Tan Kin Lian's Blog: Act with honour and integrity

Friday, October 17, 2008

Act with honour and integrity

I hope that our Monetary Authority of Singapore and the financial institutions will come forward to do the right thing.

Mistakes have been made in approving the credit linked securities and in selling these securities to the general public. At that time, these parties were probably not aware about the nature of these securities and the real risks.

Now that this matter is known, they can come forward to admit a mistake. They can offer a fair compensation to the investors. The investors cannot be made to shoulder the entire loss, due to mistakes made by people who should be more knowledgeable and institutions that they have trusted!

It is time to act honourably. This is what integrity is about.

155 comments:

Anonymous said...: During the CLOB saga, Singapore government was quite helpless towards Malaysian government.

But now, our government must come forward to help the victims - tricked and hurt by FIs and banks in Singapore!; October 14, 2008 3:08 AM
Anonymous said...: I totally agree, but we must remember it is 'an honest mistake', singaporeans to be blame, should put their money with 'CPF instead'. We are 1st in the world, will we admit this mistake?; October 14, 2008 6:15 AM
Unknown said...: In 2007, MAS warned that structured products are risky and proper disclosure should be provided by relationship managers to the clients. See link:

http://www.mas.gov.sg/news_room/statements/2007/Keynote_Address_by_ED_Mr_Kola_Luu_at_Structured_Products_Asia_2007.html

"7. However, as structured products may involve multiple risk components, proper risk disclosure should be provided by relationship managers to the clients. Investors looking to invest in relatively more complex structure should also exercise extra caution before entering into such financial transactions. Many governments in the region have begun developing legislation and guidelines to provide investors with the information necessary to understand the nature and risk associated with complex investments. As an integrated financial services sector regulator, MAS also continually reviews existing regulations to ensure that they remain relevant to market developments.

8. For example, MAS has just completed a final phase of amendments to the Securities and Futures Act (SFA) and the Financial Advisor Act (FAA) which are aimed at
• enhancing MAS’ supervisory oversight of capital markets services and financial advisers’ license holders;
• increasing the responsiveness of MAS’ regulatory framework to market innovation.

9. MAS had also introduced a set of risk management guidelines earlier, which highlighted the importance of senior management oversight, strong risk management processes and operating procedures and need for competent personnel in the risk management, control and audit functions.

10. While growth in the financial industry has been robust, the need for manpower and expertise continues to be a key factor for continued success. In consultation with industry, MAS initiated the Financial Sector Manpower Conversion Scheme in 2004 to help re-channel manpower quickly to new growth areas in the financial sector. This is done through customised conversion training programmes in partnership with partners such as the Wealth Management Institute (WMI) and ACI Singapore. Over the last few years, WMI’s flagship Masters of Science in Wealth Management has provided the industry with a pool of highly qualified and competent wealth managers. Additionally, the programme has been crafted to provide wealth managers with expertise on specific asset classes, including a module on Structured Products, aimed at presenting participants with a good understanding of the risk and return of structured products, and their use in portfolio management."

Many people have bought the products from stockbrokers by responding to newspaper advertisement or by word of mouth from relatives who may have been convinced by the RMs into believing they are low-risk. Did the FIs (especially the stockbrokers) deliberately use this method of sale (direct response) so that they can can now claim there was no mis-selling? Is such a method suitable for such a complex product?; October 14, 2008 8:08 AM
Anonymous said...: The quick response to industry personnel need was through an exam mill whose course hardly equipped the
RMs to be competent except the Master in Wealth Management course.I know RMs don't undergo a Master course but the same course like insurance agents which is horribly low.Structured products course was never a subject.; October 14, 2008 8:43 AM
Anonymous said...: I gree with the writer. All credit link investors should be looking for a common cause to get compensation rather than fight individually to prove that the FIs or Rms have mis-lead them. The common denominator is to prove that MAS indeed have lapses in its regulations allowing such credit link products with disproportionate risks-to-yield ratio to be sold to retail investors. Taking on MAS is greater than David and Goliath's battle...it's in fact foolhardy! The glimmer of hope rests upon the writer's succinct message to MAS, "time to act honourably." Lots of respect and regards for MAS will definitely be in the hearts of those living in anxities. Devine intervention to move the hearts of the powers in-charge is the other alternative invisible force...it's my prayer that there will be positive outcome for all those who have invested in such toxic structured products. The power of prayers cannot be under estimated..so chime in an pray!; October 14, 2008 1:05 PM
Anonymous said...: when was the last time we see the government admit they had made a mistake and offer apology to the public? honestly, i cannot recall. no human can avoid making mistake. it's how one react after the mistake - u can be perceive as humble and should be forgiven or arrogant, in the aftermath. i often see on tv that ministers in japan and taiwan making sincere apology and offer their resignation after some problems occur, be it within or beyond their control. people would have great respect and admiration for their courage and willingness to shoulder responsibility. i'm not suggesting any minister resigned, but the very act of admitting there was a mistake, will win the people's heart and respect, better than any election rally. on the contray, pushing away responsibility will hv adverse consequences down the road. and don't portray that u are invincible or know everything, or else we don't need election and the poeple's mandate. come on, we are not stupid people.; October 14, 2008 1:20 PM
Anonymous said...: Dear Kin Lian,
Thumbs UP for your words well said!! Hopefully the relevant authorities will take heed this time round cos things have heated up to boiling point. Hopefully, we will not see the 'VOLCANO' erupts then financial earthquake.
I sincerely plead with the MAS, CAD and other govt agencies concerned to DO SOMETHING FOR US - OBEDIENT SINGAPORE CITIZENS to recover our hard earned life savings. Blood, sweat and tears comes with these life-long savings. We thrift throughout our working life to save enough to see us through our twilight years - obediently taking our government's advice. Our CPF contributions retained in our retirement fund are insufficient to meet our daily expenses which are 'GOING UP AND UP'year after year.
We have enjoyed many good years and hope it will continue to be likewise for years to come.; October 14, 2008 2:27 PM
Anonymous said...: I had this poster pasted in my son's room since he was very young.

"Its Ok to made mistakes, everyone does it anyway.
The more important thing is that you must admit it, learn from it and never to repeat it again"

So each time he done something wrong, i will get him to read this.

I hope this same poster made will bring some soul searching for MAS & all the finacial institutions .; October 14, 2008 4:56 PM
Anonymous said...: If the MAS did give the investor a fair trial, i would give them the thumb up.

A lot of the comments say that the investor put all these money in due to greed. Are you nuts? 3~5 % for 5 years lock in period, you called that greed?; October 14, 2008 5:38 PM
Anonymous said...: 4.56pm, i do the same to my kids, it's ok to make mistakes but they hv to admit, apologise and tell me what they learn from it. i walk thru the process with them. common people who never win scholarships also know but why they dun know? study too much until brain tumour or blood clog or cannot lose face?
5.38pm, i agree with u. the 1st criteria is safe, not greed. those who said the investors are greedy also hv some blood clog in the brain. if their mother is one of them, they will be crying now.; October 14, 2008 9:39 PM
Anonymous said...: I think the best way to resolve it is MAS, FI and the investor split the losses, equally in 1/3. In this way, the losses are minimise for all 3 parties and I believe 90%of the investors will accept. And MAS and the FI can regain the public's confidence and trust and walk away gracefully. 1/3 is peanuts to MAS and the FIs but can be a big deal to some people. But I guess they have no choice but to accept, it's better than zero. And at least MAS and FI have show their heart is not black metal. Do you agree Mr Tan? But I think this mandate got to come from one of our top gun. Don't tell me any economics theory plse, theory are irrelevant in a crisis otherwise USA will not be in such a plight today, too many harvard and princeton people got too smart. I come from the angle of how I will handle it if I have a say on how to help all parties to break the deadlock, relief the pain of the investors and make S'pore a better home. Think about it....; October 14, 2008 9:50 PM
Anonymous said...: lets engage a good lawyer to sue MAS!!!

to the anynamous posted at 9.50pm
you have so much to say, why remain as anynamus? it's as good as not saying anyting, nobody could recognise anynamous; October 14, 2008 10:26 PM
Anonymous said...: 9.50pm,
pay peanuts to the Ah peks and old folks? Don't make monkeys out of these people.You have great monkey theory. You must have gotten it from one of the non debited Harvest universities..; October 15, 2008 12:09 AM
Anonymous said...: Dear Mr Tan,
I suggest that you put this right at the top of your blog everyday so that everyone including the people from MAS & the FIs can read it. This is the crux of the matter. Whether the leaders in MAS and the FIs will let their conscience guide them to be principled to act with honour and integrity, to do what is right or will they attempt to cover their mistakes and bully the small people. And will the people in MAS have to courage to act without fear or favour? All of us who are affected are awaiting to see they will do! I think this has grown too big for them to sweep under their carpets.; October 15, 2008 11:59 AM
Wealth Journey said...: In the wise saying of our revered leadership,
"It's an honest mistake. Let's move on"; October 15, 2008 1:30 PM
Wealth Journey said...: Oh ..the message was meant with a sense of sarcasm.

Just in case some of you dum dum.. cannot detect it and start flaming me. :P; October 15, 2008 1:31 PM
Wealth Journey said...: Sheeze... Must be the rainy day..

I meant Sarcasm on the greatest sentence ever invented for leadership to be used by leadership.

Like if your boss makes a mistake.. he can say that sentence..

But if you make a mistake, you try telling him that sentence, it will not work.; October 15, 2008 1:32 PM
Anonymous said...: Come on, MAS, recognise that section 27 has been broken by RMs and the FIs and deal with it swiftly and force the banks to own up and pay.

Before other advisers or insurance agents break it, come down hard on them. They have fleeced the consumers long enough and a stop must come. Not only the Minibombs but also the aia saga prove that product selling and pushing will lead to rotten and toxic products being sold by these unethical agents.Many aia policyholders found to their horror that their endowment and whole life policies have not accumulated decent cash value or for many their policies have yet broken even after donkey years. This is outrageous.
MAS must quickly address this problem and send out directives to all the FIs to implement section 27 rigth away.Remove all the options that pertain to product advice and every case the insurance agents, the RMs and the advisers must conduct the need analysis. And more importantly to let the public know they have the right to responsible advice and to report any agents or RMs who not conduct it before recommendation of the products.This is the right time to enforce all this.; October 15, 2008 2:14 PM
Anonymous said...: The FIs I went for "assiiting" them in investigation still defending themselves ... what is "INTEGRITY" to them ? All trying to cover their back !; October 15, 2008 2:16 PM
WY said...: I try to find out which are the professional associations related to investment/financial industry in Singapore.
Found in MAS’s useful links:
http://www.mas.gov.sg/useful_links/useful_links.html

Found quite a number of Singapore Government Agencies and
Financial Sector Associations and Institutes in Singapore..

One of them is SIBA (Singapore Investment Banking Association):
http://www.siba.org.sg/index.php

Read with interest this "2006 Report of the Equity Derivatives and Structured Product Taskforce":
http://www.siba.org.sg/2006/20060622TaskForceReport.pdf

SIBA and MAS had actually formed a Taskforce on equity derivatives and structured products.

I wonder whether Notes are included in “equity derivatives and structured products” in 2006.

The Taskforce had actually voiced out “investing public has to be
protected from potential misrepresentation” and recommend “guidance be issued on the marketing and promotion of warrants; that broader classes of products be permitted to be listed and guidance
issued to assist issuers understand which products are permitted to be listed; and that a streamlined
and transparent process be adopted for approving the listing of new product types.”

