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I have signed and provided my details on Mr Tan’s blog, only 71 signatures. Please my fellow brothers and sisters, if you truly want you money back, plse go there and fill in your particulars. Don’t be afraid, it’s your hard-earned money. The details will be submitted to MAS for investigation. Mr Tan is very kind to stand up for us, if we don’t support him, in the next crisis victims will have no fan for themselves.
I think most of us had signed on another petition that has more than 1,000 signatures but I guess they have no personal details.
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Many may not be aware there is another petition going on. They may be confused it is same as the one they just signed. We will need to help spread the awareness.
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I believe most of us will attend Mr Tan’s speech at Hong Lim on 11 Oct ? Why not gather there and find resolutions. We have to help ourselves !
Steve, I have sent you an email. Pls contact me . Thanks !
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Investors accuse BoC of “conspiracy”
04-10-2008
The English verison:-
Dozens of investors in the collapsed US finance firm, Lehman Brothers, have accused the Bank of China of conspiring to defraud them. They said the bank had sold them Lehman products and were now refusing to discuss their complaints with them. A group of about 50-Lehman investors gathered outside the Bank of China headquarters this morning in a bid to find out what was to happen with their investments. They began protesting when staff and security refused to let them enter the bank’s premises. There were minor scuffles as some tried to force their way inside, claiming the bank had reneged on a promise to discuss the matter with them. The group them marched to police headquarters in Wanchai where — they said — each of them made a complaint, accusing the bank of a conspiracy to defraud. Leung Kwok-hung, of the League of Social Democrats, who’s assisting the investors, said he hoped the government and police would investigate.
Regards,
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雷 曼 苦 主 與 中 銀 保 安 對 峙 再 遊 行 到 警 察 總 部 報 案
2008-10-04 HKT 13:11
數 十 名 購 買 了 雷 曼 相 關 產 品 的 市 民 ， 到 中 銀 總 行 ， 要 求 會 見 銀 行 代 表 ， 被 保 安 人 員 阻 止 進 入 ， 場 面 一 度 混 亂 。
銀 行 職 員 其 後 容 許 5 名 代 表 今 日 與 銀 行 開 會 ， 下 星 期 一 才 與 每 位 受 影 響 客 戶 會 面 ， 處 理 他 們 的 訴 求 ， 但 代 表 不 接 納 。
數 十 人 在 警 方 協 助 下 ， 由 中 銀 總 行 步 行 到 軍 器 廠 街 警 察 總 部 報 案 ， 表 示 要 控 告 中 銀 訛 騙 。
他 們 要 求 中 銀 ， 退 還 購 買 債 券 的 本 金 以 及 已 簽 下 的 文 件 。
http://www.rthk.org.hk/rthk/news/expressnews/news.htm?expressnews&20081004&55&527719
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I just known this bad news from paper. Please give me a piece of advise that what should I do now?
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Bill,
You might want to read this:
http://www.martinlee.sg/how-to-file-a-dispute-for-structured-product-victims/
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A friend of mine has an invitation to meet with MAS on monday at 18.30 and ask to bring 2 other investors. I would like to invite Kenneth, engel or anyone who is knowledgeable about this Minibond fiasco to join me for the meeting. You can reach me at [email protected]. I propose we meet at 1715 Hr to discuss the topics to discuss with them. Pls drop me an email if u are interested.
ReplyI think is the same group of 17 victimized investors who sent in a petition to PM and cc to SM. The meeting is in MAS at 6 pm while they are meeting an hour earlier to discuss. Mr. Lo, a retiree, is the main contact person. Do see the Posting at “Think is there Hope for Minibond Victims”
As mentioned by lioninvestor, they are unlikely to meet any big shots i.e. PM, SM or MD of MAS. Just officials of MAS. I believe they will give us an update.
Well, if they can continue with the foreign works domintory even after the residents protest, I don’t see any different on the above i.e. follow law by law. When Credit event happens, whether it is mis-spell, mis-rep, liquidate and say bye-bye to your investment be it hard earn saving, parents’ saving, children education saving, your saving, baby saving…etc.
Let’s continue to update each other on keep the issue alive and hope the Hong Kong FINANCE CHIEF does it differently and correctly….
Regards,
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Phillip Security using their remisier to sell the minibond. Are they violating the law? These remisers are not FA.
ReplyUOB Kay Hian was also using their brokers to sell the minibonds. These guys have no interest to explain anything to you but just focus on getting the form filled correctly and payment completed.
MAS should really disallow this. It makes it as simple as buying a very low risk products like REAL bond or opening a FD which is extremely misleading and makes investors think these are safe products.
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I have bought minibond from Philips online (POEMS), any advise on how I can contact them ? Being an onlne product, there was no personnel associated with the transactions. Do I have grounds to lodge complaint ? But somehow, I still feel misled by the sales materials online.
Replyhuang,
I think you can find experiences posted from others in this forum that may be applicable to your case. From what I think:
– are you misled by the on-line information or any of their marketing materials, misled by the name minibond which is not a bond, etc
– is on-line sale acceptable for a high risk product like this? One expects only the safe investment to have such a simple sale process, eg. you can ATM transfer money to FD. Since these are complex, high risk it is not appropriate for POEMS to sell this way
– are prospectus and pricing statement provided to you before the sale, if not how to understand the true product nature and risks?
– did poems provide any contact that you can call to check your questions?
– any indication at all about the product risk?
– any check of your risk profile?
You can search other posts to see if they apply to you
ReplyENGEL,
I wrote to all 3 already, got use or not ? See what i get above. That’s why i said only GOD can help us.
ReplyENGEL,
U are lucky. I send email to 3 Ms. then finally MAS sent me an email with the numbers that I can call for ENQUIRY. But MAS did spell out to me that they cannot get the FI to compensate us, not at all.
KH did not reply me on why the $ went into CDOs, instead of those bonds advertised and why we not informed there is such a basket of 100+ CDOs that $ was going into. If we don’t know where the $ go to, how can it be a fair transaction? This is an important point u can highlight that there was indeed mis-representation if u meet SM and PM. It’s fraud also i think, like trying to cheat someone to buy a 1.5 lit car but tell them it’s a 1.6 lit.
For the FI, if they are not going to discuss compensation, then don’t waste time. In the end, they will just push to LB. Then u hv to look for FBI in the US to get yr $. The circle gets bigger..
Kenneth,
The meeting with SM and PM are by invitation only? It’s the last chance we have to get back our $ i think. If those attending chicken out again last minutes because of fear of kanna blackmark, we can kiss our savings good bye and full stop.
ReplySM and PM won’t be there.
Just a meeting with some MAS officials.
ReplyI think it is important to discuss the topic of compensation during the MAS meeting. While we understand the cannot enforce the FI to pay compensation, perhaps we can review other ways that MAS can help “encourage” or “facilitate” compensation?
Individual action by investors will be difficult as they faced the giants while law suits can be messy and damaging to both parties.
I hope the attendees can share an update of their meeting with us, appreciate it very much.
ReplyToo trusting? Don’t blame yourself, you are only human. The job of FA is to bridge the product to the customers.
Hope tomorrow will be better….
ReplyENGEL,
I rec’d the letter yesterday from KH (just a cover letter) and some attachments from ML with complicated sentences that i cannot fully understand. Basically, the message is “ZERO or close to ZERO”, be mentally prepared when you see the final number$. I can accept if i lose 20% since LB collapse, this is the risk we hv to take but not ZERO return !
I’ve have done all i can, I also wrote to ministers but no response from them at all. I left my hp number, nobody call me to understand the problem. How???
BTW, my HR friend said she rec’d several job application letters from FAs these 2 weeks (after LB burst). One said during interview that he resigned because he felt bad lying to people that those “bonds and notes” offered much higher returns than FD, and are backed by very big & safe companies you see in the marketing materials, etc….. I didn’t sit in the interview so i cannot comment further. Just beware if you hv to hire from finance industry, their integrity, why he/she resign only these 2 weeks & in such a short notice, Dec bonus is just around the corner. Those were the questions i asked my friend to think about before making a decision to hire. If only we can get those FAs to testify, then the truth will surface. But I doubt anyone dare to take such a risk.
VerySian,
Just got a call from Phillips Capital/ Securities, saying that their Mgr wants to meet me for a discussion on my complaint next Tue. Asked her for the agenda, else dun waste my time there. She claimed needs to check n revert back.
Anyone here meet up with FAs before ? Pls share your stories here.
Fyi, I met up with GYC MD last week, just trying to push the ball away to OCBC Sec and claimed I signed on the dotted lines again blar, blar, blar …. all the shits ! Ask for a copy of what I have signed, as I do not remember the Adviser sent me anything other than the receipts of my cheque, till now also no news ! Wonder is Phillips Sec going to tell me the same shits also !
ENGEL, you must be a big investor with Phillips Securities. I sent complains to them last week and got no call to meet their mgr. Maybe my investment is PEANUT to them.
If not, then it is that they have a long queue and in order to satisfied the independent committee, they have to meet everyone. So I guess in the meeting it is more like – if not happy with our answer, please go to FIDRC to file complaint as suggested by MAS.
Heard some lioninvestors who sent in a petition to PM Lee last Friday. They are having a meeting with SM and PM on Monday at 6 pm but will meet at 5 pm to discuss. Venue is MAS. Only seven allowed.
I think is under the posting of “Think is there Hope for Minibond Victims”
ReplyI bought the minimum for Jubilee S3 but that was my mum’s savings. That adviser was formally from GYC that I placed a huge amount on Minibonds & Pinnicale. Most are my mum’s “coffin” monies. Too trusting to the same Senior Adviser !
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Phillip Securities is famous for saying since you already sign on the dotted line… you are screwed. (well, not exactly in the same words… but with the same meaning). I remember the downtime early this year when their system went offline and nobody could trade and that boo boo cost me thousands of dollars. No compensation from Phillip Securities. They said I signed on the dotted line freeing them from blame for technical hitches.
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Anyone wishes to contact Prime Minister, here is the contact:
E-mail address: [email protected]
Mail: Orchard Road Istana Singapore 238823
Fax: 63328983(PM) 67324627(SM) 67345244(MM) 68356621(General Office)
ReplyAlready wrote to the father but no news …. guess may have to try writing to the son.
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Would somebody read this article and summarize your interpretation, my english is not good enough to understand all these words that why I was corned into buying the Minibond:
http://www.nutter.com/publications_events.php?NewsID=730
ReplyDesperate,
Basically, it talks about the treatment for unwinding any outstanding swap agreements with Lehman Brothers.
The article is way too technical.
It’s something for HSBC Trust to unravel.
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Hi,
Any lawyers here to advise whether we have a case to take the banks to court? What are our chances?
It seems clear that MAS nor the govt will not be taking action to help us get compensated.
I am totally disappointed on how this was handled by them.
Let’s face it. In life, if we want to get things done, we got to do it ourselves.
However, for now, the Minibonds series have not defaulted yet. We are not clear how much loss we are facing.
So we may still need to wait in order to get legal recourse.
Any legal advice?
ReplyENGEL
I also hv Jubilee 3, just rec’d a letter from Kay Hian to inform my return will be ZERO or close to ZERO.
Ya, what the hell, i thought the money went into the 7 blue chip companies and banks. But it seems to me that they went into those 120 CDOs that none of us know about. Is this not mis-representation?
I hope Mr Lee or Mr Goh will hear us and give a serious thought as if this is their money, or from somebody’s life saving.
Even if Lehman collapse, it is only 1 entity, one would expect to lose at most 20 % (1 out of 6), how can one lose all or almost all? This is really the biggest cheat i ever encountered so far.
