Martin Lee @ Sg
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Updates on Morgan Stanley Pinnacle Notes

The Pinnacle Notes is a structured product that was issued by Morgan Stanley. Investors who have bought any of the Pinnacle Series might want to note the following:

  • Investors will continue to receive their coupons from all Pinnacle Notes Series as the structures are still intact. 
  • Last Friday, there was a low buyback price being quoted because of market conditions and Morgan Stanley were expecting a huge number of redemptions (which did not happen). The upcoming valuation should see an improvement as credit market would likely have improved as well.
  • With respect to the CDO portfolio, there are currently three defaults – Lehman Brothers, Fannie Mae and Freddie Mac. (I’m not too sure whether they are in all the Series). Depending on the recovery rate, the CDO portfolio can probably take 6 – 8 credit defaults. 
  • To that effect, investors will be receiving an update on their Pinnacle Notes with respect to the number of defaults on the CDO portfolio.
  • With the status of Morgan Stanley changing to a bank holding company (making it a commercial bank and allowing it to receive deposits), it will be in a position to strengthen its financial position. This will reduce the swap counterparty credit risk.

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132 comments
Martin Lee says 4 years ago

To all Pinnacle investors of series 1, 2, 3, 6, 7, 9 and 10,

Please go and file a claim for your share of compensation from the class action suit of the Pinnacle notes.

http://www.martinlee.sg/action-required-pinnacle-notes-investors/

Reply
Xuehua says 7 years ago

Will you please let me know the position of Pinnacle 11? It matured on 19 De 2011. Have you got your money back?

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CDO-buyer says 8 years ago

The Mandatory Redemption Event has been officially announced for the Pinnacle Series 2, and letters have been sent to us. For the SGD Tranche, there is a total of USD 4,070,606.58 to be paid back to the Tranche B Notes-holders. Converted into the SGD, this amount is equal to SGD 5,141,176.11, the Exchange Rate they used was : SGD 1.2630 to 1 USD.

On a pro rata basis, each note-holder will receive SGD 1,023.11 per Tranche B Note.

I first bought the notes at SGD 5,000 per Tranche B Note.

Hence, my loss is SGD 5,000.00 – SGD 1,023.11 = SGD 3976.89 per Tranche B Note.

It’s quite a loss to me. What can I do now ? Thanks, but this is sickening.

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CDO-buyer says 8 years ago

Sureesh,

Do you think I should start to call DMG and raise this matter to them now ?

What do you think they will ask me ?

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CDO-buyer says 8 years ago

Dear Sureesh,

I just want to thank you first for all your advice.

I checked back the copies of documents that I signed, no, I did not sign any document saying that I don’t need my risk profile assessed. I signed some forms on details about myself, the Purchase Form which I left the number of units empty and a form saying that I am not US citizen.

I was directed to the sales agent by someone. I have a trading account with them, and in one of my calls to them, I was directed to her.

What do you think they will ask me if they call me in for the interview ? I am very uncomfortable to meet them.

Can you send me an email if we can talk more privately ? My email id is : [email protected]

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sureesh says 8 years ago

Dear CDO Buyer

Looks like you have a strong case to make. MAS had requested all FI that sold the pinnacle notes to have an internal investigation process. They also should have an external adviser to advice them.

You can write a letter of complaint to them stating all these facts.

They will call you for an interview to determine the facts. They will give you a decision 2 weeks later. According to MAS you can’t lodge a complain with Fidrec now, you must complain to DMG first and only go to fidrec if you are not satisfield with the outcome. So eventhough you have no faith in DMG you must still complain to them first.

Are you sure that you did not sign a document saying that you do not want to have your risk profile assessed before you buy. many investors realised and were surprised that one of the documents they signed says that they do not want any risk assessment . maybe you should check your copy of the documents. Another thing is that did you approach them or did they approach you to
invest. Have you written to Mr Tan to join the class action suite.

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CDO-buyer says 8 years ago

Sureesh,

I have not complained to DMG, because I am not sure how to talk to them. I was just told earlier that the product is very safe because only the big banks are involved. There is no mention of any other parties that may cause me to lose money. No, there was no risk profiling done, yes, I remember, they should do this prior to selling us this product earlier.

If DMG is not going to help and or be considerate, then, like I said earlier, there is no point approaching them, just a waste of time.

Another thing is the person who sold me this investment earlier was not very knowledgeable, she always had to check first and then to come to me with the answers to some questions that I asked. She need to check everytime. She said she missed some briefing by Pinnacle.

I trusted her because she told me this is another form of FD, but pays higher interest. Is it my fault for trusting her ?

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sureesh says 8 years ago

CDO-buyer

I am not sure that you are able to sell it now. You can try. They may suspend sale. Anyway after mandatory redemption you will probably get back, at the rate shown in the latest price, in this cae 12%. That is what happened to the rest of us. Are you going to complaint to DMG

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CDO-buyer says 8 years ago

Is it better that I sell off now at this price rather than wait further ? Perhaps getting back something is still the better choice ?

