Tan Kin Lian's Blog: Speech at Speaker’s Corner

Saturday, October 25, 2008

Speech at Speaker’s Corner – 25 Oct 2008

http://theonlinecitizen.com/2008/10/investors-to-submit-fourth-petition-to-mas/#respond

1. Lodge your complaint
The first step is to lodge your complaint with the financial institution that sold the product to you.

Be honest. In your report, you should state honestly what you were told and what you were led to believe, when you decided to invest in the product. Many investors were assured that the structured product is “safe” and “low risk” and is a good alternative to “fixed deposit”. If this is the case, you can state it honestly.

Do not worry that you have signed forms given to you by the sales representative (or relationship manager). If you were not told about the content of the form and did not get a clear explanation on what the statements meant, you can state it in your report.

The most important point is to state how you were misled, and what you were told by the sales representative.

I have printed the forms for you to collect the relevant information to complete your complaint. You can get the assistance of the volunteers, if you are not clear about the type of information that is needed.

Read this advice:
http://tankinlian.blogspot.com/2008/10/general-advice-to-investors-of.html

2. “Non-Vulnerable” Investor
Many investors were unsure about how they will be treated, as the fall outside of the “vulnerable” group. So far, MAS and the financial institutions have not stated how these investor will be treated.

Let us take it one step at a time. You should lodge your complaint and attend the interview arranged by the financial institution. You can state honestly what is contained in your statement that you lodged with the financial institution.

If you do not wish to attend alone, you can bring a family member, friend or fellow investor to accompany you.

3. Dispute Resolution Center
If you are not able to get a satisfactory compensation from the financial institution, you can bring you case to Financial Industry Dispute Resolution Center, FiDREC (http://www.fidrec.com.sg/). You pay a fee of $50.

FiDREC will form a panel to consider your complaint. FiDREC has the authority to pass a judgment that is binding on the financial institution. This decision is NOT binding on the consumer. The consumer still has the right to take the case to court.

At present, FiDREC has the authority to decide on claims up to $50,000. It can hear larger cases, subject to agreement of the financial institution.

4. Open Forum with Financial Institution
I suggest that investors should get together, according to the financial institution that sold the product to you, to request the financial institution to hold an open forum with the investors to discuss the following:

a) How the investors were misled by the information given by the sales representatives

b) How the financial institution can compensate the investors for their loss, caused by the bad advice and mis-information.

5. Petition #4
There are a potential of 10,000 cases to be handled. So far, just a handful of cases under the “vulnerable group” have been handled. It will take a long time for these 10,000 cases to be resolved, using the “case by case” approach. Many of those affected have still not lodged their complaint.

I will be organizing another Petition #4 addressed to the chairman of MAS. This is to ask MAS to help find a collective solution to the mis-selling by the financial institutions. A collective approach will reduce the stress on the individual investors in making the complaint and will ensure that fair compensation is given to all the affected investors, according to the category that they fall under.

6. Legal action
Some investors wish to take collective legal action. I like them to be aware that it can be costly and risky to take this action. It should be considered only as a last resort.

Before the investors decide to take this action, they should be aware about the cost and the chance of winning the case. They must also agree on the approach. They may be able to get different estimates of the cost from other lawyers.

Tan Kin Lian
http://www.tankinlian.blogspot.com/

12 comments:

Anonymous said...: Sir, i want the form to lodge a complaint to the relevant financial institution i.e. Great Eastern Insurance. Where to download or obtain from?

From Betty Chin; October 25, 2008 7:42 PM
Anonymous said...: 6. Legal action

after coming by your open address, i am more less quite certain the above final and last avenue, or resort as some might interpret it, is almost, if not completely, out of the question.

unfortunately is, the 5 other approaches before it has not worked well so far or do not seems to be making any sort affirmative headway, except alot of 'think so', 'believe so' and 'goodwill and hope'.

that leaves the conclusion pretty much cornered.; October 25, 2008 7:58 PM
Monsoon said...: Mr Tan - I am just wondering how MAS is responding to you? Did they acknowledge or appreciate your role in helping the government diffuse the situation and control the anger out there or do they see you as a trouble making leader?

Did you manage to take contact with the chairman of MAS?