VerySian,
I cannot accept “zero” value as what you mentioned only 1 of the entity go bust after just one and a half yr placement. So far I have received no info on this “bond” but rely on this blog for info … have you lodged complaint to Fidrec ? I intend to do so now …. those independent parties will take very long and since appointed by the FIs, may not be fair. Anyway, their findings is not to compensate us.
Dear All, read carefully that these independent parties results, even if found that FIs did mislead us, the most MAS is to “fine” them …. not helping us for compensation of losses ! Then how, it just make MAS richer with these fines ! Looks like we have to go via the legal route if we were to claim back our hard earned $$ !
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I am wonder how they collate/process the complaints, as not all investors(know how/where to) file their complaints?. Is it base on banks or FI provide the compilations(of complaints) to the 3 respected individuals to oversee, investigate & analyse.? Will the 3 individuals call up all investors to gather the feedbacks or complaints (they can get it from the CDP accounts). If they are doing so, then it will be more transparent & thorough in their investigation. Hope this will not be another grey area which we investors have to bear with again. Hope they are fair in their review.
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I have no confidence with all the FIs and what even they called…. do they really do a fair deal…. fair to them may not be fair to us…. it is just to show they are doing something… .but to investors, our main worry is our $$$, what will happen to our hard earn money…., some how no mentioned about how they are going to compensate if they found if there is misrepresentation by the FIs… to assure the affected investors… they simply don’t care…
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I have just written to the bank that sold me the minibond and have tried to cc a copy to MAS. The copy to MAS was rejected and returned to me, the explanation given being that it was not addressed to a particular person/department (I had indicated ‘to whom it may concern, re: Minibond series’). Anyone know the person/department in MAS i should address the letter to?
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Hi Worried,
pls cc the following:
MAS – [email protected]
FIDREC – [email protected]
So far, I complained to GYC/OCBC Sec (addressed to a person’s specific email address) and HLF (to their customer care – no specific person), I only have acknowledgement from MAS for GYC/OCBC Sec email and not yet received any ack mail for HLF case.
ReplyJUBILEE S3 – The Securities are notes whose performance is credit-linked to a pool of 120 Underlying Reference Entities ??? What the hell is going on here …. we were told only the few entities in the brochure.
Anyway, heard that 3 reputable independent parties are already appointed today in CNA. Wonder will they be fair in their assessment as MAS should be appointing then pushing them to the FIs to appoint them !
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See this thread for CMU.
http://www.moneysense.gov.sg/resource/news_events/news_archive/2004/CMU%20AR2004.pdf
I am confident our government will get justice for us. Just give them 2 weeks’ time, till 15 Oct 08.
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Dear Hope
I hope you are right but where did you base your confidence on? How did you get the date 15 Oct 08?
Pls advise, thanks!
ReplyNew statement from MAS.
Please read and post comments over there as this post is already quite long already and takes longer to load.
Click here to read MAS Statement
ReplyHope,
If u are lee or goh, i will thank you from the bottom of my heart and i believe everyone here will. And this will be long remember in s’poreans mind, election or no election.
If u just want to console us, don’t but thank you. Some people may commit sucide if u build their hope now and later it burst again. But we still hope u are correct.
They protect only big businesses, not all businesses. So that can claim credit for “Number 1 in …”, a lot of publicity and very proud also.
But forget whether the people under their care will rate them as number 1 or will spit ? I don’t remember there is such a leadership style in harvard business textbook or management books either although i didn’t go to harvard so i don’t know what to call it. I guess we don’t matter until election or may be one day the recent happenings in kl and penang happen here. After this incident, if we don’t get a fair treatment, u think we still dare to invest or trust the banks. When words gets around, the uncles, aunties and friends will also not invest. What’s the point of having all the big banks here, who do they sell to? It will have repercussion and it’s a vicous cycle.
MISS INFORMATION BY ABN AMRO THR SELLER OF MINI BOND 3 TO ME. INVESTED USD 100,000.00 + S$ 100,000.00
NOTHING WAS EXPLAINED, SORRY TO VERY BAD ON PART OF THE BANKER TO WALK AWAY FROM THIS
G P SINGH
ReplyI am very confident MAS and government will do something. I trust they do care about average citizens who invest between 5K ~50K.
Do Not Worry.
You will see your money. And it is likely to be 100% of the principle. I am very confident of our government.
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I think Sg has a choice to make here: pro-business or pro-investor..
By being more pro-business (compared to HK, even US, Europe etc),
more banks/financial instititution will come to Sg.
Maybe more companies will come to Sg to setup HQs or even register their companies here. Think about offshore financial centers like Cayman Island etc.. Many companies/funds like to register there.
Congratulations Sg, I guess next year and the years to come, it will continue to be #1 in rank of Ease of Doing Business..
All the banks and Financial Institutions will for sure vote Sg as #1 in Ease of Doing Business. It may even be THE Financial Hub as Wallstreet, Europe is down, HK goes towards pro-investor..
Latest Merrill update on Jubliee 3 Series. 2oct 08
Q7. Can you provide more information on how the Credit Event Redemption Amount is calculated?
The Credit Event Redemption Amount is calculated in accordance with the formula described in the Pricing
Statement. See also Q3 above. The Credit Event Redemption Amount is based (among other things) on
the amount realized on the sale of certain debt obligations of Lehman. Because Lehman has filed for
bankruptcy, these Lehman obligations are trading significantly below their face value. Generally speaking,
these Lehman obligations are currently valued below 20% of their face value. This amount will be further
adjusted by (i) any loss in the liquidation of the Securities (see also Q8 below), and (ii) any termination
amounts due or payable under the swap, to arrive at the Credit Event Redemption Amount. Based on
current market conditions we expect the Credit Event Redemption Amount to be zero.
Q8. Can you explain what the Securities represent and whether there is a loss in value in respect of
the Securities?
The Securities are notes whose performance is credit-linked to a pool of 120 Underlying Reference Entities.
The current U.S. financial crisis has led to unfavorable market conditions in the broad credit markets which
has led to a significant decline in the value of the Securities. The liquidation proceeds of the Securities will
likely be significantly less than the face value of the Securities.
Kenneth, election is still far away. I have tried writing in as suggested. I asked them why the money raised was not used to buy those good and solid corporate bonds and notes but went into CDOs. All they say is plse read the risk clause in a polite way and your signature is there. So how? Sue them over $50K?
Really very sian like my name, a “first” world country like S’pore so difficult to get justice, have to write time-wasting letters, lodge police report, lodge report with Fiderc, write to MP, write to FI, etc, etc. Is there going to be any use at all, lest we all die of exhaustion or depression from doing all these. Where’s the justice? Who cares here?
I just received a letter from Kay Hian (2 days after I filed the complaint to them and Mr Goh) that my Jubilee 3 likely to get ZERO$ back. I heard one PR lose $1M, I bet he’s going to pack up and go home to tell his fellow countrymen what kind of reality he encountered here. Very sad that my beloved country becomes like that in just a few decades, compare to the 3 countries up north. I have done everything (procedures) as suggested by Mr Tan and some of you here. May be it’s time to pack up and go like my friends. The irony is I was trying to persuade them not to migrate, just 2 years ago but they still go afterall (cowards???). I feel like slapping myself now. Sigh…
Same, same here. Mentally already wrote off the lost but want to work together to hope for some good outcome. By writing off now, it will relief lots of stress. Anything from here will be bonus.
Today CNA reported that Hong Kong Govt is meeting with banks on the mis-selling Lehman bonds.
Let’s hope all the progress in Hong Kong can encourage the Sgp govt to adopt a fresh approach.
Regards,
ReplyI am sure by now they know the seriousness and how wide spread is the problem. This is especially embrassing when Hong Kong is reporting settlement out of court while the govt is still mute about it except for a statement from SM. Hope they will make a second statement soon.
Usually when there is a statement to be made, someone will speak, follow with a few more MPs or cabinet. Finally PM will speak. This time only SM speaks and no immediate followup.
Very disheartening to see that no MPs or Opposition is standing up for us. We just have to do it alone. Very sad indeed.
Regards,
ReplySg,
Thanks. I will lose big on Minibond 5 if it liquidates next week. I hope petition will move PM Lee to act fast.
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to all the brothers here we must act fast if not after some time the whole matter will be lied down and we will have no more advantage already !!!!!!! what is MAS doing ???
ReplyHere is what Henry Paulson, US treasury secretary said about these toxic waste.
He said from emails retrieved from Lehman as far back as 2 years ago, they knew that these CDO are rubbish and they need to get rid of them quickly….
The scale of devastation is worse than China milk power!
If only America hanged these criminals like what China do if they are caught.
ReplyHere is what Henry Paulson, US treasury secretary said about these toxic waste.
He said from email retrieved from Lehman as far back as 2 years ago, they knew that these CDO are rubbish and they need to get rid of them quickly….
The scale of devastation is worse than China milk power!
If only America hanged these criminals like what China do if they are caught.
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Can I ask how do I send my mail to CEO of maybank?
Does anyone have an address and name?
Thanks
2 Battery Road
Maybank Tower
Singapore 049907
Country head is Pollie Sim
ReplyNo problem. All of us are in the same boat.
I only hope we are given a fair hearing.
It will be especially hurtful if we realize the DBS [Hong Kong] settled out of court but DBS [Sgp] refuses to do it in Sgp. Then the message will come across to be very confusing i.e. Singapore victims of Lehman ok to settle in court while Hong Kong situation better settle out of court as the business is in another person’s country.
Hope local authorities are mindful about what is happening in Hong Kong. As of now, still have nothing from MAS or the press.
ReplyIn doubt will get help from MAS, as in the 1st place they should not approved such products to be sold to retail customers. Till now, they are dead quiet …. or are they taking the chance that Singaporeans will not dare to act and the things will died down after a few months ?
ReplyI posted the below at the Post “Is there hope for Minibond Victims”. Thought you may want to read. From Hong Kong The Standard. They are doing a great job for their troubled investors.
Banks in `secret’ deals to avoid Lehman suits
Bonnie Chen and Alfred Liu
Thursday, October 02, 2008
Three banks are secretly negotiating with angry investors to prevent being taken to court over the distribution of Lehman Brothers minibonds, according to sources.
They are among 21 banks and financial institutions with exposure to Lehman Brothers investment products but which are said to have only a few investors and prefer a settlement rather than a court case.
According to the source, the banks involved are Dah Sing Bank, DBS Bank (Hong Kong) and Mevas Bank, which is part of the Dah Sing Banking Group (2356).
Democratic Party vice chairman Sin Chung-kai confirmed yesterday one minibond investor had asked the party to cancel his complaint as he had accepted a settlement offered by Mevas Bank.
“The man has not given us details but said the terms were acceptable,” Sin said.
But two other Mevas customers, identified as Chu and Chan, said they had not been contacted by the bank as yet.
Dah Sing Banking Group declined to comment, saying its staff were on holiday.
The Democratic Party has received 2,300 complaints on Lehman Brothers-related investment products involving more than HK$1.1 billion.
“I believe the small and medium-sized banks have fewer cases to handle so they are prepared to reach a settlement,” the party’s newly elected legislator, Kam Nai-wai, said.
Chan Kam-lam of the Democratic Alliance for the Betterment and Progress of Hong Kong, which has received 500 complaints, said he had not heard of any bank reaching a settlement with clients.
The Hong Kong Monetary Authority, which is investigating marketing practices concerning the products, said it would welcome moves initiated by the banks. “But we will continue the investigation even if the banks have reached a settlement with clients,” an HKMA spokesman said. “So far no bank has informed us about any settlement.”
