Dear Kin Lian,
This is in response to the article captioned “Risks listed in bold, but ….Investors went ahead despite clear warnings”, by Lorna Tan [The Straits Times, Oct 31].
The nub of the issue here, Lorna, is about misrepresentation of risks, not about the risks stated in the Pricing Statement [PE]. You appear to be someone with a fecund imagination; you imagined all these investors were given the PE in advance or at the point of sale and after reading the PE and despite understanding the risks involved they still went ahead and invested. Right, Lorna, that was what you were saying or trying to project? Have you researched in these areas?
1. How many of these investors are what is now being termed as “vulnerable people” [illiterate people who cannot read or understand English]?
2. How many of these investors are elderly people who may not be illiterate but who nevertheless cannot understand the complexity of the text given in the PE?
3. How many of these investors were actually presented with the PE and asked to read it before the decision to invest or not to invest was even considered?
4. How many of these investors, if any - assuming the PE was not produced during the discussion with the RM - were cautioned by the RM that they would risk losing all their principal?
5. Do you still seriously think that if investors had been specifically told that they would risk losing all their money they would still have parted with their money, which for many was their life’s savings, their retirement kitty?
6. Have you not heard talk that some investors visited their banks wholly ignorant of the sale of these supposedly high-yield structured products but they were persuaded nevertheless by the RM to uplift the funds from their fixed deposits and invest them in these products?
7. Have you considered the possibility of the RM putting the cart before the horse, by performing a risk-tolerance analysis after he and/or his distributor-organization had made misrepresentations about the nature of the product they were flogging, and after the investor had already been persuaded by such misrepresentations [or lies] to invest?
8. Have you wondered whether the risk-tolerance analysis undertaken by the RM can be taken at face value? Some investors can recall that in their case the assessment was done hastily and carelessly by the RM, and they can prove it.
9. And why, despite seeing the investor as having an aversion to risk of loss of capital, the RM still went ahead and closed the deal, instead of telling the investor: “This product is not suitable for you”?
10. Have you taken a look at the advertising materials of the distributors, particularly the one for Minibonds Series 3 with these enticing statements: “Invest on solid foundations” and “With our Minibond Series 3 credit-linked to six major financial institutions, you can enjoy the returns you deserve with peace of mind.”
11. You pointed out the inherent risks of DBS Bank’s High Notes and Lehman’s Minibond series and it is obvious you are equipped with an imaginative mind for understanding such risks and would not have been caught with your pants [maybe, skirt is more appropriate] down through investing in either of these products – but would you argue that it was not irresponsible for any distributor to sell these products to illiterate, hence vulnerable people, let alone distribute misleading advertising materials? Or
12. Would you agree that it was a gross dereliction of responsibility on the part of the distributors or their RMs in failing to make clear to investors that by investing they would be assuming a big risk – of losing their entire principal?
13. Would you agree that the promotion gimmicks employed by distributors were profoundly at odds with the high risks inherent in these structured products? If your answer is yes, then it is regrettable that you have made no mention of this in your article.
14. Would you agree that your article is nothing but half-truths, prejudiced in a certain way, and jarring, and a hindrance to investors, numbering about ten thousand, who are now trying to recover from the distributors?
15. Would you agree that investors who have been mis-sold are now eminently reasonable in seeking restitution from the distributors?
Dear Lorna, please let us have your response to these questions, and without any equivocation, please?
Richard Woo
Saturday, November 1, 2008
Stolen identity
There are many ways that a thief can steal and use your personal identity to open credit card or access private information.
Some people in the internet pretend to be somebody else. They are also thieves and, if caught, can be prosecuted as thieves.
Some people hide behind a fictitious name and attack other people, including defamation. These people are commiting a crime and a civil offence. I hope that these people are aware about the legal consequences.
Some people in the internet pretend to be somebody else. They are also thieves and, if caught, can be prosecuted as thieves.
