Friday, November 28, 2008

Speaker's Corner 5 pm on 29 Nov - change of plan

There will be an Indian Cultural event at Hong Lim park tomorrow at the same time as my speech. The tents occupy most of the open spaces. I like to ask those who read this message to skip the meeting tomorrow. I will post my speech here.

There is space in a corner of the park for a small crowd For those who miss this announcement and turn up at Hong Lim park tomorrow, I will distribute a hard copy of my speech on the spot.

The Standard : Legco first on Lehman fizzles out

Standard, The (Hong Kong) - Wednesday, November 26, 2008
Author: Diana Lee

The first open meeting of the Legislative Council subcommittee probing the Lehman minibonds saga got bogged down in party bickering yesterday and failed to reach agreement on confidentiality.

Civic Party legislator Ronny Tong Ka-wah said meetings should be transparent and documents made available unless witnesses request confidentiality. This demand must be justified with evidence submitted to subcommittee members and the legal adviser, he said.

``In principle we should not accept a general request. I would not accept, for example, a bank claiming each and every document is confidential,'' Tong said.

However Democratic Alliance for the Betterment and Progress of Hong Kong legislator Chan Kam-lam disagreed, saying mutual respect and mutual trust should exist between witnesses and subcommittee members.

``Even individual people have their privacy, so why not companies?'' Chan asked.

The Democratic Party's James To Kun-sun said mutual trust has nothing to do with the probe.

``We are here to find out the truth,'' To argued. ``What if the banks claim the staff training manual [for selling structured financial products] is classified material? ``What's the point of a public hearing if everything could be treated as classified so easily? We talk about mutual trust among legislators, not between witnesses and legislators.'' Lawmakers also failed to compromise on whether legislators should sign a confidentiality agreement.

The pan-democrats said they did not object but raised doubts about the effect such a pledge would have on lawmakers.

Philip Wong Yu-hong, subcommittee vice chairman and a commercial sector lawmaker, said ensuring lawmakers will keep the confidential submissions confidential is more important. Classifying what is confidential is another issue.

The Legco Secretariat will host a briefing on December 4 to inform lawmakers on matters they should know about the Lehman probe, including the general principles of what information should be treated as classified and confidential.

Meanwhile, Emily Lau Wai-hing of the Frontier, again failed to persuade members to support the pan-democrats' demand for a smaller subcommittee, which currently has 24 members.

Subcommittee chairman Raymond Ho Chung-tai said he hoped the discussion on the subcommittee's size is finally over and that members may unite to face the challenges ahead.

When the subcommittee meets will be decided on Friday. It is expected to host meetings every Tuesday and Friday morning starting early next year.

To each his own

Author Unknown
Nov 27 2008

I cannot change the way I am,
I never really try,
God made me different and unique,
I never ask him why.

If I appear peculiar,
There's nothing I can do,
You must accept me as I am,
As I've accepted you.

God made a casting of each life,
Then threw the mold away,
Each child is different from the rest,
Unlike as night from day.

So often we will criticize,
The things that others do,
But, do you know, they do not think,
The same as me and you.

So God in all his wisdom,
Who knows us all by name,
He didn't want us to be bored,
That's why we're not the same

The Online Citizen interview an investor

Listen to this interview of the experience of an investor in the minibonds:

The Online Citizen wishes to have other investors to come forward to share their experience. I hope that more can come forward. We need the authority to hear about how they have been misled into the wrong investment that cause a total loss of their savings.

If you are willing to be interviewed, send an e-mail to

Thursday, November 27, 2008

Speaker's Corner 5 p.m. Sat 29 Nov

There will be a meeting of investors of the credit linked notes at Speaker's Corner at 5 p.m. on Sat 29 Nov.

1. See your MP
2. Misrepresenation in prospectus
3. Ask for information in writing
4. Experience with FIDREC
5. Mental health concerns
6. Class action
7. Special meeting on Sat 6 Dec

100,000 signatures so that more people will step forward

Bonus is likely to remain low

I organised a collective protest against the bonus cut made by NTUC Income earlier this year. I reached a settlement as follows:

I promised policyholders that I would monitor the situation and give an update.