The Securities and Futures Commission said it believed Lehman Brothers had arranged HK$12.7 billion worth of structured products.
The Democratic Party has said it will help investors sue the banks while the Consumer Council has promised a thorough probe and the use of its legal fund to help those found to have been misled.
ReplyThank for the posting Kenneth.
It just show the difference between MAS and that from HK and Taiwan.
One way to pressure MAS to take action is to forward this article to local and international media to broadcast the inaction of Singapore MAS and also make aware if MAS does not take action to protect our citizen interest, Singapore would lose credibility as a Asia Financial HUB.
Would the persons who have contacts with the local media and the person written to MM Lee take up the suggestions?
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We noticed that while many interesting suggestions were posted on this forum with regards to the resolution of the Minibonds issues, we have not seen anyone going any further (other than talking). We are just wondering if there any brave and selfless people from this forum who are willingly to volunteer & lead and not just sit back and wait for others to take action on their behalf ?
ReplyHi all,
I have bought from HLF for minibond and pinnacle. Can i check whom can i send my complaint letter to ?
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sg,
You can attention your letter to CEO:
[email protected]
[email protected]
[email protected]
MP (do a search on line, they are listed)
If you don’t cc to MAS, FIDRec and MP, then you will get “We understand your concern …. Please be assured …” type of useless reply with no substance. Copy the authorities and you will get a prompt reply that they will start an investigation
ReplyTry to send printed letters and not email if possible. You want the letters to reach the top.
ReplyDesperate, as far as I know, only purchase of insurance products have “cooling” period. Does this apply to these “bonds” as well ? I am not aware at all.
ReplyDear All, I have read Mr Tan’s blog advising those who felt that the have been misled or “cheated” to lodge a police report. From then, I started to realise that all that most of us have not got the prospectus but only receipts after signing. Is there a case here ?
ReplyI got the same reply as VerySian from GYC … worst still, they pushed me away to OCBC Sec, saying that GYC only earn very little commission as they are introducer to the “Bonds”, FI should be OCBC Sec. Then why MAS ask me to write to GYC who recommended me those products. We are just like a ball being pushed from one court to another ! Btw, anyone know about today’s meeting at Toa Payoh MRT to sign petition to PM ? Who initiated this ?
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Got a msn and call back to check but seems all are by word of mouth. Not sure who has the initiated.
ReplyHi Help-Minibond
Thks. I live in marine parade grc, you can guessed who i copied my letter to? But until today, no response. I have also not heard anyone here got any response from those high up people directly. That’s why i said i’was very disppointed with this country and how things are handled. Do they care or not, i don’t know?
Do u know how much the ministers in HK and Taiwan are paid? They are so compassionate but ours like sxxx. May be i should had stayed in HK previously. Why do we have to write petition to beg for help, isn’t the government’s job to help the people when they’re in trouble or during crisis that they deserve the super high salary ? We have a very special one indeed. Looking at the situation, i think we have to treat it as an investment of no return. Be mentally prepared, all of us….
Hi VerySian,
My suggestion: If more than a week has past, send a follow up letter indicating your complaints are not addressed in their last reply, reiterate your complaints and request they start an investigation.
Include your frustrations of any delay or that they are side-stepping your complaints so that MAS, FIDRec and MP are aware your FI is not attending to your complaints, unlike what MAS promised in their press statement
ReplyVerySian,
By the way, did you receive the pricing statement and prospectus from UOB Kay Hian before or after you signed the application form?
In my case with bank, these documents were given only after I have signed – how can I have understand them if they are not provided, if these contain important details as the FI now claim, their sale process is badly flawed
ReplyI wonder whether there is any poll online on:
1. which are the banks/FIs that their officers have misrepresented on this issue. (# of occurrences, amount, name of Notes etc.)
2. which are the banks/FIs that did the ethical way
3. which are the banks/FIs that their staffs care or not care about their customers
4. which are the banks/FIs that their staffs are or are not knowledgeable abt their products.
I wish to avoid any future transactions with those banks/FIs that are unethical, uncaring and not knowledgeable.
Anybody knows who is championing for Lehman Brother Notes’ investors in Hong Kong, Taiwan etc.. ? Maybe can learn from their experience.
ReplyNews article indicating HK banks willing to discuss compensation with the Minibond investors:
http://realtime.zaobao.com/2008/10/081001_25.shtml
HK and Taiwan authorities have managed to help the affected investor victims, only Spore has left the investors to fend for themselves 🙁
ReplyHi all,
Found from Monetary of Singapore (MAS): “Singapore Corporate debt market review 2007”.
http://www.mas.gov.sg/resource/eco_research/surveys/Debt07.pdf
From the “pie chart”,
Equity Linked Notes issuance (SGD denominated): 3.7B in 2007,
is 28% of SGD denominated structured debt.
That makes Structured Debt issuance (SGD denominated, 2007): about 13.21B.
Equity Linked Notes issuance (non-SGD denominated): 2.6B in 2007,
is 15% of non-SGD denominated structured debt.
That makes Structured Debt issuance (non-SGD denominated, 2007): about 17.33B
Other structured debts besides ELNs are:
CDO, credit linked notes, currency linked notes, callable notes, asset securitised notes, convertibles etc..
We can get examples of prospectus/pricing statement of structured product from Monetary of Singapore (MAS)’s Opera under “debentures”.
http://masnet.mas.gov.sg/opera/sdrprosp.nsf/LeftFrame?OpenFrameset&LayerVal=D&Frame=RightPane&SRC=/opera/sdrprosp.nsf/vewPublicLatestDebuntures?OpenView
We can get a glimpse of details of the Linked Notes from these prospectus and pricing statements.
I guess investors have to take a close look on other Notes that they have bought.
Pay particular attention to: counterparty, reference entity/reference obligation, event, risk factor , issuer, guarantor, scenario etc.
(can use “search” function on the pdf files of prospectus/pricing statements)
Beware:
Is there any other potential credit event that can wipe out your investment in other Notes (besides Lehman Minibonds, DBS High Notes, Morgan Stanley Pinnacle Notes and Merill Lynch Jubilee Notes) ?
I don’t understand what was SM Goh talking about, “No high Returns with High Risks”. The payout is only 4.88%, not 48%, the difference is only a miserable 0.88% if he compares to CPF. At that time, FD pays about 3% + (promotion rate for OCBC and HL Finance). Is the payout from Minibond consider high? I don’t think so. I think what most of us were seeking is a slightly higher payout as a regular income stream in what we considered a rather safe investment. Most of us thought we had invested in bonds actually.
From what I read so far, I think most of us were using Cash to invest, why did he talked about putting the money in CPF? Can we put our cash into CPF and get a 4% retrun? Can anyone care to comment on what was he talking about?
The reply I got from UOB Kay Hian, “All information with regards to the risks of this investment product have been included in the Prospectus and Pricing Statement which were distributed upon note subscription. We would like to assure you that we have adopted the necessary regulatory procedures to address Investors’ unease. ” ……
Clearly, Kay Hian side stepped my big question : WHY “the money did not go into buying those blue chip bonds and notes as stated in the Reference Entities. They went into buying some CDOs instead!” Does this not constitute Mis-representation? Can the risk statement relinquish all parties who make money by selling it from all responsibilities? Can anyone with legal knowledge comment.
I’m losing hope not just about our money, but also in this country, and the way things are handled, in comparison with the compassion of the Chinese, Taiwanese and HK government and banks. Some actions are taking place almost every other day up north but not here. Like what someone mentioned here, the highup seems to have lost touch with the feelings of the ground. May be MAS or the government is waiting for HK or Taiwan or China to show them how to solve this mess, I’m not sure?
Noticed the comments seems to be declining, is this an indication that most of us have given up hope?
Very Sian
(1) I believe SM Goh is referring to retirees who took out their monies
from CPF after age 62 and invest in structured products.
(2) You are right that returns are not fantastic, which was why most of us
did not query much when we purchased, thinking that it’s an indir
investment in bonds.
In mid-2006, SGS 5-yr bond was giving yield of slightly above 3%.
Mini-bond series 2 at 4.88%. The incremental is lesser than 2%.
And I thought I got this incremental 2% because
(a) I sacrifice liquidity
(b) I take up some credit risk of RE
and that’s all.
Only last 2 weeks then I realized I was really foolish…
ReplyVerySian,
I think you should write in to UOB KH again to strongly state that your complaints and questions have not been addressed. State your frustration to MAS and FIDReC that UOB KH is simply sidestepping your complaint.
Distributing the documents during the subscription does not remove them from the responsibility to explain the true product nature and high risks. In fact this further show thier intent to misrepresent. Do MAS agree FI comply regulation in sale of such complex products by just providing the pricing statement and prospectus?
If you have not, you should copy to MAS, FIDRec and MP to get proper attention to investigate your case
ReplyDear Folks,
Fyi, I met up with GYC MD and he informed that they are not the FI but he is willing to “talk” to me because I am their client. I told him MAS asked me to write to him, and all the “bonds” are sold by his ex-Senior Assoc, of course GYC has to be responsible. Throughout the meeting he just trying to cover his back as I requested for compensation in my mail to him. He recorded my conversation with his team, I believe he needs to report to MAS my case of complaint. Meanwhile, he said the correct FI, OCBC Sec will appoint an independant party to look into my complaint … till now no news. Wait and wait …. for more bombs to explode !
Hi anyone has the OCBC security email address which we can send the letter ? Thanks.
Reply
Looking at the current situation, I feel that nothing much will be done or can be achieved. The parties involved are likely to delay ie drag by citing various reasons.
ReplyLatest update from Bloomberg
Lehman’s `100% Principal Protection’ Means Pennies for Notes
Sept. 29 (Bloomberg) — A brochure pitching $1.84 million of notes sold by Lehman Brothers Holdings Inc. in August, a month before the firm filed for bankruptcy, promised “100 percent principal protection.”
Buyers had “uncapped appreciation potential” pegged to gains in the Standard %26 Poor’s 500 Index, the brochure said. In the worst case, they would get back their $1,000-per-note investment in three years. Only the last in a list of 15 risk factors mentioned the biggest danger: “An investment in the notes will be subject to the credit risk of Lehman Brothers.”
Lehman’s Sept. 15 bankruptcy leaves holders of the notes waiting in line with other unsecured creditors for what’s left of their money. The collapse has rattled Wall Street’s $114 billion structured-notes business, which Lehman, Merrill Lynch %26 Co., Morgan Stanley and Goldman Sachs Group Inc., all based in New York, used to raise cheaper funding as the credit crisis drove bond yields higher. About three-fifths of the $68.1 billion sold this year were bought by individual investors, according to data compiled by mtn-i, a London-based firm that tracks the market.
“Investors are going to be a lot more concerned about the credit of the issuers of these notes,” said James Angel, an associate professor of finance at Georgetown University in Washington. Until recently, “the buyers may have been mesmerized by the bells and the whistles,” he said.
The market for structured notes — constructed by Wall Street firms from a combination of bonds, stocks, commodities, currencies and derivatives — has mostly avoided fallout from the slump in sales of mortgage-backed collateralized debt obligations and auction-market preferred securities.
Hong Kong Outcry
The $330 billion auction-rate market seized up in February, when securities firms stopped supporting the auctions. The U.S. Securities and Exchange Commission, along with state regulators in New York and Massachusetts, has since forced companies, including Citigroup Inc., Merrill and Morgan Stanley, to buy back more than $50 billion of the securities from aggrieved customers. Regulators cited claims that the investments were improperly touted as safe, cash-like investments.
