Tan Kin Lian's Blog: Speaker's Corner

Friday, October 24, 2008

Speaker's Corner - 25 October 2008

I have registered to speak at Speaker Corner from 5 to 7 pm on Saturday 25 October.

Some investors are very angry at the action by the Government regarding investors outside of the "vulnerable" group. They sent strong messages to me in my blog and by e-mail.

I agree with your views. I receive more than 100 of these messages. I suggest that some of these investors should come forward and speak at Speaker's Corner. You can register quite easily at:

http://www.nparks.gov.sg/cms/index.php?option=com_chronocontact&chronoformname=honglim_park_speakers_corner

If you have registered, send your particulars to me. I will get the host to call the speakers to talk in an orderly manner.

53 comments:

Anonymous said...: Regardless of race, language or religion ....

Shouldn't all be treated fairly? I depended as much on what they told me or did not tell me to form the same wrong understanding that it is a safe product.

I am getting increasingly disappointed with the FI and I think MAS is leading them to this unjust way.; October 24, 2008 8:35 AM
Anonymous said...: DBS MEDIA STATEMENT

quote

Since the collapse of Lehman Brothers on 15 September, we have been deeply concerned about DBS customers in Singapore and Hong Kong who have invested in structured products with Lehman as a reference entity and understand the anguish they are facing. When DBS first distributed these products over 18 months ago, the global financial landscape was very different. Nobody could have imagined the extent of the fallout from the US sub-prime crisis, or the collapse of a venerable 158-year-old financial institution like Lehman and the toll this would take on investors.

DBS CEO Richard Stanley said: "I am deeply concerned about the anguish our customers are experiencing. DBS is committed to doing the right thing and my colleagues and I are working as hard as possible to resolve the situation. Every customer is important to us and in cases where our standards are not met, DBS will not hesitate to make cash compensation."

These products were sold to 4700 customers in Singapore and Hong Kong who invested a total of SGD 360 million. In Singapore specifically, 1400 DBS customers invested a total of SGD 103 million in High Notes 5. Of these customers, two thirds are from DBS Treasures, which caters to customers with a minimum of SGD 200,000 cash and/or investments, and 80% are below age 60. We will give every single case individual attention and hearing. We agree with MAS on the need to give priority to vulnerable customers and are fast-tracking such cases.

As a matter of policy, we do not discuss individual cases. However, to-date we have found that a number of cases did not meet the standards DBS upholds and the Bank will be compensating these customers with effect from tomorrow. Based on the number of cases we've reviewed, we estimate that the total customer compensation in Singapore and Hong Kong will be in the range of SGD 70 - 80 million.

The unwinding process of the products is currently underway. Regrettably, our initial expectation of the worst-case scenario whereby investors will lose their entire principal investment amount is likely to materialise. DBS will not gain from this process and the Bank will make a final announcement next week when the final credit redemption amount, based on prevailing market conditions, is determined.

We will continue to work closely with the MAS to ensure that all cases are handled in a prompt and comprehensive manner.

unquote; October 24, 2008 9:05 AM
Anonymous said...: Taken from MAS website - FAQ:

Who are the vulnerable customers referred to in MAS’ statement?

There is no fixed definition of a vulnerable customer. The indicators of a vulnerable customer include a low level of education, a lack of proficiency in English, being retired or unemployed and whether the investment amount constitutes a large part of total savings.

Is MAS investigating?

Normally MAS does not comment on its dealing with individual institutions. However given the public interest in this matter, MAS has confirmed that it has been conducting formal inquiries to determine if there have been breaches of law, poor sales practices or inadequate internal controls by the FI and their representatives. MAS will make an announcement on any actions it is taking when inquiries are completed

How many investors are affected? How many complaints have FIs received?

The total issue size of the Lehman Minibond programme was S$508 million, of which S$375 million was sold to about 8,000 retail investors through nine distributors. For the Merrill Lynch Jubilee Series 3 LinkEarner Notes, S$23 million of the total S$28 million notes issued were sold to about 350 investors through six stockbroking firms. In the case of DBS High Notes 5, over 1,400 investors bought S$103 million worth of notes.

