Tan Kin Lian's Blog: MAS statement: Compensation for credit linked notes

Friday, January 16, 2009

MAS statement: Compensation for credit linked notes

Further details of the compensation are shown in MAS website:

http://www.mas.gov.sg/news_room/press_releases/2009/MAS_Provides_Updates_on_Complaints_Resolution.html

According to the MAS statement, the investors would be informed about the compensation offer in stages over the next few weeks. This could explain why so few investors have received their offer of compensation so far.

39 comments:

Tan Kin Lian said...: Someone observed that the compensation offer is not as generous and reported. Most of the full compensation are for the minibonds where the amounts invested were smaller and there is still residual value.

Only a small percentage of investors get full or high compensation for the high notes, where the amounts invested are higher.

It is useful to look at the total amount that is invested and compensated in the various categories.; January 16, 2009 9:11 PM
Unknown said...: For stockbroking firms, only 13% of investors will be compensated. The 13% covers both full and partial compensation. This means that 87% of investors will not get a single cent. Is this correct?; January 16, 2009 9:25 PM
Anonymous said...: For claims above S$50,000, FIDReC will be able to adjudicate such claims if either the FI agrees to allow FIDReC to hear the claim or the investor agrees to limit his claim to S$50,000. Most FIs have indicated they will agree to FIDReC adjudicating claims above S$50,000 on a case-by-case basis. A few FIs have agreed to allow FIDReC to adjudicate all claims up to a limit of S$75,000.

Meaning u invest above 50k, you are finished? How fair is that?; January 16, 2009 9:28 PM
Anonymous said...: WELL DONE! Mr. Tan

Without your initiatives I doubt we will see the result today.

Cheers; January 16, 2009 9:42 PM
Anonymous said...: MAS said investors will lose their compensation offer from the financial institutions if they go to FIDReC.

Isn't this tricky and like take it or lose it situation?

How not to accept since this condition clearly deterring the victims from escalating further..

I really praying hard now that my kins will be compensated in FULL; January 16, 2009 10:07 PM
Anonymous said...: How about those who have yet to complain...? Logically, these mis-selling are so obvious and prevalent....it is quite a joke that we still need to complain to get an obvious "Mis-Selling compensation...58% of complaints are being compensated...these are the Solid proofs that the Miss-Selling are so outrages.; January 16, 2009 10:19 PM
Anonymous said...: Looking at the tables, in future, it is still safer to buy from the banks than the other institutions.; January 16, 2009 10:26 PM
Anonymous said...: Thank you, Mr Tan and all who has one or another "help to pull this together", which otherwise is lost and gone for good.; January 16, 2009 10:34 PM
Tan Kin Lian said...: The compensation from the brokers are lower than from the banks. Reason?

The investors approached the brokers to buy the credit linked notes after reading the advertisements.

For the banks, the relationship managers approached the depositors to ask them to invest ub the credit linked notes.

I suspect that this is the key difference for the difference in the payouts.; January 16, 2009 10:37 PM
Anonymous said...: The independent adviser came to my house to persuade me to buy.
I am not aware of the product or their launch bec I find it to costly to buy newspaper.
But I don't get a single cents.
Is this ridiculus???; January 16, 2009 10:41 PM
Anonymous said...: Where is the justice????; January 16, 2009 10:42 PM
zhummmeng said...: It doesn't make sense that compensation is not full when mis-selling is recognised as the underlying cause. Mis-selling amounts to cheating. Isn't cheating a crime? There must be full restitution by the wrong doers.
It is unfair that age and lack of education are used as criteria to judge whether there was mis -selling.
In the many postings before we saw many VERY EDUCATED PhDs couldn't understand the working mechanism of structured products let alone investors without finance background.
I think MAS is sticking to the disclosure based regime and wouldn't admit that it is not applicable to all products except stocks. While disclosure is useful and helpful to some but not to the vast majority of consumers.
Advisory process requires the adviser to advise whether the product is good or bad and that is advisory and it requires expressing an opinion because the advisor is in the best position to know whether the product meets the consumers' needs and circumstances and not the consumers.Consumers CANNOT make INDEPENDENT decision
It is sad that pride is behind MAS refusal to come clean of its mistakes.
Legal action is preferred to shame all parties to this debacle.; January 16, 2009 10:55 PM
Anonymous said...: MAS couldn't be bothered about the Pinnacle Notes investors!