The redemption value later after the Credit Event mey be even less than 12%.

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sureesh says 8 years ago

Sorry I think the latest indicative price is 12% as stated in the website

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sureesh says 8 years ago

Dear CDO Buyer

It would be easier if you had bought it from a bank, because a bank is supposed to assess your risk and advice you if this product is suitable for you. From what I heard DMG usually reject their complaints of misselling. One thing you must do now is to join the class action suite by e-mailling [email protected]

Did DMG do your risk profile before you bought this product. Actually the indicative price is only 0.01 % so there is no point selling the notes now, you will get back only 0.01% . You have to do the first step and lodge a complaint of misselling to DMG.

But how come you invested $17,000, usually people have to invest in multiples of $5000

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CDO-buyer says 8 years ago

Hi, can somebody reply me please ? Sureesh, Martin ?

Thank you.

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    lioninvestor says 8 years ago

    CDO-buyer,

    You will need whatever documentation you can find to help your case in Fidrec.

    Based on how they have settled so far, things are not too hopeful.

    DMG will argue that they are only providing a transactional service without advice. So if you can prove that they solicited the sale from you and even gave you wrong information, it might help your case.

    Unfortunately, it is likely you have to take a loss even if you manage to get any sort of partial recovery from Fidrec.

    Sending an email to tkla.km wouldn’t hurt.

    Reply
      CDO-buyer says 8 years ago

      Lion,

      Fortunately, I still have some printed emails from the past to prove my point because the lady suggested that I buy the tranche. I need to dig for those printed emails though.

      I’ll use those.

      The lady also helped me to fill-in the number of notes to buy, and tried to explain the benefits to me (though she was not doing a great job with it, was told that she missed some briefings).

      By the way, like Sureesh said, I was not given a Risk profiling document to sign, because if I have done this, she would be able to see that I am not so happy with those notes since there are ‘other’ factors that may cause me to lose my money.

      Are my points above strong enough ?

      Reply
        lioninvestor says 8 years ago

        Whenever you perform an investment transaction with a financial institution, there will be a KYC (Know your client) form.

        Under the form, there will be four options:

        1) Full fact find
        2) Partial fact find
        3) Product advice
        4) No advice given

        If the form indicate option 4, then no risk profiling is required.

        The securities will always argue everything is done under option 4.

        Your case will be stronger if you can establish that it’s option 1-3 and wrong advice/information was given.

        Reply
          CDO-buyer says 8 years ago

          Lion, much thanks.

          You mentioned about the KYC Form. Who is supposed to fill-in that form, me right ?

          But then back in 2006, I don’t think there was such a form, and pardon my shallow knowledge on this, I just heard of this Risk Profiling recently, and today, I got to know this KYC.

          So, I don’t think there was such form back then, so long ago, and I think such forms only came into existence after all these complaints starting coming in after the Lehman collapse, right ?

          Again, who si to sign and fill-in that KYC form ?

          Reply
            lioninvestor says 8 years ago

            KYC started long ago. It has been used since the financial advisers act 7 years ago.

            The risk profiling is one of the sections of this KYC.

            It has to be signed by both the client and the adviser.

            Reply
              CDO-buyer says 8 years ago

              I see. But I have not signed one prior to buying these notes, am I supposed to ask them to let me sign or rather, to profile me ?

              Like I told Sureesh earlier, this risk profiling was never done with me 4 years ago, and I do not recall signing any KYC, nor well, did I ask to sign any. How would I know to ask to sign this form ?

              If this was not done, and they do not know my risk matters,… can’t recall the proper words to use, they should not even have told me and advised me to buy these things.

              What is the point of having such risk practices in-place but not really using them to choose the right customers to sell the right products to ?

              Reply
CDO-buyer says 8 years ago

Hi, can somebody reply me please ? Sureesh, Martin ?

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CDO-buyer says 8 years ago

Am I the only one in this boat, for it seems like no other replies or concerns from others on the Pinnacle Series 2 ? I bought my notes from DMG & Partners. Do you think they will be able to return my money, or it’s best that I go straight to MAS and not waste time asking them anymore ?

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sureesh says 8 years ago

Hi CDO buyer.

No, this is not a good move. If you do this, you will only get back what little residual value there is left and this is the same amount you will get back after manditory redemption.

You should file a complaint of misselling to the FI, If you sell it back now, the FI may ask you to sign an undertaking that you will not take any further action against them.

where did you buy it from?

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CDO-buyer says 8 years ago

Sureesh, and others,

Thank you. I have invested 17000 of my hard-earned money. I am thinking of selling back the units to the dustributor, and gettingback whatever I can now instead of waiting for the real event of Redemtion to take place. If this a good move ? You have not commented about going to that email id : [email protected]. Is that another good move too ?

Fidrec – has there been any sucess to get back some money via this way ?