As at 19 October 2008, 1315formal complaints have been received by the 10 distributors.; October 24, 2008 9:38 AM
Anonymous said...: Maybank Media Statement

quote

Singapore – We note MAS' call to financial institutions to give priority to vulnerable customers and to take full responsibility in cases where the product was clearly inappropriate given the customer's profile and circumstances. Maybank has already identified Lehman Minibond investors who belong to the vulnerable group, and their cases have been fast-tracked for review at the steering committee.

This group has been accorded priority and a process is in place to establish fair settlement.

From the onset of the events arising from Lehman Brothers’ bankruptcy, Maybank has taken a proactive approach in contacting our affected customers to keep them updated on the status of their investments in Lehman Minibonds. We have also deployed additional resources to contact this group of customers to assure them that we are proactively reviewing their investment.

We have now called more than 50% of the identified segment within the vulnerable group. We have also conducted or scheduled interviews with 70% of those who have written or contacted us.

The management has reached a decision on deserving cases that warrant full compensation and are working out details before communicating the decision to these affected investors.

unquote; October 24, 2008 9:46 AM
Anonymous said...: Hi Mr. Tan ,

You should also invite the FIs to attend this 'speaker corner gathering'. They can make use of this platform to tell their stories. For example : Invite HLF to explain how she defines her 'Vulnerable customers' as 'Primary education and aged 62 & above '.; October 24, 2008 10:11 AM
symmetrix said...: I am concerned with the flwg comment made by DBS:-

"...Regrettably, our initial expectation of the worst-case scenario whereby investors will lose their entire principal investment amount is likely to materialise..."

Does this mean that there will be some investors in the non-vulnerable group that get back ZERO? This is grossly unfair. How can DBS pay some investors 100% and pay some other investors 0%? What is DBS's criteria of a typical non-vulnerable investor?

-Lingam; October 24, 2008 10:14 AM
Anonymous said...: Mis-selling is mis-selling - it does not make a difference if the buyer is elderly or young, lowly or highly educated, and whether he or she could or could not afford to lose the sum of money invested.

The point of fact is whether at the “point of sale”, the true and proper level of “risk” was conveyed to the buyer. The fact to be reckoned is whether the buyer’s level of “risk profile” was properly and fairly undertaken, and, then matched with the risk level of the product.

The point that Lehman Brothers Inc was stated as the Arranger is immaterial. Who really fully understood what was the Arranger’s role and what were the implications involved? The point of fact was whether the main thrust and selling points of the product were based purely on the product being “credit linked to some of the world’s largest financial institutions”. Were the probable and the worst-case scenarios fully and properly explained to and understood by the buyer?

Evaluation should not be based on hindsight but purely on the circumstances and situations as they exist at the point of sale.

Chew Boon Keng - mbkchew@yahoo.com; October 24, 2008 10:33 AM
Anonymous said...: Hi Mr. Tan,
My name is Karen Ha and I am with Commercial Radio in Hong Kong. We are doing comparisons on the differences of how the mini bond issue is handled in Hong Kong and China. Would it be possible for me to do a phone interview with you later on today?

I can be reached at (852)90849254 or (852)23394855.

Thanks in advance!
Karen; October 24, 2008 10:46 AM
Anonymous said...: Worst still, DBS has no courage to disclose the actual amount of $80millions go to Singapore investors.

