DBS Bank has announced that it will retrench 900 employees. More than half will come from its operations in Singapore.
Many companies in Singapore are expected to retrench their employees in the months ahead, following the slowdown in the global economy. Analysts expect that the number will exceed the 30,000 people retrenched during the Asian financial crisis in 1998.
Singapore does not have an unemployment insurance scheme. The retrenched employees will find it difficult to find alternative jobs. They are likely to be unemployed for several months or years.
I wish to suggest that the Government set up an Unemployment Loan scheme to provide a monthly payment to the retrenched employees. I propose this scheme to work as follows:
a) The amount of loan will be at 70% of the average earnings, subject to a cap of $2,000 a month
b) Interest will be charged at 2.5% per annum
c) The loan will apply to a worker who has been retrenched from a job that he has worked for more than 12 months.
d) The loan can be drawn for up to 24 months from the date of retrenchment.
e) Any retrenchment benefit received by the worker should be used first, before the worker is allowed to draw down on this retrenchment loan.
This loan will enable to retrenched worker to meet the mortgage repayments and family expenses. It has to be repaid in the future, when the retrenched worker has found a job. Any unpaid balance of the loan will be recovered from the Central Provident Fund savings of the worker.
This is similar to the Unemployment Benefit operated by many countries - with one key difference: the proposed scheme provides the monthly payment as a loan that is repayable at a modest rate of interest. The retrenched employee who needs money does not have to rely on credit cards and loan sharks that charge a high rate of interest.
Friday, November 14, 2008
Complexity of Credit Linked Notes
Dear Minister Mentor
An investor asked me to send this letter to you. I hope that you can find the time to read it. Thank you.
Dear Mr. Tan
I do not understand how MM Lee has come to conclusion that Minibond investors invested with their eyes open. Many financial experts have expressed their views that the minibond products are too complex for any ordinary investor to comprehend. The following are quotes from the financial experts:
1. Mr. R. Sivanthy, business times senior correspondent : (Straits Times 20/09/08) If you want a front-row lesson in first-class financial obfuscation for structured products, then look no further than the way the recently collapsed Minibond Series 3 notes were packaged and marketed.
Up to $200 million of these notes were sold to a gullible public who probably thought they were buying a five-year bond issued by six leading banks that paid a 5 per cent coupon per year, but were in reality not only exposed to the United States housing market but also to a complex credit default swap arrangement whose substantive party was the now-bankrupt Lehman Brothers.
Moreover, while it is possible to piece together the actual substance of these notes from the documents available, it is a tedious process and arguably not within the ability of the average retail investor.
Finally, if disclosure was weak, then so was knowledge among distributors. Some brokers did not understand the true nature of the instrument and sold it as a bond. Maybe the name had something to do with it, though as investors have now found out painfully, what they had bought was not a bond but a convoluted swap-based instrument.
2. Mr. Tan Kin Lian, former CEO of NTUC Income (Weekend Today, 04/10/08)
Mr. Tan interest in such credit-linked securities did not come about only now. It began when they first appeared on the market two years ago. With the help of another financial analyst, he had studied such products closely. The complex way in how these products were structured baffled him.
When financial experts who spent many hours to read the prospectus could not figure out what the structure was. How can you expect the general public who were sold these products to understand the risk that they were taking?
Even Mr. Tan was shocked with extent of the risks involved. “I became horrified to learn the true nature of the structure and the extent of the high risk”
3. Professor Ivan Png, National university of Singapore (Sunday times 26/10/08)
The Lehman bankers who designed this products were not only smart in finance, they were also geniuses in marketing. They gave the name “Minibond Limited” to the special purpose vehicle that issue the notes. So the shorthand name for the credit-linked notes issued by Minibond was simply “Minibond”. But of course, the notes were not bond at all. It took me quite a few hours to pieces together an understanding of the structure notes from the pricing statement.
I cannot guarantee that my understanding is complete and you may not rely on it as I am not a financial adviser.