Recently, I decided to surrender my Living policy, which was affected by the bonus cut. I received a surrender value that included the special bonus to compensate for the bonus cut. In this case, I was slightly better off (with the special bonus included).

During the past six months, there has been turmoil in the financial market resulting in a large markdown of asset prices. I do not know whether the "compensating" special bonus will be withdrawn or reduced in the next few years of the global financial crisis.

Earlier, I wanted to press for the bonus cuts in past years to be restored due to the good financial results up to 2007. With the large drop in asset price in 2008, it will now be difficult to press for this measure. It is also likely that future bonus will remain at a low level, until after the global economy has recovered.

On the bright side, the cash value of a life insurance policy remain largely protection (although the yield is low) during a bad period. It does not suffer the capital loss that comes from shares and other investments.

Lost the sense of bonding and togetherness

An apology to Chee Soon Juan and his sister

I refer to this posting:

The posting in my blog was written by somebody else in CNA forum. I reproduced the mesaage in my blog but overlooked to mention the author. It gave the wrong impression that the message was written by me.

I wish to apologise to Chee Soon Juan and his sister for the damage that is caused to them by the statement, “what many stupid and selfish politicians in Singapore have done and seek self destruction.” This statement came from the original posting (by someone else).

I do not personally share this sentiment and wish to acknowledge their personal sacrifice in fighting for what they believe in.

Wednesday, November 26, 2008

A sense of responsibility: Obama

WASHINGTON: President-elect Barack Obama has chastised US auto executives for being "tone deaf" for flying on corporate jets to Washington to beg for bailout money, and said he believed bank executives should forgo their end-of-year bonuses.

In the advanced excerpt of an interview to be broadcast Wednesday and released by ABC News late Tuesday, the president elect focused on responsibility.

Bank executives forgoing bonuses is "an example of taking responsibility," Obama said.

"If you are already worth tens of millions of dollars, and you are having to lay off workers, the least you can do is say, 'I'm willing to make some sacrifice as well', because I recognize that there are people who are a lot less well off, who are going through some pretty tough times ," Obama told ABC News.

As for the incident in which the heads of Ford, Chrysler and General Motors flew their private jets to Washington last week to ask Congress for bailout money, Obama said: "I thought maybe they're a little tone deaf to what's happening in America right now."

He described it as "a chronic problem, not just for the auto industry ... (but) for the captains of industry generally.

"When people are pulling down hundred million dollar bonuses on Wall Street, and taking enormous risks with other people's money, that indicates a sense that you don't have any perspective on what's happening to ordinary Americans," Obama said.

And when the "auto makers are getting paid far more than their counterparts at Toyota, or at Honda, and yet they're losing money a lot faster than Japanese auto makers are, that tells me that they're not seeing what's going on out there."

Obama said he hoped his presidency will help "usher in ... a return to an ethic of responsibility. That if you're placed in a position of power, then you've got responsibilities to your workers. You've got a responsibility to your community. Your shareholders."

He added: "And that's true ... for members of Congress, that's true for the president, that's true for cabinet members, that's true for parents.

"I want all of us to start thinking a little bit more, not just about what's good for me, but let's start thinking about what's good for our children, what's good for our country. The more we do that, the better off we're going to be," he said.

No reply from financial institution after four weeks

Hi Mr. Tan,

I think you should bring attention to the investers that under Step 3 outlined by MAS, the financial institution is required to give a reply within 4 weeks: has

I have not received a reply after 4 weeks. Why doesn't MAS take action against the FI?

I suggest that you should lodge a complaint directly with MAS on this matter.

End of Free Financial Advice

The FSA of UK (equivalent to MAS) is introducing this new measure in 2012. It will have great impact on how financial products are sold. Our approach in Singapore is modelled on the UK - so I expect that similar measures will be introduced here. It will prevent the sale of financial products that are bad for customers.

From the Telegraph in UK, 25 Nov 2008
The days of consumers getting "free" financial advice look numbered under new regulatory guidelines which are aimed at improving the way financial products are sold.

The Financial Services Authority (FSA) has outlined new guidelines that effectively outlaw commission payments, which have been seen by many consumers as a way of getting "free" advice.

