SINGAPORE INVESTORS STAGE PROTEST AT SPEAKERS CORNERS.

Held at Speakers' Corner, the only outdoor area where public meetings can be held without a permit, the crowd included several people who were sold products in July, when there were already concerns about Lehman's health. -- DESMOND WEE/THE STRAITS TIMES

ABOUT 600 investors in Lehman-linked derivatives held a public meeting in Singapore on Saturday to protest about the way banks sold them the investment products and to discuss ways to get compensation.

Held at Speakers' Corner, the only outdoor area where public meetings can be held without a permit, the crowd included several people who were sold products in July, when there were already concerns about Lehman's health.

'They never told me the issuer was Lehman and I told the manager I was afraid of American banks,' said Ms Lin Ling, who bought S$60,000 worth of Lehman-linked 'Minibonds' from a Singapore finance firm that had marketed the structured notes as a safe alternative to fixed deposits.

Ms Lin said she was persuaded to buy the notes when she went to renew a fixed deposit account. She and other investors showed brochures printed by the finance company which did not say the products were structured by Lehman.

A few elderly investors broke into tears saying they had lost a large portion of their retirement savings. 'I didn't know it's Lehman. There's no Chinese explanation,' said a lady in her 60s who identified herself as Madam Lee. 'I don't want interest, I just want my deposit back.'

Investors in Hong Kong, Singapore and Indonesia have over the past month complained the bond-like products they purchased from banks were actually complex derivatives and that they stood to lose most or all of what they had invested.

Both Singapore and Hong Kong have rules that say banks must ensure that clients purchase investment products that were consistent with their needs and risk profiles.

The products included Minibonds which were sold in Hong Kong and Singapore and DBS Group's High Notes 5 series, which would lose most of their value should anyone of eight underlying firms, including Lehman, go bankrupt.

These structured notes offered modest returns of between 4 and 6 percent per annum. The Monetary Authority of Singapore (MAS) said about 9,700 people had bought Lehman-linked structured notes worth over S$500 million. Hong Kong authorities meanwhile said they have received more than 7,000 complaints from investors alleging banks improperly sold them Lehman-related investment products.

MAS has said that while it can impose fines and suspend the licenses of financial institutions found to be in breach of its rules, it does not have the power to order banks to compensate investors.

According to Mr Tan Kin Lian, one of the protest organisers, Saturday's gathering was to allow investors to meet and organise themselves so that they could get take collective action against the sellers or petition their Members of Parliament. -- THOMSON REUTERS

(http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_288734.html)

WHOS AT FAULT?

The people who purchased the bonds pointed their fingers at the banks for not informing them about the high risk and volitality of such products when selling them those bonds. They furthered that such matters are always in small fine print and included jargons that a non-financial person would not be able to apprehend. Such matters are made worst when they are only being told of the benefits and not the risk that comes with it.

In my opinion, i strongly think that there are bank agents (i use bank agent because of the different title that banks assign to their sales person) who will, on the need to hit the minimum target of sales per month, use unethical methods to push and sell their products even though their clients do not know what and where their money are going.

On the other hand, im quite surprise that such bonds holders are retirees, chinese speaking old folks who obviously cant understand those english description of the products and house wives alikes. Isn't this the same as trying to sell magical stones to the old lady walking down the street?

I was watching CH8 News where this old lady who can only speak fluently in cantonese told the news reporter that her entire $400,000 life savings are invested in the bond, and was told that it is safe and wont be lost. On seeing Lehman Bro bankruptcy in USA, she called the bank agent and was then told that she might lose her entire $400k investment...

My my, wat a tragedy, $400k maybe peanuts to some bank executives/agents during the high times when they earn this amount in like less than months/years? but this old couple may had taken 20 - 30 years to save this amount for retirement?

On the other hand, part of the blame have to be taken by the people who invested in the bonds, as the interest rates are too high to be true and not to be any high risk attached to it, some even claimed that they are being told that it is principal protected. Yes, it is principal protected provided the co. issuing the bonds do not go bust.

Both Singapore and Hong Kong have rules that say banks must ensure that clients purchase investment products that were consistent with their needs and risk profiles.

This is 1 patricularly grey area. How do you define people whose needs and risk profiles matches those bonds issued by the banks?

You may say that the auntie or uncles sipping coffee at the coffee shop every morning reading news paper are not suitable to invest in high risk bonds or they don't need it. But how would you know if maybe they rely on such products to make a fortune?

At the end of the day, once you put ur signature on the line to sign up for the bonds, you are taken to understood every single word that is in the contract. Its just too bad that these investments went bad and that it is unknown if they will ever get back their investments. However to ask for compensation for being misinformed about the product is as good as asking the casino to refund you back your money because they did not stop you from over gambling. if ever such compensation is returned, then can listed co. return shareholders money for the lost in value of the shares?

On the other hand lets see what is happening in HONG KONG...

DBS Bank in Hong Kong has said it will offer full compensation to customers who bought mini-bonds issued by Lehman Brothers. Customers only need to prove to DBS that DBS staff misled them during the sales process (0:23).

http://www.scmp.com/portal/site/SCMP/menuitem.02bb4e979f5e08d5df646910cba0a0a0/?vgnextoid=a5a3dce60f1ec110VgnVCM100000360a0a0aRCRD&vgnextfmt=teaser&ss=Blogs&s=Home&type=Audio


http://singaporemind.blogspot.com/2008/10/break-news-minibond-holders-in-hk.html

Read on, if you have interest.