Tan Kin Lian's Blog: Pinnacle Notes Series 9 and 10

Monday, November 24, 2008

Pinnacle Notes Series 9 and 10

Pinnacle Notes series 9 and 10 was sold in November 2007 - just a year ago. At that time, the subprime and CDO market was already in trouble. The issuer put in 150 underlying assets and sold them to the retail investors.

The issuer did state, in the adverstisement, that the money would be invested in the CDOs. However, the are required under the Security and Futures Act to disclose all relevant information to help the investors make an informed decision. Did they meet this standard?

It is extremely difficult for the investors to ask for information to see if the Securities and Futures Act have been breached. I hope that the MAS will investigate this matter separately. Morgan Stanley is still around, and they should be able to provide the information for the investigation.

I hope that this investigation is carried out openly, so that the investors are satisfied that they have been treated fairly and have not been "cheated".

Here are some relevant information:
http://tankinlian.blogspot.com/2007/11/pinnacle-notes-series-9-10.html
http://tankinlian.blogspot.com/2008/11/credit-default-of-pinnacle-notes-series.html

I hope that some lawyers can advice if it is possible for the investors to take a mandamus case to compel the MAS to invstigate this matter?

I hope that the investors of series 9 and 10 get together (for each series) and study if there were gaps in the prospectus that failed to described the risk of this product. You can meet with an experienced lawyer to discuss this matter. The lawyer can get a written expert opinion from overseas. If there was material misrepresentation of the securities, it may be possible to get the court to declare the transaction as void and for the investors to get a full refund.

6 comments:

Anonymous said...: Ever heard of Pandora Box

Its a box containing a secret someone dont wan to reveal

The problem with opening Pandora Box is sometime, in fact many times, it might contain not just ONE secret, but a series of secrets

So opening one means risking opening many secrets

And not everyone wants that.

In such fiasco, no one really wants to play that devil hand that open the first Box. That Hand might get slapped for being itchy.

So do you understand the whole story now.

Investors are not just asking for a patch of grass, to the FIs, it seems they are asking for the whole Mountain.; November 24, 2008 12:57 PM
Chan J C said...: To Anonymous said...
Ever heard of Pandora Box

If the secret caused thousands of people to have sleepless nights with their eyes wide-open, then Mr. Tan is "doing the right thing" as advised by the government.

The secret or a series of secret will have to be revealed regardless whether it is ugly or not.

The question is not "what" now but "how" to get them reveal. And I strongly Mr. Tan is doing the right thing and conceiving a legal and proper to expose all these "Secret".

Investors are not asking for a patch of grass or mountain. They are asking for the "revelation" of the grass patches or mountain whereby in the first place they are supposed to be there.; November 24, 2008 2:09 PM
Anonymous said...: I wan to add something i miss earlier

Not all lawyers might wan to take up the case

Lawyers are like salemen

They also depend on future clients and they wan to close a deal soonest with the least effort and shortest time. And they hope to collect payment and not get countersued in the process.

On top all that, giant institutions have large contracts available all the time and they are utterly shameless to dangle that fact.

if lawyers take up the investors case, they are like throwing out the Forest for a Tree. However righteous or innoculous that Tree might seems.

The lawyers are just as worried if the investor lose becos they might not get paid. What about countersue!??

Think about it if YOU are YOUR lawyer

Or YOU are the defending 'evil' corporation; November 24, 2008 2:38 PM
Anonymous said...: See what had happened in the US :