I strongly beleive 90% goes to Hong Kong investors. DBS is fooling the Singaporeans again and again.; October 24, 2008 11:02 AM
Anonymous said...: Dear Mr Tan, u have championed the causes of the victims of this financial turmoil. I wish to highlight that the victims does not just include the elderly, the less educated but also include many professionals, young and middle age salaried workers who have invested in these structured products. Wat DBS and the other institutions that were involved in selling these products have done in "compensating" customers where their "standards are not met" is attempting to distract and evade the more important issues that have been raised to date. These issues were that should they have been allowed to sell these products to the retail investors in the first place; was there misinformation and misrepresentation especially with the absence of certain information in their prospectuses (which were supposedly vetted by the MAS) and whether the RMs were qualified to sell such products to the customers. These are important questions, which in many developed economies if provenned to be true, would allow class action suits against the institutions. What has been disappointing has been that the so-called "regulators" have been non-commital in investigating these questions. Are they afraid that they would also be blamed if found to be true? It's their job to ensure that the regulated financial institutions do not carry such inappropriate services and it's not shameful to admit that they had overlooked the seriousness of such a "breach" and to really do wat is right i.e. penalise the institutions by getting them to compensate all investors of these structured products. Instead, they are allowing the FIs to carrying out PR games with the "underdog" investors and to admit to partial responsibility to a sub-group of investors - better to lose some money by seemingly doing the "right thing" for the smaller group than to have to face the music for all investors?
In this whole debacle, where's the accountability in all these, from the regulators to the institutions to the RMs. The system of rewarding the RMs based commissions earned by selling these products was flawed from the beginning. It was waiting for just such an event to happen to show the vulnerability and flaws of just such a system. But is this going to change? I doubt it especially if the authorities mindset is still that the capitalist system still works, even in economic/financial downturns. Look back in history, this is not the first time that it has happened. It is just in different form/product in the past. If nothing is done/changed, after this cycle is over, wait for the next cyclical downturn, we'll have another repeat (but maybe with different products). After all, with all the financial engineering courses that are being offered out there, the creative juices of our financial wizards will be highly compensated to come up with the next "principal protected" product.; October 24, 2008 11:26 AM
Anonymous said...: I totally agree with Chew Boon Keng who commented above. Therefore DBS definition of mis-selling (stated in the Straits Times today) is WRONG. 1) Mis-selling is when relationship manager (RM) do not spell out the risks of the product involved. 2) Mis-selling is when the RM performed our Risk Analysis Profile AFTER (and not BEFORE) purchasing the product. 3) Mis-selling is when a so called Professional Advisor gives wrong advice.
Therefore DBS is wrong to link Mis-selling to the investor's income, investor's liquid assets, etc.; October 24, 2008 12:30 PM
Anonymous said...: FI - Be fair to all!; October 24, 2008 12:44 PM
Anonymous said...: The fact that the FIs have agreed to compensate the vulnerable group confirmed that the FI had made a mistake of mis-selling. Mis-selling can be of different forms, be it through the RM , sales brochures or advertisements in the News Paper. Therefore whether you belong to the vulnerable group or otherwise, the FIs are still responsible for their wrong doing.; October 24, 2008 12:45 PM
Anonymous said...: My prediction is that for those not in the "vulnerable" group, things will just drag on, even with class action suits against the FIs. And drag on until they become exhausted and finally accept whatever that comes as a matter of nature and course. Remember the CLOB issue 10 years ago? Same thing will happen except now only the actors and script are different. Life goes on as surely as the sun rises and sets.; October 24, 2008 1:30 PM
Unknown said...: Public confidence on FI is severely dented. Why do I feel that they are jus out to get our $$$?

ONce you are dried, they say "thank you". And now, "lets move on".

let me do some indepth thoughts. Do you feel the same?; October 24, 2008 1:54 PM
Anonymous said...: There should be a PUBLIC INQUIRY held which should be initiated by the Govt on this matter. Do not let them sweep this matter 'under the carpet'.

Issues include:
1. MAS role as a regulator in this matter. Why there was an oversight over this matter? Who was the head of the division who oversaw this?

2. Why MAS did not further investigate when complaints as far back as 2003/04 began regarding mis-selling of structured products? How many complaints of mis-selling had been brought to MAS attention?

3. Can the Finance Ministry also look into their role to provide a higher level overview over MAS responsibilities?

4. Can those who bought structured investment products sold by Lehman/Merrill Lynch via local banks go to their MP and raise the issue with them. Go every day or week - go pester them as much as possible! They should be working for you - Spore citizens & not the govt! Go in a collective group but behave yourselves first! Agitate for a PUBLIC INQUIRY via a petition! A govt cannot refuse the public's request!