A similar outcry broke out in Asia last week in the structured-notes market following Lehman’s bankruptcy, the largest in history. Hong Kong’s Securities and Futures Commission issued a statement saying it received 960 inquiries and 170 complaints from holders of about HK$15.6 billion ($2 billion) of structured notes arranged by or linked to Lehman.
“Many of these investors are old people relying on these investments to support their retirement,” Albert Ho, chairman of Hong Kong’s Democratic Party, said in a Sept. 23 interview.
Lehman Bankruptcy
Lehman, once the fourth-largest investment bank in the U.S., had to file for bankruptcy after its shares plummeted on concern that the firm couldn’t raise enough capital to compensate for mortgage losses. Lehman had estimated debts of $613 billion as of May 31. Holders of unsecured Lehman debt may get less than 50 cents on the dollar, CreditSights Inc. analyst David Hendler said in a Sept. 23 report.
Lehman spokesman Mark Lane declined to comment. SEC spokesman Kevin Callahan said he couldn’t comment on whether the agency had received complaints from investors or whether it is looking into how the securities were marketed.
“The banks and brokerage firms invent a product, and they push it until it breaks,” said Roger Robson, founding principal of CapTrust Financial Advisors, a consulting firm in Tampa, Florida. “Then the regulators step in and fix it. This could easily be the next product they’ve got to step in and fix.”
Structured notes were first sold in the U.S. in the 1980s, according to the Web site StructuredInvestments.com, maintained by Chicago-based securities firm Incapital LLC. They’re sometimes marketed as “structured equities” or “hybrid financial instruments” because they combine features of debt and equity.
Mitts, Sequins
They have names like Mitts (Merrill’s Market Index Target- Term Securities), Propels (Morgan Stanley’s Protected Performance Equity Linked Securities) and Sequins (Citigroup’s Select Equity Indexed Notes), according to StructuredInvestments.com. Lehman’s offerings included Suns (Stock Upside Note Securities) and Prudents (Prudential Research Universe Diversified Equity Notes).
Total issuance of structured notes in the U.S. climbed fourfold over the past four years from $28 billion in 2003, according to mtn-i.
Structured notes are “no longer Wall Street’s best-kept secret,” Keith Styrcula, chairman of the Structured Products Association, said in a Sept. 10 presentation at an industry conference hosted by the law firm Morrison %26 Foerster LLP in New York. The New York-based association has more than 2,000 members, including Citigroup, JPMorgan Chase %26 Co., Merrill, Morgan Stanley and Goldman, as well as European banks BNP Paribas, Barclays Plc and Deutsche Bank AG, according to its Web site.
Principal Protection
About a third of the structured notes sold last year promised full or partial principal protection, according to StructuredInvestments.com.
Corporate treasurers at Wall Street firms sold the notes in part to avoid paying bond yields that surged over the past year, said Brad Hintz, an analyst at Sanford Bernstein %26 Co. in New York, For example, Merrill’s senior unsecured notes due in August 2017 trade at 88 cents on the dollar. That means the notes, sold a year ago with a 6.4 percent coupon, now yield 8.4 percent.
Hintz, who said he doesn’t buy structured notes because of their “opaque” pricing, called the sales a “perfectly reasonable thing for a corporate treasury to do.”
“The reason they’re cheaper for the firms is because the average person can’t take them apart,” Hintz said.
Anna Pinedo, a partner in New York for Morrison %26 Foerster who represents sellers of the notes, said disclosures about the risks of structured notes are ample. “People go into it with their eyes wide open,” she said.
Fine Print
The Lehman brochure, e-mailed to clients in July, carried a blue banner headline — “Equity Structured Solutions.” The securities being offered were called “100 Percent Principal Protection Notes Linked to the S%26P 500 Index,” and the minimum investment was $10,000. After a table of formulas provided to compute theoretical returns was a footnote stating that Lehman had an A credit rating from S%26P and an A+ from Fitch Ratings.
A list of “selected risk factors” started on the fourth page. The brochure said there would be “no interest or dividend payments” and warned that the notes “may not appreciate.” There were “built-in costs” to cover Lehman’s own hedging expenses plus a profit, along with $20 per $1,000 principal amount of “dealer incentives.” Lehman’s “economic interests” were “potentially adverse” to those of investors, and “you must rely on your own evaluation in the merits of an investment.”
Bullet Point
The last bullet point read: “An investment in the notes will be subject to the credit risk of Lehman Brothers Holdings Inc. and the actual and perceived creditworthiness of Lehman Brothers Holdings Inc. may affect the market value of the notes.”
Georgetown’s Angel says the issue is to what extent Wall Street firms emphasized the risks that they could go bankrupt and urged investors to read the fine print. A month before the Lehman brochure was sent out, the firm announced a first-quarter loss of $2.7 billion. Over the summer, as conditions worsened, Lehman Chief Executive Officer Richard Fuld, 62, was busy trying to sell a stake in the firm to shore up its capital base. Fuld was paid $34 million for running Lehman last year.
“Until recently nobody had too many concerns about our major investment banks,” Angel said. “We thought these were rock-solid institutions that had been there since the dawn of time and would be there forever. Recent events have pointed out that that’s not true.”
Lehman Bankruptcy
When Lehman filed for bankruptcy on Sept. 15, its structured notes were declared in default, according to data compiled by Bloomberg. Regulatory filings from Lehman listed $36.6 billion of “hybrid financial instruments, primarily structured notes,” on the firm’s balance sheet at the end of May.
Some of Lehman’s structured notes traded last week in the secondary market, mtn-i said in a Sept. 23 report. “Dealers quoted a trading range between 10 cents and 55 cents on the dollar” for the notes, according to the report. SecondMarket, a New York-based company that provides a marketplace for illiquid securities — those in which there is no active market — said in a Sept. 25 statement that it will begin trading Lehman structured notes, as well as bankruptcy claims.
Merrill’s deteriorating credit, which contributed to a 36 percent plunge in its stock price during the week of Sept. 8, forced Chief Executive Officer John Thain to sell the third- biggest U.S. securities firm to Bank of America Corp. It had $86.3 billion of senior structured notes outstanding at the end of June, according to regulatory filings. That’s an 85 percent increase from June 2007, and the percentage of total liabilities represented by the notes climbed to 29 percent from 19 percent.
Goldman, Morgan
Mark Herr, a spokesman for Merrill, declined to comment.
Morgan Stanley, the second-biggest investment bank after Goldman, had $42 billion of index-linked notes outstanding at the end of November, double the amount a year earlier, according to regulatory filings. The New York-based firm hasn’t provided updated figures.
On a Sept. 16 conference call, Morgan Stanley Chief Financial Officer Colm Kelleher said that while the firm didn’t sell bonds in the public markets during the last fiscal quarter, “we did issue incremental non-public structured notes at attractive pricing levels.”
Morgan Stanley could do without the structured market because it already has met funding needs through the second quarter of next year, spokeswoman Jennifer Sala said. The firm was converted into a bank holding company last week, a status that will provide “ongoing access” to funds from the Federal Reserve, Morgan Stanley said in a Sept. 21 statement.
`Very Comfortable’
Goldman, which also converted to a bank, had $22.8 billion of unsecured long-term borrowings, which the New York-based firm said “primarily includes hybrid financial instruments and prepaid physical commodity transactions,” according to regulatory filings. A year ago the figure stood at $13.5 billion.
“Structured notes are not a core part of Goldman Sachs’s funding,” spokesman Michael Duvally said. “We are very comfortable with our liquidity and funding profiles.” Goldman raised $10 billion of capital on Sept. 24, including a sale of $5 billion of preferred stock to Warren Buffett’s Berkshire Hathaway Inc. in Omaha, Nebraska.
Until this decade, the involvement of U.S. investment banks in structured notes was limited to underwriting the securities and collecting fees for structuring the derivatives attached to them, said Steve Kohlhagen, who worked as a trader at Lehman in the 1980s and retired in 2002 as head of fixed-income, derivatives and risk management at Charlotte, North Carolina- based Wachovia Corp.
`Popular’ Offerings
Then, the notes were mostly issued by large banks with AA or AAA credit ratings. The offerings became popular because “customers think it’s a good deal,” Kohlhagen said.
“They think, `wow, I’d like to get one of those things, because I can get benefits if the stock market goes up, and I don’t lose if the stock market goes down,”’ he said by telephone from his home in Colorado. “Anybody who is sophisticated knows that what they’re buying is a call option on the stock market, but it’s attached to a note, so it looks less risky.”
Investment banks started issuing structured notes backed by their own credit because “it’s just a simpler way of doing it,” said Robert Benson, a former head of the structured-products group at London-based HSBC Holdings Plc, the biggest European bank by market value.
Credit-Default Swaps
“At the moment, it’s a big advantage to get the funding,” said Benson, who left HSBC in 2001 to start his own firm, Arete Consulting Ltd., in London. “In the past maybe that wasn’t such a big part of the rationale.”
The riskiness of owning securities-firm debt has surged, based on prices in the credit-default swap market, which is used by traders to bet on the likelihood of a default.
Merrill’s credit-default swap prices have climbed to 411, more than seven times the price a year ago, according to Bloomberg data. Lehman credit-default swap prices were trading in the low 300s earlier this month, before the bankruptcy filing. Morgan Stanley credit-default swaps were at 500 on Sept. 26, in addition to an upfront payment equivalent to 17.5 percent of the face value of the debt. Goldman’s are at 449. Bank of America, Merrill’s acquirer, has credit-default swaps trading at 161.
Morrison %26 Foerster’s Pinedo said she doesn’t expect “a real downward trend” in the market, although she says “I’m sure there will be some effect.”
“It depends on what view you take on the future of these financial holding companies,” she said.
She said more firms may sell structured notes in the form of certificates of deposits — a banking product that’s guaranteed by the U.S. Federal Deposit Insurance Corp.
To contact the reporter on this story: Bradley Keoun in New York at [email protected] .
Reply
This is the reply i’ve gotten from Maybank after writing a complaint to them, Fidrec and MAS. Can someone advice me what should i do?
(quote)
Thank you for your email addressed to our Bank on 25 September as well as to MAS on 26 September 2008 on this matter.
We understand your anxiety and concern on your investment in the Minibond.
Meanwhile, we will look into the sales process by our staff and will also update you when we hear from the Trustees on your investment.
(unquote)
Looks like they have sidestepped the main issues of your complaints.
ReplyGet them to commit a date when they will complete investigation and give you a reply. If too long, push for a next date of update. If needed, send a complaint to the next level.
Get a commitment what will be investigated and commit dates.
The Japanese do these to their suppliers all the time when there is an issue. It is good way to drive things forward.
Don’t settle for a general reply like what they gave you.
Reply2nd protest in HK
http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=72256&sid=20779304&con_type=1
Reply
Petition on Credit Linked Securities, Singapore
The Petition to the Singapore Government is now ready for signing at:
http://www.petitiononline.com/PSGCLS01/petition.html
Investors in the credit linked securities can now sign the Petition which will be delivered to the Singapore Government, tentatively by early October.
Reply
Assuming US taxpayer do the bailout of the FI’s (which is still a debate) the question will arise, why US FI’s should spend tax payer dollars to investors in foreign countries.
Already top U.S. economists are opposing the bailout in a group called ‘Economists against Paulson Plan’ :
http://www.informationclearinghouse.info/article20873.htm
Hope for investors in Lehman minibonds
http://finance.thestandard.com.hk/en/business_news_view.asp?aid=72231
Replyhttp://business.asiaone.com/Business/News/Story
Investors hit by Lehman Con Job had their 2nd protest in Hong Kong. See the link on asiaone.
Regards,
ReplyWho’s going to help those poor uncles and aunties, who are illeterate? I suspect not all everyone of them know the bad news yet, let alone write a petition or conplaint letter.