* On April 28, 2003, every major US investment bank, including Merrill Lynch, Goldman Sachs, Morgan Stanley, Citigroup, Credit Suisse First Boston, Lehman Brothers Holdings, J.P. Morgan Chase, UBS Warburg, and U.S. Bancorp Piper Jaffray, were found to have aided and abetted efforts to defraud investors. The firms were fined a total of $1.4 billion by the SEC, triggering the creation of a Global Research Analyst Settlement Fund.
* In May, 2003, the SEC disclosed that several “brokerage firms paid rivals that agreed to publish positive reports on companies whose shares..they issued to the public. This practice made it appear that a throng of believers were recommending these companies' shares.” This was false. “From 1999 through 2001, for example, one firm paid about $2.7 million to approximately 25 other investment banks for these so-called research guarantees, regulators said. Nevertheless, the same firm boasted in its annual report to shareholders that it had come through investigations of analyst conflicts of interest with its ‘reputation for integrity’ maintained.”
* On September 4, 2003, a major investment bank, Goldman Sachs, admitted that it had violated anti-fraud laws. Specifically, the firm misused material, nonpublic information that the US Treasury would suspend issuance of the 30-year bond. The firm agreed to “pay over $9.3 million in penalties.” On April 28, 2003, the same firm was found to have “issued research reports that were not based on principles of fair dealing and good faith .. contained exaggerated or unwarranted claims.. and/or contained opinions for which there were no reasonable bases.” The firm was fined $110 million dollars, for a total of $119.3 million dollars in fines in six months.
* On November 4, 2004, the Securities and Exchange Commission “filed a settled civil action in the United States District Court for the District of Columbia against Wachovia Corporation (Wachovia) for violations of proxy disclosure and other reporting requirements in connection with the 2001 merger between First Union Corporation (First Union) and Old Wachovia Corporation (Old Wachovia). Under the settlement, Wachovia must pay a $37 million penalty and is to be enjoined from future violations of the federal securities laws.”
* On November 30, 2004, the Securities and Exchange Commission announced “the filing..of charges against American International Group, Inc. (AIG) arising out of AIG’s offer and sale of an earnings management product.” The company “agreed to pay a total of $126 million, consisting of a penalty of $80 million, and disgorgement and prejudgment interest of $46 million.”
* On January 25, 2005, “the Securities and Exchange Commission announced the filing in federal district court of separate settled civil injunctive actions against Morgan Stanley & Co. Incorporated (Morgan Stanley) and Goldman, Sachs & Co. (Goldman Sachs) relating to the firms' allocations of stock to institutional customers in initial public offerings (IPOs) underwritten by the firms during 1999 and 2000.”
* On March 23, 2005, the Securities and Exchange Commission (Commission) “announced that it instituted and simultaneously settled an enforcement action against Citigroup Global Markets, Inc. (CGMI) for failing to provide customers with important information relating to their purchases of mutual fund shares.”
* On April 12, 2005, the Securities and Exchange Commission “instituted and simultaneously settled an enforcement action against the New York Stock Exchange, Inc., finding that the NYSE, over the course of nearly four years, failed to police specialists, who engaged in widespread and unlawful proprietary trading on the floor of the NYSE.” As part of the settlement, the “NYSE agreed to an undertaking of $20 million to fund regulatory audits of the NYSE's regulatory program every two years through the year 2011.” On that same date, the Commission “instituted administrative and cease-and-desist proceedings against 20 former New York Stock Exchange specialists for fraudulent and other improper trading practices.”
* On May 31, 2005, the Securities and Exchange Commission “announced settled fraud charges against two subsidiaries of Citigroup, Inc. relating to the creation and operation of an affiliated transfer agent that has served the Smith Barney family of mutual funds since 1999. Under the settlement, the respondents are ordered to pay $208 million in disgorgement and penalties and to comply with substantial remedial measures, including an undertaking to put out for competitive bidding certain contracts for transfer agency services for the mutual funds.”
* On February 2, 2006, the Securities and Exchange Commission “announced that it filed an enforcement action against five former senior executives of General Re Corporation (Gen Re) and American International Group, Inc. (AIG) for helping AIG mislead investors through the use of fraudulent reinsurance transactions.”
* On February 9, 2006, the Commission announced “the filing and settlement of charges that American International Group, Inc. (AIG) committed securities fraud. The settlement is part of a global resolution of federal and state actions under which AIG will pay in excess of $1.6 billion to resolve claims related to improper accounting, bid rigging and practices involving workers’ compensation funds.”
* On March 16, 2006, the Securities and Exchange Commission “announced a settled enforcement action against Bear, Stearns & Co., Inc. (BS&Co.) and Bear, Stearns Securities Corp. (BSSC) (collectively, Bear Stearns), charging Bear Stearns with securities fraud for facilitating unlawful late trading and deceptive market timing of mutual funds by its customers and customers of its introducing brokers. The Commission issued an Order finding that from 1999 through September 2003, Bear Stearns provided technology, advice and deceptive devices that enabled its market timing customers and introducing brokers to late trade and to evade detection by mutual funds. Pursuant to the Order, Bear Stearns will pay $250 million, consisting of $160 million in disgorgement and a $90 million penalty.”
* On April 11, 2006, the Securities and Exchange Commission announced “charges against individuals involved in widespread and brazen international schemes of serial insider trading that yielded at least $6.7 million of illicit gains. The schemes were orchestrated by..a research analyst in the Fixed Income division of Goldman Sachs, and a former employee of Goldman Sachs.”
* Sept 10, 2008, Lehman Brothers Holdings Inc. and Merrill Lynch & Co. are among Wall Street firms that concocted derivatives and stock-loan deals to help offshore hedge funds dodge hundreds of millions of dollars in U.S. taxes, according to a U.S. Senate committee investigation. Ongoing investigation.
* June 24, 1999, Lehman Brothers, one of the nation's largest investment banks, was censured and fined $100,000 as part of a settlement of regulatory charges that included an accusation that it failed to comply with market rules intended to insure that public investors get a fair share of hot initial public offerings. In addition to the offering problems, regulators also cited the firm for violations of rules governing short sales -- which are sales of borrowed stock by investors who hope to profit on a subsequent decline in the price -- and on disclosure of sales charges to mutual fund purchasers.
* 23 May 2006 Lehman Brothers was fined $400,000 by NYSE Regulation for submitting inaccurate monthly reports on the company's short-interest positions. Lehman misreported its short-interest position in a number of stocks for more than three years, according to the regulator.
* October 7 2007, NYSE Regulation fined 14 of its member firms a total of $10.4 million in fines for failing to deliver trade confirmations to their clients and other violations. Citigroup Global Markets received the heaviest fine of $2.25 million for failing to deliver trade confirmation documents in more than a million consumer transactions. Lehman Brothers and DeutscheBank were each fined $1.25 million.
* November 2, 2005 Lehman Brothers Inc. of New York was fined $500,000 and censured by the New York Stock Exchange for failing to supervise a profitable trading strategy that potentially harmed its customers. On Dec. 11, 2002, Lehman Brothers effected transactions for the sale of more than 2 million shares of the stock of Quest Diagnostics Inc. of Lyndhurst, N.J., that were disruptive and caused the stock's price to fall excessively, the NYSE said in a release this morning.; November 24, 2008 2:51 PM
Anonymous said...: Said this before say this again

North Pole is North Pole

South Pole is South Pole

Bamboo Pole is Bamboo Pole

Understand the Game to beat it.; November 24, 2008 3:14 PM
Anonymous said...: To Chan C J

I can understand you mean well, like many others here. ME including

But everyone wants to protect themselves

Losses are an expense that no one like to deal with, Especially in a foreboding bad economy.

Surely you can understand that, thats why you are here seeking redress.

No they wont even let you near enough to set up base camp. Do you understand this. You are getting NOWHERE near any locket, much less secrets.

What Investors need are WHISTLEBLOWERS.
Not one, as many as possible.

Thats the critical difference betwn Asia and the West,; November 24, 2008 3:20 PM