Structured Products ( incl Minibonds, High & Pinnacle Notes)

[kennynah]

they are asking becos they thought they are immune to any class action suit...until they see HK govt kana court case.... would you think they are seeking legal council advice for the sake of the investors? haha.. i am not so certain of their "for the people" co*k talking..

[millionairemind]

Hong Kong banks repay HK$30 million in mini-bond scandal
Posted: 10 December 2008 1424 hrs

HONG KONG: Hong Kong banks have paid back HK$30 million (US$3.9 million) to investors who said they were missold financial products backed by failed US giant Lehman Brothers, a lawmaker said Wednesday.

About 60 people have so far received compensation from the banks, Democratic Party legislator and lawyer Albert Ho said, in the scandal that has led to protests across the Asian financial hub.

But Ho lamented that the settled cases represented fewer than one per cent of the 7,000 cases the party has been handling.

"After more than two months' effort, we have successfully pressured the banks to settle about 60 cases through mediation, allowing the victims to get back the money they earned with their blood and sweat," Ho told AFP.

He added that the investors had managed to get a full refund in some of the cases, but refused to give a breakdown.

"However, this number is very small. Many times, we had to threaten them with lawyers' letters before the banks agreed to settle," he said.

More than 40,000 Hong Kong investors - including many retirees - had put a total of HK$15.7 billion of their savings into mini-bonds and other complex products backed by the investment bank.

Former Wall Street icon Lehman Brothers collapsed in September under mountains of debt, making many of the investments completely worthless.

Ho said other cases may have to use the courts to find a settlement.

He added a group of US lawyers will fly to Hong Kong later this month to discuss a proposal for a cross-country lawsuit against the US institutions involved in the handling of the Lehman-backed products.

Meanwhile, two Singaporean residents have become the first to launch a lawsuit in Hong Kong's High Court over the mini-bonds saga, The Standard newspaper reported Wednesday.

In a writ filed on Tuesday, Stephen Tou and Wong Fung-chun sought HK$9.83 million in compensation from DBS Bank (Hong Kong).

They said they had put almost all their life savings into Lehman-backed structured notes after staff at the bank told them the investment was safe.

- AFP/yb

[LenaHuat]

IMHO, class action is the only stick that will make the banks sit up and take the investors seriously.
The chances of success isn't slim. The group of American lawyers might well be acting for some American investors too.
The process of law will be long and expensive but there is a very good case for fraud against the banks.

[LenaHuat]

For some forumers who bought Pinnacle Notes Series 8 and who might well be quietly reading this thread, please note that Morgan Stanley has issued a report on Australian banks. PM me if U want to read it. I have a relative who bought this and am suffering like hell and so I actively track this issue.

[Cheng]

Wednesday, December 17, 2008
Bank RM has courage and integrity
FOR TOP PRIORITY ATTENTION

A RM of a bank called me. He is willing to come forward to sign a statement that he has been giving the wrong information about the credit-linked notes to the bank customers, due to his ignorance. He will be contacting other RMs to come forward and make a similar statement.

He told me that his bank had put pressure on him by stating that he would be held personally responsible to compensate the customers, if he admitted to giving the wrong information. He said that, when he sold the notes to the customers, he was not aware about the actual risks of the notes, due to the complexity of the structure and the poor training given to the RMs.

I told this RM that the bank does not have the right to hold him financially responsible for the honest mistake, especially as most of the other RMs were also poorly trained about these notes. It would be wrong for the bank to expect the RMs to tell a lie now to cover up for the mistakes.

I will arrange for these RMs to get legal advice and to make a statutory declaration about the actual statements and assurances that they gave to the customers about the notes.

I wish to call other RMs to step foward and be ready to make this statement. Please act honestly and with courage, and do what is right and fair. If you are willing to make this statement, send an e-mail to [email protected]. I will get a large group of RMs to make this statement, so that you will not be standing alone.

Encourage bank relationship managers to do the right thing by confessing to mis-selling
Written by Ng E-Jay (sent by e-mail to Tan Kin Lian)
18 Dec 2008

Mr Tan Kin Lian has revealed on his blog that he was approached by a bank relationship manager who wishes to confess to giving wrong information to investors of failed credit linked notes due to his ignorance about the risks of the product.

According to Mr Tan, this relationship manager has agreed to sign a statement, and will be approaching other relationship managers who are in a similar position to do likewise.

This relationship manager should be applauded for doing the right thing.

However, Mr Tan Kin Lian also revealed that the bank had, in Mr Tan’s words, “put pressure on him (the RM) by stating that he would be held personally responsible to compensate the customers, if he admitted to giving the wrong information.”
Such a threat by the bank is in clear contravention of the Financial Adviser’s Act (Chapter 110).