ReplyThere is a article by a lawyer in today’s ST forum. I think it helps to strengthen our case.
Reply
Wachovia Slips Amid Speculation Citigroup, Wells Fargo May Bid
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1wZ5AXuzIpE&refer=home
Seems to be good news for those with products related to Wachovia.
In any case, we have to act fast on our existing avenues. I am now drafting the letter and will send out on registered mail, as recommended by Mr Tan Kin Lian, on Monday.
Reply
Hi all
I really don’t know if all these letters to CEO or whosoever is going to do any good. Do y’all think it would be a good idea if we followed the Hongkongers in mass-gathering at MAS to do have some meetings or things like that? If the police come disperse us, all the better.
Reply
Hi Ahthong,
we cannot have mass gathering at MAS. it is illegal. can be jailed.
The only place for the mass gathering in singapore is at hong lim.
Reply
Hi, anyone can gave me an advice for minibond 3…..am currently
at a loss of words at the moment….
[page has been removed]
Please refer to here:
http://www.martinlee.sg/how-to-file-a-dispute-for-structured-product-victims/
Sample letter to CEO/MD of your respective FI
Reply
Hi Ang,
The template states that we are approached by the FI and convinced by them to purchase the Minibond.
However, I believe some of us got to know about this product via flyer/brochure/newspaper, then we decided to approach the bank for further information. Subsequently, we were convinced by them that the risk is low as they only emphasize on the 6 RE and not a single words of underlying securities (100+) were mentioned during that time.
As, we came to know about this product thru flyer/brochure/newspaper and approached the bank, do we have a case here ?
ReplyHI, I approached the FI after receiving their letter which asked me to order through my trade representative. I went down to the office to ask for more information. A product manager handled my case and just assured me the product is as good as what the brochure states. The rates are better than fixed deposit but you have to wait about 6 years to get your money back. Whatever additional risks was only communicated to me via the brochure and the manager merely repeated what’s on the brochure, briefly.
I’m wondering if such toxic products can be bought Over-the-Counter without an experienced Relationship manager/financial adviser/whatever you call them. It’s like drugs, if it’s going to cause you great harm without proper advice, pharmacy can’t sell you them!
You and I, and some others have approached them willingly because of their advertisements, brochures, letters, etc. I don’t see why they can run away from responsibilities. Aren’t they obligated to tell us of the relevant risks??
ReplyReasons why they didn’t tell you the risk is either they don’t understand the product or they are under took much pressure to sell due to quota target & commission.
My FA is a personal friend but as a professional, the scenario of what happen if any of the 6 entities default was not presented. It sells on the fact that highly rated RE and low risk. I thought it was a bond and a significant principle will be coming back but in actual fact, it is not but something very complex.
Had she told me then, I would not have invested.
I cannot be expected to ask all the questions else what is FA for? They must assess my suitability and lay out the risks instead of going full steam on sales talk.
Regards,
ReplyI’m in the same situation.
My advice: state the facts, be fair to the FI as well
I’m drafting my letter to FI and MAS, requesting them to ask the Independent Committee to look into the adequacy of disclosure at the advertisement & marketing brochure.
I feel that if the underlying securities are not bonds in RE, this fact should have been explicitly highlighted in the brochure as well. Failure of doing so have led my investors into assuming so, and thus did not ask any questions about ‘underlying securities”.
Ironically, even as at today, nobody is able to tell what these “underlying securities” are…basic transparency is lacking!!!
Reply
Precisely. Until today, I still thought I was lending money to the 6 RE, hence the term ‘bonds’.
I didn’t know I was in fact lending money to Lehman Brothers, which seems to be the case here because I can no longer get my investment back as they are bankrupt.
The 6 RE doesn’t have my money so they can’t really return them to me. Right?
This, in my opinion, is a fundamental breach of contract.
Reply
I am still hopeful that the authourities, MAS/ Ministry of Finace and some white knights will come in and rescue these poor bond holders. These are all mainly retirees or those plannning to retire thinking of putting their life saving and retirement fund and hoping to get some sort of regular income or return to counter the high inflation rate. They put their money in the mini bond thinking it is save as compared to stock which is consider much more risky. However the situation now is the reverse as their money in the minibond can be almost wiped out as compared to if it put in some blue chip stocks where the chance of recovery is still hopeful when the stock market recover in the long term. Can the authorities please understand the heartache of these poor category of investors who are just trying to get a recent return for their retirement. They are not gamblers or speculators.
ReplyI’m already at a very desperate end and looking at the slow progress as compared to HK, its better that we escalate even further up. It its better to write to someone who is of influence and prominent rather than talk to those ikan bilis. I informed MM Lee what that had been happened and many aunties and uncles who are illiterate may even commit suicide if they come to know that their life savings are gone ! (which apply to my mother as well) Of course I do not think he is free to vet my long-winded email, but simply want to pressure MAS to be aware we are at dead end if there is still no action ! Vincent from MAS called me and informed that I write to the contact persons from the respective FIs and MAS will follow up from there. These are:
MayBank – Priscilla Loke, [email protected]
GYC – [email protected]
I would urge all of you to act fast, there is no time to wait for miracle to happen. Till the time Mr Tan arrange to meet us, at least something is already done ….. AWARENESS !
‘
My minibond series 3 due on 02 Dec 08. My FI is Phillip Securities. They said they will get back to me in 14 days.
for Phillip Securities – [email protected] [62121873]
(Phillip Securities Director, Corporate Business Development)
Anyone knows what is the MAS email ID to send my complaint to ?
Thanks,
a fellow sufferer of MB 3
Just to share my thought :-
FI and MAS are pushing the ball between themselves and actually, both of them are to be blame:-
– MAS should take responsibility for allowing such a complicated product to be market to retail investor
– FI should take responsibility for allowing their FA, who has minimum knowledge of all the risk in Minibonds, to market this product out to the public
Neither FI nor MAS wants to bear all the responsibility and compensate all investors because this will cause them a mini bomb.
My suggestion is that HSBC trustee can proceed to force sell all the underlying securities/CDO/CDS whatever, however, FI and MAS must bear the remaining loss of investment equally.
In this scenario, FI and MAS definitely will fight for us to ensure that HSBC sell at the best price, else they will suffer a bigger loss. Now that each party doesn’t need to bear 100% of investor loss, it will be easier for this decision to be approved by their board.
or
HSBC holds all Minibonds till maturity and investor get full redemption.
This is what I call – looking into the interest of all investors. I believe only someone high up in the government can push the above suggestion thru.
ReplyI’ve lost faith in MAS already. Let’s say they don’t want to do anything and ignore us. What can we do? Nothing essentially.
It’s a natural law that in order to receive something, we must sacrifice something in equal value. Nothing in the world escapes this law. MAS stands to gain nothing from this, so I don’t think they’ll sacrifice anything — manpower.
They should start releasing press releases with concrete examples of what has been done. Something that people can physically see for themselves.
Reply
anyone has any idea why isn’t minobond 1-3 included as potential credit event in the letter sent by HSBC Trust a few days ago? does it mean it is still safe?
Reply
i think because the interest payment is not due yet, my Series 2 next interest payment is due in Nov 2008
Reply
I read many articles condemning unscrupuluous distributors selling Lehman Linked products to consumers.
I too bought the minibonds series 3
However, I must praise the Hong Leong Finance Officer that sold me the product. She told me that the notes are not guaranteed because if the banks were to collapse, there may be a chance that the money will be lost.
At that time,( early 2006) who would believe any banks would collapse now. I took it that the notes was safe and bought it.
Now I only curse those idiots that run the banks, draw huge salaries and bonuses, and just walk away scot free when the banks collapse
ReplyI have also written to MM Lee, to appeal for his advise and assess whether Temasek or GIC can step in to re-package the whole thing, be it minibond, jubilee, pinnacle or high notes, to run to maturity and help us to recover our principle or minimise our losses. I think all of us have both fear and respect to approach MM. But I can’t think of a better way now, with MAS response at such. If I don’t do it now, it may be too late to help, since Minibond 5 & 6 are almost gone, Jubilee 3 is likely to face the same fate. I think billions of dollars will be lost and thousands of fellow s’poreans will suffer. Why let this part of our national resources go into the drain? Good luck.
ReplyHenry
Agree totally.
If the US govt can consider RTC, why can’t the Asian counterparts, esp. HK and S’pore explore as well.
Let the underlying securities run to maturity may be the most practical & fairest way to minimize losses…of course the Notes holders must also understand that if a Credit Event occurs later, the Notes will still be terminated early & losses may even be higher than now. But at least it’s a Credit Event, a risk which we have been told when we purchased the Notes.
It’ll be ironical if the US and HK govt both successfully adopted the RTC way and bought time for the crisis, whilst our MAS could not do so, and the Notes in Singapore are the only ones being terminated early due to the insolvency of swap counterparty.
ReplyI admit I don’t have the guts to write to MM Lee because he is so high up.
Please keep the rest informed on the outcome.
The idea of letting the underlying securities to run till maturity sounds good to prevent force-selling at a great discount. As we start to learn more about these complicated products, more and more things begin to surface up.
Whatr exactly are the underlying securities in these products? Are they another heap of rubbish?
It seems that the reference entities (big international banks and financial institutions) are just for show to entice people.
Replyyeah, i guess many of us were sold on the impressive reference entities (America Express, BoA, DBS, HSBC,JP Morgan Chase, Singtel & Stanchart – Series 2) thinking that they are solid companies. No reference were made at all to the underlying securities from the RM.
ReplyHi Steven & Burntoast,
I agreed with you. There are a lot of things that the government can do to help but they just won’t do it because of Law-By-Law systems, sorry lah no exceptions. Then MAS utttered and release uselss a press statement, claiming that some investors said that they were very satisfied with MAS action. There’s no commitment or sincerity to help from what we see. MAS need to be take responsibility in this matter; without “APPROVAL” nobody can dump those garbage to cheat the naive citizens.
And instead of keep boosting how much money Temasek and GIC make every now and then, have they ever consider using those profits to help the poor investors like someone suggested? Or even take over the “bonds” and try to sell it at a better price (buy low sell high is what Temasek always boost about right?) or run to maturity, to help us to minimise the losses? There are many ways to help if they want to, with the top brains that reside the government, MAS, temasek, GIC, etc.
And instead of keep pursuding the public that their million $ salary is still low compared to so and so and therefore they must increase their pay, each time the global economy boom. The reason of course is we need GOOD people in the governent. Peolpe serve because of passion and devotion to their country, not MONEY. If money is the prime motivator, who can guarantee one will not corrupt since money is so important?
With eomotions running so high and so much publicity in the press, I am still waiting to make my own final assessement about the meaning behind the super scale salaries, time will tell.
I’m unconvince with that S’pore is a caring society, if you compare with HK and China, especially the compassion of the Chinese leaders Like Mr Wen and Mr Hu, in dealing with crisis. I heard they will even bail out 100% those who had been cheated or if it was a government oversight. The head responsible will also have to resign and may be face prosecution, just like in the private sectors. And in those 2 countries, their authorities and leaders moved real fast without hesitation
Many of us know that there’s a lot of frustration dealing with government institutions, especially for difficult situations. Now I understand why some middle class friends chose to migrate even during boom time or work overseas with the intent of not coming back. I quote a chinese saying, that Only in a criss, we can assess a person or the government, not when the economy is booming, period. we are not stupid.
Dear Folks, I have sent an email to MM Lee, who is our Tanjong Pagar GRC member, c.c to MAS. Guessed what ? less than 30 minutes MAS called me and give the the FIs details to lodge the complaint and they will follow up. Hope this will more or less help us.