Some people hide behind a fictitious name and attack other people, including defamation. These people are commiting a crime and a civil offence. I hope that these people are aware about the legal consequences.
Collective legal action - Leonard Loo
For investors who wish to consider collective legal action, you can attend a briefing by Leonard Loo. Details below:
http://tankinlian.blogspot.com/2008/10/lawyer-no-obligation-no-fee.html
Leonard Loo has proposed that the investors give their intent to take collective action and register their claim. He will explain the strategy to the investors at his briefing. The aim is that actual legal action will be taken only at the last resort and out-of-court settlement will be preferred, in the interest of all parties.
http://tankinlian.blogspot.com/2008/10/lawyer-no-obligation-no-fee.html
Leonard Loo has proposed that the investors give their intent to take collective action and register their claim. He will explain the strategy to the investors at his briefing. The aim is that actual legal action will be taken only at the last resort and out-of-court settlement will be preferred, in the interest of all parties.
Reply to SP Services: Don't shoot the messenger
Posted at request of Vincent Sear
Editor
Today paper
I refer to the article November 1-2, 2008: "SP Services" Don't Shoot The Messenger."
The essence of the matter is, even if SP Services is just the middleman or "messenger" as it now calls itself, how can electricity tariffs be based on US$155 per barrel of oil as announced by SP Services itself it September 2008, to justify a 22% price hike based on "forward pricing"?
Now, SP Services is claiming "average price." Whatever, be it forward pricing or average price, how come Singapore households and businesses are billed based on a much higher price? Oil price hit a peak of US$147 per barrel in July 2008 and has been falling thereafter.
How come Singapore consumers are billed based on US$155 per barrel for the quarter of October to Decemeber 2008 when oil price never hit that high? What's going on between the power generating companies (gencos) and SP Services and the Energy Market Authority (EMA)?
Oil price is now about US$70 per barrel or below. Can Singaporeans expect a corresponding 55% cut in tariffs and bills?
Vincent Sear
Editor
Today paper
I refer to the article November 1-2, 2008: "SP Services" Don't Shoot The Messenger."
The essence of the matter is, even if SP Services is just the middleman or "messenger" as it now calls itself, how can electricity tariffs be based on US$155 per barrel of oil as announced by SP Services itself it September 2008, to justify a 22% price hike based on "forward pricing"?
Now, SP Services is claiming "average price." Whatever, be it forward pricing or average price, how come Singapore households and businesses are billed based on a much higher price? Oil price hit a peak of US$147 per barrel in July 2008 and has been falling thereafter.
How come Singapore consumers are billed based on US$155 per barrel for the quarter of October to Decemeber 2008 when oil price never hit that high? What's going on between the power generating companies (gencos) and SP Services and the Energy Market Authority (EMA)?
Oil price is now about US$70 per barrel or below. Can Singaporeans expect a corresponding 55% cut in tariffs and bills?
Vincent Sear
Compare toxic financial product with melamine
Dear Mr. Tan,
A hypothetical case:
A woman walked into a famous drug stall and asked for advice from the pharmacist to recommend a milk product for the new born baby. Due to the commission for various type of milk product, the pharmacyst introduced one brand with the milamine. When asked what is a milamine, the answered was it was some sort of vitamin that is very safe and will help your child grow more intellegent.
The baby consume the product and seriously ill and the reason for sickness is due to consumption of melamine. Now the mother take up the case with the drug stall to claim compensation.
Various things happened. The drug store says:
> The name melamine is clearly stated as component of the milk. If you do not know what is the melamine, find out first before you bought. It is the life of the baby you know, how can you just trust the word of the pharmacist? So it is your faults for not doing the research, rather than the pharmacist who uttered nonsense.
> What if your child really grow up without any problem and grow more intelligent, will you complain? So common, be sporting, it is your faults for buying the milk. By the way, did anybody put the knife on your neck to buy the milk? you do it on your free will right, even though you know melamine is one of the substance used for the milk. It is your faults and you donot have the right to claim.