5. Organize collective groups to go to the MAS & Banks to protest & demand a PUBLIC INQUIRY. Do not fear the riot police squad because it's your money that is at risk. There is a fine line between political protest & personal protest. If you keep quiet & don't agitate, then you won't see your money! Better to go to jail than not see your money! What can they do to you as a collective group? It is not a time to be passive. Assert your rights as citizens to be heard!; October 24, 2008 2:01 PM
freeier said...: All the comments are showing the KS mentality of singaporeans. Since the FIs are compensating the weakers of the society why am I not getting the same?!?

The fact is, if you think there were misselling, like quoted in the previous 2nd comment, then put it in your claim and submit it to the FI. IF the FI are not reacting, submit it to FIDEC and MAS. Get your MP to write letter, or if all doesn't work, sue them.

Why all of you are so afraid to be left behind. You have not signed away your rights to fight and to sue. If you have no faith of the local juridical system, then don't vote them in.; October 24, 2008 2:05 PM
vertigoer said...: quoting from 9:05 AM, "18 months ago". 2 years ago, we know US is having trouble and don't know when they will bomb.

As a FI with analysis, they should have done their fiduciary duty, assess the risk before deciding to sell as retail product to bank customers.; October 24, 2008 2:12 PM
Anonymous said...: I am not a HN5 investors, but I have to say DBS should provide a better compensation to the investors than other FIs to minibond or Jubilee Series 3.

My point is that as MAS said, the responsibility should be shared by three parties: issuers, distributors and investors. for HN5, DBS play two roles: issuer and distributor. Therefore, ethically, DBS deserve a serious punishment besides compensation.; October 24, 2008 2:49 PM
Anonymous said...: For those of us who were affected but did not approach the FI, will be we be at a disadvantage. Will they return us the invested amount lesser compare to those who approach the FI.; October 24, 2008 3:16 PM
Anonymous said...: I agree with anonymous(2.01pm) that we should continue to press on until we get a satisfactory answer. As it is, it seems that they are ignoring our voices. We need to start a little fire by signing up collectively with a lawyer so as to force them to come to the negotiation table. I've already signed up with Leonard Loo & company who was featured over TV and had given his views. So far, I believe he has some 100 folks signing up. He will be at the Speaker Corner this Saturday and perhaps we should seek him out to give us his professional view and advise us on the next step. Let's go in together and stay united and not let these FIs take us for a ride and play into their delaying tactic to drain out our energy and fighting spirit.; October 24, 2008 3:17 PM
Anonymous said...: I agree with 2.01 pm. A PUBLIC INQUIRY is definitely required. If MAS failed in their role, they people responsible should be removed. FIs being the 'main mastermind' if found guilty should be penalised. Very sad, hard to find independance in Singapore. I am not surprised the minibond issue will drag to 2009, as FIs need their books to look good for 2008 to justify their bonuses.; October 24, 2008 4:43 PM
Anonymous said...: It is unfair, illogical and unreasonable for FIs to compensate only those considered old, less educated and vulnerable. Take this analogy, if a crook cheated a group of people, can the law allow him to return the money to the old and less educated and leave the younger and better educated to bear the loss? Utterly rubbish!; October 24, 2008 4:47 PM
C H Yak said...: What 2.49 PM says could be quite pertinent for the less "vulnerable" category.

As distributors, most of the FIs are just "agents" acting for the "issuers" who are the "principals" and the real parties who contracted with the investors.

Misrepresentation might be more triate in "Laws on Contracts" than "Laws on Agency".

For the latter, "duty of care" (Laws on Torts)oweing to an investor as a Financial Adviser seems to be more triate. But an Agent could still be guilty of misrepresentation (negligent misrepresentation).

Coupled with consideration on the degree and nature of misrepresentation (fradulent, negligent,innocent), what Mr Tan advised as possible compensation %of 50% ~ 80% (of invested principal) is quite possible and fair; even if contested in Court.