ReplyHi Engel,
You have a good start.
Please keep us updated on your case.
Thanks a lot.
Hi Engel,
Can you share the info given to you so that we can lodge our own complaint? Thanks plenty.
ReplySee what I mean. Engel email to MM & within 30 mins got a call from MAS to follow procedure i.e. talk to FI first.
From my view, the FIs taking over the complain will give MAS more time review, assess, understand, compare, strategize MAS next approach which I believe the Minister of $ will speak.
This is concerning half a billion of lost fund with a outcry of misrepresentation both in HK and Sgp. Politically, HK wins the people heart and mind at the moment. Sgp Minister of Finance must react as Lehman Brothers is not part of the RE on some of the notes but something else which investers don’t understand and FA don’t bother to explain. Not fair to expect old folks to read prospectus especially I don’t even understand.
After all things have been done i.e. petitions, television, HK protest, old folks lost retirement fund, handing over petition to MAS, newpaper coverage and still no Minister of Finance coming out to say something, then I would say the new cabinet lost their feel of the ground… then it is a sad day for me.
Anyway, there is nothing I can do but wait till 02 Dec 08 and check my bank account.
Regards,
ReplyThe latest reporting of minibond by Bloomberg Asia.
Asian Regulators Pledge Action After Lehman Protests (Correct)
By Patricia Kuo
(Correct currency conversion, typographical error in sixth paragraph.)
Sept. 23 (Bloomberg) — Hong Kong and Singapore regulators pledged to support individuals who claim they suffered losses on investments in credit-linked securities in the wake of Lehman Brothers Holdings Inc.’s collapse.
Hong Kong’s Securities and Futures Commission said it may take “steps to protect” individual investors who complained structured notes arranged by Lehman were mis-sold. The Monetary Authority of Singapore said it would punish institutions found to have misled investors, without mentioning the Wall Street firm which filed for bankruptcy on Sept. 15.
“Many of these investors are old people relying on these investments to support their retirement,” said Albert Ho, chairman of Hong Kong’s Democratic Party. “We need intervention from the government and financial experts.”
Asian investors were roiled last week after Lehman filed the biggest bankruptcy in history, Merrill Lynch & Co. and Bank of America Corp. agreed to a merger and regulators pumped $85 billion into American International Group Inc. to bail out the world’s biggest insurer. Customers thronged the offices of AIG’s Singapore unit to terminate polices as the fallout from the collapse of the U.S. subprime mortgage market spread.
Minibond Investors
The scale of problems for Hong Kong investors “is no doubt immense,” said Ho, who led investors to meet officials at the Hong Kong Monetary Authority, the city’s de facto central bank.
More than 10,000 Lehman Minibond investors in the city are affected, most with losses ranging from HK$500,000 ($64,400) to HK$3 million, Ho said by phone today. One bondholder lost as much as HK$10 million, Ho said, declining to name the person.
Hong Kong’s securities commission and the HKMA met yesterday with representatives of investors and banks that sold Lehman Minibonds, the regulators said in statements posted on their Web sites.
“Complaints related to alleged mis-selling by banks are being referred to the HKMA for further action,” the SFC said in its statement, without being more specific
Investors in Hong Kong are considering taking legal action against Lehman, and may seek help from the Consumer Council, which has a fund that can support such lawsuits, Ho said.
“We still hope there are other ways, because lawsuits are very time-consuming and costly,” the lawmaker said.
Susan Byrnes, a spokeswoman in Hong Kong for law firm Linklaters, Lehman’s legal adviser for the Minibonds, declined to comment.
Singapore Pledge
The Monetary Authority of Singapore pledged to punish financial institutions found to have misled investors in structured products. “Where we have clear evidence in the current matter that a financial institution has breached our laws or regulations, we will hold the financial institution to account,” the authority said, without saying whether it has found examples of malpractice.
The Singapore authority also said it will enhance education schemes so that investors better comprehend risk and returns and don’t buy products they don’t understand.
Tan Kin Lian, former chief executive at NTUC Income, a Singapore insurer supported by trade unions, said on his blog that he is seeking help to draft a legal statement that investors in credit-linked securities can use to settle claims with financial institutions.
Lehman-Created Notes
New York-based Lehman created about $30.5 billion of structured notes for clients, transactions in which a borrower issues debt tied to the movements of currencies, interest rates or securities, according to London-based data provider mtn-i. The deals typically involved swaps designed to protect issuers against currency and interest rate risks.
About 99 companies and multilateral agencies sold structured notes arranged by Lehman, mtn-i said on Sept. 18 after the securities company filed for bankruptcy. They must buy new hedges from other banks or else meet any obligations under the transactions themselves, mtn-i said.
The SFC and HKMA have set up enquiry hotlines for Lehman Minibond investors, according to their statements. The SFC said it has handled more than 780 enquires and more than 130 complaints about Lehman’s Minibonds, which are credit-linked notes issued by Pacific International Finance Ltd. and arranged by Lehman.
Pacific International Finance, the Cayman Islands- incorporated issuer, sold at least $1.1 billion of structured notes from January 2003, data compiled by Bloomberg show. The bonds were distributed by Asian banks and brokerages and linked to the debt of companies including DBS Group Holdings Ltd., Hutchison Whampoa Ltd., Swire Pacific Ltd., Sun Hung Kai Properties Ltd., Goldman Sachs Group Inc. and Morgan Stanley, according to sale documents posted on the SFC’s Web Site.
The most recent Pacific International-issued Minibond registered with Hong Kong’s securities regulator, Minibond Series 36, offered investors a 5.5 percent coupon for U.S. dollar notes and 5 percent for Hong Kong-dollar notes maturing in May 2011, the sale documents show.
To contact the reporter for this story: Patricia Kuo in Hong Kong at [email protected].
I have send the link to this website to the reporter. Hopefully, with more exposure to international media, MAS would take decisive action and not hand-off action!
Replyburntoast quoted that:
According to MAS, banks in Singapore have limited or insignificant exposure to the sub-prime market crisis in the USA.
Now, It would seems that it is the retail investors that is having substantial exposure to US sub-prime market. Besides the known exposure of High Notes, minibond, jubilee notes, other structured products like Pinnicle notes etc are equally exposed to the sub-prime woes in a matter of time.
Until now, MAS has not mentioned the total $ exposure of these products for retail investors. To the banks, the sub-prime investment may not be material, but to us, the retail investors, it represents our 10 years, 20 years and sometimes life-long saving and easily 10%, 20% and 50% of our individual wealth.
And for some of us, we may never able to have enough time to accumulate the saving again in this lifetime.
My expectation is for MAS is to take the lead in organizing the leading financial institutions in Singapore, including Temasek, GIC and the banks that sold the products, in looking at options to take over the role of Lehman Bros. This proactive action would help to minimize the losses to Singaporeans. We are now looking to leadership from our “world-class” institutions and we hope “million-dollars” ministers will rise to the ocassions as leaders.
This is an great opportunity for our leaders to deepen the bonding and trust with its citizen to achieve a win-win outcome for us themselves. Taking the right and decisive actions will enhanced Singapore reputation as the leading financial center in ASIA. It will help our leaders to showcase to the world how Singapore as a world class financial center tackle a messy fiasco created by US in proactively fence for its citizen in time of financial turbulence.
We have a dream, Make it real!
This opportunity unfortunately, is closing fast. The investors’ perception now is that HK MAS is doing a better job than our MAS in reaching out to the investor in find solutions.
I hope this will change in the next 2 days.
Reply
VerySian
I think you asked me about oversight. In my humble opinion the oversight was as bad if not worst than letting certain high profile terrorist limping away through a small toilet window in a supposedly highly secured prison. Utter embarrassment!
Temasek just earned US$1.5 billion from the sell of its recently purchased Merrill Lynch’s stocks to Bank of America. Benefited from the same crisis that you lost money in. Can the government not use this money and work out a rescue plan for these unfortunate investors without losing actually face? Perfectly reasonable proposition. All it takes is some clever financial engineering (pardon the punt!).
The real question is what world are we living in now ? It is a mistake to play into the their hands by debating about misrepresentation or mis-selling. Paulson and Bernanke said we are witnessing history being made here. These sorts of financial crisis only happen once in a century. The US recognizes the need to set up a US$700bn rescue package leaving aside the misgiving and misconduct of its financial institutions and individuals. Why the government here is interpreting everything by the letter of the law ?
ReplyI do not expect MAS to bail us out, or to order the distributors to bail us out.
But I do expect MAS to work closely with HKMA, and the Trustees, to see if there are any ways to avoid liquidating the underlying securities in a haste, to minimize losses to those investors of Notes whereby Credit Event has not been triggered.
I think this is a reasonable expectation in view of the large no. of investors and monies involved.
Reply
I totally agree with Foolish Investor! We don’t expect to get back our principal amount! However how can we minimise loss for now without force liquidating the minibonds.
Reply
In the USA, the FBI has started crimininal investigations into possible wrongdoings in LB for causing such a big fiasco. Shouldn’t CID be investigating our FIs?
Say MAS fines the local banks for millions of $$$. What will MAS do with the fines collected? It should be channelled to all investors on a pro-rata basis. At least this will be some consolation for the investors, and bring a closure to this unfortunate incident.
ReplyHi SP and all those disappointed with MAS’ aciton,
Bring it to PM Lee if u wish to, but I’m not sure if he will reponse. I think only he can fine MAS. I’m disappointed with the MAS and the government !All those high up don’t seems to understand the difference of $10K to them and to the commoners and retirees….just NATO and set guidelines for the future. Who don’t know how to do this? History will repeat itself some years down the road. May be we should consider migrate to China, dare to commit to return 100% for those proven cheated.
Hey everyone,
as the number of comments on this post has become quite numerous, may I suggest that everyone continues their discussion over at another post if you are not replying to any specific comments here?
This will make the page loading faster and easier for everyone to follow new comments:
http://www.martinlee.sg/minibond-victims-turn-to-mas/#comments
Reply
lion,
in order to encourage grouping of minibond and hn5 investors, is it better to have a common thread? in any case, quite a few people have both products.
Perils for the Retail Investor
http://mrwangsaysso.blogspot.com/2008/09/perils-for-retail-investor.html
LATEST on DBS High Notes: And things start to move……
http://singaporemind.blogspot.com/2008/09/latest-on-dbs-high-notes-and-things.html
Replylioninvestor,
I have sent an email complaint to the FI (GYC) and c.c MAS, as I was told this is are safe products with lower risks . Is that good enough ? I do not expect a reply from GYC anyway.
Thanks Lioninvestor. I’ve been searching all the comments. Thought somebody has posted some template on the complaint letter previously but I could not find it now. Is there one? It will help everybody if we can all send these letters out ASAP, every day counts. thanks.
ReplyToday’s business time indicated Lehman Brothers has JV and may be some other assets in Singapore. Can govt freeze those assets in case of any fault of the whole thing, those assets can be put on sales to recover somebody to compensate the investors?
ReplyGo to todayonline.com page 28 titled “PLEASE, MAS, TELL US MORE” written by Chua Soo Kiat. We are not the first to ask MAS for help and it will not be the last. I hope not be in any future discussion on MAS support either as it only means my debt has ballooned from the current Minibond 3 sega.
One question I need to ask, if the US successfully pushed through the $700b rescue plan, will Lehman Brothers come out of bankrupcy and resume the Minibond? Again this will be another miracle.