The other condition is more difficult to understand. According to the pricing statement, the synthetic CDO was some how based on a portfolio of 150 securities and the value of the CDO depended on those securities.
The pricing statement did not disclose the identities of the 150 securities referenced by the synthetic CDO.
Complex? Absolutely.
4. Associate Professor Low Buen Sin, Finance at Nanyang Business School. (Sunday times 26/10/08)
Are structure products very complex instruments? Yes, they can be. Some structured products are not easy to comprehend even for very seasoned wealth managers. Let us use credit-linked structured products that are similar to Minibond and Jubilee Series 3 as an illustration of the level of complexity that it can get to.
5. David Gerald. SIAS’ president and CEO (Weekend Today 2/11/08)
While some of the conditions are straightforward, understanding the entire 54-page document requires advice from a professional.
It is clear that having considered the document in it totality, that the structured products in question are not suitable for ordinary small investors especially for the “vulnerable group” unless they have sought professional advice or understood the prospectus and the document.
6. Associate Professor Lan Luh Luh of the National University of Singapore’s Department of business policy. (Clarification from Dr Lan Luh Luh 03/11/08)
I mentioned that I never invest in things I don’t understand, because many of these structured products are really, really very complex.
I also mentioned that there should be more stringent requirements as to the qualifications of these financial managers – from the Lehman episode, it can be seen that quite a number of them did not even understand the products that they were selling (which I found out as well when I talked to some of them on many previous occasions).
Pang
An investor asked me to send this letter to you. I hope that you can find the time to read it. Thank you.
Dear Mr. Tan
I do not understand how MM Lee has come to conclusion that Minibond investors invested with their eyes open. Many financial experts have expressed their views that the minibond products are too complex for any ordinary investor to comprehend. The following are quotes from the financial experts:
1. Mr. R. Sivanthy, business times senior correspondent : (Straits Times 20/09/08) If you want a front-row lesson in first-class financial obfuscation for structured products, then look no further than the way the recently collapsed Minibond Series 3 notes were packaged and marketed.
Up to $200 million of these notes were sold to a gullible public who probably thought they were buying a five-year bond issued by six leading banks that paid a 5 per cent coupon per year, but were in reality not only exposed to the United States housing market but also to a complex credit default swap arrangement whose substantive party was the now-bankrupt Lehman Brothers.
Moreover, while it is possible to piece together the actual substance of these notes from the documents available, it is a tedious process and arguably not within the ability of the average retail investor.
Finally, if disclosure was weak, then so was knowledge among distributors. Some brokers did not understand the true nature of the instrument and sold it as a bond. Maybe the name had something to do with it, though as investors have now found out painfully, what they had bought was not a bond but a convoluted swap-based instrument.
2. Mr. Tan Kin Lian, former CEO of NTUC Income (Weekend Today, 04/10/08)
Mr. Tan interest in such credit-linked securities did not come about only now. It began when they first appeared on the market two years ago. With the help of another financial analyst, he had studied such products closely. The complex way in how these products were structured baffled him.
When financial experts who spent many hours to read the prospectus could not figure out what the structure was. How can you expect the general public who were sold these products to understand the risk that they were taking?
Even Mr. Tan was shocked with extent of the risks involved. “I became horrified to learn the true nature of the structure and the extent of the high risk”
3. Professor Ivan Png, National university of Singapore (Sunday times 26/10/08)
The Lehman bankers who designed this products were not only smart in finance, they were also geniuses in marketing. They gave the name “Minibond Limited” to the special purpose vehicle that issue the notes. So the shorthand name for the credit-linked notes issued by Minibond was simply “Minibond”. But of course, the notes were not bond at all. It took me quite a few hours to pieces together an understanding of the structure notes from the pricing statement.
I cannot guarantee that my understanding is complete and you may not rely on it as I am not a financial adviser.
The other condition is more difficult to understand. According to the pricing statement, the synthetic CDO was some how based on a portfolio of 150 securities and the value of the CDO depended on those securities.
The pricing statement did not disclose the identities of the 150 securities referenced by the synthetic CDO.
Complex? Absolutely.