Wonder what happens to the Taskforce after that, report available is until 2006.

It is an interesting read..
Read the pdf files for details.

(Excerpt):
The Taskforce comprised of three sub-committees that
were responsible for reviewing the following market segments:
a) Investment products (“IP”): products that are sponsored, issued, marketed or supported by
a specific financial institution and sold to the retail and high net worth (“HNW”) market;
b) Exchange traded products (“ETP”): products that are listed and traded on the Singapore
Exchange Limited (“SGX”) excluding Structured Warrants as these have been addressed
by the IP sub-committee; and
c) Over-the-counter products (“OTC”): unlisted deals between financial institutions and
intermediaries.
…….
Some of the feedbacks by the Taskforce:
The investing public has to be
protected from potential
misrepresentation.
Issuers need to be guided on which
products are allowed on a securities
exchange.

One of the recommendations:
Recommendation 1: The Taskforce recommends
that guidance be issued on the marketing and
promotion of warrants; that broader classes of
products be permitted to be listed and guidance
issued to assist issuers understand which products
are permitted to be listed; and that a streamlined
and transparent process be adopted for approving
the listing of new product types.; October 15, 2008 4:37 PM
Anonymous said...: For sure more seats will be lost in next round of General Election if this simple mistake cannot admit and solved with integrity, sincerity and justice. I think many Singaporean are watching how they are handling it.; October 15, 2008 4:48 PM
Anonymous said...: If the "victims" of stucture notes are to be compensated, i would like you guys to think where is the compensation going to come from ?

From the banks ?... then the share holders will object.

From government ?.. then the tax payers who did not invest in these notes will object.; October 15, 2008 4:49 PM
Tan Kin Lian said...: Hi 4:49PM

The compensation will come from the financial institution. It will cause a small dent to their profit, but they will still be profitable.

The decisions will have to be taken by the management and the directors. It will be an honorable thing to do.

If there are not willing to compensate, MAS should take them to court on behalf of the investors.; October 15, 2008 5:00 PM
siewkhim said...: Kin Lian,

MAS is not going to admit that it was a mistake approving the credit linked securities. Neither the financial institution will admit that they were wrong in selling these securities to the public. By doing so this tantamount to MAS admiting gross negligence and the financial institution for fraudulent sales of the products. The legal implication to the admission is beyond imagination.

I don't think any amount of intimidation would move those alleged to have caused this fiasco to act in favour of the "victims". You can write it in your own blood, nothing is likely to happen. I will not be surprised it will make matter worst for the "victims". Instead of getting some consolation payments they might get nothing. It is OK for you since I was told you are not a victim. But you get all the limelight at the expense of other people problem.

Lastly I would like to know whether you are prepared to go all out to get redemption gfor these "victims". They put their hopes so high on you and like what you did during the NTUC Income AGM you throw the towel.

Are you preoared like the Malaysian blogger Raja Putra Kamaruddin who went all out to tell of the UMNO regime in Malaysia? Now he is in prison under ISA.

Please publish my comment so that people will be able to know both sides of the story.; October 15, 2008 5:17 PM
Anonymous said...: THere is the cheating case from education side. Many chinese students come to Singapore for nursing course and realised the school is not licenced for nursing. Famous hosptial engaged, that is the reason students trust the school. The school owner just declare banrupt and run away.

At the end, who compensate these cheated students, Singpaore toursit board. The do not damage their reputation as an education hub for the future.; October 15, 2008 5:20 PM
Anonymous said...: Hi 4:49PM

We should not let the end justify the mean. No matter what, justice still need to be done. We should never let the possible outcome to determine or influence the judgement. I think you are simply too perssimistic or rational.; October 15, 2008 5:34 PM
Anonymous said...: I'm looking at the Minibond Series 3 brochure in my hand.

Front page reads "Invest on solid foundations and earn 5% p.a. paid every 3 months for 5 3/4 years." So much for the word "solid".

Rear page reads "With our Minibond Series 3 credit-linked to six major financial institutions, you can enjoy the returns you deserve with peace of mind". I don't think any investor has "peace of mind" now.

Can this brochure be used against the FIs for providing misleading information, causing investors to believe that the minibonds are low-risk products?; October 15, 2008 6:02 PM
Anonymous said...: We can see for ourself
who is helping, and
who is creating trouble!
Thank you Mr. tan; October 15, 2008 6:22 PM
Anonymous said...: Dear Mr Tan
I agree to keep this on the top of you blog. My friend father redeem and lost @ 50% earlier, I am now helping her to redress the issue. It is really terrible.
Guess our Parliamentary Committee for Finance is sleeping or do not know what to do. Compare to Ms Halimah in the Parliamentary Committee for Health, she is really good. Maybe the Finance committee themselves are in FIs or FAs. Conflict of interest.

Mr Tan, proposed you inform the media of your 'blog' so that they can add pressure to MAS especially.

We talk of courtesy, clear table after eating etc. But if MAS unable to say SORRY we will take control instead of play tai chi, how does our government expect the people to respect them.

Maybe you should consider escalating to the PRESIDENT instead.; October 15, 2008 6:35 PM
Anonymous said...: Siewkim,
you seem pessimistic that investors will ever get compensated. We hope to prove you wrong . You are trying to douse the hope of these people but you won't succeed.I wonder what is your agenda . Perhaps you are an indirect stakeholder in this saga. Whatever your motives are we are not letting you stand in our way.Your discouraging words will not sow discord and doubts among these poor old folks.We will not let you.
It will be victory for these people. We are not begging the financial institutions or MAS, we want to make them see where they gone wrong, to make them come to their senses that they have a lot more to lose. Public confidence is at all time low, the FIs are feeling it , their prices are dropping, assets are lost and more if they don't act quickly. If they are waiting for a run on their assets that will be the last straw that will break their back into two.

I am with the people; October 15, 2008 6:53 PM
pisces said...: Mr. Tan,

I am from Hong Kong. Here is my view based on the leaflet that I have.

This is a fraud and deceit, by the mini bond issuing companies and retail companies.

Responsbile parties should be:
Lehman Asia, Pacific Internation, and retail banks.
(yes. related people with Lehman should be pressed with criminal charges).

Reason:
1. the product is named as 'mini bond serious'.
we know this is not a bond type of security at all;
2. this product is also named as Credit-Linked Notes, as the proper name. (based on HK documents).
In fact, thiis is not really true either.
In "Security Notes", it says: {AAA-rated collateralized debt obligation securities ("CDOs") as collateral and swap arrageents with Lehman Brothers Special Financing Inc. as swap couterparty for the payment of principal and interest under the four tranches of Notes. The CDOs will be linked to a portfolio of international credits. }.
Reading today, we understand that we are really buying into "SWAP Arrangements".

The credit-linked notes are not reflected in above definition.
It is the SWAP Arrangement guarantor who bought the CDS for the related CDO collateral.

Thus, investors should be told upfront clearly that they are buying into a swap agreement, with bla bla. And, they should be told the associated risk with the swap agreement.

THe product and prospect was designed and promoted in a way deliberately to avoid mentioning the nature of swap agreement, but to focusing on the credit-event which is associated with the CDS bought by the swap guarantor.
In the prospect program,
- it mentioned the swap failure but not in the up front, and never mention it in the main notes which is usually read by the retail investors.
- It never clearly stated that the product is a swap agreement in nature. always using credit event as the usual risk factor.

Regards; October 15, 2008 7:16 PM
G C said...: I am a Malaysian but have been following what has been happening on the losses suffered by the retail investors on the structured products.

First of all I wish to commend that Mr. Tan is very sincere in getting those responsible to admit its mistakes and as a world finance center your authority will act in upmost good faith in sorting out this problem.

I believe many have been honestly be misinform or ill advise by the RM. Me too in Malaysian has been also keenly introduced to this so call structured product when ever I went to update my Fixed Deposits. In many times the retail investor like us are difficult to understand the complexities of such products. It is time the regulators in all counties seriously relook at the regulations required before this kind of investments is allowed to be market to the retail investors.; October 15, 2008 8:20 PM
Anonymous said...: I am of the view that MAS and the FI would not admit their mistakes as the repercussion is just unimaginable. However I support Mr. Tan for his courage and dedication in raising this issue for the benefits of the investors. But chances of getting compensation will be very slim.

I am a minibond investor and I felt the sales brochures are really very misleading and MAS did not do a good job. I invested believing what he brochures have outlined and lost!; October 15, 2008 8:30 PM
Anonymous said...: I was from MAS some years ago. It is hard for bureaucrats to understand complex derivative products. For me, one look at Hi-Notes structure and my personal opinion is that I would never allow that for sale to non-sophisticated investors. This is a first-to-default Basket Default Swap where the hi-note "investor" ends up writing/selling insurance on a portfolio of international banks. I am very sure that you need strong industry knowledge (like myself having worked on derivatives for many years) and not some bookworm scholar to understand and approve such products; October 15, 2008 9:36 PM
WY said...: Hi pisces-hk,

Wonder who are the persons/associations standing up for Minibond investors in HK..
I hope both groups can help each other.

Hi G C,

do you have website showing list of structured products sold in M’sia ?
Is Malaysia affected in this saga ?; October 15, 2008 9:44 PM
WY said...: On the question of “where is the compensation going to come from”,
it should come from FI. It should not come from govt/peoples’ money.

If it is genuine misrepresentation, I would like to add that:
1. if compensation are to be given by FI to misrepresented investors, shareholders should not blame the misrepresented investors. It is mismanagement by the FI’s management and Board of Directors.
2. A company that conned (in this case misrepresented) its customers may con its shareholders.
3. In AGMs, shareholders should seek explanations and remedies from management & Board of Directors. If necessary, they should vote against Directors’ Fees, management fees.
4. Profit should not be made by unethical means. Ethics and care for customers can ensure long term good customer relationship and beneficial to shareholders too.

I think the compensation will be on case-by-case basis. Not every case is a misrepresentation.
Also, not every misrepresentation case can be proven.; October 15, 2008 9:45 PM
Anonymous said...: Just to illustrate how much faith I have in MAS and its regulations.

if I steal a loaf of bread from a store, I'm very sure I'll go to jail. However, if I churn clients' investments or mis-sell, high chance I'll only get a slap on the wrist.

This's what I tell most people who ask whether I'm regulated by the law/MAS...and yes, I'm in the industry too.; October 15, 2008 10:38 PM
pisces said...: WY:

HK has a few groups helping. But it has various directions.

Media and Government are trying to focus on the mis-selling (by bank staff) and mis-practice (by retail banks).

But they all failed to address the key issue:
the product "credit-linked notes" mini bond is NOT a credit-linked notes. Investors are buying into a different product which is called Swap Agreement.
The prospect got approval from HK SFC.

In fact, investors did buy into a Credit-linked notes (probably CDS), investors would be okay.
Because now it's the Swap guarantor Lehman bought the Credit-linked notes CDS, that's why the credit-event did not happen, but investors lost their investment to nothing.

it is a scam. The prospect is a well designed to misled investors without clearly stating the true nature of the product (i.e. a swap agreement, NOT a credit-linked note, not a mini bond).

we should launch a lawsuit against Lehman Asia / and related institutions that helped to conceive the product & prospect of the product. It is a Fraud.