The FSA has made it clear that it is concerned that these payments are used to disguise the cost of financial products, and may create bias in an adviser's recommendations.

A spokesman for the FSA said it hoped its proposals would restore consumers' trust in the financial services industry at a time when many "need real help and advice with their retirement and savings planning". The changes are due to come into force in 2012.

The regulator's review contains three key proposals. Probably the biggest change is to the way advisers are remunerated.

For the first time all advisers, whether they are independent financial advisers or sales agents, will have to declare and agree with the customer in advance exactly what the advice costs. Consumers will then have the option of paying for it in advance or opting for the cost to be taken from their savings over a period of time.

A spokesman for the FSA said: "Commission as we know it will disappear for ever. We want to sever the providers' involvement with the advisers' fees." The FSA has not ruled out banning commission completely at a later date.

Another major change is that all advisers will now have to take advanced qualifications, equivalent to the first year of a degree course, if they are offering full advice to consumers. At present 80pc of advisers do not have these qualifications.

Andrew Fisher, the chief executive of Towry Law, a firm of financial advisers, said: "This is brilliant news for consumers. The smoke and mirrors, lies and obfuscation that have been used to disguise consumer fees will be stopped.

"Individuals thought that commission meant 'free' advice but it was always paid for, either by raising product charges or by reducing the value of a consumer's investment. For the first time, any commission charge will now explicitly be linked to consumers' savings and will have to be agreed upfront."

The FSA said its framework would provide a mix of services, so "less sophisticated" investors who could not afford to pay for full advice were not excluded. Many companies are expected to offer "guided sales", where consumers are given basic financial information.

If this led to a recommendation to buy a certain product, however, the sales person would still be required to have the appropriate professional qualifications and be upfront about any product charges. The FSA said: "It must always be made clear at the outset whether consumers are paying for independent advice or a sales service."

Trevor Matthews, the president of the Chartered Insurance Institute said these proposals should "kick-start" the process "of moving to higher levels of competence and and professionalism". He added: "The biggest challenge for the long term future of this industry is to restore trust in financial services, which has been dented for too long." He said today's proposals go some way to addressing this issue.

David Elms, the chief executive of IFA Promotion, said he welcomed the proposals but was awaiting details on how they would be implemented.

He added: "We want to see the same standards applied to all advisers, whether they are recommending products from across the spectrum of providers or selling just one company's products.

"This should enable consumers to understand the choices available to them."

Singapore Dance Theatre performs Nutcracker

Dear Friend,

Singapore Dance Theatre performs Nutcracker
I hope that, in spite of the stress from the credit linked notes, your family is still in the mood to celebrate the December holidays.

I suggest bringing your family to watch the performance of the Nutcracker by the Singapore Dance Theatre. More details (i.e. ticket price, performance dates, booking instructions) are shown in this video clip:

Performing nights: Dec 12, 13, 17, 18, 19, 29.

I am the deputy chairman of the SDT. If you can support the SDT, it will be much appreciated.

Tan Kin Lian

Tuesday, November 25, 2008

Suggestion: how to approach legal action

Dear Mr. Tan

I would like to suggest the followings:

1) Use the online petition, one for each product (Minibond, High notes ....), to gather all investors who are in favor in legal action

2) Call a meeting for all interested investors to have a preliminary discussion and to select a committee to conduct a feasibility study.

3) The meeting will identify the scope for the feasibility study.

4) The feasibility study may include :
a) study the sales brochures/newspaper advertisements/prospectus to identify common grounds for the law suit (consult financial experts/lawyers if necessary)
b) cost and return analysis
c) study other similar class action cases (US, Hong Kong, Taiwan …)
d) identify the parties for the law suit (Lehman Brothers, FIs, MAS…)
e) identify where to file the law suit (local or US)
f) work out an action plan


I agree with you. I shall organise the survey (using online petiton) to gather the investors willing to take action.

Singapore Kopitiam Forum

You can visit this forum to have discusison about your specific topic on credit linked notes or other investments.

Swiss petition for national referendum to end "corporate rip off"

We can learn from the Swiss.

Mr Minder has embarked on a truly Swiss course of action to prevent such excesses in the future. Using Switzerland's system of direct democracy, he has collected the required 100,000 signatures to hold a nationwide referendum to end, as he puts it, "the corporate rip off."