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sureesh says 8 years ago

Yes it is true that series 2 will be unwound. How much have you invested. The only course of action you have is to submit a complaint of miss selling to the financial institution you bought it from. This is the so called 3 step process set in place by the MAS.
step 1 complain to the FI who sold you the product.
step 2 if not satisfied with the outcome go to fidrec
step 3 if not satisfied with fidrec’s decision go to court

what else can we do. Of course their 3 step process is of no help. You could also appeal to MAS to investigtate the FI that sold you the product. MAS may ban them from selling such products for some time

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CDO-buyer says 8 years ago

Did anyone hear that Pinnacles 2 is very likely to experience a Mandatory Redemption Event too ? The indicative price as of yesterday was only 12% per note. All the series seems to be dropping one by one.

The letter about this ‘very likely event’ has been sent out recently. But the series has not gotten redeemed yet, probably as the year turns around. What can we do at this moment ?

Can we send a note to : [email protected] to initiating actions ?

By the way, what can we ask from our distributors ? Some partial compensations ?

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Pinky says 8 years ago

Hi lee,
sure, you can e-mail your details to [email protected]
They will advise you acccordingly.

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Pinky says 9 years ago

Is there a deadline with regards to claims against the distributor and FIDREC once the mandatory redemption events has occurred?
Must the claim be filed say within 3 months ?
I am referring to PN series 7 which I received the letter dated 14/6/2010.
Thank you.

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    lioninvestor says 9 years ago

    Hi Pinky,

    The longer you wait, the longer it takes to resolve your case. Any reason why you want to wait?

    Reply
      Pinky says 9 years ago

      Hi lioninvestor,
      we are also vested in PN series 5 with residual value of 1% and we feel will likely go down the same path so we were wondering if it is better to submit our claims for these 2 together than going in one by one. What do you think?

      Reply
        lioninvestor says 9 years ago

        Hi Pinky,

        The 2 notes are similar in structure. If you are going on a basis of misselling, you can file a claim for both already. Don’t have to wait for it to fail.

        Reply
          Pinky says 9 years ago

          Hi lioninvestor
          Thanks for your explanation, I’ve got a clearer picture now.
          Appreciate your help.

          Reply
            lee says 8 years ago

            Hi Pinky,

            I also invested in Pinnacles series 7 and only just read your reply. Pls advise can I join in the class action?

            Reply
PN Investor says 9 years ago

Pinky

I would suggest that you join the class action suite. You have nothing to lose. You do not have to pay any money at this moment.
The class action can only proceed if there are sufficient people to join it.

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    Pinky says 9 years ago

    Thank you lioninvestor and PN Investor for your kind advice and reply.

    Reply
Pinky says 9 years ago

Just received letter yesterday that a mandatory redemption event for Pinnacle notes series 7 has occured. Anyone holding these notes please share on your next course of action please.

I wonder which is more effective – submitting my claim to the bank
directly or getting help from Mr Tan Kin Lian where our claims are combined and submitted to US courts. Any comments please?

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    lioninvestor says 9 years ago

    Hi Pinky, you can try both Fidrec and the US option.

    Reply
      Pinky says 9 years ago

      Thank you for your reply.
      If I try both options at the same time, does it mean that I am eligible to be compensated from both parties should my claim be successful?
      Please advise.

      Reply
        lioninvestor says 9 years ago

        You will be going after different parties.

        US one is going after the issuer of the product whereas Fidrec is going after the distributor. Obviously, if one side compensates you an amount to buy back a portion of your investment, then that portion will likely not be eligible for further recourse. You can’t get back more than what you put in.

        Reply
sureesh says 9 years ago

Hi

It is now confirmed that there is a mandatory redemption event for PN series 6. Anybody holds these notes, I think some town councils hold these notes.

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    Pinky says 9 years ago

    Hi Sureesh,

    I think both series 6 and 7 are dead by now. What will after a mandatory redemption event?

    Did you join in the class action?

    Reply
lioninvestor says 9 years ago

A US law firm, Kirby McInerney, has spoken about possible legal action that can be taken in US Courts in connection with the Pinnacle Notes.

Investors will only need to pay Kirby McInerney if they are successful in their law suit and the fee will be based on a percentage of the money recovered from the financial institution that is being sued.

As I understand, the law suit is not against the distributor of the Pinnacle Notes so those who have already settled on a partial compensation with their distributor would still be able to join.

More information here:

http://www.martinlee.sg/pinnacle-notes-legal-action/

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Fan says 9 years ago

URGENT!

Hi, does anyone happen to be still keeping the BROCHURE/PAMPHLET of the Pinnacle Notes Series 1?

Appreciate if you could reply to me if you have a copy.

Thanks.

Fan

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DL says 9 years ago

Will the value of pinnacle notes increase when the reference entities starting to be profitable? Especially on these big fat bonus payment again! what about our hard earned money? doesn’t it sound ridiculous?