For a weak case, actual weightage might be just 20% (pessimistic) while your own ideal expectation might be 80% (optimistic). Taking average of 20 + 80 = 50%. The risk is that the Court may really award less than 50% if it is really a weak case.

For a strong case, actual weightage might be 80% (pessimistic) while your own ideal expectation is also 80%. taking average of 80% + 80% = 80%.

This will probably be the grey zone where interlocutory judgement might be filed. Based on individual circumstances (merits of the case and the possibility of abducing evidence or otherwise), the FI's corporate lawyer would grind his axe. If the case merit 80%, he might file interlocutory judgement at 65% acceptance. If you appeal, you must succeed in getting more than 65% or bear the FI's legal costs. Of course if Court awards more than 65%, you win all by pushing back the legal costs (but you have to weigh and take the chances) but may still be awarded 80%, and not 100% because.

I am not an affected investor, this is just a para-legal opinion. Hopefully, I am able to read Mr. Tan and some other commentors in this blog correctly. This may help give affected investors an idea how to talk to their legal expert.; October 24, 2008 4:54 PM
Anonymous said...: i read a number of comments here but with a laugh

Naivety is just about the only word the FIs arent putting into their reports to describe their customers (victims?); October 24, 2008 7:00 PM
Anonymous said...: quote

Since the collapse of Lehman Brothers on 15 September, we have been deeply concerned about DBS customers in Singapore and Hong Kong who have invested in structured products with Lehman as a reference entity and understand the anguish they are facing. When DBS first distributed these products over 18 months ago, the global financial landscape was very different. Nobody could have imagined the extent of the fallout

One did and he is now enjoying life with his bonuses. Maybe a commission of enquiry can be formed to investigate any breached; October 24, 2008 8:04 PM
Anonymous said...: The old forks (above 62) are the fearless lot. They hv nothing to fear. so the FIs (or garmt) hv to give in.; October 24, 2008 8:38 PM
Anonymous said...: The FIs are playing a game with the investors, young and old. They hope to divide and rule - playing one group against the other. I saw on TV a short while ago that some FIs subjected the poor victims to 3-4 interviews, asking the same questions. FIs hope to harass the victims into making mistakes and thereafter claimed that they are not telling the truth.

Why should victims be subjected to interrogation by FIs in CID fashion? FIs tried to make the poor victims out to be criminals and can thereby deny their claims.

For transparency, I propose that All the victims should stand united and take out class-action against the FIs after hearing out what FIs have to offer in $ terms. That is the fairest way to settle the claims of ALL the victims because other FIs eg OCBC, HSBC, PhillipCapital, etc have not responded publicly so far.; October 24, 2008 11:57 PM
Anonymous said...: VOTE THEM OUT IN THE NEXT ELECTIONS
ONCE AND FOR ALL!

ALWAYS TAKING S'POREANS FOR STUPID AND PERHAPS WE ARE FOR NOT DEMOSTRATING.; October 25, 2008 12:04 AM
Anonymous said...: Dear Sir,

Like to confirm that 25 Oct 2008 gathering at Hong Lim still on?

If so, will be there rain or shine to support you even though I not affected.

Will ask everyone I know to attend.

Its for a good cause. One day, someone else may need some support on other issues also.

regards
Dhana; October 25, 2008 12:45 AM
Anonymous said...: structured products are highly complicated even financially-inclined people require time to understand. It doesn't make a difference whether the investors are literate or not.

Those who are outside the "vulnerable sphere" should voice up their concern.; October 25, 2008 1:20 AM
Anonymous said...: why when hlf do interview they only send their customer care to interview?? seriously the customer care is in no position to do a single thing.; October 25, 2008 1:36 AM
Anonymous said...: From the way MAS is handling this issue, it is obvious to me that it is trying to side-step responsibility.

I suspect that there could be wrong-doings or careless decisions being made by MAS when they "registered" (which is as good as giving consent) for such dubious toxic entrapping products to be sold by the Financial Institutions.

