983 investors signed a Petition to the Government to carry out a full and independent investigation into whether there was any wrong doing involved in the creation and marketing of the credit linked securities, such as the mini bond, high notes, jubilee notes and pinnacle notes.
In an accompanying letter sent to the Monetary Authority of Singapore, I identified three laws that could have been breached:
1) Securities and Futures Act (section 199)
2) Financial Adviser’s Act (section 27)
3) Trustees Act
Let me explain these points.
Securities and Futures Act
This law requires the seller of a security to provide truthful and reliable information to the buyer. The seller cannot give false or misleading information and cannot withhold any relevant information. Any breach of this law is an offence that can lead to civil or criminal action.
I like to ask MAS to see if the actual nature and risk of the credit linked security has been properly disclosed in the advertisement, sales material or the prospectus.
Are they disclosed in a transparent and clear manner? If not, was the disclosure done in a manner that can be considered to be misleading?
Many investors said that they were misled into thinking that they had invested in the bonds issued by the six or eight reference entities and that all of these entities had to fail before they lose their entire capital
How did this mistaken belief came about?
Financial Advisers Act
This law requires the financial adviser or the representative to understand the needs, risk profile and preference of the investor and to recommend the appropriate products.
Many of the investors wanted to have a safe investment. They are risk adverse.
Did the representative carry out their responsibility properly? Why did they recommend a product that has turned out to be so risky? Did the representative understand the nature and risk of the product?
This law requires people in a position of trust to look after the best interest of their client. Does this law apply to the trustee and the arranger of the securities?
Did they discharge their duty according to the law? Were the payments made out of the fund in accordance with what has been authorised in the prospectus? Were the dealings made at the correct prices and are fair to the investors? How are conflict of interest resolved?
Should the trustee have to render a full statement of account to the investors?
I hope that the Government looks into these areas, to see if there were any wrong doing that led to such large losses among the investing public.
If there were wrong doing, the Government can take the appropriate action to bring the offenders to Court and to seek suitable compensation for the losses suffered by the investors.
I hope that the Government can play an active role to minimize the losses of the investors and ensure that the underlying securities are NOT un-wound at fire sale prices.
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10/12 - 10/19
- Breach of the law - arguments
- Speech at Speaker's Corner - 11 Oct 2008
- Fall outside "vulnerable investors"
- Statutory declaration - Glenn Knight
- Lost the sense of bonding and togetherness
- Today: Man with a Mission
- TV news on MAS conference
- Investor meets HSBC Trustee
- Prompt reply to help "lost" investors
- Interview with Zaobao
- Interview with Today Paper
- MAS Media Release on Structured Products
- Meeting at Speaker's Corner 18 Oct, 6-7 pm
- Ray of light and hope
- Act with honour and integrity
- HKMA refers Lehman cases to regulator
- Dow Jones: Hong Kong banks will buy back mini-bond...
- Appeal to Financial Institutions - settle through ...
- A new financial system - back to the safe old days...
- Ponzi Scheme
- Caring and responsible country
- Petition to MAS - review sales training and market...
- HK: Tsang vows to get justice for minibonds invest...
- Petition to investigate the sales training
- Who let the sharks in?
- Fearful about speaking
- MAS International Advisory Panel (IAP)
- Impact of an offer to settle
- Hong Kong Chief Talks Tough on Minibonds - Bravo
- Request for MAS to give an update on the Petition
- Statement by DBS CEO
- Negotiate with financial institutions
- Hong Kong: Minibond fix may prove a risky business...
- New "petition" to collect particulars of investors...
- Jubilee Series 3 LinkEarner Notes
- Facilities at Speaker's Corner
- Strategy Committee for CLS
- Statutory declaration - 2 lawyers
- Statutory declaration - FiDREC
- Take collective legal action now?
- To the victims - be strong
- Caveat emptor: A licence to cheat
- Individual advice
- Specific product or distributor
- Effort to help the victims
- Meeting of High Notes investors
- The Online Citizen
- Ignorance and greed
- Protest outside DBS headquarters
- Leveraging and greed
- DBS will take responsibility, in some cases
- DBS to settle case by case: Rebecca Lee
- Look at the Product Advice
- Sales representatives did not know - misrepresenta...
- Hong Kong Lawmakers Criticize Bks Over Lehman-Back...
- FAQ from investors (1)
- Concern about disorderly behaviour
- Sales representatives should tell the truth and ad...
- HK legislators criticize regulators over bonds
- Credit linked securities were highly risky, even i...
- Low cost investment funds
- Elected President of Singapore
- Hit by Forex Losses
- Dual Currency Deposit (DCD)
- Weekly Speeches at Speaker's Corner
- Tan Kin Lian's speech at Speaker's Corner
- Minibond invetors are not risk takers
- Big loss on dual currency investment
- Forex or dual currency transactions
- SCMP: Banks risked reputations, watchdog says
- Nadya "Speaker" Zagarodnova
- Send this message to your Member of Parliament
- Weekly meetings at Hong Lim Green?
- Why the credit linked notes are highly risky
- Speaker's Corner - 11 October 2008
- Panic of AIA policyholders
- New blog for investors of Credit Linked Securities...
- STI Exchange Traded Fund
- Investing in difficult times
- Speech at Speaker's Corner: 11 Oct 2008
- Channel News Asia - report on Speaker's Corner
- Hong Kong: DBS first bank to repay bonds
- UOB Structured Notes
- Structured products are not sold in the UK
- Blogs for investors
- Volunteers to lead groups of investors
- Fight for the weak
- You have to take the risk and bear the loss
- Upset investors turn up at Speakers' Corner
- Greedy for profits
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