> Any proof that the pharmacist tell you that melamine is a vitamin? If you could prove it, we will definitely compensate you.
Obviously, the story refers to the current situation and you should be able to link them to the toxic financial product. After this fact, will anybody argue that the mother will not be eligible for compensation because of the unrecorded wrong advice given??
What do you think will happen to the drug store ??
HS
A hypothetical case:
A woman walked into a famous drug stall and asked for advice from the pharmacist to recommend a milk product for the new born baby. Due to the commission for various type of milk product, the pharmacyst introduced one brand with the milamine. When asked what is a milamine, the answered was it was some sort of vitamin that is very safe and will help your child grow more intellegent.
The baby consume the product and seriously ill and the reason for sickness is due to consumption of melamine. Now the mother take up the case with the drug stall to claim compensation.
Various things happened. The drug store says:
> The name melamine is clearly stated as component of the milk. If you do not know what is the melamine, find out first before you bought. It is the life of the baby you know, how can you just trust the word of the pharmacist? So it is your faults for not doing the research, rather than the pharmacist who uttered nonsense.
> What if your child really grow up without any problem and grow more intelligent, will you complain? So common, be sporting, it is your faults for buying the milk. By the way, did anybody put the knife on your neck to buy the milk? you do it on your free will right, even though you know melamine is one of the substance used for the milk. It is your faults and you donot have the right to claim.
> Any proof that the pharmacist tell you that melamine is a vitamin? If you could prove it, we will definitely compensate you.
Obviously, the story refers to the current situation and you should be able to link them to the toxic financial product. After this fact, will anybody argue that the mother will not be eligible for compensation because of the unrecorded wrong advice given??
What do you think will happen to the drug store ??
HS
Why are banks allowed to sell structured products that give poor value?
Mr Tan,
If there is a silver lining that comes out of this minibond/high note/jubilee fiasco, I would hope that its some serious soul searching by all stakeholders, investors, FIs & the government.
Investors have to ask themselves, what is their investment objective, really.
Structure deposits have been around for some time. I have never purchased any but each time I am at any bank, without fail, bank staff would try to promote them to me.
Over the years, I've seen the way they are structured becoming more and more complex & arcane.
My point is, if the general public has been losing money or making unsatisfactory returns, why have the banks been able to launch series after series of the same products ?
Regulators, are they really out to build a "world class" financial centre in Singapore ?
Efforts to develop a vibrant corporate bond market has fizzled out. Look at the corporate bonds listed on SGX, lacking both depth, breath & also market liquidity.
If the recently launched OCBC NCPS preference shares can yield 5 percent, then any good quality corporate can float coporate bonds at around 5 percent, which at 150 basis point spread to 15 year SGS govt bonds, seems about right.
So, if these alternatives are available, would investors need to even consider the structured deposit nonsense the FIs are putting out ??
Lastly, correct me if I am wrong. SGX, along with the KLSE, I think are the only 2 exchanges left in the whole wide world that allow contra trades, ie. allowing investors to sell shares that they have purchased within 3 days, before they are settled, without paying up first. All other exchanges require some sort of margin or deposit. Is this prudent risk management ? I rest my case.
Regards
If there is a silver lining that comes out of this minibond/high note/jubilee fiasco, I would hope that its some serious soul searching by all stakeholders, investors, FIs & the government.
Investors have to ask themselves, what is their investment objective, really.
Structure deposits have been around for some time. I have never purchased any but each time I am at any bank, without fail, bank staff would try to promote them to me.
Over the years, I've seen the way they are structured becoming more and more complex & arcane.
My point is, if the general public has been losing money or making unsatisfactory returns, why have the banks been able to launch series after series of the same products ?
Regulators, are they really out to build a "world class" financial centre in Singapore ?
Efforts to develop a vibrant corporate bond market has fizzled out. Look at the corporate bonds listed on SGX, lacking both depth, breath & also market liquidity.