Did any of the banks try to reach out to you? I think even as they may see you as an adversory on the other side against them, for their long term interest, they should initiate a dialogue with you. I am fully confident you will be fair minded and your advice to them will help the bank and the MAS retain at least some credibility with the public even those like me who are lucky not to be mislead into buying the minibonds.

If they are ignoring you, it say very much about how our financial system operate. It is in time like these that our officials have a good opportunity to show their leadership ability and responsibilities and a chance for them to show their sense of fairness. I think not only Singaporean but other outside interested parties are watching.; October 25, 2008 9:46 PM
Anonymous said...: Mr. Tan

I support your partition #4.

Today ST page A21 said we could go direct to Fidrec to lodge complaint. Is there any advantage to go to FI first than go to Fidec? ( sugested by you )?

Without knowing the remaining value of the Minibond 5, how can we state the amount of compensation or how Fidrec could work ou the fair compensation?

Please advise.; October 25, 2008 10:01 PM
Anonymous said...: Hi Mr. Tan ,

Following is written by Zaobao reporter 龚慧婷, published in Zaobao dated 25 Oct. I quote as follows " ...在9月15日，美国雷曼兄弟事件爆发前的周末，银行的客户经理还向我推销由美国投资银行美林所发行的结构投资产品................　　
　　当时，年轻的客户经理告诉我的一番话，让我一直印象深刻：（一）这个产品是经过金融管理局严格筛选过滤（carefully screened by MAS）的，是安全的。（二）淡马锡控股已经注资美林，因此美林应该是不会倒闭的。听了以后，我不禁哑然失笑。
　　当然，除了这两个为了让我放心和放胆投资的“承诺”以外，客户经理也告诉我，除非美林倒闭，否则我的投资应该是“保本”的....... "
Zaobao reporter 龚慧婷 can be our 'independent witness '! ( for RM mis-selling ); October 26, 2008 12:34 AM
Anonymous said...: Hi Mr Tan,

We have printed excerpts of your speech on our blog:

www.wayangparty.wordpress.com

Please read through and inform us if there are any mis-representation.

We can be contacted at:

wayangparty@hotmail.com

Fang Zhi Yuan
Chief Editor; October 26, 2008 12:51 AM
Anonymous said...: Regarding the excerpted Chinese text above, it leads me to an important observation.

The bank RM said that unless one of the Meryl lynch types (or whatever) collapse, you should be able to get all your capital back. The bank RM further said that Meryl is strong and unlikely to collapse - this is personal opinion, not necessarily a statement of fact. If i say, NTUC Income is strong, unlikely to collapse. How can i be faulted, it is my opinion and the investor is required to use his brains to agree or disagree.

The bank RM did not state the damning statement "if Meryl (or Lehman or whatever)collapse there are X others behind it, your capital is quite safe".

In my opinion, any RM who didnt state the damning statement, but merely the statements in the chinese excerpt, IT IS NOT MIS-SELLING, and the investor does not have rights to claim..

The onus of proving what actually transpired, lies with the investor. That is the biggest problem, "your word against mine". I believe, some blur (intentional or otherwise) RM would have said the "damning" statement to some investors. Then there are other RM like the RM in the chinese excerpt, that RM was honest in my view.. the statement DOES indicate that IF Meryly collapse the capital is lost, so it is not mis-selling.

We have a big headache because EVERY of the unlucky investors will naturally imagine that his RM DID say the damning statement. To be fair to the banks, how can you ever prove who is correct.. the verbal discussions took place at the point of sale typically many months ago!!!

REX; October 26, 2008 9:41 AM
Anonymous said...: Rex, It is vey difficult to prove what the RM has said, it is our words against their words. But if you sign petition 3 from Mr.Tan, for the authority to go through the product training materials where the RM's are trained how to postiion the product, who are the target customer, what are the points (benefits) to stress on and what are the points (risks to avoid. See whether any where in the training materials suggesting to sell the high-note as bond products. The authority could go one step futher to interview RMs. especilly those who sold the product and have since left the FI.