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Grazel says 10 years ago

Is Pinnacles Notes Series 11 Tranche B CDO or CD linked products?
Are consumer-investors safe?
Which orgainization is most transparent to update the current investment status consumer enquiries on Series 11 that I can call on? I have called the RBS bank, RM, Morgan Stanley but the customer service evades our questions?

BTW, CNN Jan09 News reports RBS facing deep losses after buying over ANB Amro.

Please advise and share your views with me. I am perturbed.

Best Rgds,
Grazel

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andrew ng says 10 years ago

Just got the lastest updated for Pinnacle Notes 15 from my RM at standard chartered is at 80.79% (Sing Dollars)

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penniless says 10 years ago

btw, can anyone help me to interpret the effect on downgrading of Morgan stanley “unsecured debt” rating by Moody’s and S&P recently to chance of default for the “floating rate” notes issued by MS?

http://www.rbs.com.sg/Singapore/Important-3/index.htm

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penniless says 10 years ago

I understand that pinnacle 15, the underlying assets has a floating rate note with an interest pegged to 1-month USD LIBOR – BBA plus margin. The underlying coupon quarterly payout were basically basaed-on the lending rate between bank, and hence depending pretty much on level of bank confidence and central bank rate. it is clear that libor’s movement indirectly proportional to central bank lending rate while speaking of central bank rate, we are in deep recession at the moment (with singapore the first country in asia officially in recession) where we are talking about not 1% growth, not zero growth, but NEGATIVE GDP growth.

Therefore bank all over the world, including UK, US, and japan are moving their attention to zero central bank rate which in return will bring LIBOR down along. what worry me so much now when the underlying coupon payment are highly depending on LIBOR, well just put it this way “if libor is at 3.5%, how can MS payout 3.5% to pinnacle series 15 holder???”. remember, the term of early redemption stipulates ” when the notes unable to meet its obligation” such as giving quarterly coupon, the notes is deemed worthless…

please click on below link fyi:
http://www.abs-cbnnews.com/business/10/10/08/singapore-asias-first-economy-recession
http://www.thisismoney.co.uk/libor
http://www.moneycafe.com/library/libor.htm

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jess says 10 years ago

Lioninvestor

Thank you. I will be there.

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MC says 10 years ago

I heard the news of Citigroup and it unsettle me. Will it go bankrupt like Lehman if US govt is not stepping in. Citigroup is asking for SGD 3 trillion which is enormous amount for US govt to step in. Will I lost all my Pinnacle series 15 investment that I bought in Citibank Singapore if they really go bust… 🙁

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    lioninvestor says 10 years ago

    Hi MC,

    Citibank is just a distributor of the product. A collapse will have no effect on Pinnacle 15.

    Reply
jess says 10 years ago

Hi lioninvestor

may i know wat time is the rally at Hong Lim Park on 29 Nov 08

Reply
    lioninvestor says 10 years ago

    Hi Jess,

    the time is from 5-7pm.

    Reply
P.I.N.S15 says 10 years ago

after reading ps-15 prospectus, i think i should just hang on the investment as term of investment is backed by short-term debt note by MS. the long-term prospect of the investment is higher in-term of security than those credit-linked pinnacle notes. the long-term notes give fixed coupon and treated like bond with capital protected. MS by now should have enough capital to cover its liability and MS stock performance in one year term stock drop 70% while Goldman sach drop 73% (better performance compare to GS with their diversified bussiness model). As notes investor, that should be enough reason for me to sit tight and USD700B bailout package should enough to cover MS’s liability to debt-holder like us. although market pretty bottom down right now, I hope Singtel will be back just in time.

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gerry says 10 years ago

Pinnacle notes series 15 indicative price is around 82% last check. You can check the indicative price every Friday with your bank and decide whether to sell or not. Let’s keep each other in touch here and advise one another on Pinnacle notes series 15. I myself had been very stress over this whole financial crises.

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pinnacle15 says 10 years ago

with alot of anxiety in the air, i think it’s still safe for pinnacle15 and 16. their underlying assets are based-on notes issued by Morgan stanley. their not buying into toxic CDO and swap, but into MS itself which received injection by MUFJ and US gov.

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ALICE says 10 years ago

Can you let me know what Mr Tan Kin Lian’s blog address is? I want to see his forthcoming meeting schedule at the Speakers’ Corner.

Thanks.

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wgu says 10 years ago

I am holder of Pinnacle Series 9. Can anyone please advise where in the Base Propectus is it stated:

1. The list of “Other Underlying Assets” ie. the list of 100+ entities which issued the CDOs.

2. The default and mandatory redemption threshold level?

I understand that at the time of closing of Series 9, there was still no such list, ie. it is not in the Base Prospectus. The list was only subsequently constructed much later.

Lioninvestor,

1. Is there a legal case against MS for intent to conceal, mislead and misreprsent by selling a product without fully disclosing the list of “Underlying Assets”, while deliberately highlighting only the 5 Referenced Entities (which are generally considered to be low risk), thereby camouflaging the actual risks?

