Tan Kin Lian's Blog: Jubilee Notes

Sunday, October 19, 2008

Jubilee Notes

Dear Mr. Tan Kin Lian

I am concerned about the lack of action or discussion about the Jubilee Notes that Merrill Lynch put together, allowed to default on the excuse that a single of the six highly regarded reference entities went broke, and left all investors with zero compensation.

Here we have a large Financial Institution that is still alive and sound, yet they seem to be getting away with doing everything wrong. They apparently sold off the instruments in question for next to nothing as there is no market at this time.

Yet, MAS seems to not even mention them, much less going after them. I would not be surprised, if the buyers of these instruments were able to sell them for good value to the US Government and pocket a handsome profit while we, the investors, get nothing.

Again, where is Singapore's regulation and supervision to ensure the good name of Singapore as a safe and well regulated Financial Hub is not placed in disrepute?

BM

REPLY
Please write to the trustee. Use this template:
http://tankinlian.blogspot.com/2008/10/jubilee-series-3-linkearner-notes.html

15 comments:

Anonymous said...: So many people are affected and by so many types of structured products. It has become a mass problem with almost mass similarity of being misled.

Looks like to solve these problems, need for strong decisive action, but don't know who can provide it. I had hoped for MAS to do it but with their latest statement, that hope was lost. To solve case by case or in a non-transparent way is as good as not solving and moving on.; October 19, 2008 5:04 PM
Anonymous said...: Dear Mr. Tan,
I think the reality with Merrill and DBS products are that Lehman is one of the referenced entities.

Can anything be done?; October 19, 2008 5:04 PM
Anonymous said...: Dear Mr. Tan,
In ST today article, it was reported that internal DBS meeting with their RM confirmed that the RM have given feedback that there was no mis selling? So any point to file complaints?; October 19, 2008 5:08 PM
Anonymous said...: Hi Mr Tan

This comment which I heard yesterday at the speakers Corner, by an educated and well dressed lady in green in an interview with channel News Asia is pertinent to this post. U may be able too see this lady if this interview will be aired on CNA.

Among other things, she said, 'when people go to a casino, ppl know its a casino..ppl are prepared to loose but also hope to win..ppl know what they are in for in a casino. But when ppl go into a bank, ppl expect the bank to be safe..transparent, secured..ect and dont expect banks'...this is the gist of it, as I cannot remember her exact words..but guess the meaning is there..; October 19, 2008 5:40 PM
Anonymous said...: Mr. Tan, I think you should post this. Post from CNA.

The tone has changed, but they are still asking investors to resolve the issue individually with banks and if that fails to head to FIDReC for arbitration. With the power of front page headlines publicity, there is now a danger that the nascent group which has formed will be liquidated and dispersed as affected investors fall back into the rut of relying on the government to solve all their problems. Nothing could be more inimical to your interests than to approach the banks individually. You would be one person against an entire corporation with their team of lawyers and bullying employees who will brow beat you into accepting a bad deal. FIDReC comes attached with certain vested interests and you would be well served to understand what that is before committing to an arbitration involving them.

Although the authorities have admitted that these structured products have been mis-sold and appear to be wielding the stick, investors need to understand that mis-selling is not misrepresentation. To mis-sell means that the financial product sold was inappropriate to the needs of investors. There is no implication of fraud and it would purely be a civil matter. In misrepresentation there is a clear intent to deceive and to defraud. In other words, outright lies were told. From media reports alone, I am convinced that these structured products were mis-sold. But from the allegations that have been made by investors, it appears that some people may have also been defrauded. Why has there been no mention of potential misrepresentation?

What role does criminal deception have in our society? In a free society, we make choices and either reap the benefits or suffer the consequences. The basis of this system of reward and punishment is the law. It is the law that guarantees the rights of investors and allows capital to form. Without the law, financial assets would not exist for no one would have any confidence in them. It is therefore of utmost importance that the law be upheld. If there is evidence of wrong-doing, or in this case allegations of fraudulent inducement, then it is not in the interest of the people of Singapore to allow such serious crimes to go uninvestigated. We must ensure that persons in position of public trust, be they ministers, members of parliament, civil servants, directors and managers of public companies or even bank employees, are brought to account if they violate the sanctity of our laws for otherwise our republic is doomed.

To throw the veil of secrecy because the matter is politically sensitive smacks of cowardice. Why have investors been asked to conduct unequal private negotiations when their collective interests are best served if a settlement is reached via representative action in a public arena? What are they afraid of? They ask the financial institutions to do the right thing when criminal allegations have been made against these same institutions. Would urging all robbers in Singapore to do the right thing solve the problem of theft? The people of Singapore need to know which financial institution has done what for how else can we make informed decisions in the future? Let me remind you that it is these same choices that we are held accountable for.

Without the disclosure, no investor can know if the deal offered by the banks is fair. It will be dictated to them that getting something back is better than getting nothing back. Take it or leave it. Since you have no idea what others are receiving, and the government has placed its authority on forcing a resolution, you would have no choice but to accept what you know is an unfair outcome.