Under the Financial Adviser’s Act, the Financial Adviser (in this case, the bank) is responsible for the conduct of the Representative (the relationship manager) in respect of providing financial advisory services. If the Representative has mis-sold a product, whether out of ignorance or willfully, the Financial Adviser must take responsibility for it, and also decide whether or not to take action against the Representative. In the case of criminal activity, the Financial Adviser is obliged to lodge a police report, or give an explanation to MAS why a police report is not lodged. These rules are found in the Financial Adviser’s Regulations, which is subsidiary legislation enacted by MAS in support of the Financial Adviser’s Act.
A wrongful act cannot be covered up by telling the Representative to keep quiet about it. That would be outright fraud, the most serious offence under the Financial Adviser’s Act.

Furthermore, Section 68(1) of the Financial Adviser’s Act states that “A person is not excused from disclosing information to the (Monetary Authority of Singapore), pursuant to a requirement made of him under this Part, on the ground that the disclosure of the information might tend to incriminate him.”
Hence, it is not only morally right for the relationship manager to disclose that he has mis-sold a product, he is in fact required to do so under the Act.
We should encourage all Represenatives in similar situations to do the right thing by confessing to mis-selling the structured products and credit linked notes.
In my opinion, MAS should issue a blanket amnesty for all Representatives who mis-sold the credit linked notes due to ignorance. This would encourage more of them to come forward.

It is also very clear to anyone who is an industry practitioner that banks have high sales quotas for their relationship managers and exert tremendous pressure on them to meet those sales quotas.

Furthermore, the Financial Adviser’s Regulations make it clear that Representatives should only sell products in which they have competence. Since the Lehman-linked structured products deal heavily in arcane instruments like Credit Default Swaps (CDS) and Collaterialized Debt Obligations (CDO), it is not likely that the majority of Representatives would have the competence of explaining these underlying instruments to clients and appropriately advising them on the risks involved.
It is the banks and other financial institutions which should take full responsibility for the structured products fiasco.

http://tankinlian.blogspot.com/2008/12/encourage-bank-relationship-managers-to.html

[kennynah]

whatever the case maybe....the bank, an employer cannot abscond her responsibilities to her customers for any wrongful act on part of her employees(agents)... think about it...otherwise, companies will never get sued by relinquishing all blame to employees...
in addition, the contract is established between bank and customers, never customers and relationship managers... if at all, the RM is to be punished, it can ONLY be in tort or wilful misrepresentation...none under contract.

[millionairemind]

HK works on it so quickly.. whereas we in Singapore are simply dragging our feet on this issue...

Jan 9, 2009
HK reviews finance regulation

HONG KONG - HONG Kong has launched a full review of its financial regulation structure after thousands of investors suffered heavy losses after buying products backed by collapsed US bank Lehman Brothers.

Hong Kong's Financial Secretary said the review will firstly aim to better protect retail investors by examining the sale of financial products and whether enough information about them is currently disclosed.

'Later we will carry out a structural review that may be required for improving the regulatory structure and protecting investors as well as other measures that need to be implemented through legislation,' Mr Tsang said late on Thursday.

The move followed the publication of reports by Hong Kong's two regulatory bodies - the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) - into the scandal.

The two have been the target of fierce criticism, after thousands of investors including some retirees, said they were missold the complex products that have seen their value plummet since Lehman's collapsed in September.

In the two reports, parts of which were not released for legal reasons, the regulators agreed there should be a clear distinction between banking services and securities services.

There has been suggestions the two bodies should be merged following the episode.

But SFC head Martin Wheatley on Wednesday said such a move would be very complicated and insisted the city's regulatory system had stood up to the global financial crisis.

More than 40,000 Hong Kong investors put a total of HK$15.7 billion (S$2.9 billion) of their savings into minibonds and other complex products backed by Lehman.

The subsequent loss in their value sparked protests across the city. -- AFP

[millionairemind]

Published January 17, 2009

Refunds in 3 of 5 Lehman review cases
By SIOW LI SEN

MANY investors who got burnt by Lehman-linked products will find their wounds soothed by some form of compensation.

The Monetary Authority of Singapore (MAS) said yesterday that of the 5,127 cases that had been reviewed by financial institutions by Jan 14 this year, some 58 per cent (2,974 investors) will get a full or partial settlement. That is almost three in five.

Some 25 per cent or 1,282 investors will get full settlement of their losses. Another 33 per cent or 1,692 are being offered partial settlement.

