Tan Kin Lian's Blog: Offer of 30% compensation

Sunday, December 07, 2008

Offer of 30% compensation

Two investors met me at Speaker's Corner yesterday. They received offer from their distributor (stockbroker) of 30% compensation and are given a deadline to accept it. They asked for my advice.

My view is that a fair compensation is 50%. If the distributor offers 50%, you should accept it.

For the 30% offer, I suggest that you let it lapse and wait for a better offer. If you wait until February, the prospect of the class action may be clearer. At that time, your option will be clearer.

However, if you are willing to take 30% and call it quits, you should decide on your own. It is better than nothing.

26 comments:

Anonymous said...: Why is the security firm offering the compensation if it has not breached any law? It need not pay a cent. or is the 30% goodwill gesture?
What do you think?; December 07, 2008 9:37 AM
Anonymous said...: If amount invested is $50K or less, accept the 30% settlement and move on.

Even at 50% settlement and which you have to fight hard for it, actual amount may be less than 50% due to expenses incurred.

Hope your investment is not the bulk of your money or else it is still painful whether 50 or 30 % settlement.; December 07, 2008 9:52 AM
Anonymous said...: HONG KONG (AFP) — Hong Kong investors who were allegedly mis-sold mini-bonds in the collapsed bank Lehman Brothers have been invited to mount an international lawsuit against the institutions involved, a lawmaker here said Friday.

James To, a lawmaker from the Democratic Party here, which is acting for most of a group of some 40,000 mini-bond holders in the city, said US lawyers presented them a proposal for a legal action in a US court.

The lawmaker said the lawyers had also approached affected investors in other places, including Singapore.

"These lawyers are very aggressive. They have identified the Lehman saga as an excellent business opportunity for them," he said.

His party is now consulting US legal experts for their views on the proposed action. He said the party would only discuss the matter with the investors if they could be sure that the lawsuit would not place the investors under further financial burden.

The Wall Street icon filed for bankruptcy in September as it buckled under the weight of the collapse in US subprime, or high risk, mortgages.

The investors mounted protests against the banks, the Hong Kong government and the city's financial regulators, urging a full refund.; December 07, 2008 12:20 PM
Chan J C said...: Is it possible to share which structure product is that? Is it Minibond, Julibee, Pinnacle, etc?

I hope this question is not sensitive.

Thank you.; December 07, 2008 12:59 PM
Anonymous said...: Another question is whether this distributor is offering this 30% settlement to all its clients or just a selected few and why? Further, is there any value in the notes or just zero?; December 07, 2008 2:01 PM
Anonymous said...: Law suit is the only way to recover all.You cannot let them get away with this this. Your hard earned money and especially for some their retirement money is at stake.
Prove miss-selling , beach of section 27 and non-dislosure of facts and risk against the RMs and the FIs is the key to winning the case.; December 07, 2008 2:27 PM
Anonymous said...: FIs are not stupid. Most of the resp I heard of so far are outright rejection, or 0%.
If they are willing to offer 30% to u now, it show yr chance of recover 100% is very very high.
Are u able to disclose yr group (vunerable, etc.)?
I beleive u shd make a very good test case for legl action!!!!!!!; December 07, 2008 4:36 PM
Anonymous said...: Hi Mr Tan, hasnt the bankruptcy of Lehman brothers happen just a few months ago? Shouldnt the relevant authorities be given some time to respond to this?Currently, I am having some problems of my claim from an income policy but I am assuming things like this just needs some time. Or should I protest and speak at the speaker's corner too?
After all, they insure half our Singaporeans for the opt out DPS.; December 07, 2008 4:53 PM
Anonymous said...: 30% may be little but is better than waiting & nothing.
Going through lawyers does not mean 100% recovery.

Jasmin; December 07, 2008 6:14 PM
Anonymous said...: surely in the chain of export these toxic products, there must be money hidden somewhere, else, freeze the luxury castle of the L. Bros's CEO.

