Comments on: 84-page minibond prospectus

By: Justin

Justin — Wed, 25 Feb 2009 15:36:58 +0000

there is hope for Lehman minibond notes victims.
an investors action group has engaged a lawyer to seek redress.
http://www.minibondsg.blogspot.com

By: TichPillina

TichPillina — Tue, 30 Dec 2008 09:18:34 +0000

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By: cjc

cjc — Sun, 07 Dec 2008 20:23:00 +0000

Many questions have been raised over whether those who purchased Lehman Brothers-backed Minibond notes had the risks of these products adequately explained to them…. The 84-page document was issued in some cases to illiterate retirees.

I don’t find this reason practical enough to win this case in court. Even an illiterate person will buy and use a refrigerator without reading through all the terms of usage and risk. So if a refrigerator somewhere explodes and injure someone, can everyone who has a refrigerator at home ask for a refund?

On pragmatic grounds, chances of showing that the structured product is so complicated that it is unfit to be sold in the first place (but not other types of investment products or any other merchandise) is incredibly remote.

By: Remote guy

Remote guy — Sun, 07 Dec 2008 19:33:34 +0000

Lots of people seem to be worried about the prospectus shifting the blame back onto the buyers.
But there are other key questions too.
Did the government imposed conditions to protect the buyers? E.g. prohibiting selling to anybody who cannot understand the prospectus?
It may be a criminal offense to hand out application forms and advertising flyers without also making available a copy of the registered prospectus. Did this happen to anybody? If so, just have the selling banker arrested for criminal investigation. This offense can be committed even if there is no misrepresentation.
Finally, things may change materially from the date of the prospectus registration. That invalidates a prospectus unless it is updated. By early 2007, the US mortgage crisis was generally known and over 25 large mortgage lenders declared bankruptcy, with underlying securities prices plunging. But some banks were still selling this stuff well into 2007. The question is not whether they knew, but should they have known if they exercised due care?

By: Jeff Sonn

Jeff Sonn — Wed, 19 Nov 2008 01:00:05 +0000

The reality is that despite the alleged risk disclosures, financial advisors, brokers or promoters usually do not emphasize the risk, only the return and safety of the investment. In the US, it is against just and fair principals of trade to sell an investment by only trying to sell how safe an investment may be, when the prospectus discloses substantial risk. This is a serious violation of the duty of the seller’s agent because they are not giving a balanced presentation of the risks, only the rewards. It is misleading to sell something just based on the size of the company that underwrites the product, without disclosing that the true collateral, being very risky collateralized debt obligations or subprime collateralized mortgage obligations, are instruments that were created by the firms to sell to the public, where the lower tranches of the investment are likely never to pay off. There was no reasonable efforts to perform underwriting on the very products that were serving as the collateral for these so called mini-bonds. We feel that the sellers, agents and promoters have some responsibility here for not truely knowing the product they sold before they sold it.

By: Lion Investor

Lion Investor — Sat, 25 Oct 2008 15:07:15 +0000

39) Donaldson,

the pricing statement of one of the series can be found here:

http://www.lioninvestor.com/minibonds-update/

By: Can Naive sporeans still remember lesson 2 years later?

Can Naive sporeans still remember lesson 2 years later? — Fri, 24 Oct 2008 16:38:30 +0000

That is the question.
Lesson forgotten can only be relearnt by having another boo boo another of their lifetime savings.

By: [Click here for Minister Lim Hng Kiang 's Transcript]

[Click here for Minister Lim Hng Kiang 's Transcript] — Fri, 24 Oct 2008 10:08:59 +0000

You must read the Prospectus before deciding whether to invest…”. If this is the case, how come the bank can sell the product without presenting the prospectus to me? – Fedup (#49)

The base prospectus and the pricing statement are provided individually to the retail investor. This practice has to stop.

By: Fedup

Fedup — Fri, 24 Oct 2008 09:48:58 +0000

I have purchased other notes not affected my this current crisis. I don’t have the chance to read the prospectus cos it was never sent to me in the first place (the RM told me that it will be sent to me later)! Based on the RM’s recommendation and the full assurance that it works like a FD (capital protected), I was persuaded to buy the notes. What I have is the brochure which indicates in fine print that “Investment involves risk. You must read the Prospectus before deciding whether to invest…”. If this is the case, how come the bank can sell the product without presenting the prospectus to me?

By: Kang Ah Loo

Kang Ah Loo — Fri, 24 Oct 2008 05:04:16 +0000

Singapore’s news may report it as financial hub and 1st world.
Can I ask them, in light of this Fiasco causing much greive in investors, is Singapore able to provide a 1st world Financial services?

Relationship managers and FI and banks, Ask yourselves!