No mention of PN complains.; January 16, 2009 11:01 PM
Anonymous said...: How can the term ' Almost all elderly investors with little income, formal education or investment experience were compensated ' when mas never show us the numbers of elderly getting compensation. IT JUST SHOW US the % of cases being compensated. Even there is really 58%, who knows this 58% are cases in 5k or 10k? Why dont they give us the $ they paid out if they do instead of giving % of paid out? If you are the bank, will you paid out someone who invest 500k 60 yrs old with no income or 100 cases of 5k to make the book look good. Think about it!; January 16, 2009 11:13 PM
Anonymous said...: A toxic product is a Toxic product. I received updates from my Financial Adviser Representative (FAR) on Minibond notes, and after receiving advice from him, bought the notes from a brokerage. I received a rejection letter from the brokerage firm.
I will take this up with Fidrec, why the investigation process is not thorough or the resolution is not fair? Why "advice" from bank RM is different as "advice" from FAR who represented the brokerage?; January 16, 2009 11:23 PM
Anonymous said...: MR TAN
Please keep up the good work. I think the battle is not over. It is only the beginning. Let's wait and pray.

Most important is to see also the quantum of compensation in terms of VALUE. I think the numbers presented refers to cases.
eg. If you compensate ONE small case and no action for the other ONE large case, you have 50% compensation in statistics.

From CASHEW NUT; January 16, 2009 11:40 PM
Anonymous said...: Dear Mr.Tan,

Your reason that the lower percentage of compensation cases from the Stock Broking Firms is because the investors approached the Broking Firms is not correct. In my case, I did not approach the Broking firm, it was the rep from the stock broking who approached me over the phone and convinced me to purchase the product. I submitted my complaint, but was rejected by the Stock Broking firm without giving me any reasons.; January 16, 2009 11:43 PM
Anonymous said...: Bought from IFA, the IFA hide behind "Introducer agreement", so we get nothing, is it fair???
A mis-selling is a mis-selling. Just bec we are not well verse in legal term we got """"""???
where is justice?; January 16, 2009 11:51 PM
Vincent Sear said...: I agree with T.K.L. In transaction, there's a question of representation. Tied agents and bank RMs are usually deemed to represent the sale side of the equation, whereas independent brokers are usually deemed to represent the buy side.

When a product is found to be faulty or "toxic", you're likely to get more compensation if you're sold than if you bought.; January 17, 2009 12:39 AM
Anonymous said...: On an overall basis, this certainly exceeded my expectation. More important to the monetary compensation is the restore to some extent of people’s confidence in the checks and balances in our financial system. I don’t even know my own outcome so my comments are impartial.

I would like to compliment MAS and the Financial Institutions for their efforts. And the independent persons who oversee the complaint handling process. And, last but not least, Mr. TAN Kin Lian (and many supporting volunteers) for taking the leadership and devoting his time to lead the efforts, rain or shine. Without his leadership and the support, I am sure we would not have gotten over 5,000 people going forward with the complaint process.

In a massive process like this, unfortunately not everyone will get full satisfaction. Now that I have confidence in the complaint handling process, I hope MAS and the Financial Institutions will continue the same spirit in the FIDReC process – particularly in working with the FI’s to raise the $50,000 FIDReC limit. Else I think we will end up with a lot of the remaining cases in court. Or we might have people losing more than $50,000 still going through the FIDReC process to get their case heard before moving on to the court system.

I setup my HK5D alias to challenge Singapore to be faster in this process. Singapore clearly won. And, I promised that I would change my alias to SG5D after Singapore won.

P.S. I just checked – SG5D has been taken. So, SG is indeed 5D after all :-); January 17, 2009 12:50 AM
Anonymous said...: The compensation from the brokers is almost zero despite they sent the misleading brochure to promote the sale of minibond to customers. Is not this the same as the RM approached the depositors to ask them to invest in the CLN? They even confirmed CLN were a safe porduct. Why the same product marketed by banks and brokers and yet having different responsibilities. Perhaps, the brokers should not be selling the product is the first place.

Raising claim limit above $50,000 to be tested at Fidric, what mentioned in Parliament and request to the FI are completely different.; January 17, 2009 12:53 AM
Anonymous said...: MAS advised all parties to take a less legalistic approach in this fiasco. Why then a vast difference in compensation between Banks and Brokers?; January 17, 2009 1:43 AM
Anonymous said...: 100% of Lehman Related products Investors should get compensation and NOT ONLY 58%.

This is what theory.; January 17, 2009 9:25 AM
Anonymous said...: I bought Minibonds from a brokerage, but through an IFA representative who spent almost 2 hours with me providing what I had perceived as "advice". I also have emails showing the "advice" given by IFA. Even Banks' RMs probably didn't spend as much time explaining the product to their clients. Irony is that Banks offer compensation.

But Brokerages together with IFAs hide behind the "Introducer" agreement, and simply give a "no reason to accede to your complaint" outcome, without thorough investigation or fair compensation.

I think Mr Hwang SJ's job is not yet over.; January 17, 2009 9:54 AM
Parka said...: Stockbroker firms are smart with their indirect tactics. Just hire some external party to do the promoting and let the investors approach themselves. They can then claim investors have already understood that's why they signed the contract.

Nice move. Very smart. Consumers should learn in the future to be ruthless against these people too. For every action, there will be a reaction.