I view with grave apprehension this decision by the Monetary Authority of Singapore and I am deeply disappointed with the self appointed heroes who sycophantically support such an unequal decree. Fraud has been alleged by numerous individuals and a complaint has been filed with the Commercial Affairs Department. Now that the government has made its policy clear, it becomes even more important for investors to come together to enforce their rights. Do not accept this insulting attempt to palliate your feelings without a substantive admission of wrong doing or any concrete compensation. We owe it to ourselves to defend our country. Fraud must be punished or none of us are safe.; October 19, 2008 5:52 PM
Anonymous said...: The foreign sharks and barracudas have struck. The bite is deep and ferocious. Blood is drawn.; October 19, 2008 7:50 PM
Anonymous said...: I believe that our govt will act in the face such unsettled situation, despite the 'mild' attitude taken by MAS on the face. If not, it is such great affront to its authority and the local and foreign FIs will be laughing at them thinking that they are just paper tigers or cowards. We came and cheated your innocent people(young and old) so what?; October 20, 2008 1:38 AM
Anonymous said...: Highnote investors are luckier than Jubilee 3’s

I believe Jubilee 3 & High Note are both the same, having Lehman Brother as underlying entity. High Note 5 is under studied just because it was issued by DBS. But we have already received notice from Jubilee 3 Trustee that this investment is closed & we have ZERO left.
I do not know whether HSBC International Trust informed MAS about this before they act. If they have, do you think MAS should treat this matter the same as High Note 5 by instructing them to hold back so as to sort a better solution? I am highly suspicious whether the HSBC International Trust is acting for the interest of the investors.

I followed Mr. Tan KL's suggestion and wrote to them asking for more information. However, I doubt this will serve any useful purpose. They will send me some writeup with incomprehensive jargons and conclude that the balance is either ZERO or even negative. That is how they "discharge their responsibility" and protect themselv; October 20, 2008 10:08 AM
Anonymous said...: Last Friday I received a letter regarding the proceeding of Jubilee 3.

Anyone of you got anything that you can chip in.

Appreciate help on course of action .

Do you has any format for me to send out to the FI. Thx; October 20, 2008 12:07 PM
Anonymous said...: Answer to Anonymous 12:07pm

The letter I received is to inform the investors that they got noththing left. It seems that the matter is closed.

I am also at a lost; October 20, 2008 1:13 PM
Anonymous said...: Dear Jubilee-3 victims,

The only ray of hope is to find a common thread in this whole saga regardless of which Credit Link Products one invested. MAS takes the stance to investigate the FIs and RMs but not looking into their own house. One BURNING question is the ENFORCEMENT OF ITS REGULATORY GUIDELINES for the FIs. If there are lapses in the due diligence to enforce the regulations wouldn't MAS be taken to task as well? The investigation MUST answer the 2nd burning question, "why are sophisticated credit link products allowed to be marketted when professionals and ordinary citizens find them difficult to understand?" The 3rd burning question is the LOW RISKs perception taken in by all investors who chose these products because it generates fixed income at a moderate yield. Why didn't MAS question the FIs during the launching of such products just like how SGX questions listed companies for clarifications and transparency? These are examples of common weaknesses in the MAS system which entail further robustifications to prevent future problems. Having said that, wouldn't MAS take responsibilty if truely there are weaknesses in the current system? Wouldn't investors at the mercy the reglatory system be compensated? This is the common thread that will give Jubilee3 investors some hope. We need Mr Tan's voice to help expound and expand the means of finding the common thread in a legalistic manner so that all will benefit from the whole saga rather than letting MAS and FIs divide the investors into elderly..etc and concur!! We sincerely appreciate your selfless assistance Mr Tan! May you be abundantly blessed!

S8N; October 20, 2008 1:19 PM
Tan Kin Lian said...: Hi 10:08 AM

If the trustee give you an unsatisfactory reply, this is what you do:

1. Call the person by telephone and give him an earful. Tell him that he is not discharging his fiduciary duty to the investors!

2. Write a letter of complaint to the MAS. Send the letter to the newspapers.

3. Fight for your right!; October 20, 2008 1:50 PM
BenY said...: We can go after Merril Lynch for acting prematurely by auctioning off Lehman asset when other FI were still waiting for the auction of Lehman Bonds which was completed on Oct 12 and a week after Merril informed us of zero value. I read that the FI got 8.6cents for every dollar of Lehman CDS.
At least that's better than the zero value Merril informed us on Oct 6.; October 22, 2008 9:26 PM
Anonymous said...: Dear Mr Tan

My mother and my friend had invested in Jubilee Notes 3, and they each received a letter from Jubilee Global Finance Limited saying the "Credit Event Redemption Amount" is S$0. But shouldn't the trustee be sending out the letter?

They are now very confused. They would like to write to the trustee to ask how they come up with S$0 but dont know how to go about doing it.

So can you help them to ask other buyers to come together to question the trustee? More is better than less. They also feel that Straits Times has not reported a lot about Jubilee.

You will be at speakers corner on saturday, right? Can you help us (the neglected lot) please, Mr Tan?

Thank you.; October 23, 2008 8:49 PM
Anonymous said...: Dear Mr Tan KL,
I bought MQ yield + notes, Jubilee Series 8 and Pinnacles Note series 16 between May and July 08. I took up this offer when the bank assure me of 100% capital protected upon maturity.
1) How many investors like me understand the difference between Capital Protected and Capital Guaranteed?
2) We were made to sign several documents during the sales. How many of you really given an opportunity to read the docs including product prospectus, financial statement, etc before sign up. the financial managers/ planners/ consultants don't even bother to highlight to you the section on Risk Factors.
When you get home to read those docs, then you realise that what the financial managers said were totally incorrect.
The financial institutions are playing with words where majority is not able to understand. The financial planners/consultants/managers are liars. They utmost objectives is to secure quick sales, commission, etc at the expense of prudent investor like me.
No doubt my notes are still ok at this juncture, I deem it as mis-selling and the ditribution banks of these product should bear full responsibility; October 27, 2008 11:19 AM