What if MS decides to populate the belated list with toxic assets that it wants to dispose of at the expense of Pinnacle 9 holders? This is clearly fraudulent and criminal. What is MAS’ position?

2. If there is no mention specifically of the default and mandatory redemption threshold level in the Base Prospectus, is there a legal case against MS for selling an incomplete product that it can later arbitrarily decide on the threshold level? The playing field is clearly tilted in MS favour. If the threshold level is not in the Base Prospectus, can it be argued that there is intent to conceal, mislead and misrepresent?

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ping says 10 years ago

could like to know how about series 6????

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    lioninvestor says 10 years ago

    6 is in danger as there could be a mandatory event should more defaults take place.

    Reply
jess says 10 years ago

hi may i ask if jubilee series 8 which is arranged by Merrill Lynch has any underlying DSO basket of companies?

lioninvester could u advise me?

how about the pinnacle notes series 9? is there any confirmed outcome alr? is it true that there is really no possiblity of the investors getting back any amount of money?

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Dave says 10 years ago

I think the term “mis-sold” is a lighter term describing selling through “trickery” and “deception”… In another industry, this may still be condoned to some extent, but in the highly regulated banking sector ??!?

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    Kenneth says 10 years ago

    Mine is minibond 3.

    Since mid Sept, the frustration & disappointment are:

    MAS action: ask HSBC to work harder, ask investors to go talk to their FI.

    FI action: Contact 1-to-1 session with those investors who complaints. Delayed reply to complaints and refuses open forum requested by investors except DBS.

    RM/FA: Keeping a low profile, no future business with investors. Also admit they didn’t know product is so toxic.

    Investors: wrote to MP, PM, SM, MM. Petition to MAS, DBS. 4 rounds of Hong Lim Square gathering. Too expensive to go for class action while no creditible lawyer willing to take up.

    Outcome: Nothing while DBS High Notes, Jubilee, Minibond 5/6, Pinnacle 9/10 slowly liquidating.

    HSBC still working on it……

    Conclusion? Back to square one. Fighting a losing battle…

    Reply
andrew ng says 10 years ago

As you mentioned before Series 15/16 are USD floating rate notes.

Can please elaborate more on the floating rate notes.

Thanks

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    lioninvestor says 10 years ago

    Hi Andrew,

    there is no mention of synthetic CDOs in the entire pricing statement of pinnacle 15. So it’s not exactly in the same class as series 9,10, etc.

    Floating rate notes means the coupon on the notes is pegged to some standard benchmark. For pinnacle 15, the underlying assets has a floating rate note with an interest pegged to 1-month USD LIBOR – BBA plus margin.

    Reply
    andrew ng says 10 years ago

    Just got the latest update for Pinnacle Notes 15 is at 80.79% (Sing Dollars) from my RM at standard chartered.

    Reply
andrew ng says 10 years ago

Hi

Is it wise to call back the pinnacle notes series 15 now?

As I was quoted the price now is at 84.4% of my total investment as of 14 Nov 08.

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Hazel says 10 years ago

Morgan stanley website does not have information on series 15/16

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MC says 10 years ago

The interest for series 15 has been credited. Anyone can advise how to find out about indicative price for Series 15?

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    lioninvestor says 10 years ago

    Hi MC,

    You can request your distributor to check for you.

    Reply
lioninvestor says 10 years ago

MAS has provided some advice to investors who would like to file a complaint:

http://www.mas.gov.sg/consumer/other_structured_products/index.html

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lioninvestor says 10 years ago

More information at the Morgan Stanley website:

http://www.morganstanley.com/pinnaclenotes/index.html

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Ed says 10 years ago

PN 10 is Lehman-linked!

http://www.sgpolitics.net/?p=1207

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Peter Hor says 10 years ago

Is it advisable for me to sell off my Pinnacle Notes series 15?

What is the value of the Pinnacle Notes worth now?

Thanks.

Peter

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    PH MM says 10 years ago

    You should ask your RM who sold you on the recent value. It should be at 80++% from what i last heard.

    Reply
wan2know says 10 years ago

Hi, anyone bought pinnacle series note 2? was told credit events had occurred. Can advise me the value worth now or 100% loss. Tks

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Fury says 10 years ago

Were pinnacle notes sold in HK?

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Hazel says 10 years ago

Hi lioninvestor,

Kindly advise is floating rate notes credit linked? My RM told me that the underlying asset of Pinnacle 15/16–USD floating rate notes are senior unsecure debt. The word ‘debt’ worries me. I have no clue about senior unsecure debt. Is floating rate notes safe?

Reply
    lioninvestor says 10 years ago

    Hi Hazel,

    If you are holding 15/16, your main risk would be that of Morgan Stanley going under.

    The debt obligations refer to that of Morgan Stanley. ie they owe you money. Unsecure simply means without collateral.

    Reply
      Lostinvestor says 10 years ago

      Hi,
      do you mean that for note 15, as long as Morgan Stanley survives, the notes should still be safe?