There are people saying that they don't care of charging Lehman people, they only want to get their money back. However,
By sending them to jail, it would also help to prove the case.

we should keep in touch and fight together.; October 15, 2008 11:10 PM
Anonymous said...: Dear Mr Tan, I am impressed by your efforts to go all out for the affected investors and pointing them to the various channels to seek redress. However, I'm wondering what's the point of this appeal if one can never be sure that the relevant parties are reading it. Is it just a place for people to get together and say how much MAS and the banks sucks? If so, my opinion is that this post is utterly pointless and irrelevant (beyond letting people vent their fustrations) and unless you can let us know what you intend to do with this post, I'm inclined to think it's just some wayang stunt to make yourself appearing to do a lot in public. Not that I'm trying to diss you but this is just the feeling I get when I read this post and wonder, what's the point? Hope you don't get offended. But I'm just thinking if I'm the relevant parties, I'll just get more peeved and defensive and shut down negotiations. It's reported that in HK, public is starting to lose sympathy for the investors who demanded full compensation no matter what. I hope this doesn't happen in Singapore but human emotions are hard to contain and any stirring of volatile emotions may simply backfire if not managed properly.; October 15, 2008 11:27 PM
Anonymous said...: Dear Mr Tan,

although some people may call you 'kay poh' but deep in most people heart, we know you really care for us commoners.

deeply appreciate what you have done for everyone.; October 15, 2008 11:58 PM
Anonymous said...: When diluted milk tainted with melamine is sold as pure milk, the AVA acts and the sellers have to provide a full refund for all the recalled products. The supermart chain that continued selling the tainted has even been taken to court!

Now, when such complex high-risk products are sold as low-risk bonds, shouldn't the MAS enforce that the sellers provide a full refund for all these mis-sold products as well? And why shouldn't those that continue selling such products be taken to court as well?

Is there a double standard used in the health industry and the finance industry? Does it mean that the Minister of Health has more authority than the Minister of Finance? If it takes someone to die (or develop kidney stones) when consuming melamine-tainted milk before the government acts, are we going to wait till these retiree investors commit suicide (or die from depression/heart attack) before the Singapore government acts?

I urge the authorities to act immediately, for the sake of Singapore's reputation.; October 16, 2008 12:33 AM
Anonymous said...: Hi,
I am a Malaysian PR who wants to share the sorrow and burden of those affected in this chapter of deception.
I was burned in stock market once. As a result, I do not have much now and I keep in wealth in
1. CPF
2. EPF (Employee Privision Fund of Malaysia)
3. Cash (ringgit) in Malaysia
4. Cash in Singapore ( not more than 20k for any single bank)
5. Property in Malaysia
My mentor who is a millionaire and a loyal customer in HSBC Malaysia has liquidated all his investments into cash before the financial storm based on his financial adviser's advice. My point is that if I am not rich enough to be a propority customer who can afford to pay some very INFORMED relationship managers to put my bets in the investment market, then I will play safe. No share trading and investment funds at all. A visit to Genting will soon help me to realise if i am lucky enough. I chose to play defensive, I will never let others who know nuts to put bets for me. I do not gamble. All the best to those affected, I heard HK government has forced the bank to buy back this product. I hope the same will be done here. May the blessing of God be with you!; October 16, 2008 1:11 AM
Anonymous said...: Good or bad times - solidarity and reciprocal support should be both ways between the citizens and the empowered bodies.

How this domestic fiasco is going to be resolved (duration and approach) will be closely watched by local citizens and foreign media including other countries.

FIs in the US were ordered to buy-back ARS at par from all the investors. Will Singapore take the lead to follow suite or re-engine a WIN-WIN solution for all? Won't be surprised if emigration and outflows start moving to those countries offering 100% protection.; October 16, 2008 2:27 AM
Anonymous said...: ST Oct 15, 2008
HK banks mis-sold bonds

HONG KONG - HONG Kong's chief executive Donald Tsang said on Wednesday that some city banks had been found to have mis-sold financial products backed by failed US investment bank Lehman Brothers.

He demanded the banks indicate this week whether they will adopt a government proposal requiring them to buy back the products from investors at their market value.

Mr Tsang told reporters in a briefing after his annual policy address that the government had waited too long for a reply from the banks on the proposal, which was announced on October 6.

'We feel that... we have already waited a rather long time,' he said.

'Also, I heard from the Hong Kong Monetary Authority that there were already cases in which mis selling was found to be involved,' he said.

'Under the circumstances, I demand that the banks must give a reply within this week.'

The authority, the city's de-facto central bank, said it had received some 7,000 complaints involving more than 40,000 investors who said their banks had not told them the risks associated with the products.

The investors, who are estimated to have put 12.7 billion dollars (S$2.4 billion) into the products, worried that they could only get back a portion of their money under the government plan because of the dire market condition.

Lehman Brothers, one of Wall Street's most established banks, collapsed last month, sparking turmoil on financial markets across the world. -- AFP; October 16, 2008 3:43 AM
Anonymous said...: Today's Straits Times headlines give real cases of savings lost. Looks like our regulator really keep quiet, banks I hope will not talk to the investors individually and sycho them to accept the loss.
I totally agree to what's being said so far in the BLOG and Mr Tan's action. You deserve more than the PBM.
The authorities should set-up an independant inquiry board maybe comprising of Mr Tan, a judge, former MAS staff etc. They need not interview all investors. If 9 out of 10 bank clients are misled, than the bank should be made fully responsible to pay in full plus current interest lost.
MAS or our regulator is 'playing with fire' everyday. New unregulated products are in market, they aware, keep quiet. No complaint no action. If there is complaint, go to FIDREC. Their mindset is very 'old and closed' and maybe they rely on advise from 'advisers' from the industry who are in the business and protecting themselves. They just sit down and receive their big fat pay and be compacent which will lead to downfall. Time for shakeup in MAS.; October 16, 2008 6:29 AM
Anonymous said...: Look like all the good people in msa have all gone, and they are now staff staffed with many "paper" scholars.; October 16, 2008 7:12 AM
Anonymous said...: DBS CEO Richard Stanley says in his message dated 19 September 08 that

"While we do not know how long the turbulence will last, at DBS, we are committed to upholding the highest standards of integrity. Of that, you have our deepest assurance"

Refer to website :
http://www.dbs.com/dbsgroup/announcements/

Is this DBS rhetoric or do they really mean it ? I guess we will find out from the outcome of how they handle this situation.; October 16, 2008 8:19 AM
WY said...: Hi pisces-hk,

Thx for your insights.
Wonder whether you can recommend few HK groups that are using “lawful” means.
Preferably organise through internet..

I didn’t invest in Notes, in no position to fight the case. Maybe you can just post your insights on this blog.

I only hope the real unethicals can be punished, money squandred by this means can be returned, a better investment environment and more investor protection going forward.; October 16, 2008 9:14 AM
Anonymous said...: Dear Mr. Tan,
Is there any feedback from MAS on the petition? That is whether they will take it up or decline or ignore?; October 16, 2008 9:25 AM
Anonymous said...: MAS and FI, please have some concern to most of the affect victim esp. uncle and aunties. Every day of worries can aggravate heart palpitate leads to health probelm eventually. Please shows your concern to us SINGAPOREAN and stand out to HELP us. FAST!!!; October 16, 2008 9:58 AM
Anonymous said...: It seems that many of our politicians are not aware or is it cannot be bothered to find out the facts about what is happening. Mr Tharman said that "Each bank has set up a panel headed by an independent person...This is not white-washing, it is a serious process of mediation". What the bank told me when I spoke with them and from what I read in the papers is that the indepedent person looks only at their complain resolution process. OK you replied within 1 day, good. You will talk to them within 1 week, good. OK good process. That's it. They are not going to look at the individual cases. How can they "mediate" then? Meanwhile MAS takes our petition and keeps totally quiet? What is happening? Are you going to investigate? Have you investigated? Is our petition valid or are we talking rubbish? Say something. Anything! Hong Kong MA in the meantime, shows our MAS what they should be doing. Perhaps they are waiting for HKMA to show them what to do. And the Chief Executive of Hong Kong Donald Tsang has weighed in on this - he says he is losing patience with the banks and warns the bank not to keep dragging on. What are our ministers doing? Do they really think that we are unreasonable, greedy investors who keep quiet when we make money and make noise when we lose? Nobody, including the Hong Kongers will complain when they invest their money in shares and lose money. I am sure many in Hong Kong and Singapore have lost money in the stock market. But do you see anyone protesting? The reason is no one was deceived in buying shares. We are angry and protesting only because we have been deceived! Is this not reasonable?; October 16, 2008 11:14 AM
Anonymous said...: Dear Mr.Tan,

First I would like to commend you for your self-less help to the investors. I have immense respect for you. I am not investor because I don't trust those bankers especially now after this debacle.

To the MAS, please take the necessary action to help these investors who have lost their life-long saving. I believe they have been misled by those heartless relationship managers and bankers who had misrepresented the products. If these RM really spare a thought for these old retirees, they would not recommend such risky products knowing that these money is their life-long saving.

As a Singaporean, I feel betrayed that our very own local bank like DBS actually introduced such risky products to the public without thinking of the consequences. Indeed, how can I trust my bankers to give appropriate advice? From this debacle, I saw for myself how unethical these RM can be.; October 16, 2008 11:40 AM
Anonymous said...: Mr Mas,

Please help Singaporean and standup for them.. Why so quiet?
So many people are suffering now.
Really "jia liao bi" (Hokkien) our Mr Mas.

LC; October 16, 2008 12:43 PM
Anonymous said...: Are all the 10,000 investors of minibonds and other notes being misled by bank RMs? Or is it a case of investors hoping to get better interest rates than bank FD rates at higher risks?; October 16, 2008 12:57 PM
Anonymous said...: MAS Launches The 2008 Heritage Orchids of Singapore Coin Set.
Where got time to response?
It has been a week since the petition. It has been a month since Lehman collapse. Really heartless.; October 16, 2008 1:14 PM
Anonymous said...: Not only the RMs, the dept concerned & management too.; October 16, 2008 1:40 PM
Anonymous said...: this is the price we pay for globalisation and liberalisation of the fund management industry in striving to be a regional fund management centre. We even encouraged the public to invest their cpf savings with "professional fund managers" supposedly with lower risks than investing in individual stocks directly. With easy access to retail banking distribution channels, the influx of foreign ideas and risky products creatively packaged by the new breeds of fund managers now become a liability to many. Hence it is prudent for MAS now to review its regulatory framework on professionally managed funds to safeguard the interest of the retail investors in restoring public confidence moving forward.; October 16, 2008 2:35 PM
Anonymous said...: Yes, Integrity is no doubt the utmost important success factor in the banking industry.; October 16, 2008 2:39 PM
Iyeo said...: In addition to the point of mis-selling, I am appalled that banks are selling an instrument that will default when the Lehman Brothers go bankrupt.

The Lehman Brothers' crisis was known as far back as the summer of 2007 (according to the New York Times report). I also read in the July 7 2008 issue of the Fortune magazine (Lessons from the House of Lehman) that Lehman Brothers was in big trouble and it is facing an "uncertain present" and it is not known "whether the firm itself will survive or in what form".

The question then is why are the banks still selling minibonds which (quoted by Business Times Singapore report) actually "went towards insuring Lehman against losses in its portfolio"? And not purportedly linked in any way to the six or seven other Reference entities thus giving investors the impression that the instrument will only fail if ALL the REs failed.

I did not buy the instrument and am hence not familiar with it, having only read about what I know from the Business Times' article in Straits Times on Saturday.

