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.
REPLY
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.
Sunday, November 23, 2008
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:
http://tankinlian.blogspot.com/2007/11/pinnacle-notes-series-9-10.html
http://tankinlian.blogspot.com/2008/11/credit-default-of-pinnacle-notes-series.html
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.
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:
http://tankinlian.blogspot.com/2007/11/pinnacle-notes-series-9-10.html
http://tankinlian.blogspot.com/2008/11/credit-default-of-pinnacle-notes-series.html
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.
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:
http://www.mas.gov.sg/consumer/structured_products/fidrec_faqs.html
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
http://www.mas.gov.sg/consumer/structured_products/fidrec_faqs.html
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.
LKH
REPLY
Please write directly to ask MAS. I will post your e-mail in my blog also.
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.
LKH
REPLY
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:
http://tankinlian.blogspot.com/2008/11/risk-analysis-form.html
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.
http://tankinlian.blogspot.com/2008/11/risk-analysis-form.html
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 http://www.theonlinecitizen.com/.
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.
You can read them at http://www.theonlinecitizen.com/.
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.
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!
Anne
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!
Anne
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:
http://tankinlian.blogspot.com/2008/11/political-ambitions.html
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.
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:
http://tankinlian.blogspot.com/2008/11/political-ambitions.html
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.
DRAW
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.
DRAW
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