Saturday, September 27, 2008

Negligent or dishonest acts

I need to find some examples of negligent or dishonest acts of the financial institutions that create or sell the financial products. Here are some of my views:

1. The adviser fail to inform the investor about the risk of the product
2. The adviser recommend the product (with high risk) to investors who are not aware or do not understand the risk
3. The adviser did not understand the risk of the product that they were selling
4. The adviser failed to give the prospectus and other pricing information
5. The adviser get the investor to sign documents, without explaining what the documents were
6. The adviser failed to advise the investor to diversify the risk, and recommend a large sum to be invested in a single product.
7. The product creator failed to disclose the charges that are taken away from the investors
8. The product creator has conflict of interest as they are also the counter party for some of the swap and other transactions
9. The trustee or product creator failed in their duty to take care of the interest of the investor
10. The product has high risk as they need to earn sufficient income to pay the high charges, and this is not disclosed to the investor.
11. The adviser or the managers of the financial institution did not buy the product that they are selling to the investors (consumers)

Any more angles?

Please give supporting evidence to back up the above allegations of negligent or dishonest conduct of the advisers or the product creators.