If the recently launched OCBC NCPS preference shares can yield 5 percent, then any good quality corporate can float coporate bonds at around 5 percent, which at 150 basis point spread to 15 year SGS govt bonds, seems about right.
So, if these alternatives are available, would investors need to even consider the structured deposit nonsense the FIs are putting out ??
Lastly, correct me if I am wrong. SGX, along with the KLSE, I think are the only 2 exchanges left in the whole wide world that allow contra trades, ie. allowing investors to sell shares that they have purchased within 3 days, before they are settled, without paying up first. All other exchanges require some sort of margin or deposit. Is this prudent risk management ? I rest my case.
Regards
Trace the IP address of SiewKhim
Dear Mr. Tan,
I suggest that you block the rubbish that is being posted by SiewKhim. This person is really terrible. He writes defamatory, malicious statements.
REPLY
I posted his comments so that his IP address can be traced. He is probably on the payroll of an organisation, and is paid to harrass me in my blog. I believe that this is a criminal act and can implicate his paymaster as well.
Some can help me to locate his IP address. You can check the time of his posting and check against the log of the site meter (recent visitors - details) to get the following page:
http://www.sitemeter.com/?a=stats&s=s30tankinlian&r=8
Happy detective work!
I suggest that you block the rubbish that is being posted by SiewKhim. This person is really terrible. He writes defamatory, malicious statements.
REPLY
I posted his comments so that his IP address can be traced. He is probably on the payroll of an organisation, and is paid to harrass me in my blog. I believe that this is a criminal act and can implicate his paymaster as well.
Some can help me to locate his IP address. You can check the time of his posting and check against the log of the site meter (recent visitors - details) to get the following page:
http://www.sitemeter.com/?a=stats&s=s30tankinlian&r=8
Happy detective work!
Scuffle in HK Protest Over Lehman-Linked Products
By THE ASSOCIATED PRESS Published: October 31, 2008
HONG KONG (AP) --Investors in financial products linked to collapsed U.S. investment bank Lehman Brothers Holdings Inc. scuffled with security guards at a bank in Hong Kong on Friday, as some 200 people protested in the financial district against institutions that sold the now worthless products.
The incident highlights anger among the thousands of Hong Kong investors who've been burnt by the Lehman collapse. The outstanding amount of the products is 20.2 billion Hong Kong dollars ($2.6 billion), according to the Hong Kong Monetary Authority, the territory's defacto central bank.
Several of the protesters got into a scuffle with security guards at a Hong Kong branch of Singapore bank DBS Group Holdings. No one was injured, according to an Associated Press photographer who witnessed the incident.
They were part of a larger group of 200 protesters who marched through the financial district, stopping at several banks that sold Lehman-related products holding signs that said ''major bank fraud'' and ''My money gone, I don't want to live.''
Bank spokeswoman Glendy Chu said none of the DBS security guards were injured.
Investors have complained that bank sales staff were misleading and didn't fully explain the product or connection to Lehman Brothers.
Jonathan Li, a spokesman for the Securities and Futures Commission in Hong Kong, said the body is still investigating the complaints against the banks.
DBS said recently that most of the 360 million Singapore dollars ($243 million) in Lehman-linked structured notes sold to clients in Singapore and Hong Kong are now worthless. It has offered to pay compensation to clients.
Billions of dollars in souring debt forced Lehman Brothers Holdings Inc., once the fourth-largest investment bank in the U.S., to file for bankruptcy last month amid the world's worst financial crisis in decades.
HONG KONG (AP) --Investors in financial products linked to collapsed U.S. investment bank Lehman Brothers Holdings Inc. scuffled with security guards at a bank in Hong Kong on Friday, as some 200 people protested in the financial district against institutions that sold the now worthless products.