Therefore, I fully agree and support the call for a Commission of Inquiry to be conducted by an independent neutral body convened by the Govt. Either the PM or the Finance Minister should initiate the Commission of Inquiry to address likely injustice, fraudulent dealings, breaches of regulations, cunning manipulations of the laws as well as to draw lessons from such a fiasco so that MAS and FIs would be put into their proper shoes in order to bring confidence back to Singapore as a financial centre.

by Neutral Observer, 24 Oct 2008.; October 25, 2008 2:43 AM
Anonymous said...: Dear Mr Tan
Besides Minibonds, there are still many who invested in structured deposits etc and are unaware of their link to minibonds. FIs should be transparent and keep the investors informed or the media should highlight these products. Eg Prosperity from UOB has Lehman component. Just like what AVA is doing with the 'milk' issue; October 25, 2008 5:56 AM
Anonymous said...: The crux of the problem is that the money are not invested good quality securities.
Some of the Ref. entity is "xx country or centre bank", and the rating was only in the "B" range.
The the money raised were supposed to be invested in "AA"rated securities.
This gave people the false sense of security. Furthermore, the securities would be kept by the trustee.
So it is no wonder many educated ones are also misled.

It is very unfair to just compensate the undeucated or the very old ones (>62).; October 25, 2008 10:10 AM
Anonymous said...: ....continuing from last night's posting at 11.57pm... the FIs are behaving like vultures waiting to pick off the poor victims one by one. The victims should all stand united and wait for what the "white knights" and FIs can finally offer by the end of the week before taking a class-action against the FIs. The legal action can be protracted and expensive. Meanwhile, MAS should take a pro-active role as we are the leading Financial Hub. Are we not?; October 25, 2008 10:20 AM
Anonymous said...: I just saw this comment in ST. And i think it is so true. Now all investors are crying when things go wrong..but when things are ok? everyone only praises themselves

We can also look at this from another angle. Suppose Lehman had not collapsed, and there was no financial crisis. Suppose the investment had done very well, and instead of the promised 5% interest payable every 6 months, all the investors got an extra 100% interest every month - the investments had done extremely extremely well!

Would anybody now claim that they had been mis-sold the products? No! Of course not. All the investeors will in fact now boast to their friends that they had the foresight and brillance to invest in the superior product 2 years ago!

So if Lehman collapsed, the banks had mis-sold the product to me.

But if the investment performed very well and I receive a double bonus interest payout, I had the foresight to invest in this solid investment!
Posted by: ooptimizer at Sat Oct 25 08:15:05 SGT 2008; October 25, 2008 10:32 AM
Anonymous said...: It is very difficult to give opinions and talk because we will be thumbed down. It is a difficult place to express opinions else we will be marked.; October 25, 2008 11:42 AM
Anonymous said...: Its hard to make money and any money collected are hard savings of people for various purposes. When it comes to tax, its mandatory and irregardless we have to pay.
But when this sort of problems crop up, they should do their responsibility and integrity to pay these "bond" holders regardless of class, race, vulnerable, etc.

They should be fair and not categorically class them!; October 25, 2008 11:49 AM
Anonymous said...: Do you know why people in the past use to keep money in beds, homes, sofas, etc? The financial institutions cannot be entrusted with money. Trust yourself with your own funds. We are going back to our medieval ways of living.Trillions are wiped out when the stock markets worldwide sell down in 1 day. Down 5%-10% each day and in 3 weeks its back to zero value. Can it happen?; October 25, 2008 11:56 AM
Anonymous said...: to ooptimizer:
If you have bought the milk product from china that they have vitamin (actually it is melamin) to feed your baby and the baby dies, whose problem is it. Many people will blame the manufacturer of the milk but you will just blame yourselves for not being careful to scrutines the oroduct like doing the lab test to see whether this product is suitable to your baby !! If your baby, instead, donot die and grow healthier with pink cheek, then you will boost to others "see, how smart I am to buy this product"!!
I would like to remnind you 5 percent offered for those toxic product is nothing compare to the return you have from stock market over a long period of time, as quoted by Dr. Money, it is 12 percents. I do invest in stock market for over 20 years. Even though I donot keep track of the profit, I believed those investment yield more than 10 percent (inclusive of divident paid). 5% for safe product like bond is ok, DBS even paid 6% for the preferential share !! Who can then expect DBS to pay 5% for this toxic product ??; October 25, 2008 12:19 PM
Anonymous said...: To ooptimizer,

We are using the word mis-sell for politeness purpose, to be crude it it cheating.