Regardless of the outcome, be it 58% or 100%, I've already associated the banking industry as incompetent and selfish.

How in the world can you sell a service you can't be responsible for? Apparently you can, as taught.

I've learned a valuable lesson. One that teaches people that you can get away with anything if you play the moves correctly (legally), even if not ethically.; January 17, 2009 11:00 AM
Anonymous said...: Dear Mr Tan Kin Lian,

Whatever the outcome to the FIDReC and/or Court Case, please accept our sincere thanks for guiding us through this different period in our lives.; January 17, 2009 11:09 AM
Anonymous said...: I heard the FAs had only a introducer agreement and NOT a distributor right with the banks and successful closures the FAs would get a referral fee. This agreement required the introducers ONLY to identify the prospects and the advisory process was left to the banks' advisers.
It looks like the banks have reneged on the contract to avoid liabilities and compensation.
This is no gentleman agreement anymore.; January 17, 2009 11:34 AM
Anonymous said...: Do you think THIS IS FAIR to those have NOT compensation. Same products but everyone got different outcome.

Banks and Brokerage House are selling the products BUT why more are compensation from Banks.

Does this mean MAS have different standard from Banks and Brokerage Houses.

Every Lehman Related Products Investors should get the same compensation And not One more, the rest lesser and some got NONE.; January 17, 2009 11:51 AM
Anonymous said...: Though i am still waiting for my outcome, i would like to thank Mr Tan for all the things he did, without him, i don't think we could have so many investors get compensated. Thank you very much to Mr Tan and happy CNY to you and your family. Good health.; January 17, 2009 12:06 PM
Anonymous said...: Very unfair.
Can forget about IFA forever.
There should not be any more IFA in spore!!!!!!!!!!!!!; January 17, 2009 3:20 PM
Anonymous said...: The most expensive word in spore (or even the world) in 2008 is "INTRODUCER".
It can cost you so much money.; January 17, 2009 3:27 PM
Anonymous said...: A group of us even more SUAY. The so-called INTRODUCER did not tell us he is acting in his limited capacity as INTRODUCER only. Instead he sent emails that product is safe etc, met up with us, told us about the products, then we signed forms to buy from BROKERAGE.

ALL OF US ALREADY RECEIVED REJECTION LETTER FROM BROKERAGE.

The INTRODUCER IFA also advised and sold us products, just like the BANKS' RMs. SO WHY WE DON'T GET COMPENSATION???? Just because the BROKER SIGNED SOME INTRODUCER AGREEMENT WITH THE IFA (WHICH WE DON'T EVEN KNOW ABOUT UNTIL NOW), IT ABSOLVED BOTH OF THEM THE RESPONSIBILITY !!!

MAS PLEASE RE-OPEN THE CASES FOR THOROUGH INVESTIGATION AND FAIR COMPENSATION!!!; January 17, 2009 5:04 PM
Anonymous said...: Even I who bought Jubilee Notes from Broker without any introducer or IFA and no advice from Broker, the broker can still reject my claim. How do you compare Broker with the Banks when broker can claim exemption selling same toxic product?; January 17, 2009 8:56 PM
Anonymous said...: Perhaps all those who have bought from Brokers should knock on MAS's doors until our voices are heard.

If the basis of compensation is that the buyer did not understand the product, then most of us should be compensated.

Shall we take collective action to boycott the broker concerned since obviously they do not care for our business?; January 17, 2009 9:43 PM
Anonymous said...: Next time all banks/FIs will learn from stok brokers.

Then who will suffer?????; January 18, 2009 12:04 AM
Anonymous said...: If the brokerage or FI don't say that the product is safe, most people will not buy the product.
Once bitten twice shy.
Now everyone will wake up and spend time to read the fine print and ask more questions than before.; January 18, 2009 5:01 PM
Anonymous said...: This is the most ridiculous result! The ability to claim refund depends on the party from whom we have purchased the toxic product. MAS, SURELY THIS IS NOT RIGHT!!!; January 18, 2009 6:49 PM
Anonymous said...: I think MAS trying to put a good show to Hong Kong Monetary Authority. As the Class action is going to start next week in Hong Kong.

Still trying to tell the world, SG is number One Finanical Hub. With this Stupid reason, Same toxic products but have differnt outcome with Banks and Brokerage Houses.

100% Investors SHOULD BE COMPESNATED. There are no such things 50-50 or 30-70.; January 19, 2009 1:53 PM
Anonymous said...: THIS TOTATLLY WRONG APPROACH AND UNFAIR. THIS SURE WILL CREATE MORE PEOPLE UNHAPPY AND NOISE.

VERY PAINFUL, THOSE TOP GUY GET SO HIGH PAY AND DARE TO COME WITH THIS OUTCOME.; January 19, 2009 1:57 PM

Friday, January 16, 2009

MAS statement: Compensation for credit linked notes

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