Investors should see their Member of Parliament

I sent another e-mail to the investors to see their Member of Parliament in groups. I know that some investors had already seen their MP and the MP asked them to see the MAS or the financial institution or argued that they should have "their eyes open".

You can see the MP again. This time, ask the MP to do the "right thing" as the leader that represents you: The MP should:

1. Ask MAS what is the outcome of petition #1, asking MAS to investigate if there were any wrong doings by the financial institutions that created and marketed these credit linked notes? did these financial institutions breach the Securities and Futures Act and the Financial Advisers Act? What is the outcome of the investigation?

2. Ask how many investors had their cases resolved at the first leve, i.e. the financial institutions? How many cases were rejected by the financial instituions or made offers that were not accepted by investors? How many cases are still "waiting for decision"? How long does it take for the financial institutions to make their decision?

3. Ask MAS how many complaints have been lodged with FIDREC. How many cases have been decided by FIDREC? How many are still pending? How long does it take for FIDREC to handle these complaints?

It is the duty of your MP to ask these questions, on your behalf, to MAS or to ask them in Parliament.

Why I wanted 100,000 signatures

Discussion in

smallvoice585 on November 25th, 2008 2.31 am

Dear Tan Kin Lian,
With due respect, sir, I believe that you are not ready for politics yet. Though you have been a PAP member for 30 years, you have not been engaged in any grassroots work in the last 20 years. You also have no experience in electioneering. You do not have a dedicated or well-organised support structure around you.

People know you to be a long-time CEO of NTUC Income for 30 years; recently as an on-line protester against insurance bonus cuts; and lately, as a champion of burnt financial product investors. I’m afraid that’s not enough to gain credibility as the next big thing in alternative politics. People need to know your stand, views and ideas on a full spectrum of political issues articulated consistently over a significant period of time. They need to see proof of a wider range of leadership qualities required in political office.

Of course, please do not misconstrue that I’m trying to discourage you.

But the 100,000 signatures that this article is calling for is in my view totally irrelevant. True politicians do not ask for a show of hands before entering the fray - they offer themselves as instruments for their beliefs and willingly submit themselves to the caprice of public opinion. That is, you do not ask for support before you commit, but you should commit first and see if you’re getting any support. If you are not ready for this uncertainty, then it speaks volumes about your dedication to your political cause.

Tan Kin Lian on November 25th, 2008 5.19 am

Hi smallvoice585
You are correct. I am not “ready” for politics …. in the conventional way. There are many examples of more capable people who came into politics during the past 20 years. Most of them did not survive. Only two did, and they have a lot of difficulty in building up their base of support.

You are also correct about the lack of a political machinery. It takes more than this political machinery for an alternative party to succeed- as it has to compete with the incumbent that has more resources beyond its own political machinery..

I wanted to take a different approach - to create awareness, to educate the public. The recent event involving the 10,700 investors of the credit linked notes show how bad things can be - that the government can just ignore the call to do the right thing and enforce the law.

If more people come forward to voice their views, it may wake up the current leaders and create the change that is desriable and good for the country. An important change is to recognise that the elected leaders should represent the people, and that a free contest is for the good of the country.

Many people said that an alternative party needs more than one person. How do you expect other people to come forward? They are not willing to sacrifice their career. They will be subject to discrimination. Maybe 100,000 signatures will change their mind.

Will my approach work? Some people think so. Others are sceptical. I am willing to give it a try. If it does not, I can go back and retire.

Monday, November 24, 2008

Buyer beware

Letter by Adrian Tan

Much has been said and written about “Buyer beware”, investing “with their eyes open” and “I think the prospectus says ‘you could lose all or a substantial part of your investment in the Notes’ in bold print, on page 1 or 2”.

But what if the prospectus did not disclose material facts?

The New Paper’s Doctor Money ( Larry Haverkamp) wrote on 4 November 2008 that

“A feature common to ALL linked notes is that investors never see the charges. They include:
> costs embedded in the initial pricing;
> counter-party returns in the product’s risk/return structure;
> commissions from buying and selling the options, swaps and underlying bonds;
> market-making and surrender fees; and
> annual management fees, including trailer fees kicked back to distributors.