4. Associate Professor Low Buen Sin, Finance at Nanyang Business School. (Sunday times 26/10/08)
Are structure products very complex instruments? Yes, they can be. Some structured products are not easy to comprehend even for very seasoned wealth managers. Let us use credit-linked structured products that are similar to Minibond and Jubilee Series 3 as an illustration of the level of complexity that it can get to.
5. David Gerald. SIAS’ president and CEO (Weekend Today 2/11/08)
While some of the conditions are straightforward, understanding the entire 54-page document requires advice from a professional.
It is clear that having considered the document in it totality, that the structured products in question are not suitable for ordinary small investors especially for the “vulnerable group” unless they have sought professional advice or understood the prospectus and the document.
6. Associate Professor Lan Luh Luh of the National University of Singapore’s Department of business policy. (Clarification from Dr Lan Luh Luh 03/11/08)
I mentioned that I never invest in things I don’t understand, because many of these structured products are really, really very complex.
I also mentioned that there should be more stringent requirements as to the qualifications of these financial managers – from the Lehman episode, it can be seen that quite a number of them did not even understand the products that they were selling (which I found out as well when I talked to some of them on many previous occasions).
Pang
Be careful if you wish to redeem your credit linked notes
Dear Mr Tan.
I brought $X pinacles note 15. I have complained to F1 for mispresentation , but received a negative reply.
Thinking of putting the all matter behind because I have seen little actions done postively, I decided to cut loss.
I went to direct to the bank. They give me the email price of 84.75% as pricing today at 2pm. Beside I have an sms from business manager with the same pricing. I signed the forms and they do not allow me to put the pricing. They give me the assurance that there will be little changes to it.
In the evening,they called and tell me nicely they have sold it at 76.76 % as a bad news. No explanation are given , they only sympathise with me.
Yes, the only alternative to complain again or sue. I wonder what the banker have become? I getting very tired.
Please be very careful if anyone wish to made redemptions. Dun trust banker 's words anymore. Make sure the pricing are written black and white.
JP
REPLY
A unit trust also adopt the same practice - they given an indicative price and calculate the actual price at the close of the market. The is called "forward pricing"
But tjhere is a big difference. The forward pricing adopted by the unit trust is based on the actual closing price of the underlying shares. It is possible to audit the forward price to be a fair price.
In the case of the forward pricing of the credit-linked notes, there is no such transparent process. We do not know how the bank calculate the forward price to redeem the contract. If there is a drop of 8%, it could be profit of the bank that bought the credit linked note from the investor. If so, this will be grossly unfair.
I suggest that the investor should make a written complaint to the bank and ask to receive a written explanation. You can bring the case to FIDREC.
I brought $X pinacles note 15. I have complained to F1 for mispresentation , but received a negative reply.
Thinking of putting the all matter behind because I have seen little actions done postively, I decided to cut loss.
I went to direct to the bank. They give me the email price of 84.75% as pricing today at 2pm. Beside I have an sms from business manager with the same pricing. I signed the forms and they do not allow me to put the pricing. They give me the assurance that there will be little changes to it.
In the evening,they called and tell me nicely they have sold it at 76.76 % as a bad news. No explanation are given , they only sympathise with me.
Yes, the only alternative to complain again or sue. I wonder what the banker have become? I getting very tired.
Please be very careful if anyone wish to made redemptions. Dun trust banker 's words anymore. Make sure the pricing are written black and white.
JP
REPLY
A unit trust also adopt the same practice - they given an indicative price and calculate the actual price at the close of the market. The is called "forward pricing"
But tjhere is a big difference. The forward pricing adopted by the unit trust is based on the actual closing price of the underlying shares. It is possible to audit the forward price to be a fair price.
In the case of the forward pricing of the credit-linked notes, there is no such transparent process. We do not know how the bank calculate the forward price to redeem the contract. If there is a drop of 8%, it could be profit of the bank that bought the credit linked note from the investor. If so, this will be grossly unfair.
I suggest that the investor should make a written complaint to the bank and ask to receive a written explanation. You can bring the case to FIDREC.