You go to a foodstore which is hanging goat head and buy a package of rice. What will you do later if you found out that the package of rice does not come with goat meat but dog meat. Many people will complain but I think you this type of crazy people will laugh !! sigh -what to do with this type of retarted person !; October 25, 2008 12:27 PM
Anonymous said...: All these papaer promises are just that, Paper Promises. I read NTUC Income latest advertisements in full colour with disgust. How dare they still keep talking about people trusting in them when the trust level has never been so low! Still wasting policyholders money to make the CEO look good. After cutting our bonuses still wasting our money to make himself look like he care for us. Paper promises by financial crooks are empty promises. Get out of it before you lose it.; October 25, 2008 1:04 PM
Anonymous said...: Anonymous 10.32 AM, the coupon interest is a fixed amount whether the product does very well or average. So there is no way, they will give the investors more.

Will people risk everything for an additional ~3%? Will u?

Will the FI managements and RMs buy these products knowing the EXTREMELY HIGH RISKs? I doubt.

So pls read this blog 1st, understand the contents before making such uncalled for remarks.; October 25, 2008 1:08 PM
Anonymous said...: 10.32am,
this is not unusual argument from people like. You talk as if you know investment and that these investors were sold correctly.Your assumption that the investment does not lose money means it is the correct investment and that the adviser gives the correct advice. It is like asking Ah Pek to put his life saving, $100K on a Black Jack game and he lost. He blames you for not disclosing the risk. You cannot tell, Ah Pek, what if he wins another $100K, will he share with you his winning?.Although he wins he still has the right to scold you or to take you to court.
Let me put to you. What if the product did make money for you , let say 5% but it didn't meet your required return? Do you have a case against the adviser for poor advice? Yes you have..
Anyway this just an illustration about your requirement of return and not about loss or gain.
The issue here is about inappropriate advice and the FIs and their representative didn't meet the requirement of the law and risk the investors money with looking into their circumstances, ie. whether they could afford to lose; whether the products could meet their needs or risk appetite.; October 25, 2008 1:09 PM
Anonymous said...: In response to optimiser's comments at 10.30 am - should Lehman Bros have flourished, the FIs would further perpetuate their ignorance / deceit. More depositors, NOT INVESTORS, would have been caught in the black widow's web.

As it stands, observers of the financial debacle think the victims of this scam are investors.
Bonds were passed off as FD's to financial illiterates. They were sold toxic products and eventually, more would be infected through misinformation. By word of mouth, adverts. etc many would seek to optimize their oncome.

This 'credit event' was waiting to explode for the onset.

To the financially naive, Fixed deposits (FD) are money deposits not investments. The bank pays the depositor an interest that is time-based. Those who bought the minibonds did not think of themselves as investors but depositors because they earn a time-based interest on their deposit. Comparing minibonds to fixed deposits shows intention of deceit through product mislabelling, right from the inception of the scheme.

There is no 'if' scenario of getting great gains as an FD depositor as the 5% interest cannot compare with stock market gains when times are good.

