Singapore has built a strong reputation for observing the rule of law and having a fair and efficient administration of justice. It has won high international recognition for a transparency, consistency and justice in handling of commercial affairs.
Under the rule of law, all parties can look towards the law to be applied in a consistent and fair manner, as it is written, and that the law can be interpreted in the right spirit, to serve justice and fairness to all parties.
In the saga involving the Lehman Minibonds and other credit linked notes, the letter of the law are clearly spelled in the Securities and Futures Act and the Financial Advisers Act. These law requires the financial institutions to make proper disclosure about the financial product and imposes a duty on financial advisers to give appropriate advice to consumers.
I could not find any part of these law that define that people should be treated differently according to their "vulnerability", standard of education or age or other factors.
I do not quarrel with the generous decision of the financial institutions to give full compensation to the "vulnerable" investors. I also accept that it is within their prerogative to take the commercial approach to reject the complaints from the "non-vulnerable" investors.
However, I believe that the aggrieved investors, being ordinary people, have the right to expect justice to be administered according to the rule of law, especially from the following parties:
a) The regulator, who has the duty to investigate and prosecute any party that is found to have breached the law
b) The judges, who have the duty to decide in accordance to the letter and spirit of the law. This duty also falls on the Financial Industry Dispute Resolution Center (FIDReC).
I hope that FIDReC will adjudicate according to the law, and not principles of “vulnerability” as this is not stated in the law.
I believe that the investors and the distributors have to share the blame equally for the disastrous mistake. It would be most unfair, if FIDReC were to rule that the investors are fully responsible and that the distributors are not culpable (as they have failed in their duty to give proper advice to the investors).
Although the distributors have asked the investors to sign a disclaimer, this does not absolve the distributors from their legal duty under the Financial Advisers Act. I hope that FIDREC will take a similar view, in the interest of justice.
Tan Kin Lian
Tan Kin Lian
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Credit Linked Notes
11 comments:
Mr Tan,
Fully agreed with what you said. Kindly send this letter to FIDReC CEO Mr Ng Wee Jin.
Many complainants have their cases dismised based on the reasons that you are educated and your have signed.
The adjudicator judgement is no difference from the FIs.
FIDReC has failed to up hold law and justice.
Steve Li
MR TAN
Thank you for speaking clearly about the law.
[1] It is gravely regrettable that there is differential treatment between "vulnerable" and "non-vulnerable" investors. We should look into mis-selling based on the act of the "person cheating" and and not on the profile of the "person being cheated".
[2] It is gravely regrettable that MAS or Fidrec are allowing such "disclaimer" or "confidentiality" clause to be used by the bank. This is because mis-selling is an a breach of statutory duty, and cannot be circumvented by "disclaimer" etc. For example, you raped somebody, you cannot offer her compensation subject to "disclaimer" and "confidentiality".
[3] When it involves statutory requirement, you cannot hide behind any other civil agreement. For example, when you are called upon as a witness to the court, you cannot hide behind confidentiality clause to remain silent.
FROM CASHEW NUT
The insurance agents think that after their clients have signed or being made to sign the documents or a disclaimer they are absolved from any liability.
They are wrong. The agents are still liable considering the circumstances under which they are executed.
Eg. The new guidelines will require the disclosure of circumstances the clients came to buy the products.Was the client prospected or the client on his or her own free will initiated the buying.If the client was prospected the agent cannot claim that the client knew everything and needed product advice only. Even though the product advice was ticked in the fact find form it is obvious that the client was persuaded or 'threatened' to tick product advice option and under examination the client can be shown that he or she didn't know anything about their needs or the products or the agent failed to conduct the fact find.
Even the client initiated the buying the 'savvyness' of the client can be tested against the insurance agents' claim that his or her client required product advice or no advice.
Having said that, all this rule will be useless if MAS doesn't enforce it.
To safe guard the customers the insurance company is required to have a internal whistle blowing mechanism for people to report against their colleagues for misconduct and malpractice. If this is not foolproof and it will more effective that MAS also provides for this whistle blowing channel for policyholders to report against any insurance agent, RM, advisers for misconduct.
Scams and mis-selling are on the rise and as more insurance agents qualified for mdrt the need is greater and MAS must be more alert to make sure these mdrt agents didn't qualify for mdrt by fleecing their customers by selling and pushing high commission products unethically without conducting the need analysis and fact find.Another safeguard is to check the sales of mdrt agents to see if their sales have been ill gotten, through unethical means and the products recommended were not of reasonable basis and inappropriate.MAS must enforce this requirement that the insurance companies conduct an internal audit and give a report annually on their mdrt agents, the high risk group.
