Dear Kin Lian,
Mr. Heng Swee Kiat, the Managing Director for the Monetary Authority of Singapore, is reported to have said, inter alia, ... "This group should have understood the risks of investing in these products and take responsibilities for their actions" [Sunday Times, Oct 26] when he expressed assurance that all investors’ complaints of mis-selling would be reviewed, with regard to their investment in structured products linked to bankrupt Lehman Brothers. Was it fair of Mr. Heng to pass such a comment? If mis-selling is considered a legitimate ground for seeking restitution, then it would have been more constructive if Mr. Heng had said: "Any bank or institution that has mis-sold or misrepresented must bear the loss suffered by the investor."
Some examples of mis-selling are clear-cut, and have been discussed in the local newspapers. An advertising pamphlet [M-pamphlet] produced for public consumption, for Minibonds Series 3, is a case in point. This M-pamphlet was produced with these enticing statements:
"Invest on solid foundations and earn 5% pa paid every 3 months for 53/4 years" and
"With our Minibond Series 3 credit-linked to six major financial institutions, you can enjoy the returns you deserve with peace of mind"
As a marketing ploy, these adverts make the product look attractive, but M-pamphlet was designed with deception in mind nevertheless, notwithstanding a disclaimer clause, in almost illegible fine print, placed at the bottom of the pamphlet. When the institution responsible for this M-pamphlet instructed the investor to sign on a modified version of M-pamphlet, the investor was probably not aware of the slight but crucial disparity between this modified version and M-pamphlet. And one cannot be faulted for saying that many, if not all, investors could have seen M-pamphlet and relied on the enticing statements mentioned above. And what is this disparity?
The disparity is that this encouraging and enticing statement "With our Minibond Series 3 credit-linked to six major financial institutions, you can enjoy the returns you deserve with peace of mind" and the disclaimer clause do not appear on the modified version. Any investors must still be given credit if they had noticed this disparity but had thought nothing of it. But if no one had noticed it they could not be faulted. It is clear that the advertising pamphlet was designed with a preconceived intention of misleading the public.
If MAS is serious in holding distributors responsible for mis-selling, MAS should ask for specimens of advertising materials/other documentation used by distributors when they were flogging these products, and critically examine them. The verbal input given to investors by relationship managers is no doubt an area of equal importance, if not more so, as a source of evidence for mis-selling or misrepresentation.
If any risk analysis completed for an investor shows the investor was NOT a high-risk taker, then the distributor was prima facie irresponsible for selling the product to the investor concerned and must now reimburse the investor for the loss. Should any distributor be found to be clearly at fault for mis-selling or misrepresenting a particular product, then MAS would do well to tell the distributor to reimburse all investors to whom they sold the product.
- ► 2020 (1162)
- ► 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)