They are deducted directly from the yield. Investors are likely to attribute the low return to market conditions rather than unseen costs.

Most importantly, unit trusts and investment-linked products (ILPs) routinely publish their charges. Linked notes never do.”

Investors in Minibonds and HN5, Jubilee and Pinnacle Notes should be asking lawyers whether the failures to disclose the above amounts to a breach of section 243 (1)(a) of the Securities & Futures Act which reads, “A prospectus for an offer of securities shall contain all the information that investors and their professional advisers would reasonably require to make an informed assessment of the matters specified in subsection (3).

And if they are, what are the remedies and against whom. As Doctor Money wrote, “The question of the day is: ‘Should non-disclosure of embedded charges invalidate linked-note sales contracts and require a refund from issuers and distributors?’”

Breaches of section 243(1)(a) are something MAS is surely investigating because we have been assured, MAS is looking, “thoroughly into every possible breach of regulation, poor internal regulation or sales practices. And it will take action where necessary”.

Adrian Tan

Singapore's investments in global banks

I received a report from an analyst.

Temasek and GIC invested a total of SGD 36.7 billion in the global banks, namely Barclays, UBS, Merrill Lynch and Citigroup. The invstment in Barclays was made 18 months ago. The others was made nearly 12 months ago.

The value of these investments dropped by slightly more than 50%, or about SGD 18.5 billion. During the same period, the global stockmarket dropped by about the same extent. (Earlier, I thought that the global banks performed worse that the market, but it does not seem to be the case).

Ask for information in writing

Dear Mr. Tan,

I hve invested into Jubilee Series 8 Notes which will mature in 2.5 yrs time in Jan 2011. A fix rate of 3.15% per year is paid. The arranger of the Notes is Merrill Lynch who has since taken over by BOA. The trustee is HSBC Institutional Trust Services (S) Ltd. Currently the value of the Notes is 84% of the purchase price.

I have asked the RM many times but he is also not sure where the money is invested in and whether the Notes will default since more and more bad news are disclosed nowadays. I asked for the prospectus from the RM and took pain to go thru' the 100 pages but just not understand at all. I has no choice but to visit one of the branch and one of the RM verbally told me that it is invested in Merrill Lynch's bond.

I hope you can assist by enlightening me the following:-
a. where the money is invested in?
b. I understand that BOA is taking over Merrill Lynch. Could BOA just take over Merrill Lynch's assets but not its liabilities? If this is possible, then I think most likely the Notes will terminate and worthless.

I am at a lost. There are so many series and each series is different from the other series.

I suggest that you should ask the issuer (Merill Lynch) to give you the reply to your questions in writing. If they do not, you should lodge a complaint with MAS.

Pinnacle Notes Series 9 and 10

Pinnacle Notes series 9 and 10 was sold in November 2007 - just a year ago. At that time, the subprime and CDO market was already in trouble. The issuer put in 150 underlying assets and sold them to the retail investors.

The issuer did state, in the adverstisement, that the money would be invested in the CDOs. However, the are required under the Security and Futures Act to disclose all relevant information to help the investors make an informed decision. Did they meet this standard?

It is extremely difficult for the investors to ask for information to see if the Securities and Futures Act have been breached. I hope that the MAS will investigate this matter separately. Morgan Stanley is still around, and they should be able to provide the information for the investigation.

I hope that this investigation is carried out openly, so that the investors are satisfied that they have been treated fairly and have not been "cheated".

Here are some relevant information:

I hope that some lawyers can advice if it is possible for the investors to take a mandamus case to compel the MAS to invstigate this matter?

I hope that the investors of series 9 and 10 get together (for each series) and study if there were gaps in the prospectus that failed to described the risk of this product. You can meet with an experienced lawyer to discuss this matter. The lawyer can get a written expert opinion from overseas. If there was material misrepresentation of the securities, it may be possible to get the court to declare the transaction as void and for the investors to get a full refund.

Experience with FIDREC

I wish to ask investors, who have gone through FIDREC, to share your experience.