      Reply
        pinnacle15 says 10 years ago

        indeed, as long as Morgan Stanley survives the notes will…

        it’s buying into USD floating rate notes issues by MS and MS is sound with investment by MUFJ and covered by 700B US bailout plan. In overall it won’t fall down as easily as other notes.

        Reply
Dave says 10 years ago

I m very very shocked !! I am from Singapore.

I bought into Pinnacle Notes Series 1 in 2006 through a local distributor bank after seeing its ADs, brochures and also through advise from the bank staff… They told me that Pinnacle Notes Series 1 was linked to the performance of 7 major Asian bonds but never told me about it being linked to CDOs… 2 days’ ago, they forward a “self-explanatory” letter from Pinnacle Performance Ltd to me although the contents of the letter was totally “greek” to me!!!

Only through my phone contact with the branch manager that I came to know that the product is linked to the CDOs and 5 “credit events” (what that meant?!) had taken place. Also, the “value” of my investment has dropped to 2% !!! Over the last 2 years, I was never once given information on the status of my investment with Pinnacle Notes…

My questions now :

1. Is this how foreign banks are allowed to “re-package” their products with fantasy offerings and make false claims to entice their customers to buy into the false claims ??!?

2. Isn’t this criminal ?

3. Can anybody comment on my recourse ?

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    Ed says 10 years ago

    What’s more “criminal” in my opinion are how Financial Advisors sold these high risk products unscrupulously to the masses under the idea that its all based on strong companies like SIA, Singtel, Temasek etc. and not told about the dangers from risky toxic CDOs.

    That’s criminal!

    Reply
      Dave says 10 years ago

      Yes. The so-called strong companies or Asian bonds are merely fantasy products that hid the fact that the real products driving the investments are the high risk CDOs… There is a disconnect between how even during harsh times, strong Asian bonds and companies are still thriving while the risky sub-standard CDOs have all gone under-water… Surely in doing so, the distributor banks have deceived their clients and should bare the full responsibilities of their actions by paying back every penny taken from their clients!

      Reply
        Ed says 10 years ago

        And the brochures the FA & WM gave us states “5.5% in bull or BEAR market” … what a joke!!!

        Reply
Intheknow says 10 years ago

just note… NOT ALL MORGAN STANLEY PINNACLE NOTES HAVE THIS STRUCTURE….

It’s like Merrill Jubilee notes.. Series 3 is dead.. but Series 8 is fine.. because they have different structures.

Jubilee 3 is credit linked.. and died.
Jubilee 8 is like a fixed deposit and as long as Merrill (in future BOA) doesn’t die, Jubilee 8 won’t die.

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    PH MM says 10 years ago

    Hi,

    This is the same for MS Pinnacle Series 15 too right?
    As long as Morgan Stanley does not default, notes wouldn’t go into default too.

    Reply
lioninvestor says 10 years ago

This looks like another can of worms after the Minibond and High Notes incident.

If there’s anyone of you who don’t mind sharing your story (can be anonymous) with the press, please let me know. Time for Pinnacle to be highlighted in the press.

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    Intheknow says 10 years ago

    This is yet another brand of credit-linked products going kaput. It’s actually quite interesting, all 3 brands have different problems.

    1. DBS High Notes 5. One of the reference entity has gone bust, thus the investor will lose their principal. This is quite clear cut.

    2. Lehman Minibonds. Lehman is not one of the reference entities, yet investors may lose their principal since Lehman was the Arranger and Swap agent. Not very clear cut, hope someone takes over Lehman’s duties.

    3. Morgan Stanley Pinnacle notes. The reference entities did not go bust, however a number of the securities in the Underlying Securities went bust. The Underlying Securities, in my opinion, were not highlighted sufficiently in the first few pages of the propectus (although it was mentioned somewhere in the thick prospectus). Unfortunately, it was indeed mentioned in the prospectus that should the Underlying Securities suffer a loss beyond a threshold (which has been breached now), investors will lose their principal. Legally, they are covered.. but morally…

    The above 3 actually highlight the 3 possible problems that could occur with a credit-linked note, and all 3 has happened!

    Reply
      jc says 10 years ago

      Hi Intheknow

      For CASE 3, if one was never given the “other” thick prospectus to made the purchase decision, is that legally correct?

      Thank you
      jc

      Reply
        Intheknow says 10 years ago

        Hi JC,

        It is a requirement for a copy of the thick prospectus to be made available to you.

        Unfortunately, when you sign the risk disclosure / subscription form, I am pretty sure there is a clause there that declares you have read and understood the prospectus.

        Thus, it’s going to be very hard for you to prove that you were not given the thick prospectus.

        Regards,
        Intheknow

        Reply
      lioninvestor says 10 years ago

      Hi intheknow,

      you are absolutely right.