But if indeed, the article is correct, then the banks were absolutely wrong to continue selling an instrument knowing that Lehman Brothers, the only security of concern was floundering? Even if they had not collapsed then, they are obliged to explain the risk to the investors knowing fully well the company's stock prices had fallen drastically since mid of last year. This, I think, is a more serious question than mis-selling.; October 16, 2008 3:42 PM
Anonymous said...: As far back as summer 2007, Lehman Bros are still credit-rated AA by the ratings agencies.; October 16, 2008 4:05 PM
Anonymous said...: Dear Irene,

Thank you very much for this information. HOwever, I feel so hopeless, the higher level won't know what happened and they didn't hear our voice at all.

Another point, people use to invest more when the risk is low and less when the risk is high. Obviously, RM try to convience clients these toxic products are low risk. If they do not present this way, If they exlplain clearly the risk involved, people won't put so much money in one product.; October 16, 2008 4:45 PM
Anonymous said...: What's done, cannot be undone. Let's be more practical. Whether it is mis-selling or delibration from the part of FIs or Banks, it is time to come forward as a group to made sure our voices are heard by our trusted legislators. The aim is to get some form of compensation from MAS and FIs. Many of us have invested our life time savings!!! This is the only way to preserve Singapore's utmost integrity!!!; October 16, 2008 5:03 PM
Anonymous said...: Please Singapore don't DISAPPOINTED us again

1) Malaysia CLOB Share Case - All Money Gone

2) Raffles Town Club Case - Only managed to get back $3000 out of $28000.

Now Lehman Minibond Case.; October 16, 2008 6:04 PM
Anonymous said...: Dear MR.Tan thanks for giving us this platform to vent our frustrations about this whole Lehman debacle since no other authority has given us any support whatsoever.After reading the others comments I have now stopped feeling like a victim and I am really angry.
I am an invester in the minibonds 2 series.I now am convinced that this product is fraudulent from the word go.Intentionally misnamed to mislead people,touted as safe and suitable for retirees.Why it even managed to fool those finance wizards from MAS and FIs.Someone somewhere did not conduct due diligence when it came to this little gem.Come on MAS take it on the chin cos I certainly am not!; October 16, 2008 6:09 PM
Anonymous said...: Anonymous said "Are all the 10,000 investors of minibonds and other notes being misled by bank RMs? Or is it a case of investors hoping to get better interest rates than bank FD rates at higher risks?"

Of course the risk shld be higher, but not as high as what it turned out to be! After all, the 5% returns are just slightly higher than FD rates. Even if there was no collapse of Lehman Bros and no sub-prime issues, if the banks like DBS had explained properly the actual risks involved then very few people would have bought the products.

This is the crux of the issue - the banks downplayed the risks and mechanism in which the product operated. That's why the accusations of misrepresentation.

I gather from your post that your thinking is that people who go for a higher interest rate deserve the current result. Obviously you should find out more before venturing to comment.; October 16, 2008 6:12 PM
Parka said...: There's a quote I hold close to heart: "Never compromise on integrity. Sooner or later, you'll be left with none."

I don't think there's much left for MAS and the FI.

If one investor cries misrepresentation, there's nothing much to say. But if close to a 1000 cry misrepresentation, then there might be some sort of pattern.

Frankly I'm amazed at MAS for not being able to do anything. In fact, I don't think they can do anything or have the power to do anything other than to act out according to current laws, which is to fine the FI. Giving fines is totally useless and not from the perspective of the suffering investors.; October 16, 2008 6:20 PM
Anonymous said...: If you hv the "heart" to do somthings, sure it can. Be positive.
"There is a will, there is a way"
Don't be a "heartless" person.; October 16, 2008 6:51 PM
Anonymous said...: This is a case illustrating the conflict between making Singapore the financial hub and safe-guarding the interests of the investors that are supporting Singapore to be the financial hub.

Does MAS allow high risk low quality investment products to be sold, and potentially to people with hard earned monies for the sake of developing Singapore economy to greater height?

Or does MAS say no to products that potentially can harm the personal finance of people in Singapore, to be truly governing the financial health of individual (as they are doing the same for corporation)?

Singapore government had done a good job in banning chewing gum to make Singapore a place of greenery.

Why can't Singapore ban the sales of toxic structured products to customers (which serve no purposes to their portfolios other than betting their monies speculatively on market directions)?

I know banks contain smart people who are good in satisfying regulations minimally so that they can continue to push products to migrate customers cash to investments, with little knowledge of what is best for customers.

Banks are in the actions of getting away with profits, before being caught by customers dis-satisfactions.

May be we should not allow banks to sell products directly to customers? May be we need to make the case to mandatory requiring Independent Financial Advisors to sell those products? May be we should not allow Advisors selling products to be compensated by commissions (to remove the greed factor)?

While doctors make sure that our physical body recover when we fall sick, Advisors should make sure our financial health is not harmed and safeguarded.

May be we need to certify Financial Advisors like we certify doctors? So that we can suspend the license of the Advisors if they mal-practice?

The governance in financial industry needs a big change before mistakes are to be repeated again.; October 16, 2008 6:58 PM
Anonymous said...: Mr Tan has the "heart" to help, but is quite "powerless".
There are many with the power to help, but are not willing to just taking even a small step. Please be kind the the old & poor people. Please don't be "heartless".

Mr Tan, we respect you.; October 16, 2008 7:21 PM
Anonymous said...: Let's mark this incident to judge whether the government is sincere in helping its people. NOT when the election is near. Whatever the government is doing or "hands'off" for this incident will show their sincerity in helping its people when we need them.; October 16, 2008 7:50 PM
Anonymous said...: WCL,
that change is coming next year but not enough when section 27 of the FAA is a white elephant. It will be MAS's wayang show. Tharman said we are OVER regulated already. Tony Tan also said we are OVER regulated.
It seems they have low threshold of regulation. What has happened is due to OVER regulation. Structured products debacle is due to OVER regulation. NO free play for these product, supply and demand forces too overly regulated
until they gone minibomb.
Why not talk to SCI the exam mill that provided the industry with quick supply of financial experts masqueraded as RMs, person bankers, financial advisers, consultant, exeecuthieve financial consultants,planners. The insurance agents suddenly become financial experts by sitting for a tikam tikam exam. Yes they are certified to make a mess of consumers' finances. MAS is screwed up regulator. Its response is measured and orderly drag.; October 16, 2008 8:05 PM
Anonymous said...: MAS is too shy. It has fallen behind Hong Kong, Malaysia, Taiwan and maybe Batam. It is playing Tai Chi and has no time for this petty paltry stuff. It is focusing on billion dollars investment and watching ICeland for takeover opportunites. Maybe a rescue plan for Iceland and take over the sovereignty of the island as part of Singapore..; October 16, 2008 9:24 PM
Anonymous said...: Too thick skin or too shy???; October 16, 2008 9:35 PM
pisces said...: I think, we should start criminal investigations to those related personals from Lehman Asia or other institutions & related institutions that helped to conceive and construct the product prospect and leaflet.

the prospect and leaflet are evidence of Deceit.
Retail banks did not prepare the product prospect. Lehman Asia does. It's possible other related institutions (e.g. the co-manager etc on the leaflet) may be involved in the architect of the prospect & leaflet of the product.

If related personals and institutions can be proved to be guilty on the charge, they should have jail term and possible financial penalty.

Any thoughts on this ?; October 16, 2008 10:21 PM
Anonymous said...: Warn all your family and relatives--don't trust whatever the bank sales people say. Don't understand, don't buy.

Not happy, go to the bank and make noise. As long as you don't bring big group, it isn't illegal assembly. Voice your displeasure about misleading sales pitch. Even if it doesn't bring your money back, it will turn off other potential customers. That will teach them that making a customer unhappy is a costly mistake.; October 16, 2008 10:30 PM
Anonymous said...: Dear Mr Tan
Looks like no action from MAS to date. They are too busy dealing with the recession, no manpower all too busy being busy body. I think your 'blog' should be made known worldwide to CNN etc let the world know our 1st class regulator does not know what to do. Maybe the number of investors and amount lost are just 'peanuts to them'. No point helping these 'peanuts'. Have Mr Tan thought of escalating to the President or asking these investors to meet the President during the coming Istana open ground in Deepavali. Maybe he will 'take cover' also.; October 16, 2008 11:14 PM
Anonymous said...: Let's see how the whole thing will be eventually settled, or if at all. Maybe the amount lost by folks is really "peanuts" which has no effect at all. The gahmen action or inaction so far seem to suggest this. Maybe over time it will just die down and life goes on. Folks, learn it the hard way.; October 17, 2008 12:30 AM
Anonymous said...: Dear Mr Tan,

Somebody put it in a nutshell on how the fortune of this world's musical money chair came to a grid lock..called the Ponzi Scheme! Simple anedotal way to explain a complex situation...please publish it for the benefit of those who read your blogs. Thank you!

S8N

___________________________________

This is a complex subject but I shall endeavour to make it as simple as I can.

Starting Point

The Ponzi Scheme

The crux of the fraudulent Ponzi scheme is the twin pillars of:

1) Fannie Mae & Freddie Mac – the two giant mortgage corporations of USA

2) The Derivative financial tool known as Credit Default Swap (CDS)

Once you have a grasp of these two concepts, you cannot but agree that we are facing total global banking collapse. Why? Because the entire global banking system has been built on these two financial pillars! But the system became irreparable in the last 7 years when CDS became the linchpin in the massive expansion of derivative trading and financial engineering.

The Mechanics

1. Banks became greedy and were unwilling to earn safe and steady profits from mortgages for housing and commercial properties which usually spread over a period of between 5 to 30 years.

2. Banks wanted massive profits in the shortest period of time and the ability to lend massive amounts and not be regulated as to how to do it.

3. The crooks devised a scheme. It was a simple idea.

4. Banks will provide mortgages to all and sundry.

5. I am going to use a simple example and using small numbers to illustrate for ease of calculation. Thus, assuming the Bank gave out US$1 million to finance mortgages, bearing interest at 10%.

6. The bank then sold the mortgages to Fannie Mae and Freddie Mac at a discount. Fannie Mae and Freddie Mac being Government Sponsored Companies (GSCs) are able to get cheap financing to purchase these mortgages as they were assumed to be "guaranteed by the US Government".

7. Fannie Mae and Freddie Mac then package these mortgages into all sorts of structured financial products and these were sold to investors (private as well governments) . Central Banks hold massive amounts of dollar reserves and they need to find a safe haven for them. Hence, and invariably, Central Banks invest their reserves in US Treasuries and financial "mortgage-backed" products issued by Fannie Mae and Freddie Mac as well as other US financial institutions.

8. With the payment of US$ 1 million by Fannie Mae / Freddie Mac, the bank by law, can lend ten times the amount after keeping 10% reserves i.e.US$100,000. Therefore, the bank can lend US$9 million by "creating money out of thin air" i.e. by crediting the borrowers in their loan accounts in amount of the loans extended. These US$9 million loans secured by mortgages are then sold to Fannie Mae / Freddie Mac again.

The cycle keeps repeating and the banks keep creating more and more loans.

It was so easy that the banks decided to create dubious loans called "Liars Loans" whereby the borrower need not state the actual income and or ability to repay.

9. As more and more of these loans were created, investors (government and private) demanded assurances that these loans were good for investments. The rating agencies (e.g. Moodys, Standard & Poor and Fitch etc.) who in collusion with banks, gave AAA ratings to what were essentially junks. This fraud led investors to believe that these financial products were good investments.

