Martin Lee @ Sg
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Six Brokerages to Compensate Vulnerable Lehman Investors

In a joint statement issued by the Securities Association of Singapore (SAS) yesterday, the six brokers namely, CIMB-GK Securities, DMG and Partners, Kim Eng, OCBC Securities, Phillip Securities and UOB Kay Hian, said that they were prepared to buy over the Lehman-linked investments at cost from vulnerable investors.

CIMB-GK has gone one step further and said they will buy back Lehman Minibond Series 3, 5 and 6 and Merrill Lynch Jubilee Series 3 LinkEarner Notes at the original investment amount, irrespective of interest earned. The scheme will first apply to vulnerable investors.

The coordinated timing of the announcement meant that the decision was something that was brokered behind the scenes. It’s a complete turnaround based on initial feedback given by some of the investors who have gone to meet their securities firm. Some of them were earlier told that the firms only provided a transactional service (like buying/selling shares) and did not provide any financial advice.

This move to make compensation has somehow become necessary with increasing pressure from the public. The gathering at Hong Lim Park, parallel events unfolding in Hong Kong and subsequent press coverage must have played a role in influencing the government to apply “pressure” on the financial institutions to “do the right thing”.

Surely, this is a much better arrangement than asking every investor to lodge their individual complaints with the financial institutions? The original insistence by MAS that “they cannot ask financial institutions to make compensation” now seems like a thing in the past.

Non-vulnerable investors continue to await their ‘fate’.

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3 comments
Ahthong says 11 years ago

Maybank said they will look into the ‘vulnerable’ category carefully. My mother is in this category and after the meeting with them, they told her that they will look into her case and get back to her only 4 weeks later. And they made it clear that only ‘deserving’ customers will be compensated. So my question is, is there an ‘undeserving’ category in this vulnerable group? My mother is above 65 and had no more than primary school education. Maybank was real quick in jumping on the bandwagon of DBS and these 6 brokerages in trying to give false impression that they too will compensate the vulnerable group. And now this ‘only deserving customers’ lame exclaimer. So convenient of them. Who knows how many percent of these vulnerable investors really get compensated in the end, 0.1?

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Ahthong says 11 years ago

Maybank said they will look into the ‘vulnerable’ category carefully. My mother is in this category and after the meeting with them, they told her that they will look into her case and get back to her only 4 weeks later. And they made it clear that only ‘deserving’ customers will be compensated. So my question is, is there an ‘undeserving’ category in this vulnerable group? My mother is above 65 and had no more than primary school education. Maybank was real quick in jumping on the bandwagon of DBS and these 6 brokerages in trying to give false impression that they too will compensate the vulnerable group. And now this ‘only deserving customers’ lame exclaimer. So convenient of them. Who knows how many vulnerable investors percent really get compensated in the end, 0.1?

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harry utama says 11 years ago

I have heard lots of DBS High Notes and other Lehman linked investment prodcuts sold by DBS, but nothing was mentioned of DBS Credit Linked Notes on 10 Global Financial Institutions (SGD), wherein 1 of the 10 Financial Institutions is Lehman Bros.
I am the holder of such notes and to may great dismay had been informed by DBS that I would be lucky if I could get a recovery of 8c to the $, in the form of another Bond as opposed to cash.

Considering that this CLN had sufferred the same fate as the other Lehman linked structured products, I do not seem to note any comments or complaints from any of the holders of such notes.

Your viewers’ comments and input would be highly appreciated.

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