As of Jan 14, 2009, the 10 financial institutions that sold DBS High Notes 5, Lehman Minibond Notes and Merrill Lynch Jubilee Series 3 Notes had received a total of 5,381 complaints.

Interestingly, the greatest number of investor complaints were directed at two foreign banks and Hong Leong Finance.

In contrast, DBS Bank - which bore the brunt of the investors' fury over the whole sorry debacle caused by the bankruptcy of the 150-year-old Lehman Brothers Holdings last September - had relatively fewer complaints and settlements.

ABN Amro Bank, now a Royal Bank of Scotland unit, Maybank and Hong Leong Finance have reviewed a total of 3,606 complaints over the sale of Lehman Minibond Notes, the MAS said.



Of the 3,606 reviewed complaints, 75 per cent or 2,704 investors will get a full or partial settlement from the three financial institutions.

The three - ABN Amro, Maybank and Hong Leong Finance - declined to disclose the number of investors who had lodged complaints against them for misselling the products.

A spokeswoman for ABN Amro said that the bank has completed the review of all Lehman Minibond Notes sold, regardless of whether the client lodged a complaint. 'This was done to ensure a fair resolution to all.'

'Of the total number of complaints received by all the financial institutions, a very small proportion were our investors,' she added.

Said Priscilla Loke, Maybank spokeswoman: 'There are various considerations for offering refund to the investors. Not necessary misselling.'

To ensure consistency and fairness in the entire process, Maybank worked closely with the independent party, Law Song Keng, in the establishment of an assessment framework, she said.

'The assessment framework considered, amongst others, factors like age profile, literacy level and investment experience of the investor,' said Ms Loke.

Hong Leong Finance, Singapore's largest finance company, said it 'strongly believes in acting responsibly towards our customers, and is committed to helping them resolve this issue'.

'To date, the company has compensated many of its vulnerable customers as well as others on compassionate grounds. We are now in the process of communicating the outcome to remaining customers and thank all those involved for their patience.'

It added that 'many customers who have received payments have in fact redeposited their funds with Hong Leong Finance and we greatly appreciate their confidence and trust.'

Hong Leong Finance said it has set aside about $45 million in this regard which will be accounted for in the results for the full year ended Dec 31, 2008.

Nine distributors sold Lehman notes worth $508 million, of which $375 million was bought by about 8,000 retail investors over a roughly two-year period until Lehman went bust last year.

Of the nine, six were stockbroking firms and collectively they had 535 complaints reviewed and 13 per cent or 70 investors will receive full or partial settlements.

DBS Bank, which sold High Notes 5 worth $103 million to 1,400 investors, reviewed 835 complaints and offered a full or partial settlement to 24 per cent or 200 people.

In a statement, DBS said 24 per cent of complainants will be receiving some form of compensation.

'This is an indication that the bank's overall processes are largely robust. Nevertheless we acknowledge that improvements can be made and we have already started doing so,' it said.

MAS also gave an update on the status of investigations into the selling practices and policies within each financial institution, as part of its formal investigations.

It said: 'We will be communicating our preliminary findings to the CEOs of the FIs involved.

'As part of due process, MAS will give the FIs a reasonable opportunity to respond to the preliminary findings before making a final decision.'

Finance Minister Tharman Shanmugaratnam said last November that MAS would take 'firm and appropriate regulatory actions' where there are breaches of law or regulations by banks.

These include fines, public reprimands and prohibition orders that ban a bank or its representative from providing financial advice for a specified period.

[winston]

Easy come, easy go

Jacky Cheung makes full fledged return to showbiz

Xin.sg - Friday, January 23

Affected by the Lehman Brothers' bankruptcy, the half-retired Hong Kong singer Jacky Cheung lost S$8million worth of assets, spurring him to re-involve himself in the entertainment industry. Cheung announced plans of his comeback on a Disneyland event.

Cheung made rare appearance on an award ceremony on Jan 18 when he presented flowers to the winner of RTHK Golden needle award, Lin Xi. Subsequently, he showed up at Hong Kong Disneyland Lunar New Year event as their ambassador, and also made star appearance at the premiere gala of Disney animation "Bolt" in which he was involved in the dubbing for a character. Cheung also revealed that he will be releasing a Mandarin album at the end of 2009 and holding world tour concert in 2010.

He will also be making a movie this year and is currently waiting to sign the contract. However, Cheung denied to be returning to the movie industry because he is in need of money.

"This is a small production which will be filmed in Hong Kong only. I'm doing it because I miss making movies. If it is a big production, then I will have to leave Hong Kong for a few months," he said.

[kennynah]

every now and then, when my wife and I see an absent movie star back to work...we amuse each other saying... "no money liao.... get to work"...hahahaha....