While you are covered under some confidentiality agreement, it should be all right to give some public information about whethere you accepted or rejected the adjuication, or the number of interviews and length of time taken to present your case.

This information will be helpful to other investors who are waiting for FIDREC adjudication.

I have asked the media to find out from FIDREC and give an update of the number of cases cleared through FIDREC and the summary of the outcome. I believe that this information is necessary for the public to know.

Guide on FIDREC process

MAS has put out a good guide on the FIDREC process. Please read it:

Key Things to Note About the FIDReC Fast-Track Dispute Resolution Processes for Disputes relating to the Lehman Minibond Programme, DBS High Notes 5, Merrill Lynch Jubilee Series 3 LinkEarner Notes and Morgan Stanley Pinnacle Series 9 and 10 Notes

Morgan Stanley website on Pinnacle Notes

Dear Mr. Tan,

I was trying to find out more about Pinnacle Notes by entering the Morgan Stanley website. Lo and behold, we need to sign in agreeing to all the terms before I can view any information at the FRONT PAGE.

Can you ask MAS
[1] Is this the right practice?
[2] Is this morally right practice?
[3] Is this trying to reduce information flow to investor?
[4] I thought the Pinnacle is selling to "public" through retail network, but information sudden becomes only to privy. Is this infringing the basis of sale of Pinnacle Notes?
[5] Can MAS conduct an investigation on this type of practice to restrict information to investors?

This has been the darkest moment for my wife and myself. Frankly, the hopelessness is not due to the loss of money (altough it is a lot of money) but the loss of confidence in the system.


Please write directly to ask MAS. I will post your e-mail in my blog also.

Risk analysis form - wrong statements

You should ask the distributor to send you a copy of the risk analysis form. See here:

If you find any wrong statements in the form, you should write a letter formally to the distributor to correct the statements. If possible, try to find evidence that the statements were wrong - e..g regarding your risk appetide, etc.

If the wrong statements were fraudalent, you can lodge a police report against the sales representative.

One investor found that a statement was entered into the form without his knowledge, and he is able to prove it. He has decided to lodge a police report about the fraudalent act. This will strengthen his case to ask for a full refund.

Gathering 100,000 signatures

Several people have written e-mails to encourage me to represent the views of the people through the political arena. I have sent these e-mails to The Online Citizen (after removing their names) for publication.

You can read them at

I will keep this blog largely focused on financial and insurance matters, especially the credit linked notes. There will be some mention about the "gathering 100,000 signatures" but it will be somewhat subdued. It will take a few months to gather the signatures, so this matter will quieten down after a few days.

Most investors have been badly affected by the credit linked notes. Your loss could have been reduced or avoided, if there were greater accountability by the authority. I suggest that you should print out the petition form and get 20 signatures or more.

Strategy on credit linked notes

My next step is to help the investors to identify suitable lawyers to take up a legal case on the misrepresentation in the advertisements and prospectus on the credit linked notes.

It is possible to identify a group of investors who have been misled by these materials and to claim for a full refund, based on the misrepresentation of the product.

The investors will have to identity the grounds of misrepresentation and to discuss it with the lawyer.

I hope that this will encourage the distributor to offer a fair settlement out of court. A fair settlement in my view should be 50% of the amount lost by the investor, i.e. both parties share the loss equally.

Low compensation offered by HLF

Dear Mr Tan,

I have received some updates from HLF regarding the Minibonds.

Both of my elderly aunts (one is mid 70s, the other is 59) have both received the calls from HLF last week regarding the "compensation" regarding to their MiniBonds investment. The total sum invested was $90,000, and HLF actually proposed to return them $250 each to compensate for their losses. This is outright ridiculous! HLF had clearly taken their money thru mis-selling, and now they are offering $250 each as good-will! Both of my aunts rejected this compensation and seeks to bring this case up to FIReC.

Thank u for everything u hv done for us!


Sunday, November 23, 2008

Tan Kin Lian eyes elected presidency

This is the headline of an article in the Sunday Times.

The front page has the following message: "Im game to be elected president or member of parliament if people wants me" Tan Kin Lian now opens up on his political ambition.

My "political ambition" has been summarised in this posting in my blog on 2 November 2008:

It is also reflected in the article written by Nur Dianah Suhaimi. It reflects my views quite fairly. The headline is an exaggeration and gives a distorted angle.