The incident highlights anger among the thousands of Hong Kong investors who've been burnt by the Lehman collapse. The outstanding amount of the products is 20.2 billion Hong Kong dollars ($2.6 billion), according to the Hong Kong Monetary Authority, the territory's defacto central bank.
Several of the protesters got into a scuffle with security guards at a Hong Kong branch of Singapore bank DBS Group Holdings. No one was injured, according to an Associated Press photographer who witnessed the incident.
They were part of a larger group of 200 protesters who marched through the financial district, stopping at several banks that sold Lehman-related products holding signs that said ''major bank fraud'' and ''My money gone, I don't want to live.''
Bank spokeswoman Glendy Chu said none of the DBS security guards were injured.
Investors have complained that bank sales staff were misleading and didn't fully explain the product or connection to Lehman Brothers.
Jonathan Li, a spokesman for the Securities and Futures Commission in Hong Kong, said the body is still investigating the complaints against the banks.
DBS said recently that most of the 360 million Singapore dollars ($243 million) in Lehman-linked structured notes sold to clients in Singapore and Hong Kong are now worthless. It has offered to pay compensation to clients.
Billions of dollars in souring debt forced Lehman Brothers Holdings Inc., once the fourth-largest investment bank in the U.S., to file for bankruptcy last month amid the world's worst financial crisis in decades.
Speaker's Corner - 1 Nov 2008 5 to 7 pm
SPEAKER'S CORNER
Saturday 1 November 2008
Time: 5 - 7 pm
Nearest MRT station: Clarke Quay (NE Line)
Agenda:
1. Update on Petition #4
2. Help to complete complaint form
3. Dialogue with senior management of distributor
4. Collective legal action (as a last resort)
5. Meeting of investors (according to distributor)
6. Translation into Mandarin
Ask your friends and family to attend. Let us aim for a large gathering!
Saturday 1 November 2008
Time: 5 - 7 pm
Nearest MRT station: Clarke Quay (NE Line)
Agenda:
1. Update on Petition #4
2. Help to complete complaint form
3. Dialogue with senior management of distributor
4. Collective legal action (as a last resort)
5. Meeting of investors (according to distributor)
6. Translation into Mandarin
Ask your friends and family to attend. Let us aim for a large gathering!
Speaker’s Corner 1 November 2008 - Speech
1. Petition #4
I have received 1,017 signatures for Petition #4 which is addressed to the Chairman of the Monetary Authority of Singapore.
The Petition asks the MAS to:
a) appoint or set up an independent unit to receive the complaints and to provide assistance to the complainants to write their statement.
b) encourage the financial institutions to adopt a collective approach in offering fair compensation to investors who have been misled into investing in these unsuitable investments.
I have lodged the Petition with MAS on Saturday. I have asked to meet the chairman of a senior official of MAS next week.
2. Complaint form
MAS has issued a statement that 2,500 investors have lodged a complaint about mis-selling of the structured products. Another 7,500 investors have not lodged their complaint.
We will continue to help these investors to lodge their complaint. I have printed the complaint form to help the investors to gather the required information.
This form will be distributed to investors at Speaker’s Corner. You can get a form from a volunteer, who can help to explain the required information to you.
The complaint form can also be downloaded from my blog, www.tankinlian.blogspot.com.
For investors who wish to get a lawyer to help to prepare a statutory declaration, the telephone number of the lawyer is stated in the form. Call Ms Ivy Goh (Tel: 68999888). Fee: $120 plus GST
3. Dialogue with senior management
I suggest that investors in each group (based on the distributor that sold the product) should get together to sign a collective letter to the senior management of the distributor.
You should ask the senior management to:
a) Obtain from the trustees a detailed statement of account for each series of the credit linked securities sold to us, from the inception until the latest available date, together with a valuation of each series of the securities at the latest available date.
b) To hold a meeting of the investors to give an explanation on the performance of each series of the securities and to allow the investors to ask questions and seek clarification. You should also ask for the independent, well-regarded person to be present at the meeting.
c) Discuss how the investors were misled into investing in the structured product, and how the distributor can compensate the investors for their loss.