Banker fill up complaint form, but did not disclose the content
Mr. Tan
I submitted a letter of complaint regarding my pinnacle notes and I was told to fill up a feedback form. As usual I ask the banker how to fill up the form the banker just told me to fill up my name and he will fill up the rest.
Honestly I do not know what is written in the form and he told me is just a routine and the bank will get in contact with me soon. He didnt bother to explain the details to me.This is the same scenenio when I signed those risks assessment forms during the sales of the structure products.
I was told that there will be an early redemption (not due to credit event of reference entities) of the pinnacle notes series 10 and the return of my investment will most likely to be zero.
I ask why and I told him I dont believe the basket of notes or secuities worth nothing. The explaination given to me was that when the notes went into liquidation, the money will first be paid to the reference entities and the remainder then to the investors.
I do not understand why should the reference entities get the money instead of the investors.The money come from the investors and the reference entities are getting the money instead.It is not logical and I do not believe anyone even a small kid will invest in this type of product if it was properly explained.
To me this type of product was meant to fail at a start as a failure will benefit the others except the investors. It was designed to cheat investors of their money!
I also had an interview with one of the FI recently and I bluntly told them do not threatened me with the risks disclosure form that I have signed. I told them the risks disclosure forms that I signed was according to the risks that was told to me by the RM and not those hidden risks that was unknown to me.
Saddened Victim.
REPLY
I suggest that you should prepare a statutory declaration to support your complaint. This is explained here:
http://tankinlian.blogspot.com/2008/10/general-advice-to-investors-of.html
I submitted a letter of complaint regarding my pinnacle notes and I was told to fill up a feedback form. As usual I ask the banker how to fill up the form the banker just told me to fill up my name and he will fill up the rest.
Honestly I do not know what is written in the form and he told me is just a routine and the bank will get in contact with me soon. He didnt bother to explain the details to me.This is the same scenenio when I signed those risks assessment forms during the sales of the structure products.
I was told that there will be an early redemption (not due to credit event of reference entities) of the pinnacle notes series 10 and the return of my investment will most likely to be zero.
I ask why and I told him I dont believe the basket of notes or secuities worth nothing. The explaination given to me was that when the notes went into liquidation, the money will first be paid to the reference entities and the remainder then to the investors.
I do not understand why should the reference entities get the money instead of the investors.The money come from the investors and the reference entities are getting the money instead.It is not logical and I do not believe anyone even a small kid will invest in this type of product if it was properly explained.
To me this type of product was meant to fail at a start as a failure will benefit the others except the investors. It was designed to cheat investors of their money!
I also had an interview with one of the FI recently and I bluntly told them do not threatened me with the risks disclosure form that I have signed. I told them the risks disclosure forms that I signed was according to the risks that was told to me by the RM and not those hidden risks that was unknown to me.
Saddened Victim.
REPLY
I suggest that you should prepare a statutory declaration to support your complaint. This is explained here:
http://tankinlian.blogspot.com/2008/10/general-advice-to-investors-of.html
Structured products linked to Lehman Brothers
Contributed by Richard Woo
Let us recap the salient points and the parties involved, and issues/questions of relevance that appear vague and for which we need clarification and further information:
[1] Monetary Authority of Singapore [MAS]
MAS is the party at the top of the rung and it was MAS which gave approval, wittingly or unwittingly, for the sale of these toxic products to the public. And since MAS gave approval for their sale, MAS cannot now accuse the distributors for selling them.
The Prime Minister in an interview he gave to journalists on Oct 26 is reported to have said, inter alia, .. "In this case the Lehman Minibond Notes or DBS High Notes or ML Jubilee Notes were clearly not low-risk products." …
If they were not low-risk products, can they be considered as high-risk products, then, or, more appropriately, products with risks of robbing the investor of his capital, risks that were evidently sky-high and inappropriate, and absolutely incompatible with a meager return of a paltry 5% pa coupled with freezing of principal over a long period of five to six years?