My friend said that the article may backfire on me. My supporters may not be able to get 100,000 signatures. Why not ask for 50,000?

I told my friend, "It is not my interest or ambition to stand for election. If I do not get 100,000 signatures, I have the excuse to opt out - that this is a bad idea." I am willing to leave this to the voice of the people.

Issuers of toxic notes should take more of the blame

Dear Mr Tan

I have been tracking news of Minbonds, Pinnacles and Jubilee Notes (MPJ) series actively. Some points I have observed and wished to highlight

1. Distributors with advisory roles distributing the MPJ series have recieved alot of flak for their sale, esp DBS Bank. I am not sure how much revenue these distributors are paid for each $1000 invested but a educated guess would be not more than 5-10%, Its pretty amazing how so much flak is diverted on them as opposed to the issuer (manufacturer) of these products. Lehman is insolvent now, yet, Morgan Stanley (Pinnacle issuer) and Merrill Lynch (Jubilee) have offices in Singapore and they have recieved less attention as opposed to DBS bank. As issuers of the notes, margains are definitely higher than distributors like DBS, yet I see Morgan Stanley/ Merrill Lynch relatively unscathed by all these. Surely there are no protests and investor wanting justice. I am not sure if some of the investors are even aware that Merrill Lynch/ Morgan Stanley are the issuers for them and not the local banks.

2. The main issue here are the bankrupty of the underlying asserts that causes the credit events leading to the default of the notes, I have gone through the prospectus and none of the underlying assert was mentioned. In fact alot of, esp less savvy investors, believed that the funds are invested in the 6/7 major reputable and not the underlying 150 firms. Since the underlying sercurities were not in the prospectus except that at point of printing all are rated double AA rating. If the distributors are not informed of this, is it fair to blame them wholly ?Further with a margain spread of 10-15%, does investor really expect the banks to pay them 100% of their investments? Can the banks then blame MAS as these MPJ investments were approved by MAS for sale.

3. My point here is to let lay the blame on the right parties who are primarily responsible for all these. Local Banks/distributors may have some smaller responsibilities but Morgan stanley and Merril lynch should rightly be held responsible for all misleading marketing info (since all marketing brochures pertaining to the product is issued by these 2 investment banks). Charges of continous issuance of series for pinnacle series continued despite the dismal performance of series 1/2 , yet the series were allowed to launch till series 15...

I hope you can post my comments as despite all the emtions about investments, I think we should be going after the parties who are PRIMARILY responsible for all these saga then the local distributors. In some ways, they may be victims as well since I believe noen of them knows abt the details of the investments as well.


Plea to MAS - investors of Pinnacle Notes

Managing Director,
Monetary Authority of Singapore

82 individual holders of Pinnacle Notes arranged by Morgan Stanley Asia (S) Pte Ltd have co-signed a self-explanatory Plea to MAS on their plight in their investment in the said Notes. On their behalf, I am handing over herewith the Plea together with their signature sheets and details as stated therein.

We hope that MAS will respond positively to our Plea as we are at our wit’s end as to how to protect whatever good values that remain in our investments. We have also enclosed Morgan Stanley’s latest indicative valuation of various Pinnacle Notes which one of us had obtained through his broker. As you can see, many of these have devalued down to barest values. We understand that these devaluations had occurred rapidly in recent weeks. On top of that, we are in the dark as to the timing and exact root causes of the devaluation. Morgan Stanley is also not providing such information to us even though some of us had asked for them through our brokers.

We will be most happy to take your response in any form you deem appropriate, be it directly to me on their behalf, through a press statement or any other means.

As a matter of courtesy, I wish to advise you that I will shortly be posting a copy of the Plea, in a website which the signors have agreed, to enable them to access a copy for their records as most of them did not get one for keeps at the time of the signing at Hong Lim Park due to lack of photo-copying facilities at the site.
Thank you.


Manifesto - the future of Singapore

KC asked me to write a manifesto of what I want to do, if I get into public office. My views are already reflected in several postings in my blog. They cover moral values, economic and social issues, etc.

