside GBP 165 million to compensate claims relating to mis-sold endowment policies, involving 45,000 policyholders.
In 2003, Lloyds TSB was further fined GBP 1.9 million and had to compensate GBP 98 million to 22,500 investors, many of them pensioners. This was related to the mis-selling of high-income 'precipice' bonds touted as an 'Extra Income and Growth Plan'. These bonds promised a return of 9.75-10.25 per cent over three years (twice the bank deposit rates then) and were linked to 30 stocks. They were called 'precipice' bonds because the investors' capital returns could 'fall off a cliff' if the markets fell below a pre-set trigger point.
The markets linked to the 30 stocks did indeed fall. These high-risk bonds, which were highly leveraged, were sold to inexperienced investors. Some 16,500 investors had never purchased equity-related investment products before.
22,500 sales out of 51,000 (that is, 44 per cent) of the total sold were deemed to have been mis-sold. Howard Davies, outgoing chairman of FSA, said that the products sold by Lloyds were 'inherently wicked' (because they were highly leveraged) and they were sold to unsuitable people.
Andrew Proctor, FSA director of enforcement, said: 'There was nothing wrong with the product itself. The problem was that too much of it was sold to the wrong people.'
- ► 2020 (762)
- ► 2019 (1839)
- ► 2018 (1406)
- ► 2017 (1258)
- ► 2016 (828)
- ► 2015 (691)
- ► 2014 (144)
- ► 2013 (501)
- ► 2012 (1269)
- ► 2011 (1873)
- ► 2010 (2369)
- ► 2009 (1654)
10/26 - 11/02
- Compare toxic financial product with melamine
- Why are banks allowed to sell structured products ...
- Trace the IP address of SiewKhim
- Scuffle in HK Protest Over Lehman-Linked Products
- Speaker's Corner - 1 Nov 2008 5 to 7 pm
- Speaker’s Corner 1 November 2008 - Speech
- Use your real name
- Educate the public about the structured products
- Invest in transparent and fair products
- Petition #4 - Review Complaint Handling Process
- High Notes Investor Group - Press release 30 Oct 08
- Buy Government Bonds through ATM
- Undergraduate reply to Prof Lan
- News about Jubilee Notes arranger
- Conflict of interest between bank and customer
- Old news that may be useful
- NTUC Bonus Cut was a bad idea
- Financial Services Authority fines Lloyds Bank in ...
- Reply to Today Paper - "Structured Products ....."
- Be empathic to investors who lost their savings
- LET'S NOT FORGET ABOUT PERSONAL RESPONSIBILITY'
- Misleading Prospectus
- Thomas Jefferson's views on the banking system
- Talking point - minibonds and structured products
- Videos about speeches in Speaker's Corner
- US Attorney General recovers for investors in auct...
- High risk from inception
- Do you hear the people sing - version #4
- Mini-bond investor gives his view
- Savings of retired workers
- Collective legal action (1)
- Buying Government Securities
- Regulator should disallow the sale of bad products
- Singapore Kopitiam Forum
- Nature and risk of the structured product
- Make Government Bonds easily available
- Not a happy time for me
- Misleading advertisements
- Why does the stock market fall?
- Unconditional help from volunteers
- NUS dean also exposed to loss
- Enforce the law
- Well regarded persons oversee the financial instit...
- Town Council invest in Minibond
- Jump on bandwagon
- Malaysia act against land banking
- Can investors understand CDO?
- Biggest loss in the the structured products
- CLSA Asks 500 Staff to Take Pay Cuts of Up to 25%
- Collapse of the global financial system
- Lehman Brother bond
- A fair compensation
- Prospectus needed
- A fair rate of return
- Electricity prices: 82% higher her than in Hong Kong
- Profit margin in creating the structured product
- BBC radio documentary on structured products
- Call to MAS - pass general guideline for compenstion
- Husband's objection
- Blog for High Note investors
- Complaint Form
- It will be handled 'fairly'
- Interviews with Financial Institutions
- Unhappy with the interview
- Deposit Guarantee scheme in New Zealand
- Singapore Government guarantees bank deposits
- Leveraged Dual Currency Investments
- Pinnacle Notes - lodge a complaint now
- ▼ 10/26 - 11/02 (68)
- ► 2007 (1803)
- ► 2006 (696)
- ► 2005 (159)