MAS, it seems, can only point the finger at any distributor that has "mis-sold" or committed a legal breach. However, ten thousand investors have lost in total about half a billion dollars – and that's a lot of money; some of this money came from their retirement kitty, and for some it was their life-long savings.
In at least one product, there is clear evidence of mis-selling or making misrepresentations of the risks. If a distributor has misrepresented or lied to the investors, then there can be no justice in saying that investors did not enter with their eyes open; it would be an act of prejudice to blame investors by saying they should have invested with their eyes open; caveat emptor can in no way be introduced as a principle of fair play if one party has lied or misrepresented.
It is indeed strange that MAS has had no qualms telling investors poisoned by these toxic products: You were greedy. MAS is still investigating and exploring and that's laudable, but the comment about investors being greedy has no basis in fact and must be openly refuted or repeatedly refuted if necessary. If concerned MAS officials have a conscience, they would do well to examine it.
[2] "Vulnerable" group of investors – question for MAS/distributors
Would MAS or distributors please define the terms "vulnerable" and "non-vulnerable" and provide details of the criteria for distinguishing vulnerable from non-vulnerable?
Questions for MAS:
[a] Is it fair to leave it to each distributor to make the initial decision to compensate or not to compensate?
[b] Would it be fairer to consider, based on availability of evidence including but not limited to, advertising materials, internal procedures, risk-profiling of individual investors, as to whether any distributor was clearly guilty of mis-selling, or misrepresenting the risks involved?
[c] Would it be rational to think that distributors would admit liability to an investor who in their opinion is not among the group classified as "vulnerable"?
[d] Would it be unreasonable to say that if a distributor had mis-sold to Ms A or B it had in all probability also mis-sold to Mr X or Y?
[e] Would it be fairer to hold any distributor fully accountable to all their investors if they have mis-sold or misrepresented?
[3] Risk-profiling or analysis
Questions for distributors:
[a] What was the point of performing a risk-analysis?
[b] Was the risk-analysis performed in an objective manner?
[c] Would you agree that the risk-analysis was never used to determine whether an investor was suitable for the product concerned?
[d] Would you agree that you were selling a highly toxic product?
[e] Would you agree that any claim that you were merely acting as "order-executioner" cannot be meaningfully supported if you were uttering lies with abandon relative to the product, via print advert or otherwise?
[4] RMs
Can any of the RMs selling these structured products be said to be non-bilingual? To find out we need to see their CVs or ask their friends or family members. To be sure, many people in Singapore, especially the younger set, are bi-lingual.
Can it be rational to argue that an investor conversing in Mandarin, or in a vernacular other than English, with the RM is "vulnerable" but another investor discussing in English is not? But the crucial thing is: Did the RMs explain the risks of the product they were selling to the investor? Did they perform the risk-analysis diligently? Did they ask the questions concerning the risk-profile of the investor upfront, at the commencement of the discussion? Did they point out the risks spelt out in the so-called Pricing Statement?
Was a copy of the Pricing Statement handed out to the investor? Some investors have no hesitation making the claim they were not given a copy and that they did not even know what it was all about. According to some investors I spoke to, the RMs who attended to them spoke mainly about the merits of the product, for example, the interest yield, the quarterly interest payment, the link to highly rated financial institutions, the names of these institutions, and misrepresented by saying the investor would get all his/her money back if the investment were to be held to maturity.
Some investors have reviewed the risk-analysis form completed, in a hasty and careless manner, by their RM and noticed that although they were categorized as a low to mid-range risk investor, the RM did not tell them that the product was not suitable for them. I can see from the "tick-marks" completed for two investors that the information given in some areas was inconsistent or contradictory.
How many of the RMs, if any, really understood the contents of the Pricing Statement? It is obvious that people like MM are looking only at a small area of the picture. A complete analysis needs to take into account all the factors involved. Has any distributor or their RMs contravened a legal enactment, for example, the Financial Advisers Act? Any investigator seeking truth cannot avoid looking into this area. In the context of the scenario before us, would MM or MAS consider the use of the term "minibonds" as something innocuous, coincidental, or as something more than that, as part of a carefully hatched-up scheme, a scam perhaps, to fleece members of the public?