There could be money in Off shore banks, someone need to track down how these money were remitted from FIs to US or to their off shore banks...; December 07, 2008 6:20 PM
Anonymous said...: Is is possible to disclose the profile of this investor who get 30% compensation? What is his/her age and education?; December 07, 2008 6:22 PM
Anonymous said...: If Mr Tan is advising to take 50% means there wasn't any misrepresentation right? If he strongly believes there was a misrepresentation why should agree for 50%; December 07, 2008 7:30 PM
Anonymous said...: I agree. We should encourage these 2 investors to reject the offer and become the test case to sue the FI for 100%

I am really angry with UOB Kay Hian who sold me these toxic in a negligent manner and now try to disclaim responsibities; December 07, 2008 10:04 PM
Anonymous said...: I think that the previous "anonymous" commentator may have been confused. An insurance claim is different from a misrepresentation claim, if indeed there was misrepresentation.

That being said, if indeed an insurance claim is taking too long to be processed, I don't see anything wrong with the claimant protesting, seeking redress and expedition, including writing to the press, speaking up at the Speakers' Corner or through other channels as available.; December 07, 2008 11:19 PM
ybcomments said...: I think you mean "securities firm" not "security firm". A "security firm" is a company that sends the angry, generally unhelpful old men, to sit at front desks in office buildings and condos.; December 07, 2008 11:43 PM
symmetrix said...: I do not know which US law firm approached investors in HK (and possibly SGP) to represent their class action suit in a US court. However a US law firm by the name of "Coughlin Stoia Geller Rudman & Robbins" was mentioned in a recent blog. I believe our chances of recovery is much higher if our case is heard in the US instead of SG.

Their website is http://www.csgrr.com/.
Glancing thru their website, I think these US lawyers are super. They are experts in securities fraud. They have recovered billions of $$$ for Enron shareholders and received only about 10% of it as legal fees. They get paid on a contigency basis, with the % determined by the US court. (We need to chk this out carefully before engaing them.) Even if they get 30% in legal fees (due to case complexity etc), I still say it is worth it. They operate on a "no-win, no-pay" basis. This is unlike several local lawyers who charge up to S$400/hr just for consultation.

They are now working on a case of Citigroup investors against Citigroup. The complaint is at http://www.csgrr.com/cases/citigroupmortgage/complaint.pdf. This case mirrors that of Lehman Minibonds. Perhaps we should approach Coughlin Stoia to evaluate our case.; December 08, 2008 1:17 AM
Chan J C said...: To VS Lingam

I am working with a group of Pinnacle Notes' victims on possible class action and we are indeed in need of a good lawyer. Thank you very much for your posting.

You may want to contact me via joo_chong@yahoo.com so that we could pool all possible brain power and resources.

To all other readers

Similar intention, please email me to join the group for possible class action.

Regards
JC; December 08, 2008 1:41 PM
Unknown said...: i note that some posters are keen on taking leadership of class action, recommending lawyers, urging money pool and such etc etc

isnt there some sort of system of monitoring or transparency, which is precisely the problem the Investors are victimised for in the first place

how does anyone know for certain if its not some agenda from some special interest groups or even some lawyers representatives themselves cooking business in downturn

then all these become some sort of an online advertorial opportunity to be abused; December 08, 2008 2:45 PM
Anonymous said...: wayanfnologisy,
it is not the time to douse the spirit of these people. You are sowing doubt and discord among them. Who do you represent? You are no help. You are not critical but putting down every idea.Are you sent to create wayang? Piss off if you are .You have come to the wrong place.; December 08, 2008 11:40 PM
Anonymous said...: i think for pinnacles and others, taking the case to usa is possible as the originators are still around. for minibond, it is better to do it in sg.; December 09, 2008 7:55 AM
Anonymous said...: Dear Chan JC

I am also working with a law firm and have gotten quite far. I am also waiting for an eminent Professor's opinion. Can u pls. contact me at:
cslim123@singnet.com.sg

I wld like to coordiante with you for Pinnacle our efforts.

