Distributors were negligent

The distributors who sold the credit linked notes were negligent, but were not cheating.

Most of them were probably ignorant about the true nature of these structured products. They mis-represented the products, but not intentionally. In the greed to earn the attractive commission on the sale of the products, the sales representatives failed in their duty to give proper advice and information to the customers. The financial institutions also failed in their duty to supervise the sales representatives.

The negligence has caused loss to the investors. The investors deserve to be fairly compensated for the loss. The financial institution cannot hide under the disclaimers signed by the customers, as there was negligence and misrepresentation.

The compensation does not need to be full. It would be fair for the loss to be shared equally between the investor and the negligent distributor.

An honorable financial institution would recognise that it had neglected its duty and come forward to offer a fair settlement to all affected customers, and not only to certain customers based on educational level or age. Great Eastern Life has acted honorably and deserve to be commended.

But many financial institutions chose to look at its bottom line profit, and decided to use its financial power to fight these cases in court. And, sadly, they were backed by the Government.

When will Singapore return to its old values of honesty, fairness and justice?

Tan Kin Lian