[5] Questions for Fidrec:
[a] What are your standards or criteria for making judgment on cases referred to you?
[b] The number of Fidrec staff involved in reviewing each case?
[6] Plausible entry of new swap counterparty to replace Lehman Brothers [Minibonds].
Distributors who have advertised "invest on solid foundations" and/or "invest with peace of mind" ought to take over as the new owner of the investment, with or without the new swap counterparty arrangement. Since they have misrepresented, through print advert and, plausibly, via verbal input from their RMs, they can be seen as having mis-sold or misrepresented, hence they should not shirk from their mistakes or responsibility; they should act honorably by returning investors their principal minus what the investors have received in terms of interest payment.
[7] Statistics – Request to MAS:
For the benefit of the investing public, please publish in the newspapers statistics covering data [in table form] linking information as follows:
Type or name of structured product, Name of Distributor, Total amount invested, Total number of investors, Number of "vulnerable" investors, Number of vulnerable investors if any who have been compensated and Number of "non-vulnerable" investors if any who have been compensated
[8] Future/present
It's all very well to think about the future by talking about revamping the industry, introducing tighter control measures, overhauling sales tactics etc but there is no future when the present is not taken care of. We all need to be mindful of the present; we need to be aware of the dire situation in front of us: an "explosion" has occurred and injured people are lying everywhere. Let's take care of all the injured before planning our next move.
Richard Woo
Let us recap the salient points and the parties involved, and issues/questions of relevance that appear vague and for which we need clarification and further information:
[1] Monetary Authority of Singapore [MAS]
MAS is the party at the top of the rung and it was MAS which gave approval, wittingly or unwittingly, for the sale of these toxic products to the public. And since MAS gave approval for their sale, MAS cannot now accuse the distributors for selling them.
The Prime Minister in an interview he gave to journalists on Oct 26 is reported to have said, inter alia, .. "In this case the Lehman Minibond Notes or DBS High Notes or ML Jubilee Notes were clearly not low-risk products." …
If they were not low-risk products, can they be considered as high-risk products, then, or, more appropriately, products with risks of robbing the investor of his capital, risks that were evidently sky-high and inappropriate, and absolutely incompatible with a meager return of a paltry 5% pa coupled with freezing of principal over a long period of five to six years?
MAS, it seems, can only point the finger at any distributor that has "mis-sold" or committed a legal breach. However, ten thousand investors have lost in total about half a billion dollars – and that's a lot of money; some of this money came from their retirement kitty, and for some it was their life-long savings.
In at least one product, there is clear evidence of mis-selling or making misrepresentations of the risks. If a distributor has misrepresented or lied to the investors, then there can be no justice in saying that investors did not enter with their eyes open; it would be an act of prejudice to blame investors by saying they should have invested with their eyes open; caveat emptor can in no way be introduced as a principle of fair play if one party has lied or misrepresented.
It is indeed strange that MAS has had no qualms telling investors poisoned by these toxic products: You were greedy. MAS is still investigating and exploring and that's laudable, but the comment about investors being greedy has no basis in fact and must be openly refuted or repeatedly refuted if necessary. If concerned MAS officials have a conscience, they would do well to examine it.
[2] "Vulnerable" group of investors – question for MAS/distributors
Would MAS or distributors please define the terms "vulnerable" and "non-vulnerable" and provide details of the criteria for distinguishing vulnerable from non-vulnerable?
Questions for MAS:
[a] Is it fair to leave it to each distributor to make the initial decision to compensate or not to compensate?
[b] Would it be fairer to consider, based on availability of evidence including but not limited to, advertising materials, internal procedures, risk-profiling of individual investors, as to whether any distributor was clearly guilty of mis-selling, or misrepresenting the risks involved?
[c] Would it be rational to think that distributors would admit liability to an investor who in their opinion is not among the group classified as "vulnerable"?