4. Collective legal action
The collective legal action will be considered as the last resort, if it is not possible for the investors and distributor to agree on a fair settlement.
The possible actions that can be taken are:
a) Misleading information in the prospectus and sales materials
b) Mis-representation and inappropriate recommendation given by the sales representatives
5. Meeting of investors
The purpose of the weekly meeting at Speaker’s Corner is for the investors to meet other investors according to the distributor that sold the product to you.
You can share information abow how you were mis-sold and the appropriate steps to make your claim. You can also discuss about the collective legal action (at the last resort).
Some investors have come forward to be leaders of the group. You should contact your group leaders for advice and for collective action.
Please give your full support to your group leaders.
6. Tan Kin Lian’s Blog
Please refer to my blog for the appropriate information and the latest update:
www.tankinlian.blogspot.com.
If you are not able to access the blog, ask your family member or friend to help you.
During this time, I am very busy. Please avoid asking me to spend time on individual matters, as I do not have the time to attend to it.
Tan Kin Lian
I have received 1,017 signatures for Petition #4 which is addressed to the Chairman of the Monetary Authority of Singapore.
The Petition asks the MAS to:
a) appoint or set up an independent unit to receive the complaints and to provide assistance to the complainants to write their statement.
b) encourage the financial institutions to adopt a collective approach in offering fair compensation to investors who have been misled into investing in these unsuitable investments.
I have lodged the Petition with MAS on Saturday. I have asked to meet the chairman of a senior official of MAS next week.
2. Complaint form
MAS has issued a statement that 2,500 investors have lodged a complaint about mis-selling of the structured products. Another 7,500 investors have not lodged their complaint.
We will continue to help these investors to lodge their complaint. I have printed the complaint form to help the investors to gather the required information.
This form will be distributed to investors at Speaker’s Corner. You can get a form from a volunteer, who can help to explain the required information to you.
The complaint form can also be downloaded from my blog, www.tankinlian.blogspot.com.
For investors who wish to get a lawyer to help to prepare a statutory declaration, the telephone number of the lawyer is stated in the form. Call Ms Ivy Goh (Tel: 68999888). Fee: $120 plus GST
3. Dialogue with senior management
I suggest that investors in each group (based on the distributor that sold the product) should get together to sign a collective letter to the senior management of the distributor.
You should ask the senior management to:
a) Obtain from the trustees a detailed statement of account for each series of the credit linked securities sold to us, from the inception until the latest available date, together with a valuation of each series of the securities at the latest available date.
b) To hold a meeting of the investors to give an explanation on the performance of each series of the securities and to allow the investors to ask questions and seek clarification. You should also ask for the independent, well-regarded person to be present at the meeting.
c) Discuss how the investors were misled into investing in the structured product, and how the distributor can compensate the investors for their loss.
4. Collective legal action
The collective legal action will be considered as the last resort, if it is not possible for the investors and distributor to agree on a fair settlement.
The possible actions that can be taken are:
a) Misleading information in the prospectus and sales materials
b) Mis-representation and inappropriate recommendation given by the sales representatives
5. Meeting of investors
The purpose of the weekly meeting at Speaker’s Corner is for the investors to meet other investors according to the distributor that sold the product to you.
You can share information abow how you were mis-sold and the appropriate steps to make your claim. You can also discuss about the collective legal action (at the last resort).
Some investors have come forward to be leaders of the group. You should contact your group leaders for advice and for collective action.
Please give your full support to your group leaders.
6. Tan Kin Lian’s Blog
Please refer to my blog for the appropriate information and the latest update:
www.tankinlian.blogspot.com.
If you are not able to access the blog, ask your family member or friend to help you.
During this time, I am very busy. Please avoid asking me to spend time on individual matters, as I do not have the time to attend to it.
Tan Kin Lian
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