10. The rating agencies were only too aware that this scheme needed something more concrete to prolong the fraud and induce the investors to part with their monies.

11. The insurance companies like A.I.G. came into the picture. They were seduced by the idea that if they can insure against risks of accidents, storms etc., they could also insure risks against default by the mortgage holders. Thus was born the financial innovation – Credit Default Swap (CDS). Any financial product with a sound CDS would be rated AAA. It was as good as being guaranteed by Uncle Sam. Assholes the world over, especially central banks, fell for it – hook, line and sinker. Bank Negara was no exception.

12. The scheme works out like this – AIG sells protection – i.e. in the event there is a default, AIG will pay out to the buyer who buys the protection (the CDS) in exchange for the payment of premiums covering the period of protection not unlike your usual insurance policy. It was easy money for everyone.

The banks get to sell their loans and have the liquidity to create more loans.

Fannie Mae / Freddie Mac and other financial institutions get the opportunity to repackage these loans / mortgages and sells them to investors with a tidy profit.

The investors are happy with their so-called guaranteed returns. The insurance companies, investment banks and other players get their premium income for selling protection. It was old fashion mafia loan sharking and protection business dressed up in modern financial jargon and everyone was too arrogant and greedy to see through the fraud.

13. When loans default and continue to be delinquent, the law (depending on each country) provides that if the loan is in default for 90 days or more, it should be declared a Non-Performing Loan (NPL) and banks must provide reserve to cover the loss.

14. What happened was banks were covering the defaults and kept them on the books for two years or more in the hope that no one would be wiser and interest income from new loans would cover the defaulted old loans – the classic ponzi modus operandi.

15. When the two years default reached critical proportions starting with the sub-prime loans, the fraud began to unravel. Investors began demanding their protection money for the losses arising from these defaults. It has been estimated that the market value of the CDS was in excess of US$60 trillion but the capital of the insurance companies like AIG are only in the billions. It is therefore a physical impossibility to make good the demand for payment for the defaults.

16. If AIG the No. 1 insurer in US and the world is in default, it means the rest are in deep shits. You can take it as a given that no one and no one has good coverage and protection anymore.

17. When there is no coverage and protection, how can there be AAA ratings for new issues of such financial products? Fannie Mae/Freddie Mac etc. cannot package these products for sale to investors and if they cannot sell, they will have no funds to buy more dubious mortgages from corrupt and fraudulent Wall Street banks. With no additional funds, these crooks in JP Morgan Chase, Goldman Sachs, Citigroup, Lehman Bros., Morgan Stanley, Merrill Lynch, Bank of America, UBS, Barclays, HSBC, Deutsche Bank, Credit Suisse, etc. will have difficulty extending new loans.

The "Musical Money Chair" will have to come to a complete halt. The entire system gets into a gridlock.

Given the above explanation, can the US government and the Fed continue to bail out banks and other financial institutions? When US is in deficit in both the budget and current accounts, where else can they get the extra monies except by creating out of thin air (virtually by keying digits into computers) or print more dollars.

If you are a sovereign lender or a private hedge fund, knowing the situation, would you lend more monies to the US Treasury knowing that each dollar issued (whether digitally or in printed notes) are not worth the value stated therein.

These dollars ARE NO BETTER THAN TOILET PAPER.

The bulk of our reserves are in US dollars. Our trade – petroleum products, palm oil and other exports are mainly traded in dollars. When the dollar dives into the cesspool of waste, what then?; October 17, 2008 1:15 AM
Anonymous said...: The problem is MAS approve this product or let this product go through. They also have a KPI on the timeline to approve structured products like IPOs. Officer-in-charge may be multi-tasking and and do not want to miss any KPIs (this in Singapore, everything must go fast). Do you think they will slap their own face and investigate Lehman Brothers who design this product for Singaporeans? Will CAD go and investigate MAS? Don't think so right?; October 17, 2008 1:54 AM
Anonymous said...: What good will the President do if the PM himself has not said anything to help the investors so far? Anyway cannot blame our world class leaders as they are very very busy taking care of their their multi-million dollar salaries (bty, is Singapore in the Guniness Book of Records for having the highest paid civil servants on planet Earth?). The best outcome we can expect is MAS adding another so called independent party to "oversee" the banks' complain handling process and soon the saga will be "over", see ?; October 17, 2008 3:42 AM
Anonymous said...: Can MAS explain why they followed HKMAS move to gurantee deposits so quickly but no move at all to follow HKMAS actions on the Lehman minibonds issue ?

Can our MPs explain why they helped to bring up foreigners' quarters issues in Parliment and yet did nothing for their very own citizens on the minibonds even when we went to seek their help ?

Maybe we are sorely in need of foreign talent in the government service. Talent that comes with a heart and also costs less tax payers' money too.; October 17, 2008 4:02 AM
Anonymous said...: Cos minibonds affect only locals... govt doesn't care abt singaporeans.. more worried that all the private banking money flies to HK cos of the deposit gaurantee.

Singaporeans ask for deposit guarantee.. never give.. when we realise that HKMA gives, we scared that all money fly there.

Singaporeans not important.; October 17, 2008 9:24 AM
Anonymous said...: One shouldn't blame MAS for these problem. Have anyone read through the 1st few pages of these structured product prospectus ? I have, and the words "INVESTOR COULD LOSE THEIR ENTIRE INVESTMENT" are clearly stated in the first page of these prospectus, and in bold letters too.

The question here, is did RM made known this fact to potential investors ?

If not, bank should tell us why ?; October 17, 2008 9:49 AM
Anonymous said...: If the advertisements and the brochures are all so misleading, is there a need to proof case by case of mis selling? Those are the written evidence. Otherwise it is difficult to prove what each party has communicated in the selling process and all the forms that the FI asked the customers to sign.; October 17, 2008 9:57 AM
Anonymous said...: 9.49AM,
All investment products carried that kind of warning! Just like when you open an internet bank account, the bank warn you that they are not responsible for your vlosses whatsoever the circumstances or when you apply for giro. Does it mean that you do not use those services as if you have a choice? wake up; October 17, 2008 10:03 AM
Anonymous said...: Being emotional does not solve problem.
HKMA asking banks to redeem the minibond but did not ask them to fully refund. There are alot of difference. One can perceive HKMA as a strong enforcer, but one can also see them as trying to influence the capital markets too much.

End of the day I don't think Singapore investors will be worst off than HK investors in the minibond saga. We shld all work together to get back as much money for them instead of just getting emotional and jumping onto the cheering/jeering bandwagon.; October 17, 2008 11:07 AM
Anonymous said...: 9.49Am

Do you know the RM never,even took out the prospectus when explained during the whole process of the investment. If they have done so, bet you, this saga will not happen in Singapore. If you have read this blog, you still can't picture out the mis-led & mis-info which has make so many people came out to share their grievance. Still a lot of people not aware of their investment at risk yet. For instance, this morning during my travel to work, i heard 2 young couple said that they need to check with their parent,what investment they have sign on.?. after reading the MAS statement & investment write-up in Chinese, my paper. Most of the investor are low-risk taker. Moreover, some cases, the prospectus only send/post to them 1-2 weeks later. How to explained this.????; October 17, 2008 11:14 AM
Anonymous said...: Anon 9:49 - One shouldn't blame MAS for these problem. Have anyone read through the 1st few pages of these structured product prospectus ? I have, and the words "INVESTOR COULD LOSE THEIR ENTIRE INVESTMENT" are clearly stated in the first page of these prospectus, and in bold letters too.

So, who is at fault when the RM still pushes it to you despite you ticking the Conservative or Growth boxes on your profile (rather than Agressive), and assures you that the basket of REs actually help spread the risks?; October 17, 2008 11:18 AM
Anonymous said...: DEAR MR.TAN,
MY FRIEND WHO BOUGHT THE dbs PRODUCT INFORMED ME THE THE PAYOUT IS 8%. I AM NOT SURE THIS IS INDICATIVE OR CONFIRMED?; October 17, 2008 11:31 AM
Anonymous said...: 10.03am
I agree with 9.49am.that RM should be blamed. I was NOT shown the words "Investor could lose their entire investment" in the prospectus when I applied for my Minibond Series 7. RM only sweet-talked on how good the following 6 industry entities viz AIG, Boeing,Electricite de France, HSBC, Procter&Gamble, Wal-Mart store, are all AA or AAAs. There was no mention and he did not mention Leyman Bros at all on the brochure. Now I really feel frustrated and cheated by the Bank!; October 17, 2008 12:02 PM
Anonymous said...: we should learn from the bank guarantee episode. from what i see, the u-turn is not so much of following the other govts but that of the money (or the threat of) actually flowing out.

so instead of appealing to intangibles or worse, to follow the footsteps of the other govts, i think the more effective way is to move your money(or the threat of) to places where better consumer protection is given to your money/funds/investments.

Not only people affected by the minibonds but also people who think they are not. Collective action. Remember if this can happen to them, this can happen to you!; October 17, 2008 12:11 PM
Anonymous said...: I was approached by HSBC to buy some Structured Products but luckily, because I can't differentiate them, I declined.

In their brochure, it was stated "Structured Deposits are required to provide principal protection at maturity while Structured Notes are not.

Private placements are meant for accrediated investors, typically for Structured Notes.
Structured Deposits can be sold via private placements too but are usually made available to retail customers as well."

Are banks negligent,if they choose to sell Structured Notes to innocent retail customers?

If some banks choose to sell Structured Notes at their counters to retail customers by RMs and don't tell them the difference between Structured Deposits and Notes,are they negligent?

Even if they explained, did they make an effort to ensure the risks arae understood by illiterate old folks?

The methods of selling these risky products to old illiterate folks are indeed questionable.; October 17, 2008 12:59 PM
Anonymous said...: Dear Mr. Tan,
Can you ask the Strategy committe legal mind to look at the strength of the advertisement and brochures as one of the key in mis selling.

All these are written evidence. This may solved some of the issues raised in the selling process.

This mis selling together with the second petition may be a good ground to stand on. This will avoid the individual being picked off one by one by the FI and conclude there is no case.

My undersrtanding of the law is that the court often look objectively what a "normal" person when reading the advertisement and brochures would be misled and form a conclusion of how the product works. It is not up the the specific FI or a specific individual on how they perceive the ad and brochures on whether there is mis selling involved.

0; October 17, 2008 1:12 PM
Anonymous said...: When we have Integrity money will flow in like the tsunami! Sg will continue to be prosperous.; October 17, 2008 1:20 PM
Anonymous said...: DBS Hk helped the people to settle. DBS is Sg's very own and why the very citizens are not helped?; October 17, 2008 1:23 PM
Richard Goh said...: Dear Mr. Tan,

In spite of so much activities in your blog and the media, MAS seems oblivious to all the "desperate voices of the people".

Thinking aloud, is it because this is such a mountainous issue that even the best of brains cannot find a solution?

Getting into perspective, let's focus on the main issue, or issues that are begging replies.

I try to summarise them, as follows:-

1. Who should be responsible and accountable?

2. Who should clean up the ugly mess created in our midst?

As parents, we tell our children and instil in them everything virtuous and ask them not to "create a mess".

Like our children who take our guidance, we as honest citizens now look upon our guardians for help to resolve these issues that are entangled in this mess.

Don't let our values that have been cultivated and preserved so painstakingly over the years go down the drain.