[d] Would it be unreasonable to say that if a distributor had mis-sold to Ms A or B it had in all probability also mis-sold to Mr X or Y?
[e] Would it be fairer to hold any distributor fully accountable to all their investors if they have mis-sold or misrepresented?
[3] Risk-profiling or analysis
Questions for distributors:
[a] What was the point of performing a risk-analysis?
[b] Was the risk-analysis performed in an objective manner?
[c] Would you agree that the risk-analysis was never used to determine whether an investor was suitable for the product concerned?
[d] Would you agree that you were selling a highly toxic product?
[e] Would you agree that any claim that you were merely acting as "order-executioner" cannot be meaningfully supported if you were uttering lies with abandon relative to the product, via print advert or otherwise?
[4] RMs
Can any of the RMs selling these structured products be said to be non-bilingual? To find out we need to see their CVs or ask their friends or family members. To be sure, many people in Singapore, especially the younger set, are bi-lingual.
Can it be rational to argue that an investor conversing in Mandarin, or in a vernacular other than English, with the RM is "vulnerable" but another investor discussing in English is not? But the crucial thing is: Did the RMs explain the risks of the product they were selling to the investor? Did they perform the risk-analysis diligently? Did they ask the questions concerning the risk-profile of the investor upfront, at the commencement of the discussion? Did they point out the risks spelt out in the so-called Pricing Statement?
Was a copy of the Pricing Statement handed out to the investor? Some investors have no hesitation making the claim they were not given a copy and that they did not even know what it was all about. According to some investors I spoke to, the RMs who attended to them spoke mainly about the merits of the product, for example, the interest yield, the quarterly interest payment, the link to highly rated financial institutions, the names of these institutions, and misrepresented by saying the investor would get all his/her money back if the investment were to be held to maturity.
Some investors have reviewed the risk-analysis form completed, in a hasty and careless manner, by their RM and noticed that although they were categorized as a low to mid-range risk investor, the RM did not tell them that the product was not suitable for them. I can see from the "tick-marks" completed for two investors that the information given in some areas was inconsistent or contradictory.
How many of the RMs, if any, really understood the contents of the Pricing Statement? It is obvious that people like MM are looking only at a small area of the picture. A complete analysis needs to take into account all the factors involved. Has any distributor or their RMs contravened a legal enactment, for example, the Financial Advisers Act? Any investigator seeking truth cannot avoid looking into this area. In the context of the scenario before us, would MM or MAS consider the use of the term "minibonds" as something innocuous, coincidental, or as something more than that, as part of a carefully hatched-up scheme, a scam perhaps, to fleece members of the public?
[5] Questions for Fidrec:
[a] What are your standards or criteria for making judgment on cases referred to you?
[b] The number of Fidrec staff involved in reviewing each case?
[6] Plausible entry of new swap counterparty to replace Lehman Brothers [Minibonds].
Distributors who have advertised "invest on solid foundations" and/or "invest with peace of mind" ought to take over as the new owner of the investment, with or without the new swap counterparty arrangement. Since they have misrepresented, through print advert and, plausibly, via verbal input from their RMs, they can be seen as having mis-sold or misrepresented, hence they should not shirk from their mistakes or responsibility; they should act honorably by returning investors their principal minus what the investors have received in terms of interest payment.
[7] Statistics – Request to MAS:
For the benefit of the investing public, please publish in the newspapers statistics covering data [in table form] linking information as follows:
Type or name of structured product, Name of Distributor, Total amount invested, Total number of investors, Number of "vulnerable" investors, Number of vulnerable investors if any who have been compensated and Number of "non-vulnerable" investors if any who have been compensated
[8] Future/present
It's all very well to think about the future by talking about revamping the industry, introducing tighter control measures, overhauling sales tactics etc but there is no future when the present is not taken care of. We all need to be mindful of the present; we need to be aware of the dire situation in front of us: an "explosion" has occurred and injured people are lying everywhere. Let's take care of all the injured before planning our next move.