I like to invite other readers to post your views about what you like to see regarding the future of Singapore.

Battle of the mind and the heart

Dear Sir,

I am writing this e-mail in response to the statement: "It is not my interest or ambition to stand for election. If I do not get 100,000 signatures, I have the excuse to opt out - that this is a bad idea. I am willing to leave this to the voice of the people...."

Frankly, I do not agree with some of the things you have said and the way you have said them, and some of the things you did and the way you do them, but I believe what you are doing is for the sake of the Republic and her people and not for any personal gain or ambition.

From your statements, I can somehow sense that your mind is constantly asking you to opt out while your heart is begging you to take this course.

This further cement my views that you are doing this for the right reason and you strongly believe in serving the people of the Republic.

By giving you my support and my signature, I am also taking away your option (1/100,000) to opt out and to take your views and strengths to a bigger stage and platform where you have the power to do more for the people you care so much for.

I would like to further suggest that you consider writing a Manifesto to set out your strategic direction and outlines of any prospective legislation changes you would like to bring about if you are elected to public office and why you would like to change them.

Best Regards


Reveal your identity

Somebody asked me to "be fair" and allow his critical comment to be posted. I agreed to his request.

Normally, I expect a person to use his real name, if he wish to post a comment to criticise any person or view. If you do not wish to reveal your identity, you should post your view neutrally and do not attack or pass judgement on another person.

Useful role for financial advisers

I believe that financial advisers (i.e. insurance agents and sales representatives) have the responsibility to give appropriate advice to the consumers and they should be fairly paid for their time and effort.

The commission system and sales targets are the source of the malpractice. If a distributor or adviser can earn $6,000 (3% of $200,000) to sell a credit linked note within 30 minutes, something must be wrong. Of course, the adviser will say that the product is good, safe, approved by MAS, etc.

I encourage financial advisers to give independent and good advice for a fee of $100 or $150 an hour and to keep the advice within 1 or 2 hours. A doctor is also paid for the time that is spent to treat a patient, and does not receive a commission for the medicine that is prescribed.

Moral values and ethics

I posted a blog on my moral values and ethics, as follow:

Many people agree that it is important to have good values, as they drive our conduct and relations with other people.

A retired teacher lamented to me that in recent years, our young students are taught technical and work skills, but are lacking in moral values and ethics. Nowadays, it seems to be all right to "cheat" people to increase profits. Just say, "caveat emptor".

I hope that some of the moral values will wake our government leaders to do the right thing - the values of honesty, courage, fairness, looking after the interest of others - to name just a few.

A few readers were uncomfortable about my statement of values. They felt that I should not be "preaching" these values. I think that it is the duty of all members of society to articulate the values that should guide the future of our society. I hope that more people can come forward to express their views on this matter.

Investors to see your Member of Parliament

I have sent the following message to the investors to meet their Member of Parliament in a group.

Some investors said that they have met their MP earlier, and their MP have not acted. You should see the MP again, and again.

It is the duty of the MP to look after your interest. As many people are affected, you should continue to see your MP - until the MP has taken the appropriate action.

All the best!

Dear Friends,
I suggest that you should contact the other investors in your constituency and arrange to see your Member of Parliament at the Meet-the-People session. Tell your MP about how you were misled into investing in the credit linked notes. Let the MP know about this matter for the victims directly. Ask your MP to take up the matter in Parliament or with MAS.

You can get information about your MP from this website:

The investors in your postal sector are shown in the attached Excel spreadsheet. I hope that a few of you can take the lead to contact the other investors and organise the visit to see your MP.

Speak up for our rights

Dear Mr. Tan

It is very courageous of you to give a voice and help those Lehman and Pinnacle investors. I hope you do not get into trouble with the authority or banks.

You know I feel our senior X has tamed us Singaporean over the course of 20-30 years to just obey the authority. Whatever is implemented by the government, to just accept it!!!

We Singaporean do not dare to stand up for our rights and do not have a voice of our own unlike Hong Kongers, Thailand, Koreans who dare to street protest. But I do not think that street protest is not good for the economy.

If not for you, I do not think the Lehman/Pinnacle investors would dare to go to speakers corner or question the banks/ stock brokerage.

Mrs Y

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