The seller of a gold ornament is cheating, if he knowingly mis-represents the ornament to be made of gold, when it is actually fake.
The seller of a property is cheating if he knowingly mis-represents the property to be freehold, when it is actually a leasehold.
The financial institution that creates a credit linked note is cheating, if it writes the prospectus in a manner to mislead the investors about the true nature of the product. If the creator is aware that some of the underlying assets have already turned bad (as reflected in a severe drop in value), but they continue to mis-represent the product based on its outdated credit rating, they are cheating.
The top people in the financial institution may not be aware that the product was created to generate profits by misleading the investors. But the financial institution should take the responsibility for the actions of its employees.
The standard of honesty has become so low, that cheating is now tolerated as being part of the free market. But this is a mistaken belief. A free market can only operated if there is a climate of honesty and trust.
There is a duty on the Government to investigate cases of suspected cheating and to bring the culprits to court. The judges can decide on these cases. Quite often, the court case may not be necessary as the party may be willing to settle the matter by paying appropriate compensation without admitting liability. This approach is practiced in America.
Tan Kin Lian
The top people in the financial institution may not be aware that the product was created to generate profits by misleading the investors. But the financial institution should take the responsibility for the actions of its employees.
The standard of honesty has become so low, that cheating is now tolerated as being part of the free market. But this is a mistaken belief. A free market can only operated if there is a climate of honesty and trust.
There is a duty on the Government to investigate cases of suspected cheating and to bring the culprits to court. The judges can decide on these cases. Quite often, the court case may not be necessary as the party may be willing to settle the matter by paying appropriate compensation without admitting liability. This approach is practiced in America.
Tan Kin Lian
4 comments:
I fully agree with you. Our moral value/standard have drop by a number of pegs in the recent decade. I think we have to start moral education in the schools to ensure future generation of decisions makers have a strong moral conscience. Just look at the current turmoil, it is all due to the pursuit of financial gains for a small group of people at the expense and sufferings of many. Greed & power (maybe lust too) is the result to this behaviour. The next turmoil (you can bet on it) may be worse than the current one we are experiencing so we need to really educate the young now before it is too late.
Schools already have civics and moral education. The problem is, what is taught in schools may NOT reflect what is being practised in real life. Take compassion for instance. A student is taught the value of compassion etc. He then goes home and finds out that his parents have been served with an eviction notice ( after losing their jobs), or received a rejection letter from FIDREC.
How do you teach the right values to that student?
GENEVA (AFP) - - It is unclear if the three wolves were too greedy or simply hungry, but what is certain is that by killing more sheep than they should, they have violated Swiss law.
Swiss authorities have issued a death warrant for the three offending wolves originating from Italy and France, and wardens have 60 days to hunt them down//
MAS should adopt what the Swiss authorities are doing. There are too many wolves in the insurance industry and they are causing environmental damages to the poor who have to work as toilet cleaners and fast food during their golden years.
There is an over population. The worst thing is 90% of them are not qualified. MAS should consider reducing them to a more manageable number of 5000 who are qualified and honest. To meet this objective MAS must turn them into competent ones by making them to upgrade to proper financial planning qualification at tertiary level. Failing which they must leave. It looks ruthless but ruthless means must be used to deal with ruthless agents for the good of the consumers.
Like the wolves they must be eradicated.
Clearly for the case of MB, the financial institutions cheated. They too invested in the product with their own capital e.g. Phillip Capital.
Why? They don't understand the product themselves because they too thought those companies will never collapse.
Clearly MAS knows it but stick to "not to micro manage".
Why? MAS approved the sale of the product but refuse the responsibilty on how the product was design to cheat retail investors and how FIs took advantage of the selling process.
What does it means?
Don't look for the regulator for help. Products will continue to evolve and once the MB dust settled, it will happen again. You may not be the victim but your children will.
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