Let’s hope our good man, Mr Tan Kian Lian can make a breakthrough. Another ray of hope is the MAS of HongKong and Japan. If they are able to recover a significant capital back, then this will probably teach Sgp MAS a thing or two. If not, then, hard luck minibond investors. I just frame up my Minibond 3 receipt and motivate myself to work harder on my financial intelligence…..
ReplyHi Kenneth,
That US 700b rescue plan is to save mainly AIG and not Lehman Brothers.
Even if there is a white knight to save Lehman Brothers, do you think it will not press real hard to get a good deal which means we could only recover mininal?
We have to be prepared to suffer loss of our principal and take it that this investment has turned soured. What we are doing now or intend to do, is to cut this loss as much as possible.
YES, this is a good letter – right tone and hit all the good spots. I paste it here in case it becomes inaccessible later. I don’t TODAY will mind this educational piece being made available here:
AS I read about investors losing money in the DBS High Notes, I cannot help but continue to feel disappointed in the Monetary
Authority of Singapore’s (MAS) regulatory approach towards financial institutions. About two years ago, in “Light in financial
dark” (Dec 12, 2006), I urged MAS to take the lead in protecting retail investors.
As a quick recap, examples listed then include selling of structured deposits like a fixed deposit and non-disclosure of a few variable board rates for housing loans.
In one of my recommendations, I urged MAS to disclose more information on their investigation of financial institutions to allow retail investors to make more informed decisions. MAS did not agree with me that more disclosure of this sort would help.
In “Make time for a cuppa, MAS” (March 22 last year), I again suggested that MAS may have relied too heavily on their official stance of “non-disclosure of dealings with financial institutions” and
urged greater disclosure. MAS did not reply to this letter.
Fast forward 18 months and again, we are witnessing the same complaints, this time about DBS High Notes. Having read the replies from MAS in the newspapers, it appears very clear to
me that nothing much has changed significantly over the last 18 months. MAS continues to divert complainants to Financial
Industry Disputes Resolution Centre (FIDReC) and the general public to the website MoneySENSE for self-education.
It is puzzling why MAS does not want to address the issue head on. The public is frustrated. Those who had lost money in DBS High Notes, not only want they their money/capital back, they also want to know how and why inadequate disclosure or misrepresentation of clauses and terms have happened and are continuing to happen.
In short, they want accountability and errant bankers and sales persons, together with management punished accordingly,
whether via fines or suspensions of trading or other means. And punishments can only be meted by MAS and not FIDReC.
I have no doubt that over the years, MAS has followed up on these public complaints and have conducted their own investigation. What I really cannot understand is why punishments are not
made public.
Currently, MAS discloses on their website (under “enforcement actions”) the penalties, fines levied on individuals in relation to insider dealings, licensing breaches etc. However, on this website,
there are no reports of errant bankers/sales persons being taken to task for employing misleading or unfair sale tactics which lead me to believe that MAS must have concluded that the sales tactics employed are above board and have not contravened any of the relevant regulations such as the Securities and Futures Act and
Financial Advisors Act.
This “conclusion” does not seem to gel with the numerous complaints sprouting over the past years from all walks of life
claiming they have been “misled”. When urged to disclose the reasons for their rationale, MAS will fall back on their official stance of “non-disclosure of dealings with financial institutions”
and the public will have no where else to turn to and no choice but to swallow their grievances.
Once again, I urge MAS for greater disclosure of their investigation of financial institutions to ensure greater accountability. Simply directing complainants to FIDReC and the public to MoneySENSE
will only stoke public frustration further.
If left unchecked, I believe some may even want to follow in the footsteps of our Hong Kong counterparts who are planning to sue the HK financial regulator over the Lehman products debacle and turning the issue of “misleading tactics employed by financial institutions” into “misregulation of financial institutions ”.
More importantly, if such frustration intensifies, the general public might lose faith in our financial institutions and Singapore will never be a world class financial hub no matter how many big
foreign names set up offices here.
The news article from TODAY was a better write-up than ST’s – truer to reality – maybe ST editor took out all the good stuff:
TWO years ago, at the age of 76, she sunk her life-savings of $200,000 in mini-bond notes. When her fixed deposit matured after two years, the bank officer advised her and her daughter to put the money into a new product that was “safe” yet promised “higher returns”.
Then, just days ago, the bank manager called with an ominous warning: Don’t expect much in return.
Yesterday evening, the daughter, a 44-year-old homemaker, was among 95 angry and bewildered investors who signed a petition outside the National Library, calling for more to be done for local investors caught in the turmoil that spiralled out of control when Lehman Brothers filed for bankruptcy
protection last week.
From about 7pm until after 9pm, the investors — who were mostly middle-aged or older, and ranged from office workers to retirees — gathered in small groups at the foyer to swop stories of angst and disbelief, as well as find out more about the fiasco from more savvy investors among them.
Ms Koh, as she wanted to be known, had herself sunk $30,000 in the mini-bonds. She told Today: “We are conservative investors, not risk-takers. It is my mother’s hard-earned cash, and she is 78, why would she want to place her money in risky investments?” She added: “If a robber comes to rob your house, the police will pursue and try to recover your stuff.” Surely the same idea should apply in this scenario, she said.
The petitioners hoped to convince the Monetary Authority of Singapore (MAS) to help them recover as much of their capital as possible and to find out if there had been misrepresentation by the financial institutions in marketing the products.
The original plan was to submit the petition on Monday, after collecting more signatures. But, when they heard from a reporter present about a media briefing MAS was holding at the same time, they decided to hand over the document immediately after the meeting.
“We didn’t want to waste time,” said financial adviser Martin Lee, the creator of the portal on which the petition was arranged. With emotions running high among investors, they were eager to share their woes, frequently interrupting each other’s tales with their own gripes about how these mini-bonds were marketed to them.
One, who had invested $110,000, said: “We were told this is safe and low-risk, but to our horror, we found out that our money is used by many other banks that we were unaware of.”
Investors were not told that Lehman Brothers was the issuer, added the investor. “How can MAS allow such risky investments to be marketed to retail investors?” The mini-bond series, which was touted as a low-risk investment, promised investors a 5-per-cent rate of return, higher than the 2 per cent for fixed deposits. “They were just selling rotten apples to us,” said another irate investor. “We’re all conned.”
One investors recounted how his friends, a couple from India, had put $1.8 million into mini-bonds here instead of another product back in India that promised a higher return of 8.5 per cent. “They thought Singapore was safer,” he said.
Reply
I was not told that LB was the issuer! I was given the impression that the money will be invested in some bonds.
Also, I was told that as long as there wasnt any credit event relating to the RE, all will be ok. How come the bankruptcy of LB affect the mini bonds since LB is merely as arranger?
Can someone please answer?
ReplyI think many of us are afraid to go through the legal way because we don’t have the resources to fight against banks or financial institutions. We don’t have any legal knowledge. What happens if in the end, we can’t get back some from the principal we have put into these products and then incurred a debt on the legal fees to bear?
Reply
VSL – thnks. Have emailed lioninvestor the petition for him to put it up.
Update on our talk with CEO HSBC Insitutional Trust last evening. This was a dead end. They said their role as trustee is very well defined. They don’t have the power to negotiate with other interested parties to take over the mini-bonds. They cannot comment on the misrepresentation by FIs. They have no part to play in the investing or marketing process, blah, blah blah. They only come in when there’s a default. They don’t even want to publish the list of securities held by each series or to comment what they will do when the 15 days’ grace period is up for series 5 and 6. I was pointed to this dead end by MAS who should be very well aware of what the trustee’s role is and therefore know that I will not get any answers from them and yet they cleverly fenced me off by arranging a meeting for me with HSBC. This convinces me that MAS is just pushing off all the responsibility to the trustee bank and the FIs.
All the FIs use the same marketing material published by Lehman, which was vetted and approved by MAS. Why is MAS just blaming the banks? If you go to FIDREc, you have to produce solid documentary proof. Unless you have an email or letter from the bank to confirm that this product is very low risk, has no exposure to CDOs, etc. it’s our word against the banker’s words. For most of us, it’s an over the counter sale. Going to FIDREc is another dead end given by MAS just to keep us going in circles.
ReplySH,
I totally agree with you that MAS is trying to wash their hands off this whole matter by pushing the blame to the distributors!
Unless we have very stong concrete evidences (eg emails, recording of the conversations) i doubt we can win the case of mis-selling of the pdts!
Like what SH mentioned, all distributors used the SAME marketing material which has been approved by MAS. May I ask if anyone from MAS actually reads the prospectus or understand more of the pdts before releasing to the mass market!?
ReplyYou know what, SH, given what you just wrote plus the treatment by banks about complaints, I think it’s time to rally the respective uncles and aunties to complain at the respective MP Meet-the-People sessions. Only when the pressure is felt will there be some action taken by the likes of MAS. Can we gather some of these people with compelling stories to tell and arrange for the Chinese papers to interview them?
ReplyThis is a good idea. Ideal interviewees will be retirees, do not read English, and invest a substantial portion of their savings.
Serve two purposes:
(a) highlight the helpless position we are in now
(b) prevent others from falling into same trap
so in short – we just have to write off the minibond….
for those in 20’s, 30’s,40’s – our youth is our wealth…but how about those poor 70’s eldery ….
is this a so called gracious society that we are striving for…
ReplyI just spoken to a closed friend who work in a law firm and ask if any lawyer is kind enough to help us proceed legal actions FOC against the FIs, as many aunties n uncles are involved. Perhaps many are not aware of the situation now till no interest goes to them. She has helped me to sent out emails to other law firms and see how it goes. Individual effort is not enough, hope those signed on the petition and affected people voice up ! I have already written to GYC n MAS for an explanations on how such risjy products are not being highlighted to us ? Guess it may not help but at least something is being done. Do you think all of us go to the press will help also ? I guess pressure is needed for MAS to do something !
ReplyFrom Tan Kin Lian’s website:
It is more important that each investor should write to lodge your complaint with the financial institution that sold the product to you. You can send a registered letter to make sure that there is a record of its despatch.
Read this blog:
http://tankinlian.blogspot.com/2008/09/lodge-complaint-with-financial.html
Some investors told me that they have difficulty in writing the complaint letter. My friend Adrian Tan has agreed to help. You can send your facts to him in by e-mail. He will try to write it for you. Adrian Tan
Does it mean that apart from the petitions that we have signed, all of us still need to write to lodge our complaint individually?
Reply
I’m totally disappointed with MAS, they keep saying they can only fine the FIs, cannot force them to compensate investors. Isn’t MAS should be the one to get fine first? Can someone tell us who has the authorities to fine MAS?
Reply
Certainly MOF cannot escape from this crisis.
They need to address the issue of allowing a the sale of “very safe product” (actually very risky) to an investor who mark on the survey form as CONSERVATIVE.
Replyfrom Tan Kin Lian’s blog:
Experience in lodging a complaint with the bank
Hi Mr. Tan,
I had a tele conference with two “product experts” of DBS. This conference, arranged by my RM, was to address any concerns I might have about my investment in high notes 2.
We discussed about the several issues and told them that I strongly felt that the product was mispresented to me. I also cited a clause in the pricing statement saying that “the product was not suitable for inexperienced investor” and told them that it was unethical of the bank to have sold many of this risky high notes products to gullible old uncles and aunties.
That noted my complaints and promised that the taped conversation will be passed to an “independent team” within the bank to investigate, the results of which would be forwarded to MAS.
Do you think this is what the MAS wanted the bank to do and is this sufficient? My concerns are not every investor has a RM to ask for a tele conference and how about those who cannot converse in English?
You may want to post this email in your blog (within revealing my email address) so as to encourage as many investors as possible to voice their complaints through such tele conference.