By: zhummmeng

zhummmeng — Thu, 23 Oct 2008 17:22:55 +0000

cst,
the episode continues with the one kindergarten engrish educated one.
.
Teller to potential investor or would be victim,
Sir, you want good return , no risk?
Inv: got huh? good, good , tell me more.
Teller: wait, I introduce you one very good RM, you sure invest with her.
she can give good return.
Teller to RM: “hey, i got one fat one with fat account. Want or not? i already presold you and the product.” she whispered to RM.
RM: Sir, If i can grow your money 5 times would you be interested?. FD only earns you less 1%, this one gives 5%. This one is called Minibomb. When it explodes your money will explode 5 times that you cannot recognise your house
Inv :wow!! so powderful, interest rate must be very high.
RM: OK? i take out forms and you sign.
Inv: Can i put all?
RM: sure!!! you got any under your bed , also can put here.
Inv: No, lah.. this is all I got, $500K
RM: Ok, $500K also good. Now take this prospectus, you go home read. Don’t say I never give you but you sign here first.
Inv: but I haven’t read, you ask me to sign.
RM: same, lah, read now or at home you read same thing right?
Inv: ya lah.. Ok. where to sign? Wah, so many to sign.
RM: this is to make you safe…
After every thing completed.
RM: Sir ,you are very good man. I wish you luck.
Inv: what luck? I don’t play 4-D.
RM: same like 4-D, you also need luck.. I want to give you a gift. Here is $5 voucher to eat ice cream at Siansen Icecream.

By: gemami

gemami — Thu, 23 Oct 2008 05:01:52 +0000

44)

never, never, NEVER ask such a question.

reason is, you will never get to hear them criticise themselves.
these people are so brain-dead that their job is just to echo what they hear from the top. the very junior ones even have to wipe backsides when told to.

and all of them will tell you they have ‘contributed’ to society – because they live in a different society of their own.

so please, never, never, NEVER ask such a question even though it is a good one for one to examine his conscience at the end of each day.

By: cst

cst — Thu, 23 Oct 2008 05:00:05 +0000

re: zhummmeng on October 22nd, 2008 6.25 pm

Imagine if the RMs did comply with section 27 by conducting a need analysis with the uncles, Ah Peks and Ah Sohs do you think that RMs dare to recommend structured products and justify it? Unlikely , becuase she or he will not take the risk…

i can imagine the following converstion:

ah pek: this one “oon boh” woo wee hiam boh?

RM: ah pek, everything also got risk lah. you walk out of this bank, someone throw flower pot from upstairs also can hit you on the head! But lau seet kong, very oon (safe) want. big ang moh bank, buay toh. risk very very very small. SUIT YOUR RISK PROFILE. why not, earn 5 times FD interests!

before we put all the blame on RMs, if they really believe that the product carries very low risks and yet earns 5 times the interests paid on FD, they may honestly be thinking it benefits the Ah Pek.

By: How Does news people feel they have contributed to SOCIETY?

How Does news people feel they have contributed to SOCIETY? — Thu, 23 Oct 2008 04:51:14 +0000

Any comments from news people out there researching on the internet and happen to see this question?

By: Observer (SG-HK)

Observer (SG-HK) — Thu, 23 Oct 2008 03:59:00 +0000

42) Donaldson Tan on October 23rd, 2008 11.07 am

Look at the positive side, they are at least willing to take the first steps to compensate. As to the percentage compensated versus amount invested by those investors, let the investor’s be their own judge to see whether it is reasonable.

Whether ST choose to omit whichever portion has no bearing to the actual proceeding of the case. ST is just reporting it as news and it is subjective to their edditorial.

By: Donaldson Tan

Donaldson Tan — Thu, 23 Oct 2008 03:07:53 +0000

The news is out last evening that DBS has begun their compensation process to some of investors both in HK and SG. So this is at least some eoncouraging news to those who are affected the most. Let’s hope there are better news coming their way. – Observer (SG-HK) (#40)

http://www.straitstimes.com/Breaking%2BNews/Money/Story/STIStory_293690.html

ST made an omission in the above news article. ST claims that DBS will compensate S$70-80M to DBS High Notes 5 investors. This is true, but what ST didn´t say that is that this S$70-80M is the expected compensation sum for all DBS High Notes 5 investors in Singapore and Hongkong. DBS High Notes 5 Investors from Singapore and Hongkong has invested a total of S$360M, so the compensation is actually less than 25%.

By: Observer (SG-HK)

Observer (SG-HK) — Thu, 23 Oct 2008 03:05:59 +0000

Oops. It should read “Live is not always necessary measured with Wealth…” Please accept my sincere apology for the typo error.

By: Observer (SG-HK)

Observer (SG-HK) — Thu, 23 Oct 2008 03:03:06 +0000

37) don on October 22nd, 2008 9.46 pm

Coming back to your point that it should not simply be a neglience case when so many are involved… I really can express no views on this as we (at least I am) not one of them who invested and do not know the details of the transaction process then. I can only say, at a time like this, each individual will use its best effort to safe guard their interest. I am not implying that they will deny what had been agreed verbally when investments paper were signed (if there are no written evidence), it is human nature behavior commonly found in each one of us (unless you are a saint).

As a fellow Singapore citizen and as a conscience fellow human being of planet earth. I certainly hope for the best settlement outcome for these affected folks. if there is one lesson they need to learn, I think fundamentally, take the noble advice of “someone with poor English”. Live is always necessary measured with wealth albeit a majority of people in this world particularly those who are capitalistic would agree. That’s us, HUMAN. We are all different in many perspectives.

By: Donaldson Tan

Donaldson Tan — Wed, 22 Oct 2008 19:20:50 +0000

This is just the base prospectus. Each series of mini-bond has an additional prospectus document known as the pricing statement. The pricing statement also contains information on the basket of entities for each mini-bond and the promised interest rate. We need more information to be made public.

By: blade

blade — Wed, 22 Oct 2008 16:40:40 +0000

gemami (#21):
it’s encouraging to hear that you too share the same views as me.