Richard Woo
Why You Need to be at Hong Lim Park Tomorrow (15 November)
Message from betsybug
It's coming to five weeks after our first rally at Hong Lim Park. In that time, much has been achieved by us all - we have come together and we are now more organised as a group, and we know better some of the true nature of this perverse product DBS has sold us. Some have gotten a form of redress from DBS; the bank has been forced to make some grudging admissions, and they have relented by holding dialogue sessions with us.
But for the vast majority of us, we are no nearer a resolution. Much has been achieved, but much more needs to be done.
We must see this contest between us and the bank as a marathon race. We must see that it is a not dash of a hundred meters, for we cannot finish a marathon if we try to sustain the speed of a sprint race. So, we must learn to live our everyday lives, do our work, spend time with our families, take care of our minds and bodies, and go on with the framing of our plans even as we tussle with DBS. However painful the loss, despair must not debilitate us, slow our pace, or weaken our resolve.
Some of you will remember the actor Gregory Peck who carried very memorably the role of Atticus Finch in "To Kill a Mockingbird". He quotes Churchill to illustrate the code that Atticus lives by: "Withhold no sacrifice; grudge no toil; seek no sordid gain; fear no foe: all will be well".
We have asked all of you to be truthful in your letters and interviews. We must not claim what has not happened and what was not said. If the bank will not do the right thing, then we must be the ones who will set the example for them. Be truthful, not fearful. Be not afraid for it is not us who have carried out a wrongful deed - it is not us who must fear.
Some of us may weary from the fight when the end is not easily seen. But the end may be around the corner, and we could have stopped just short. Can we later justify our inactions to ourselves or to our families? DBS has said they are responsible to their shareholders for compensations they make, but are our families not our shareholders, and are we not answerable to our own stakeholders?
"All will be well". If each of us just do our little share, pull our small portion of the weight, push back our part of the wall, then together, big as DBS may be, and small as each one of us is, together we can shame even such a behemoth onto a proper and correct path of action. Because, in the end, we know that we are right, and on their side, they will know they have done wrong.
We hope to see you at Hong Lim Park tomorrow.
Betsybug
It's coming to five weeks after our first rally at Hong Lim Park. In that time, much has been achieved by us all - we have come together and we are now more organised as a group, and we know better some of the true nature of this perverse product DBS has sold us. Some have gotten a form of redress from DBS; the bank has been forced to make some grudging admissions, and they have relented by holding dialogue sessions with us.
But for the vast majority of us, we are no nearer a resolution. Much has been achieved, but much more needs to be done.
We must see this contest between us and the bank as a marathon race. We must see that it is a not dash of a hundred meters, for we cannot finish a marathon if we try to sustain the speed of a sprint race. So, we must learn to live our everyday lives, do our work, spend time with our families, take care of our minds and bodies, and go on with the framing of our plans even as we tussle with DBS. However painful the loss, despair must not debilitate us, slow our pace, or weaken our resolve.
Some of you will remember the actor Gregory Peck who carried very memorably the role of Atticus Finch in "To Kill a Mockingbird". He quotes Churchill to illustrate the code that Atticus lives by: "Withhold no sacrifice; grudge no toil; seek no sordid gain; fear no foe: all will be well".
We have asked all of you to be truthful in your letters and interviews. We must not claim what has not happened and what was not said. If the bank will not do the right thing, then we must be the ones who will set the example for them. Be truthful, not fearful. Be not afraid for it is not us who have carried out a wrongful deed - it is not us who must fear.
Some of us may weary from the fight when the end is not easily seen. But the end may be around the corner, and we could have stopped just short. Can we later justify our inactions to ourselves or to our families? DBS has said they are responsible to their shareholders for compensations they make, but are our families not our shareholders, and are we not answerable to our own stakeholders?
"All will be well". If each of us just do our little share, pull our small portion of the weight, push back our part of the wall, then together, big as DBS may be, and small as each one of us is, together we can shame even such a behemoth onto a proper and correct path of action. Because, in the end, we know that we are right, and on their side, they will know they have done wrong.
We hope to see you at Hong Lim Park tomorrow.
Betsybug
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