C.S.Tan
REPLY
I do not agree with the approach taken by MAS. I hope that MAS realise that it is very difficult for the public to go through this complicated process. They are likely to get an unsatisfactory outcome from the financial institution.
My question is how INDEPENDENT are these teams, and also the independent party MAS asked banks to appoint to appraise compensation? They are, after all paid by the banks themselves. MAS has issued another useless suggestion. Instead of sitting by the sidelines, apparently wringing their hands, they should take some concrete investigative action!
ReplyI think the immediate task is to make sure series 5/6 do not get force-liquidated after 15 days. I am afraid by going through the channel suggested by MAS, it will be too late, unless MAS has the power to stop HSBC from liquidating.
Reply
From the estimate it is between S$800m and S$1 b being invested by Singaporeans in the Minibonds series.
This is a hug amount and I believe many Singaporeans are actually relying on this investments for their retirement.
If this investment gone ‘kaput’ many of us would have a hard time ahead. As world wide economy is shrinking many economic woes will follow. How to survive……
MAS please play a more active role to help these affected Singaporeans.
ReplySH,
Your Petition Letter was well writen and it jolted MAS. Can you pls cut-and-paste the entire contents in this blog. I, and many others, would like to use it as a template to write our own letters to our banks. Alternatively, pls call me at 98592860 or email me at [email protected] to help in this regard.
As a followup of burntoast’s idea, if a mass rally can be organised at Speaker’s Corner this Sunday morning with Mr Tan Kin Lian as speaker, it would be super. Tks.
Replyhi lingam, I suggested MAS building not Speaker’s Corner. Some folks may be frightened off (although I will be there if that’s the decision) and the venue is not so conducive to speaking/discussing and also need to prepare for wet weather. But it is a great choice publicity-wise!!
Replyfrom Parliament’s Hansard (Sept 2007):
5. Mdm Ho Geok Choo asked the Minister for National Development (a) what impact will the current crisis in the US sub-prime market have on the property market in Singapore; and (b) what steps will the Ministry take to mitigate any negative effects on the property market, especially on public housing.
The Minister for National Development (Mr Mah Bow Tan): Mr Speaker, Sir, the impact of the sub-prime crisis on the domestic property market remains to be seen, as new developments are still unfolding everyday.
According to MAS, banks in Singapore have limited or insignificant exposure to the sub-prime market crisis in the USA. Local banks have issued statements to affirm this. MAS has also clarified that banks in Singapore do not issue sub-prime loans to local home-buyers. Moreover, MAS has reminded local banks to conduct proper credit assessments when granting loans.
The property market is driven by economic fundamentals and confidence. So far, there is no sign of a negative impact from the US sub-prime crisis. Our economic growth is still healthy. The key downside risk would be from a slowdown in the US economy, should their consumer spending and business investment be affected by tighter financing conditions. At this stage, the impact on Singapore’s economic activities does not appear to be widespread or large. MTI is of the view that Singapore’s fundamentals remain robust and, as the Minister of State for Trade and Industry told the House earlier, the growth forecast of 7%-8% remains unchanged.
ReplyWhat can MAS do? The most fine 9 FIs but they must first overcome FIs lawyers who have started putting up their defense. Class suit? RTC $28,000 fee, member felt checked and sued. I think they took back $3,000 after 2 years. If there is going to be one, I don’t mind joining but these are things that may come along in the near future.
While those not involved in this saga may say it was the risk investors took but the unhappiness here is misrepresentation that causes hugh lost of hard earn savings. I blame on the lousy FIs and FAs who know nuts about what they are selling but just wanted $ and quota.
So did the FIs know the danger that this product has high risk due to property bubble?
If no, then the FAs & FIs are incompetent and I guess same applies to their other products.
If yes, then it is a coverup.
Conclusion, be smarter and don’t trust FIs’ FAs anymore as they are all just doing sales talk. CNBC Suze Orman says you are your best FAs….
I lost big in Minibond 3 and my wife says cool it off, life goes on.
She prefers a happy husband then a moody one that makes home a moody place to rest in the evening.
For me, I write off my lost as investment lost. I challenge myself to return the same amount back in 5 years.
Mind you, I have not been sleeping good since the saga but this is my way to overcome the self-blame and find opportunity in the market. If CNBC Suze Orman can owe US$250,000 debt in credit debt and now financially independent, then we are not that bad after all.
Be positive. This site is definitely better than my FI customer service support and HSBC institutional Trustee Service.
Maybe we can form a internet club with the objective to recoup our loses by working as a team and reinvest in a down market in Sgp or USA. More heads is better than one and risk should be lower since there is a layman level discussion
We have to learn from the above and find back our strength. Money lost can be earn back. Negative thoughts, self blame can only affect health, concentration on work. Always easier said then done, but we have to move forward. Hope of getting something from MAS, FIs, class suit, recoup are small hope which always hurts when did not materialized. Write if off first and anything good comes along, it is a bonus. Things you cannot control don’t bother.
I am hoping for the best and already prepared for the worst i.e. write off the lost. You will find it easier when you say it loud that it was a mistake and move on. Tomorrow will be better. In due time, people forget but for me, I have a 5 years challenge while and lost my faith in FIs and FAs…..
ReplyGood post, Kenneth.
There’s nothing to stop people from doing both:
– adopt a positive attitude and take concrete actions to do other investments, and
– attempt to recover/minimise loss from Minibond/HN5
Dear Kenneth,
I like your postitive attitude towards this crisis.
I am a layman who known nuts about the technical financial terms used in these products. I would be interested to join the internet club if any.
Replykenneth thumbs up for your well written thoughts, mentally i have write off my 200k in series 1. like u – i strive to make it back in futures. but life go on. my wife also realised i been moody – money should bring happiness but by owning this 200k and invest it – it bring misery. BIG BIG MISERY…
ReplyI have everything … Jubilee, Pinnalces n series of Minibonds. No complaint as one of the entity for Jubilee Notes is LB. That time when I wanted to place some funds on Pinnacle S3, that GYC Senior Associate convinced me to take up Minibonds S3, as she think is safer n furthermore comes with quarterly interest. Though now Pinnacle is not affected, I really do not have high hope as yest news US parliament not willing to accept BUSH plan to pump in more $$ to the US Financial markets. Look like Pinnalce is a time bomb and better get ourselves mentally prepared.
ReplyENGEL,
I also got my minibond thu GYC. I still remembered asking her if that is a “bond” product and she said it is multiple “bonds” together under the different REs. No even a single word of issuer/arranger/swap … being mentioned and emphasis is on RE. I knew I am taking the risks of RE and hence looking for series that don’t overlap on the RE. Now that all the series are all under LB, we have a so called single point of default on the same series under LB.
I ageed with Kenneth, I have mentally written off them. These are hard-earned money and I think this is a wake up call to MAS and FIs when they release product of high complexity and risks, should they release them to retails in the first place and the initial outlay is quite substantial (in the order of SGD 10K each).
We just hope for the best and sleep well.
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The amt should be close to SGD 800 mio – 1 bio, from good estimation. HSBC trustee or CDP should be able to provide the accurate figure.
ReplyI would like to propose several courses of action for consideration:
1. a) Please, you MUST write (not fill up a feedback form on the bank’s website!!) to your bank. MAS has already asked investors to do this and as what VSL said above, at least they cannot say this avenue was not explored.
b) Please copy the letter to MAS as well so that they will know the numbers involved.
c) I would advise REGISTERING the letters to demonstrate seriousness.
2. For Singaporean investors, you should write to your respective MPs (email addresses are in Parliament website). I know of at least 1 MP that has been sent some of the info here and elsewhere. It’s time they help their constituents. The elderly, retirees, retirement funds, banks like DBS are all powerful hot-button issues in Singapore.
3. We need to combine both the Minibond and DBS High Notes investors. Nothing speaks louder than sheer numbers. And as someone said last night, we must also make sure the older investors are informed – the non-English newspapers need to be informed.
4. Convene a forum on Sunday 28th. Quite a number of people may not be aware of yesterday’s meeting, and most importantly Tan Kin Lian is away until Sat 27th. He will be a great point-man for this. In this fight, we will need a credible, media and finance-savvy champion. So far, he’s been great.
5. I would suggest this forum be held at MAS. The very least they could do is help to provide facilities. For investors, it would show a serious intent for the forum.
6. This is F1 race weekend. The international press is in town. Wouldn’t it be great if one or two of them can cover this growing issue. I am sure MAS and banks will really get the message then – reputations and MAS ambitions will be put under the microscope.
Reading the press statements from banks and MAS, and also individual investor’s experience seeking answers/redress, it is quite clear that all these parties just want to shelf away the difficult questions and avoid blame. Investors need to apply pressure to make sure that they don’t succeed. Only then will they act. I am not happy with MAS’ latest statement – are you?
Replyall this is a case of the FI mis-leading us, if any of the reference entity really collapsed,it would affect our investment, we jolly well accept it because we understand that this is the risk involved because we were told, but now is out of sudden, the arranger collapsed, HOPE THAT MAS CAN DO SOMETHING TO HELP THOSE UNCLES AND AUNTIES HERE AS THEY MIGHT NOT BE FAMILAIR TO THOSE DETAILS AND THE THOUSANDS OF PEOPLE WHO ARE BEING MIS-lead into buying this products
ReplyThanks alot lioninvestor.
J_asmine – no point in blaming yourself like I did last week. I’m also a graduate in Finance …. even drag my mum’s life savings in ! All the FIs when they market the products simply tell us it is a low risk products with steady stream of income….. even they persuaded me to invest in Unit Trusts, I told them I’m risk adverse, somemore my mum needs something more secured. Now all these happened and I still did not dare to break the news to her, looks like I have to compensate her out of pocket even my life savings are gone now. I’m not sure who has the legal knowledge here is kind enough to help us ……..just pray that MIRACLE will happen soon ! I just spend my days like zoombie ever since this event started, lucky enough we have this web to share our woes.
ReplyWhen I bought this, I was in middle of year 3 undergrad in engineering. I’m not sure if our supposedly better finance knowledge prevent us from having a case against the FI since we entered with our eyes wide open (supposedly, again). My mum gave me a sum to “invest”. I dared not use the money on stocks as I thought she needed something safe. If I had poured into blue chips like Singtel, I would probably lost only ~10% and with a good yield too! Similarly, I had decided to “absorb” the loss myself.
ReplyI can also return the monies back to my parents out of my own pocket. I did some calculation and based on my current pay and on top of what I used to give them, I can fully pay up by 9 years time!!! 9 years!?!!!!
ReplyThanks alot lioninvestor.
J_asmine – no point in blaming yourself like I did last week. I’m also a graduate in Finance …. even drag my mum’s life savings in ! All the FIs when they market the products simply tell us it is a low risk products with steady stream of income….. even they persuaded me to invest in Unit Trusts, I told them I’m risk adverse, somemore my mum needs something more secured. Now all these happened and I still did not dare to break the news to her, looks like I have to compensate her out of pocket even my life savings are gone now. I’m not sure who has the legal knowledge here is kind enough to help us ……..just pray that MIRACLE will happen soon ! I just spend my days like zoomy ever since this event started, lucky enough we have this web to share our woes.
ReplyI’m so fed up! Initially I didn’t dare to let my parents know as well as it is a HUGE sum of money dumped in this pdt. But I have to break the news to them to get them mentally prepared.
I only got my updates through this blog. Called my banker only on last Monday to ask for more information but he couldn’t provide more but to ask me to wait! I don’t blame him, really! Unlike other bankers, he took time to explain to me the situation and assuring me that he will provide latest updates to me if there is any.
We also have Pinnacle Notes! Praying hard that nothing is going to happen.
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