Said simply, the values of a nation is at stake.; October 17, 2008 1:28 PM
Anonymous said...: Integrity and honour belong to the old world. When leaders make mistakes and say "lets move on" with no accountability (except for the poorly-ranked who become scapegoats which is their version of accountability), what more can you expect from instituitions. Its the age of "look after yourself" and I respect TKL for his courage and compassion. Hope S'pore still have a few good men standing.; October 17, 2008 1:52 PM
Anonymous said...: I wonder what are these bodies for. Are they selective when it comes to the opponents?
MAS bochap. They only tai chi to others, layer and layer to go through.
CASE silent. FIDREC silent.
Unlike these local supposedly consumers' knights in shinning armour the HK government made it very clear. Pay up and be quick about it or Consumers Council will take over.
When it comes to protecting their own interest it immediately went into action to stem the outflow of money. But foreigners got eyes to see. What about my money in structured products? This is not fund, then what is it. You can't do, who can do? You ask me, I ask who? The art of taihci is another form of burueacracy.( kaysee)

I also kaysee; October 17, 2008 2:08 PM
Anonymous said...: Dear Mr Tan,

When I was persuaded to buy the Mini-bond and Pinnacle, my remisier told me that they were all triple "A" Bonds backed by a bundle of blue-chipped US stocks sold by a well-known Wall Street Investment Bank. As I am a risk-aversed retiree, I was taken in by the offer.

I now found out that instead of blue-chipped stocks they are all derivatives. This mis-information is a clear case of fraudulent.; October 17, 2008 2:09 PM
Anonymous said...: Hongkong act fast as they know this will affect their reputation as a financial centre.; October 17, 2008 2:56 PM
Anonymous said...: We, the poor landless peasants came to this island many, many years ago to build a prosperous island nation that now owns major financially troubled banks, the big names of Wall Street and some major names. Why let us be subjected to such situations?; October 17, 2008 3:02 PM
Anonymous said...: No matter where we grow up or live, we have a long term sense of attachment. Born here, study here, fight here, live here, die here and the new generations will continue to do the same! That ensures the prosperity of our great nation! The spirit to do our best for our nation! We are a great nation with totally nothing, no oil, no water, no sand, no minerals, not much of a land and we had built it till today and its no mean feat! Look around us! We have guts!; October 17, 2008 5:11 PM
Anonymous said...: You're right.
The MAS has only need to lift their fingers to rectify this problem. Why back-up the banks with hugh sums of money, when a fraction of it would apeace the public & gain back confidence in the establishments & financial integrities.; October 17, 2008 5:14 PM
Anonymous said...: 1.20pm
According to dict "integrity" means original perfect state, honesty. U think S'pore has it and remain properous forever?? Look at super-power USA, it just collapsed overnight.
Do not be proud. You just watch. Singapore will go downhill once Lau Lee goes up the lorry.Then you may witness the start of many political struggles within.; October 17, 2008 5:23 PM
Anonymous said...: All of you huh... Dunno what to say about you people.

When u all buy that time, u all don't complain. Buy already and lose money now, then start to complain here and there.

I am very sure when you make money, all of you will be quiet.

Pls lah. Read carefully before you buy anything. Not when something started to happen then you all start to blame everyone except for yourself.

Elise Chee; October 17, 2008 5:25 PM
Anonymous said...: If this whole episode works out & the banks finally do what is right & compensate us fairly, I think we should all write a big thank-you letter to Donald Tsang, the HK opposition politians, the HKMA and the HK Securites & Futures Commision. It is thanks to the politicans in Hong Kong, the HKMA & the HK Securities & Futures Commision that help us Singaporeans. So much for our own politicians, our MAS & authorities. They can continue to keep quiet and pretend nothing happened. But we all will know and remember who really helped us.

It is ironic that our MAS and politicans are putting so much effort and is so fast in taking measures to make sure that the banks here don't collapse but when the citizens collapse from being ripped off by the very same bank, they take their own sweet time and do almost (& I am being kind here).....nothing.; October 17, 2008 6:49 PM
Anonymous said...: I feel MAS should restrict the sales of these credit linked notes such as Lehman Brothers minibond or DBS High notes to institutions investors only and not to the general public. These structured products are actually a form of CDS swap agreement and it is alright if the underlying reference entities do not go bankrupt. If one of them does go bankrupt then those minibond investors will end up as the creditors in which the minibond would be closed and remaining funds returned to investors.

These credit derivative stuff is clearly not easy for public to understand and there is a risk they could lose their full investment.

On the other hand, equity linked notes and structured deposits are quite safe since they are principal protected if held to maturity.

But overall it is quite shocking to see so many people invested in their structured products without knowing the full risk involved.

Financial institutions here sold billions of these stuff racking in million of fees and if they are not careful, more such credit linked notes with fancy names such as pinnacle series or jubilee could blow up in their face, given the precarious situation of the world economy.

Now it is probably a good idea for MAS to sit down with banks to discuss about their credit linked notes exposure, think of ways to minimised these risk and keep their investors informed.; October 17, 2008 7:34 PM
Anonymous said...: This incident is likely to be a historic event for spore.

Never in spore history had so many "HARD CORE" supporters (aunties, uncles and retirees) of garment hit so "HARD", and were so disapointed to their "CORE".; October 17, 2008 10:45 PM
Anonymous said...: Now, our MAS hold a press conference when HKMA has already achieved so much and are closed to a resolution! But our MAS STILL DON"T GET IT! Our MAS still thinks that Minibonds is just mis-sold, mis-represented to the old & un-educated. Check first before you make this assumption. If only they bothered to even take a cursory look at the Minibond fact sheets they will know that it was designed to deceive & mislead on a mass scale. I don't know if the people & bosses in MAS have even bothered to look at the Minibond fact sheets or are they still at 10,000 feet. MAS, please ask yourselves a few questions. Why should 1,000 Singaporeans sign a petition to ask you and Commercial Affairs Department to investigate the FIs if it is only the old, uneducated who have been cheated? If we are bluffing about being cheated, why be so silly to petition the Commercial Affairs Dept to investigate? This is mass cheating not isolated cheating. I hope you get it. Ask yourselves why are so many people in Hong Kong & Singapore protesting not just the old and uneducated? Ask yourselves, why should the banks in Hong Kong agree to buy back ALL their customers' minibonds & not just from the old and uneducated? The banks are not silly or charitable. If it is a few isolated cases, they will only compensate these few cases. Why compensate so much more? Please open your eyes & investigate properly before you say anything. I fully sympthize with the old & uneducated being taken advantaged of by the banks. It is totally unbecoming of the banks to do such things. But the old & uneducated are not the only ones being cheated. Do not assume that the educated cannot be cheated. MAS, you are already tardy, do not further damage your reputation by jumping to the wrong conclusions so fast without proper fact finding. We have all been taught that ASSUME makes an ASS of U&ME. Please check if what you think/say is an assumption or a fact. Please don't mess up again and cause us further anguish & frustrations.; October 17, 2008 11:28 PM
Anonymous said...: Elise, haven't you read that many of these victims are retirees and people can't really read English? Also, what do you mean by "I am very sure when you make money, all of you will be quiet"??? In the very first place, all victims bought these structured products with the expectation of earning the stipulated interest and principal protection. Since these structured products will not earn them anything extra apart from the interests they already expected in the first place (and which was the reason they invested), what kind of song and dance are you expecting when they receive their scheduled interest payments? We are not talking about stock market capital gains here. Please think about you write.; October 17, 2008 11:48 PM
Anonymous said...: Elise Chee

It is quite obvious you have no idea what you are spouting. Many of us will not have bought these products if we have known the full facts, whether it was paying money or not. Why? Because the risks is too high for the fairly low returns. Now do you understand?; October 17, 2008 11:59 PM
Anonymous said...: So what if most of the victims are retirees. Do you mean retirees can commit a crime and get away from it?

We have to be logical. An investment is an investment. When you sign a contract, you are ultimately liable for it. In the 1st place, you should have read the terms and conditions properly before you signed on the dotted line.

After you signed, you are presumed to have understood everything. No one used a gun to force you to sign, didn't you??

Even if someone uses a gun to force you to sign, i have sure you can use your common sense to think and determine what is right and wrong?

Don't because now something happen, then you can come out here and blame everyone. Why can't you look at things in proper prespective? A bad investment is a bad investment. Be a gentleman and accept when you had made a mistake.

Elise Chee; October 18, 2008 12:40 AM
Anonymous said...: After reading so many complaints in this blog, my feeling is S'pore has no government or the government don't care about the people. Truly, if one person complaint, may be he's exaggerating but if one thousand people complaint, there must be some element of truth. I can see on the brochure that there are indeed misleading words to imply or convey that the product is safe and good and deserve your money. I believe many people got trapped because they do not know the risks invovled but again you signed it. If the government don't step out to do something, it will be doing an injustice to its people who entrusted their votes for the last four decades. Confidence is already lost, image tarnish, after reading this super long blog. Where else can those helpless people go, except commit suicide or migrate or vent their frustraton in other ways?; October 18, 2008 1:00 AM
Anonymous said...: Elise Chee,
I know those words didn't come from your head or mouth perhaps from your butt because even monkeys wouldn't make such statement without considering the feeling of the victims.Whether the consumers make money or not it is incumbent upon the advisers or RMs to see that the cleints have the BEST chance of making the money within his risk tolerance and circumstance.Investigation has shown otherwise and even MAS recognises that these victims shouldn't be sold these toxic products.
Please don't use any other hole to speak except through your mouth.

Disgusted with Elise Chee; October 18, 2008 1:02 AM
Anonymous said...: 11.28 pm, i saw those brochures. Yes they were designed to mislead, with words like sound, solid, grow, etc. That's how i feel when i first read them. Can anyone pass the brochure to Goh Chok Tong and Heng See Kiat to read and ask them how they feel after reading. If still not enough, pass them to two Mr Lee. May be Mr Tan can help to do that. Sorry for suggesting more work for you.
Then may be the three of them will finally understand why so many people got so emotional and angry. Even those who didn't buy them. And why Mr Tan is wiling to step out to help. It's a mass scam and deception. Maybe eventually, they will ask you to sue Lehman Brothers like OCBC said they only distribute and don't sell. See how clever they twist; their lawyers teach them, so how to get justice if government don't step out?; October 18, 2008 1:14 AM
Anonymous said...: Someone said MAS busy with recession? But another person said MAS selling special edition coins today. So are they busy or not? This must be the biggest joke i have heard. Important thing don't do, wayang quickly do.; October 18, 2008 1:18 AM
Anonymous said...: Anony : 11:28
You are right, many "paper" professionals & "paper" scholars could also be mis-led or mis-sold, unless they have the actual experiences in the trade or are CFAs.; October 18, 2008 6:13 AM
Anonymous said...: A few has sided saying MAS should not be blamed and Elsie blamed on investors. We know that Singapore is very regulated in many areas. The current approach of our regulators is wait and see attitude which is very bad or they just do not know what to do. If our authorities allow product x to be sold in singapore, will we buy it? So who does the initial approving process? Just like the China Milk case, after outcry from public than our authorities 'wake up', they always think it will not affect us.