Let's give these depositors a breather and stop academic argumentation when such pain is endured by so many people.; October 25, 2008 2:11 PM
Merchant Police said...: I feel so sorry for everyone, hold strong everyone. Majority of Singaporeans are educated and most probably did not get the repayment.As I Trusted these Financial Institutes so did You. They ABUSED our TRUST.In my case, I did not even invest, I just TRUSTED NETS & eNETS PTE LTD and used their service and I lost 200K and above...I am fighting on even if its costs me my life. I am waiting for my Meet The People Session result,so far not much. Talking to the bank and their VP is useless. eNETS VP himself assured me in April 2008, no point. Now it's NOVEMBER 2008. They just keep their silence or transform into a TAICHI MASTER. I just hope the Singapore government will severely punish the actions of these TRUSTED BODIES and FINE them HEAVILY and use these HEAVY FINES to compensate those HURT and to help the people of Singapore through these difficult times.
团结就是力量-There is strength in UNITY. UNITE with the SINGAPORE GOVERNMENT, allow our leaders a chance to prove they are worthy of our votes, appeal to them to see to it that these irresponsible Financial Institutes be FINED HEAVILY for MISTRUST, MISLEADING and most importantly for TARNISHING the Singapore image as a SAFE FINANCIAL HUB of ASIA. I tried to Warn the Online Citizens about the Banks...(http://www.youtube.com/watch?v=KEdN_62o9D0)
Now You See It , Now You Don't! Your money disappear and then they transform themselves into the TAICHI MASTER? My Name is Isa Belle Lin Nai, a Singaporean who is a VICTIM of ABUSE, they ABUSED my TRUST in them. I will fight for the TRUTH even if it costs me my life. I WILL NOT LIE.; October 25, 2008 4:58 PM
Anonymous said...: 10.32am,

Don't you think some things is missing......

if this incident never occur, could you imagine how many more such toxic products would continue to sell in the market and many more people will draw to it without realising how their money are actually being used by their trusted FI without them fully disclosing the actual complexity of these products and the type of risks arising with the mechanism of how these toxic products actually work; which is indeed actually not easy for the normal heartlander on the street to understand. With the type of these products nature, it shall not recommend at all to the FD depositors in the 1st place if the FI/banks claimed to have their integrity and seriously taken care of their customers' wealth management. The risk gap between FD and these toxic products are in fact at the extreme opposite end!! So what is the point or intention for RMs/Financial Consultants to even fill up the customer data/risk profile esp. after the sale has been concluded to ensure 'proper paperwork' is done for administration purpose only.; October 25, 2008 5:24 PM
Henry said...: Hello Merchant Police, plse share with us how NETS cheated you of so much money. It may be another bomb out there that we are not aware of. Thank you..Henry.; October 25, 2008 11:16 PM
Anonymous said...: 1.04 PM
After Tan Kin Lian left NTUC Income, I have stop buying any more policy. And it will probably be like that for a while at least. I'm quite digusted by the new approach under the current leader. Medishield alone upgrade 3 times in 2 years or so, one moment change benefits, one moment add rider, even the name also changed. I'm quite lost today as to what is my policy, just like all these min bonds, swap here, swap there until I become so confused. Although I invested in some stocks, Reits and Shipping Trust, I admit I am not savvy at all. Why don;t they simplify it? Engineer only know 1+1=3 !; October 25, 2008 11:24 PM
Anonymous said...: I read from an article in a chinese newspaper (something like the following):
"If this crisis was to occur, it is better to occur now than later.
Otherwise many more people would be affected, and the situation would be much worse than now."; October 26, 2008 8:57 AM
Anonymous said...: Hi, Merchant Police, your case is interesting. Don't waste your energy with the MP or PM, we hv tried and it does not work. Just go straight to your lawyer or CAD. If you need our support, just inform us thru' TKL's blog.; October 26, 2008 12:40 PM
Anonymous said...: Few years back, I have heard friends from the Fin industry that reports predicting the major american banks going into trouble and the US banking system was in shambles.

Of course such reports won't end up in the Straits Times. We only read honky dory headlines like golen era etc

With this knowledge, I can't but feel that we have been taken suckers for these banks whose CEOs were trying to offload their toxic waste to us.

And it doesn't help when our MM and Temasick are so in awe of american banks.

We pay a price but hopefully Singaporeans will learn to trust less and do your reading, preferably not from the States Times. And don't just read the good news.; October 27, 2008 6:50 AM

Friday, October 24, 2008

Speaker's Corner - 25 October 2008

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