The Watchman
Mr Tan, this is a good article to highlight the "rule of the law" available to commoners demand "justice and fairness" or "equity in law". By right, administration of justice should strictly follow the same principle.
What is more important is whether the "administration of justice" is equitably practised and administered by those who are responsible in administering the legal system - the "Officers" of the Courts, including judges, advocates, solicitors and relevant Autorities.
Although Singapore has a strong reputation, it still has "bugs" within the system, and there are common abuses.
The Paradox - Judges decide cases based on the "rule of law" by interpreting what is presented to them by lawyers. Lawyers can add slurs, untrue, unfair comments and arguments in their submissions. Some even flout Written Directions / practice rules from the Court in the course of administration of justice by routing unfair arguments and challenges unnecessarily back to the Court, and forcing the common folks to give up. And perhaps to earn more legal fees.
Unlike other legal systems, our Judges look at what evidences are technically presented as evidence and admitted at their discretion, but will not investigate anything else fairly any further. Certain judges even decide based on their own personal perceptions without thinking out-of-the-box of the actual international context and inplications involving their cases. Oral evidence even if given in Court may not be accepted by Judges even though the "rule of the law" and written laws permit. Lawyers particularly big "corporate" lawyers working for large rich corporations then capitalise on the limitations of of the legal system and the lack of financial resources by poor commoners for a "slaughter", the latter ignorantly still have a high regard for our reputable legal system under a "climate of fear".
I am sure in your previous capacity as a reputable CEO of a large Insurer, you know well about the game I had just mentioned. My salute to you for writing this piece and I hope I has added a little spices in support.
If there is a fault with the system, I am sure the System Adminstrator must do something, especially if it involves the "rule of law".
Dear Mr Tan,
Thank you very much for the effort you put on our saga! How lucky Singapore have people like you to speak out for ordinary people.
The reporter Francis replied " I have, they don't want to listen to me either. " When I SMS him "Hi, Francis, v u received Mr Tan KL's email. The data in U rpt given by MAS is very misleading. The majority r not happy indeed. Kindly please tell MAS the truth, they don't listen us. Thanks!"
I am very sorry to post his reply, but he is the person can reach MAS now, we need him to help us. I understand he have the difficulties to help us, but at least we need some body pass the message to MAS. I wondering whether MAS know how is Hongkong treat this saga.
How come investors cannot find lawyers that argue the way you do?
Ok it could be issue of money that investors cannot find $ or unwilling to do so.
But MIAG,the non-zombie action gp, has lawyer that does not argue this way.
HK lawyers do not argue this way in their claims
Have you ever tot that yr arguments are weak in law?
One of the key words in this sad saga is "mis-selling". There is no such word in the English dictionary.
That is why you have such a weak legal case.
Commercial laws are fairly clear when it comes to things like:
a. Stupidity
b. ignorance
c. incompetence
d. negligence
e. mis-representation
f. fraud
There is no legal case or precedent before any courts concerning mis-selling ... whatever that means.
Putin tells Russian casinos to cash in their chips. Singapore should do likewise.Learn from the experts, the evils of gambling.
Soo Dou .... I think you are right in the sense that the wording mis-selling can be confusing:
(a) For those who does not know law, they don't even know that "mis-selling" could be a legal jargon. Hence, people are trapped when they lodged complain without thinking through. Investors still think about fairness (per MAS pronouncement telling FI to apply fairness) when they complain; while FI could be carefully evaluating its legal position.
(b) I think MAS has thought through carefully when using the word "mis-selling". This is because if they use the word "mis-representation", then it will automatically trigger S27 of Fin Adv Act and MAS has to step. Hence, the word "Mis-selling" has a much wider buffer zone or grey area.
Not sure I am correct or not? Please enlighten me if you could. Actually, I did not know that the issue can be so intricate until we are drawn in . . "CASHEW NUT"
MAS is obviously making use of Francis Chan to release distorted news. If MAS is dishonest, what can we expect FIDReC and FIs?
There is a Chinese translation of Mr Tan's post:
http://wayangparty.com/?p=10404
Chinese educated readers may like to take a look for better comprehension.
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