I doubt our FIs will be penalised by MAS - most probably if settled, all will be hush hush and the fine 'peanuts'. Like we see how PTC fined the operators 'peanuts. That's Singapore.; October 18, 2008 8:20 AM
Anonymous said...: I am a chartered accountant and I have been misled. Before all this happened, I had no idea what Structured Investments were. I have never heard of CDOs, CDS etc I was told buying HN2 was like buying OCBC bonds! These are new terms and products which were manufactured in the last few years by investment bankers!; October 18, 2008 9:56 AM
Anonymous said...: Elise Chee
You must be either a RM from the bank or an official from MAS. I guess you are speaking on behalf of them. You should thank your lucky star for not being involved in this scam. Please have some sympathy and don't made uncalled for comments. It may be good for your soul.; October 18, 2008 10:26 AM
Anonymous said...: If you don't understand the products, then don't buy it.

Ask yourself this question :
You mean all of you are that "dumb". Did the relationship manager force you to buy the products? At any point in time, did they force you to sign on the dotted line? Or do you mean they forged your signature? Or are you implying that they guided your hand when you are signing?

I am very sure all my questions are answered as "NO".

In such situation, how can you say you are mislead? If you are determined and not easily swayed by the extra interest given on products, would you have signed?

All these happened because you are greedy. Greedy because of the extra few percent of interest. You could have state your point and tell the counter lady that you want to continue with your FD. But you didn't. So can you blame anyone now??

If Lehman had not collapsed, I am sure you all will still be collecting the interest given and continued with the product.

So don't because something happened now, then you blame everyone else.

Don't be such a loser. Accept things as they are.

Elise Chee; October 18, 2008 11:08 AM
Anonymous said...: Too many FTs holding high posts in MSA???
They don't understand (or ignore) the problems of local people???; October 18, 2008 11:59 AM
Anonymous said...: Elise,
You really have a twisted logic. The investors were misled It is not a question of making a bad investment and lets move on.

If we adopt your twisted logic, if you get robbed in the back lane of a busy street, you should balame yourself for not using the main street!

Think carefully before your give your comment or else your brain may malfunction soon with all the twisted logic.; October 18, 2008 12:38 PM
Richard Goh said...: My dear Elise Chee,

All affected by this "Dunno what to say about you". But I have some kind advice for you.

Please pen with a clear conscience when you write about retirees. Your parents and people dear to you will one day also join the retirees camp. Your time will also come.

The fact that retirees invested and failed is already bad enough. Don't add salt to wounds!

Please do not be impertinent.; October 18, 2008 1:13 PM
Anonymous said...: Cheap Elise Chee,

From what you have said, you are dear no more. I, too, have been doped into this , looking at the brochure, there are 8 entities and was told this is a diversified products and warned that we should not put our monies in one baskets, should diversify. I did not expect to have more than 15% of the capital loss for the bankrupcy of Lehman. Is this a case of mis-selling????
If a makan stall hang a goat head and you order the meat from them, what will you do if you found out the meat is dog meat >> is it cheating ??
Talked with your conscience !!; October 18, 2008 2:06 PM
Anonymous said...: Dear Elise,
My sister in laws have several structured products. She is worried as she does not know what they are. All she was told by the RM was that it was like FD! Did they force her hand to sign those documents? Of course not but she was ambushed and sweet talk on the spot and was convinced to sign up. After she left the FI, she was not sure excatly what she has bought.

So you think you are very smart and know all the circumstances on how each and every individual sign up because of greed? You need to be humble cause you are probably one of the priveledge few that are smart enough not to be trapped. Your view is serve you right irrespective of the circumstances for the distressed and get out of your elitist face type. How sad for you. sigh...; October 18, 2008 2:17 PM
Anonymous said...: I am a graduate and a retired accountant, I was trapped by the brochures too.But with the latest MAS statement, I think my investment is gone for good as I probably dont belong to the group that they will help.; October 18, 2008 2:29 PM
Anonymous said...: Dear Elise,
If you use the smart brain that you have, ask yourself a question.

That is why is there no protest by the public who has lost billions in the Singapore stock market with the SGX index down by almost half wiping off billion of dollars.

The answer is simple, the investors know what they are getting into.

But the minibond, it is a bomb and that is the reason for the upset reaction because of the mis selling!

Personally, I have lost 3 times more than I have lost in minibond but I am only upset about the minibond investment because of the mis selling.

So now do you get it?; October 18, 2008 4:46 PM
Anonymous said...: If you don't know what you are buying, then why are you buying? Aren't you being dumb by doing it when you don't know what you are getting into.

An example :
If there are 2 roads. 1 leads you nearer to your destination but there are potential pitfalls and you will fall into a pit if you are not careful, while another road has always been taken by you all the while. Which 1 would you have taken?

You probably would have taken the 1 which is nearer but with some risks as you would like to get to the destination faster. This is call risk.

Similarly, when you have chosen to buy the products, you are taking a risk to get a higher interest rate. No one cheated you. You could have checked with your family members, colleagues or friends before you even signed up.

But because you were greedy, you fell into the trap. And when things happened, you started blaming everyone else except for yourself.

Sometimes you need to take a step back and think.. Think before you act. Did anyone force you? If no one force you, then how can you say you are being mislead? Don't you have a mind of your own?

Elise; October 18, 2008 7:07 PM
Anonymous said...: Elsie,

You are crude to write all these comments. You are no different from a brainless monkey. These retirees had trusted the national bank's relationship manager (RM) assuming that these RM would be professional and provide the best advice. Apparently these numbskull RM did not and instead abused their trust. Where is integrity? Instead of 'buyer beware', it should be 'seller beware'. They should recommend suitable investment products since they know their profile. By recommending risky investment products to these risk-averse investors is gross negligence. These RMs, knowing that these retirees are using their nestegg and still urge them to invest are just inhumane.
Elsie, beware of karma. I can see that you are plain crude and cold. Be ashamed of yourself.; October 18, 2008 8:51 PM
Anonymous said...: Don't let MAS hush it up
From the way I see it, MAS and FIs are deploying the divide and conquer strategy. the end product is, Yes, investors are likely to get some form of compensation. How much will depend on how firmly you stand your ground and how strong your case is.
However,I hope everyone here will not lose sight of the bigger and, to me, a more important picture.
The bigger picture is improving and changing the way FIs conduct their business & sales.
A complaint to MAS was issued against some dishonest RMs in Standard Chartered bank. These were the top 2 RMs who were lauded by the Head of Consumer Banking as shining examples all RMs should aspire to become. However, to anyone with any brains, the sales volume generated by these RMs were extremely suspicious.
After MAS received this tip off, yes high profile investigations were done and not surprisingly it was discovered that these 2 RMs went so far as to transact Dual Currency sales without the knowledge of the investor. Some of these were done by forging signatures, most of these trades went through without any signed proper documentation by the clients. The sales volume was in excess of 30 trades per week by each RM and yet management conveniently closed an eye to the blatant lack of documentation.
You may now wonder what happened to these RMs or the bank. The Bank was given a slap on the wrist by probably just a stern warning. The Bank suffered no bad repercussions whatsoever. Business continued in the regular dishonest way.
As for the RMs, they were obviously sacked by the Bank but again no repercussions from MAS. Now I understand one of the RMs works in another bank in Singapore, the other one, working as an RM in a bank in Indonesia.
Back to my point. I think the greater good that hopefully will come out of this Lehman episode is to force MAS to take a more serious stance towards regulating the FIs and the sales people. If wrong doing is found, rightful punishments should be melted. If process are not proper, improvements needs to be made. If investment products does not serve the interest of the average singaporean, sieve it out. All this has to be done for MAS to be taken more seriously.; October 18, 2008 9:48 PM
Anonymous said...: Don't let MAS hush it up
From the way I see it, MAS and FIs are deploying the divide and conquer strategy. the end product is, Yes, investors are likely to get some form of compensation. How much will depend on how firmly you stand your ground and how strong your case is.
However,I hope everyone here will not lose sight of the bigger and, to me, a more important picture.
The bigger picture is improving and changing the way FIs conduct their business & sales.
A complaint to MAS was issued against some dishonest RMs in Standard Chartered bank. These were the top 2 RMs who were lauded by the Head of Consumer Banking as shining examples all RMs should aspire to become. However, to anyone with any brains, the sales volume generated by these RMs were extremely suspicious.
After MAS received this tip off, yes high profile investigations were done and not surprisingly it was discovered that these 2 RMs went so far as to transact Dual Currency sales without the knowledge of the investor. Some of these were done by forging signatures, most of these trades went through without any signed proper documentation by the clients. The sales volume was in excess of 30 trades per week by each RM and yet management conveniently closed an eye to the blatant lack of documentation.
You may now wonder what happened to these RMs or the bank. The Bank was given a slap on the wrist by probably just a stern warning. The Bank suffered no bad repercussions whatsoever. Business continued in the regular dishonest way.
As for the RMs, they were obviously sacked by the Bank but again no repercussions from MAS. Now I understand one of the RMs works in another bank in Singapore, the other one, working as an RM in a bank in Indonesia.
Back to my point. I think the greater good that hopefully will come out of this Lehman episode is to force MAS to take a more serious stance towards regulating the FIs and the sales people. If wrong doing is found, rightful punishments should be melted. If process are not proper, improvements needs to be made. If investment products does not serve the interest of the average singaporean, sieve it out. All this has to be done for MAS to be taken more seriously.; October 18, 2008 9:48 PM
Anonymous said...: If you are not careful,whether it is Minibond or not, you can still loose a large portion of your money.

I will relate my bad experiences, so that some of you will not feel so frustrated and agitated with your loss in Structured Notes.

When the AB Asian Technology Unit Trust was launched about 8 years back, I invested $50.000. In October 2006, I wanted to liquidate at $26,778 and was prepared to loose $23,222 but my financial advisor advised me not to liquidate.

Regrettably, I listened to him. When I sold the unit trust 2 weeks ago, I obtained less than $16,000. I had lost $34000.

When FT US aggressive growth fund was launched many years back, I bought $20,000 with CPF. 2 weeks ago, I sold it and lost $11.000.

Out of total investment of $70,000, I lost $45,000(64.3%) of my CPF money.

I regretted my purchase of the wrong unit trusts.

Therefore, in future, I have to tread carefully so that I will not loose more of my money.

Because of bad experiences in investment, I had been advising my Mum not to buy any investment products from Bank RM when she is solicited by them.

I may have saved her from loosing her life savings.; October 18, 2008 10:40 PM
WY said...: I wonder whether this discussion can go into a more constructive direction.

Just some points to ponder, maybe we can brainstorm on these or better consult lawyer.

Wonder whether victims should start to:
1. compile details of the selling process for e.g
a. when you buy, who you approach or who approach you, nature of approaching (for e.g being refer to RM when you are going to withdraw your FD), bank, branch, RM’s details (e.g name, rank, credentials, belonging to any professional bodies, other info from name card etc.)
b. what documents (e.g brochure, prospectus, factsheet etc.) and date you receive or first see them (e.g exact date, received before/after product sold)
c. any risk profile test done
d. any documents signed (for e.g. risk profile sheet, document showing you have read whatever documents and understand the risk, RM’s appraisal form etc..)
e. any other follow-up, communication with/by the RM or staffs of FI (for e.g price info etc..) and details
f. details of the selling process, how long it takes etc..
g. any instances like:
you request for bond/FD/any low risk product only, RM says Minibond works the same;
you feel doubtful, RM says "no worry, I guarantee, MAS also approves, our FI sure won’t con you, sure won’t default etc";
h. your own educational level, language proficiency, investment experience etc..