HS; October 26, 2008 1:33 PM
Anonymous said...: Mr Tan
I missed 25 Oct gathering at Hong Lim. I saw on CNA, May Wong, holding a piece of paper. Where can I get a copy of the form. I will be meeting Leonard Loo this Sunday afternoon at the legal talk. Can I get a copy anywhere. Mine is not yet matured but I believe it has been mis-sold. I have been to your speech at Hong Lim for three consecutive saturdays except last night's.

Many thanks Mr Tan; October 26, 2008 1:56 PM
Anonymous said...: hi HS
In response to your comment, sad to say i think the review of bank's training materials will lead to no where. Which bank will show you evidence that they mis-trained, mis-guided their staff? It is childish thinking... Their reputation is at stake and you will not find a single bank who will tell you sorry i trained the guys wrongly and they mis-sold.

So long as the RM did not make any statement to the effect that "you still have so many other parties to rely on in the basket", my view is that the product cannot be considered mis-sold. Especailly in the chinese excerpted text, the RM did hint (indirectly) if Merryl collapse it will lead to capital loss, and i feel that, the mere mention by RM that Merryl not likely to collapse is an opinion not a mis-fact, and there is no grounds to claim ignorance.
In my view there will be RMS who mistakently (unintentional or otherwise) also thought that there is a whole basket to spread the risk, if such a view is implicated to the investor, then only Mis-selling had been committed and 100%refund is fair.
Furthermore if the investor didnt ask and RM said nothing to such effect.. it is very difficult to claim.
In my view the claims would only be treated by banks in ex-gratia mode, the investor has little grounds as it is very difficult to prove that the RM made a statement that the basket is safe because of so many banks. Indeed, some investors may actually know it but will hop on the bandwagon to distort the facts to get back the money. Why, if the Wall street bankers play dirty games, the ordinary poor guy who get cheated, he should also play back some dirty games in this filthy world!

REX; October 26, 2008 5:49 PM
Anonymous said...: Hi Mr. Tan ,

Independant Witness 2:

Another article written by Zaobao reporter,许丽卿,
(title:贪婪好？published today, 26Oct). I quote as follows :
"....对于每三几个月就往银行办理定期存款更新手续的我来说，面对银行柜台小姐游说购买投资产品早已司空见惯，她们从不放过任何一个推销机会，我也从没心软而被说服。不为所动，是因为我从不相信衍生产品适合散户投资者。所以，银行职员将复杂的衍生产品卖给六七十岁的老人或连什么叫投资和衍生产品都搞不懂的低教育者，很不可思议.....

巴菲特都说了，如果要了解债务抵押债券（CDO），需要阅读1万5000字的材料，一个CDO方阵则需要阅读高达75万字的材料才能理解。所以，银行柜台小姐将雷曼迷你债券当一般债券来卖给散户，我一点也不奇怪...."

That was exactly how the RMs 'push' the 'toxic minibond' as 'low-risk bond', to their 'vulnerable and non-vulnerable ' customers.
The RMs only aim to get 'high commissions ' and the customers were not given the 'right advice' that would match their risk profiles!

Zaobao reporter,许丽卿, is just another 'independant witness' who experienced the same sale tactics
adopted by the RMs.; October 26, 2008 10:01 PM
Anonymous said...: Hi Mr. Tan ,

Independant Witness 3:

Article written by economist Mr. Lim Kim San, Professor of Business Policy of Information System and Economics at NUS. Title is " Option and what they mean ", published in the Sunday Times dated 26 Oct. I quote as follows :
"....So what are the Risks? Obviously, these vary from one product to another. Let me illustrate with respect to the Minibons Series 5 notes.
....So the shorthand name for the credit-linked notes issued by Minibond was simply "Minibond". But , of course, the notes were not bonds at all.
It took me quite a few hours to piece together an understanding of the structure of these notes from the pricing statement issued by Minibond and an announcement by HSBC, which is the trustee of the notes. I cannot guarantee that my understanding is complete and you may not rely on it as I am not a financial adviser......"

It demonstrates that how complex this "Minibond" is ! Even an economist ( and professor at NUS ) takes quite a few hours to piece together an understanding of the structure of these notes from the pricing statement and yet he still cannot guarantee that his understanding is complete.; October 27, 2008 6:13 AM

Saturday, October 25, 2008

Speech at Speaker’s Corner – 25 Oct 2008

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