tks; December 09, 2008 9:58 AM
Anonymous said...: I think Coughlin Stoia is a good option as well. Let's pool more resource to get our minibond money back; December 09, 2008 12:39 PM
Anonymous said...: As regards wayangnologist, it is best that we all ignore his comments. I think he his against anything that we the victims of the structured notes are trying hard to organize and help ourselves. He just has nothing good from his mouth. As the Chinese saying, no ivory tusk will grow from a dog's mouth. He could be one of those RMs who had sold many toxic investment products to the unsuspecting public and now trying to ruin our actions for justice. So let's ignore him. Save our breaths and do not respond to his evil comments.; December 09, 2008 1:48 PM
Anonymous said...: The Hong Kong newspaper Ming Pao did mention in a research article that the US lawyers approaching the Minibonds victims in Hong Kong were involved in the Enron case (they were the key players) and succeeded in getting billions dollars remedies and punitive compensations for the investors and employees.; December 09, 2008 4:39 PM
Unknown said...: "Anonymous said...

The Hong Kong newspaper Ming Pao did mention in a research article that the US lawyers approaching the Minibonds victims in Hong Kong were involved in the Enron case (they were the key players) and succeeded in getting billions dollars remedies and punitive compensations for the investors and employees.

4:39 PM"

You are wrong

They got TRILLIONS!

[Might as well go for break since you are contorting two entirely different contexts for the purpose of creating a single ILLUSION]; December 09, 2008 5:17 PM
Anonymous said...: From: TAN Mui Ling Christina [mailto:christina@mas.gov.sg]
Sent: Tuesday, December 09, 2008 8:26 PM
To: M
Cc: MAS Response; leeellengh
Subject: Fw: Request for progress status update on MAS Investigation on the failed structured products as per Investors Petitions 1 , 2 & 3

Dear M

I refer to your email on 25 Nov 2008 to Ms Ellen Lee, MP for Sembawang GRC. We also spoke briefly on the same matter on 2 Dec 2008.

2. As mentioned during our telephone conversation on 2 Dec 2008, you may wish to refer to MAS' reply to a Parliamentary Question on 17 Nov 2008. MAS has been conducting formal inquiries into allegations of breaches of the law, inadequate internal controls by the financial institutions (FIs) that sold structured products linked to Lehman Brothers, and poor sales practices by their representatives. We will make an announcement on any actions we are taking when the inquiries are completed.

3. Further, you requested for information on the profile of investors and the number of complaints. In our press release of 10 Oct 2008, we indicated that over 80% of the Minibond Programme and Merrill Lynch Jubilee Series 3 noteholders invested up to S$50,000, with 28% having bought S$10,000 or less. In the case of DBS High Notes 5, over 1,400 investors bought S$103 million worth of notes. More than half of them invested S$50,000 or less. We also announced in our press release on 29 Oct 2008 that the 10 FIs that sold these notes have received about 2,400 formal complaint. On 7 Nov 2008, FIDReC said that 790 consumers have approached FIDReC on structured products, with 25 lodging formal written complaints.

4. MAS has been following up with the FIs to ensure that they are handling investor complaints according to the serious and impartial process that we have set up. The merits of each case depend on its specific facts and circumstances. Sufficient time must be accorded for each complaint to have a thorough review by the FI, and where cases are referred to FIDReC, adequate time must be given for the dispute resolution process facilitated by FIDReC. MAS will ensure that these processes are completed within a reasonable time frame.

5. If investors have feedback or concerns regarding the 3-step dispute resolution process set up by MAS or encounter difficulties when referring their complaints to the relevant FIs or FIDReC, they can contact MAS (email: consumers@mas.gov.sg or tel: 6229 9081). While we cannot compel FIs to pay compensation to individual investors, we are committed to ensure that there is a rigorous process in place to ensure that complaints are accorded a due and fair resolution process.

6. We will continue to put out public statements as and when appropriate to keep investors apprised of relevant developments.

regards

Christina Tan
Deputy Director & Head
Consumer Issues Division
Capital Markets Department
Monetary Authority of Singapore
Tel: 6229 9352; December 09, 2008 10:39 PM

Sunday, December 07, 2008

Offer of 30% compensation

26 comments:

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