2. Scan the brochure/factsheet, put online for people to brainstorm
3. Get documents that you don’t have:
prospectus you can get from MAS Opera website, pricing statement may not be available.
But the prospectus there states where you can request for a copy of prospectus/pricing statement.
Document the timestamp you receive the prospectus/pricing statements

4… the list goes on….; October 18, 2008 11:26 PM
WY said...: Hi pisces-hk,

On your idea of “we should start criminal investigations to those related personals from Lehman Asia or other institutions & related institutions that helped to conceive and construct the product prospect and leaflet. “,

I just take a brief look on Minibond prospectus (Sg), the last page is showing all the related parties.
Wonder lawsuit (if any) will be on which parties and which countries.
They are very clever, Minibond Limited, Corporate Services Provider, Auditor are all in Cayman Islands (an offshore financial hub, with business-friendly law).

Maybe a point to note when buying financial product next time, "don’t buy if incorporated in offshore centre."

I guess Lehman and many parties will get off from any lawsuit, the prospectus is carefully grafted to cover everything.; October 18, 2008 11:27 PM
Anonymous said...: To Elise Chee
just becos' you did not fall into the trap and are luckier than most of us doesnt mean that you have a bigger brain but dont deny that you have a cheaper mouth!
Though we are not hold by RM's hand to sign, but that doesnt mean that we are not becos' of their persuasion that we bought. If becos' of that mere addtitional 2-3% we are branded with the "GREED" is truly unfair for us. In that instance, I think all S'porean who has placed their $ other than savings & FDs are all greedy fellows. We don't / never expect everyone to sympathise with us but that doesn't mean that we want salt to be added to our wounds! If you got nothing better to do, suggest u don't waste eletricity and eyesight to serve this blog!!; October 18, 2008 11:49 PM
Anonymous said...: Dear Elsie,

Please engage your brain before you write. Using a broad brush to say that an investment is an investment therefore investors MUST accept the underlying risks if it goes awry is too simplistic and flawed!! It's either you lack the bandwidth to understand the physcological trauma of the affected investors or you have an ulterior agenda? If it's neither of that, then please have your brain examined by a neurosurgeon to see if it's warped. Your motion simply cannot stand given the barrage of outcries over what you've said.; October 19, 2008 12:49 AM
Anonymous said...: Elsie Chee

It is clear you still don't get it, your mind has malfunction and we are soooooo sorry for you. We will be kind and won't blame you for not being able distinguish between misled & mispresentation with making bad investments.

We do not blame anyone if we lose money on stocks because we are aware of the risks. In the case of structured notes, the FIs tell a false story, they claim the product is low risks, very safe, it is bonds we are buying etc. This is mispresentation and miselling and in simple English this amounts to fraud.

Advice to you - before you open your mouth next time, use your brain (ie. if you have one).; October 19, 2008 1:07 AM
Unknown said...: I am an engineer. I was also trapped by these Minibond. Before buying, I have read the ads and the Risk section of the Pricing Statement and the Prospectus. I was misled to believe that the Minibond is a collection of debt which related to 6 to 8 big companies which we are quite familiar. Therefore the risk is quite low. Even if one company default, the loss should be less than 20%. Even Lehman bankrupt, these securities still have their value.
I did not realize I was misunderstood until I received the Lehman letter dated 15/08/08 regarding the replacement of the underlying securities. I read the Prospectus and the Pricing Statement again and again. I realize that Lehman (including it's various affiliated) with the help of our local distributors, have cheated us to buy the Minibond.
1. By emphasis on the risk of the 6 reference entities, they purposely induce us to misunderstand that Underlying securities are related to these 6 reference entities. All the money we paid were to buy the debts issued by these 6 entities.
2. In the Risk section, there are no CLEAR disclose that the Underlying securities are referenced to 150 companies!! They only mentioned this inside the section of "description of the underlying securities". In Minibond series 2, they did not disclose this. They ambiguous stated "a portfolio credit-linked notes".

3. If we, the investor, clearly know that the minibond related to 150 + 6 companies, and 12 of these 156 companies' default will cause us lose all our money, will we still buy this minibond ??; October 19, 2008 1:42 AM
Anonymous said...: Dear Elise,
I am starting to doubt you intelligence now. You mentioned that investors check with family, colleagues and friends. Many did but they are also misled. Are you sure your IQ is so high that you actually understand the prospectus on how the minibond works? Come on, be honest that even you dont understand how the structure work if experts already confirmed that they dont. Dont tell be you are the expert and if so you might just be the only one who understand other than the original creator.

So be kind before you shoot of comments from your butt again. Use your brain instaed of giving senseless and irrelavant example to push your agenda. Your brain may get short circuit and malfunction before exploding.; October 19, 2008 11:01 AM
Anonymous said...: Stinky Elise

It is shocking how you could continue stubbornly with the same thread of rebuttal despite so many people trying to enlighten you with the situation. It just goes to show how unreceptive, unrepentent and arrogant a person you are! Singaporeans really need to worry if you are working in a Singapore Ministry or Stat Board! Or worst case scenario, MAS!

You kept saying investors should have read the documents, or avoid the Lehman products if they are unfamiliar. But the issue here is, in the case of the MINIBONDs, most people think these are BONDS!!! By definition, a bond entitles the investor to get back the full principle amount at maturity as long as no credit event occurs on the part of the bond issuer. In the case of Minibond, the impression was that the Reference Entities were the joint issuers.

A bond is supposed to be a relatively simple product. If investors were led to think Minibonds were BONDs, do you expect them to proceed with asking "Oh, by the way, does this bond happen to involve complex swap arrangements, blah blah blah?". If one does not know what he/she doesn't know, how could that person possibly ask about those things that he/she doesn't know?

If you respond further to this string again insisting people are dumb and greedy, it just goes to show you are inhuman.

YOU SHOULD APOLOGISE!; October 19, 2008 11:22 AM
WY said...: another point to consider:
1. Is prospectus/pricing statement be provided during the selling process or before the cooling period (if any) expired ?

If prospectus/pricing statement is provided only after cooling period expired, this is detrimental to investor. He can't evaluate the risk (provided factsheet info is not sufficient) before buying.

Even if he sees the risks after getting the prospectus/pricing statement, he is already at losing ends already even if he redeems the investment.; October 19, 2008 11:58 AM
Anonymous said...: Elsie is another "Elite" who will say: Please get out of my "elite uncaring face".
We shd get out ASAP.; October 19, 2008 12:57 PM
Anonymous said...: Cheap and stinky Elise,

I believe you are one of the RM's who are now guilty conscious and tried to excape that feeling by your stinky arguments. Just tell us how many people you have cheated and confess how you cheat them (I know you do not force them or put knife in their throat); October 19, 2008 1:10 PM
Anonymous said...: Cheap and Stinking Elise Chee ...

I have read your remarks and cannot help it but have to add on to the analogy put up by some who who mentioned about hanging a Goat's Head and serving Dog's meat instead. I am sure Elise Chee .. is too smart for it and will know that it is dog's meat that is being served because she is one, but of a different gender. What say you Elise?; October 19, 2008 3:04 PM
Anonymous said...: Elise,
Do you understand English? People are misled by printed brochures by FI. Which part of the word MISLED that you dont understand.

You are not that smart afterall. Wonder why your boss still keep you. I would have fired you long time ago if you are working for me. Lucky you.

From you replies, one can tell that you are:
1) Stubborn
2) Not a team player
3) Selfish
4) Lack humility and sympathy.
5) Can work with people
6) Can not see other people point of view
7) Lack a bit of intelligent
8) Lack IQ, EQ and whatever other Q.
9) Lack of foresight and vision.
10) Likely the insubordiante type and like to argue for the sake of arguing twisting all kinds of logic.
11) pathetic personality

and the list goes on. I think you are just wasting Earth natural resources to sustain you.; October 19, 2008 4:22 PM
Anonymous said...: All I know is that a truly stupid person will call other people stupid as it will make them feel better. I guess, Elsie has to be aware of karma. Do to others as you would have them do to you. Maybe Elsie is one of those unprofessional Relationship manager who cheat old people's money and abused their trust. Next time you see RM trying to sell you products, be buyer beware. Be on your guards.; October 19, 2008 8:22 PM
Richard Goh said...: Dear, dear.. Elise,

You are making a mockery of yourself.

Don't distract everyone from the real issues which need to be resolved by the FIs and MAS.

If you are not involved in any way, I advise you not to incur the wrath of everyone.

It would be better for you to hold your peace.; October 19, 2008 10:01 PM
Anonymous said...: I am not wasting time or making a mockery of myself.

I am just trying to let everyone know and let them not have any false hopes of getting back their money. One time of disappointment is enough. Now by discussing this in this blog, all of you are basically giving the retirees and old folks false hopes of getting the money back.

Please... If you still have any heart. STOP THIS NOW!!; October 19, 2008 10:18 PM
Anonymous said...: Let me tell you. If the national bank like DBS is not returning money to these old folks. I will just withdraw my money. I do not want to put my money in a bank with no integrity. They should know that these retirees are depending on their saving for retirement. By recommending these toxic products to these retirees, clearly they had committed gross negligence. How could these relationship managers for their own commission, recommend these unsuitable investments. Clearly they did not do their work and checking their profile. Perhaps Elsie does not understand if the banks do not do the right thing, they will lose respect and trust from Singaporeans. Since I can't trust DBS bank to do the right thing, I will put my money elsewhere. As a Singaporean, I am angry that our national bank Mr.Raja, head of consumer banking group is still siding with his RM who would not admit any wrongdoing. Who would admit that he/she committed an offence. If not we do not need the judge at supreme court to give judgement. The fact that they are recommending unsuitable investment products show that they are unprofessional and unethical.; October 19, 2008 11:15 PM
Anonymous said...: I support Elise, nobody force you to signed on the dotted line. you have to responsible and face it now. Don't point finger to other now.....understand; October 20, 2008 12:12 AM
Anonymous said...: Dear Elsie, WOW! Calling people stupid, dump, gullible and yet have the audacity to laugh..."haha!" You still have your nose held high in the air snorting away despite being lambasted by bloggers for your sadistic remarks! Paradoxically, how can a despot responsible for the killing fields suddenly be concerned about, "giving retirees and old folks false hopes of getting the money back?" You must be kidding! Who is to believe you? Are you raising your white flag pleading with the inflamed bloggers to: "STOP THIS NOW!!" You think you can scoot away like a sotong after squirting black ink at your infuriated attackers? Please re-arrange your mis-placed organs and put back where your heart and brain ought to be. We can empathise with you if you've used your kidney to think and your bladder to show concern...which explained why you're slow in comprehending the gravity of the situation in the first place!! Please use the right organ for the right purpose from now on...and take good care Elsie!; October 20, 2008 1:47 AM
Anonymous said...: Dear Elsie no more,
Please leave the blog! I know you are enjoying seeing people are suffering. Now you suddenly turn into a "nice and concerned" person? You are a devil in disguise!

Please dont make fun of the poor investors. One day when you are not that smart, you may fall into the same trap. Not that you are that smart now based on things that you said. You are probably below average intelligent boardering so near the retard level.

Please help yourself and keep those twisted view to yourself and stop using your butt to give further rubbish comment.; October 20, 2008 9:23 AM
Anonymous said...: Is there any class action?
Why not?; October 20, 2008 4:39 PM
Anonymous said...: If it's ain't broke don't fix it....it only works during good times.

But when there is trouble...all start to point fingers and looking for scapegoat.

AIG has used billions from the Fed but hasn't said for what??

How do you expect consumers to know what they actually buying??; October 30, 2008 4:18 PM

Friday, October 17, 2008

Act with honour and integrity

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