      I was actually going to write a post highlighting this, but you beat me to it. 😛

      Reply
      Dave says 10 years ago

      If we go by the fact that there are some prints hidden within the prospectus that have never been brought to light through the sales process (i.e. advertisements) as well as the explanation of the product (i.e. prospectus and bank officer), then I believe there is still a strong case for a legal dispute… It’s akin to legitimately hiding facts about what is being sold and in the process, bet that the victims do not see the fine prints before they sign the dotted line or that the worst case scenario doesn’t not happen… One may ask how come parts of the product has been so blatantly exposed in the hard-sell process while some other parts have been so nicely hidden, never been raised at all …

      …Either way, a crime has been committed…

      Reply
      C S Lim says 10 years ago

      Dear in the know:

      Can you pls. point me to the page of Pinnalce Base Prospectus whihc specifically gives the “threshold” beyond which the principal is “gone”.

      I have read the Base Prospectus 10 times – and cant find the “threshold”. But I found the words on p. “A-1” -Description of first-to Default Notes – to the effect that the proceeds of a series of notes will be “invested in equal aggregate principal amount of original underlying assets”. (i.e. equal weighting)

      If they are equally weighted – say 100 names in the portfolio, how can just 6 defaults wipe out the rest of the 94 ?

      Perhaps , someone can explain the “voodoo” mathematics that is facing us all : 6 defaults and the rest of the portfolio is reduced to nothing? It will only be nothing if the 6 defaults happen to be weighted more than the 94 that did not default. That is simple arithmetic, isn’t it ?

      E.g. if there was $10 mln issued for a Series and there are 100 names in the udnerlying assets – each “asset name” will only be invested up to 1% or $100,000/-. If 6 defaulted- then only $600,000/- is wiped off and the rest still value – even if it is a lower “market value”. But they do not all become “zero” !

      The only way to get a satisfacotry explnation as to what and where our money went is the court. There befoer the judge they can explain and see if the judge understands the basic question : Where did our money go to ?

      Reply
    Ed says 10 years ago

    My mom’s afraid she may say the wrong things to the press and make matters worse, so she prefers to give it 2 weeks & see what’s the reply from Hong Leong Finance first. Good to hear we have avenues in the press for airing the problem. 🙂

    Fyi, she wasn’t given the prospectus, nor told of so-called “underlying assets”, but just shown a few pages of the prospectus and assured that the reference entities are all very safe and worse case senario will be only a 5% loss.

    Totally mis-sold!

    Reply
Ed says 10 years ago

My mother got the “biggest birthday surprise” today when her FA greeted her on the phone with a “I think you’re gonna lose every cent of your $100K investment in Pinnacle Note 10”! She really has some birthday luck!!!

Fact is, she’s almost 70, primary educated, and only heard this bank’s wealth manager telling her Pinnacle Notes are the safest kind of investment, based on stable bonds like SIA, Kepple Corp, Singtel etc; and that at most, she’ll lose only 5% of Principal value … of course, she’d be fooled into buying the notes rather than putting into FD!

Only today then she got the letter with Morgan Stanley stating that the notes will be worthless soon due to its links to some credit-hit only-God-knows “underlying assets” like Lehman, Fennie& Mac etc. … (What the ???? is going on???)

This is definitely MIS-SELLING!

My mother should be fully compensated!

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David says 10 years ago

I just got a call from my FA with the most dreaded news from Morgan stanley. Its a total loss. Besides getting repeated apologies from her, what else can I Do? It was suppose to be a safe investment. “highly unlikely” to lose the principle kind of thing. What happened?

Reply
    jc says 10 years ago

    do something for yourself and ask for justice!

    Reply
    lioninvestor says 10 years ago

    Hi David,

    Sorry to hear about the situation. May I ask which series is it?

    Reply
Lyn says 10 years ago

hi,
do u hve any idea what is the px of Pinnacle Series 6&7 ? my friend a retired sch teacher bought into this quite heavily and the usual comment is she went there to renew FD and was informed this is like FD….
I searched the whole web but couldnt find any pricing.

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    jc says 10 years ago

    dont count on the price. the bid/offer price is depending on the credit spread. chances of CDO (only Gods know what this is) default will be high.

    File your complaint please.

    Reply
Intheknow says 10 years ago

Don’t worry about a slight delay in the crediting of the interest.

It can take up to 7 working days from the official payment date.

The payment date is when the Issuer effects payment to the Custodian Agents. There is maybe 2 working days delay already. Then the Custodian Agents take sometime to credit your account.

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Pinnacle 9 distress says 10 years ago

Hi there

Anybody bought Pinnacle 9? Latest update from FI is that it is on the way to Mandatory Redemption event and could face a TOTAL loss.

Any kind soul to advise? Should I complain as I only get to know about the CDOs default will cause Mandatory Redemption event and loss principal.

In distress now!!!

Reply
    lioninvestor says 10 years ago

    Hi pinnacle 9 distress,

    unfortunately, your worst fears has come true. You can file a dispute if you felt you were mislead about this investment.

    Reply
Chua says 10 years ago

Hi

Pinnacle Notes series 15 & 16 are expected to pay the interest on 5 Nov 08 but the interest has still not been credited in my bank account yet.

