Complaining to sellers of credit linked notes

Message from Adrian Tan

Mr Tan Kin Lian has urged that the many people who have yet to lodge a complaint to do so.
If you are one of them, you should because the results of the MAS/FIs Complaints Resolution process are more favourable than many have expected. Read this.

In particular, minibond investors who have not complained, should do so because "For the Lehman Minibond Programme Notes which were sold by banks and one finance company, 34% will receive offers of full settlement and 41% will receive offers of partial settlement; for those sold by stockbroking firms, 1% will receive offers of full settlement and 12% % will receive offers of partial settlement."

The following form, was drafted for the use of the layperson complainant.  It is self-explanatory. Many investors have used the format.

(Note to users -- You can just type the questions down in an email message, and answer them according. You need not, print out a hard copy and answer on it. Just use the format in an email message.)  After completion, you can send the form here.

As said earlier, the form is self-explanatory, and anyone who has a secondary school education in English should have no problem filling it in for himself, a relative or friend. But for anyone who doesn't want to fill it in person, and is willing to pay me S$120, I will prepare a draft based on the information provided. I can be contacted at atans1@hotmail.com.

No point asking me to do it for free. If you can send me an email in English, you can fill it in yourself at no monetary cost to yourself or to complainant.

A Tan

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Factors affecting the quantum of compensation

An investor who helped an elderly relative to get 100% refund of a large investment in mini-bond wishes to share the following information:

Factors affecting the quantum of compensation:
1. Vulnerable
It seems like the definition of vulnerable is a combinition of following:
- age > 62 yrs old
- uneducated
- non-english speaking

2. Tranche of your minibond.

Different minibond series are invested in different combination of assets. Some tranches invest more in corporate bonds such as those issed by GE Capital, hence their underlying value are worth more and likely to worth more if held longer, when conditions of the captial market improves. In return for compensation, you need to transfer your rights of the minibond to the FIs, hence FIs are more willing to compensate more for those series with higher underlying value, especially the ealier tranches of minibond, as they will be able to benefit in future, if any.

3. Written Evidence.

As minibond is considered to have high risk profile, if you have written evidence that your risk profile is on the contrary (most if not all FIs need to do some form of needs analysis for you and there is a section on risk profile), then the chances of mis-selling is very high. On this basis alone, you have a high chance of winning under Common Law (i.e. sue the FI in court).

4. Customer-centric

Some FIs with progressive leadership team are more customer-centric and more willing to compensate on the basis of good will.

IN SUMMARY

Whether you get compensation and how much depends mainly on the interplay of the above four factors (although some other factors may also be relevant).