Has any other investors encountered such a problem?

Thanks.

Reply
    chong says 10 years ago

    Nothing yet.
    Do you have a copy of the fact sheet?
    I seem to have misplaced mine. Maybe I did not receive one to start with.
    RM who sold me the product has left the bank.

    Reply
    chong says 10 years ago

    Hi Chua,

    RM from Citibank says interest has been paid out for Notes Series 15 & 16. Have you received yours?

    Reply
Fury says 10 years ago

Is pinnncle series 2 also linked to a basket of underlying securities? If yes, how many of them already default?

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chong says 10 years ago

Hi lioninvestor,

Any news about pinnacle series 15 and 16?
Guess it is probably the same as for MLJS8. If Morgan Stanley does not go bust, principal is still not affected, right?

BTW,
Like to say once again, I can get much more info from your website than from anywhere else including the RMs and financial institutions who pocketed all that money selling us these products. Guess they will still be enjoying the fat bonuses gotten from the past 1-2 years while the clients may be losing sleep over their retirement funds etc.

A sincere thank you.

Reply
    lioninvestor says 10 years ago

    Hi Chong do you have the factsheet of Pinnacle 15 and 16?

    Every series is different.

    Thank you for your feedback.

    Reply
      lioninvestor says 10 years ago

      The underlying assets of Series 15 and 16 are floating rate notes issued by Morgan Stanley. No toxic CDOs or CDS there.

      Reply
        Andrew Ng says 10 years ago

        I have brought pinnacle notes series 15 some months back and also receive the interest payout recently but as you mentioned that the notes are “floating rates notes”

        Can you please explain what is “floating rates notes”

        My RM mentioned to me something about Singtel.

        I hope you can tell me more. Thanks

        Reply
        lioninvestor says 10 years ago

        Hi Andrew,

        there is no mention of synthetic CDOs in the entire pricing statement of pinnacle 15. So it’s not exactly in the same class as series 9,10, etc.

        Floating rate notes means the coupon on the notes is pegged to some standard benchmark. For pinnacle 15, the underlying assets has a floating rate note with an interest pegged to 1-month USD LIBOR – BBA plus margin.

        Reply
kilo says 10 years ago

Hi lioninvestor,

I have invested on the pinnacle notes series 15. Any information regarding this notes status ?

Reply
    lioninvestor says 10 years ago

    Hi Kilo,

    The best way would be to get the latest information from your distributor. If you do get anything new, I would be appreciative if you could post it here for all to see too.

    Reply
Lay says 10 years ago

hi….sorry, let me re-phrase my question – anybody here has DBS High Notes Series 1. What’s your take on it so far….unsure if I should cash out. But I stand to lose out a part of it if I cash out now.

Reply
Lay says 10 years ago

Hi, does anybody have information about the 100 reference entities in relation to DBS High Notes Series 1?
Many thanks,
Lay

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Chan J C says 10 years ago

Please read on this update… This is positive to MS:-

http://sg.news.yahoo.com/rtrs/20081011/tbs-morganstanley-fed-7318940.html

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Very Sian says 10 years ago

plse can u tell me what the latest value of pinnacle 5? i may consider to sell it..plse advise me.

Reply
    lioninvestor says 10 years ago

    Hi Very Sian,

    You can check with your distributor on the latest buy-back price.

    Reply
James says 10 years ago

How serious is the pinnacle being affected? I would like to knw more about the pinnacle series 8, how can i found out more?

Please help….thks

Distress Investor

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jess says 10 years ago

Oh, just saw the Pinnacle Notes banner stick on TV news for the Hong Lim Park gathering.

All along, I only thought the Lehman Bros minibonds (which I didn’t buy) were in trouble as featured on earlier news, was shock that my Pinnacle Notes is high risk ?

I bought Pinnacle Notes (series 11) from my Maybank regular Relationship Manager in November 2007. I’m a low-risk saver and only want Principal-Protected investment, thus was being recommended Pinnacle Notes. Never get to read any thick T&C, only have the Brochure in my file, that bold “Principal-protected if held until maturity “. There’s some fine prints below, too fine for my eyes to see or understand…. oh no… I’ve been mis-led…
the Relationship Manager already left the bank a few months back.

What can I do now ? Wait for things to happen ? or make a record with what department ?

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VerySian says 10 years ago

Can someone send to me the “Q and A issued by Merrill Lynch” on CIMB’s website. I can’t find it at all. I have invested in this Pinnacle Notes. Thanks.

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janna says 10 years ago

Hi there,

Do you by any chance know the ISIN number for this pinnacle notes.
thanks

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Peg Loo says 10 years ago

Thanks for the update. You have done a greater job than my FA who has not given me any assurance since the saga about the minibond and pinnacle notes started.( I am a victim of both products and only now then I know they are called structured products )
Thanks again.

Reply
    lioninvestor says 10 years ago

    Hi Peg,

    You are welcome.

    Reply
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