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Sep 10, 2009
165 sue over Minibonds <!--10 min-->
<!-- headline one : start --> <!-- headline one : end --> <!-- Author --> <!-- show image if available --> <table border="0" cellpadding="0" cellspacing="0" width="100%"> <tbody><tr></tr> <tr> </tr> <tr> </tr> <tr><td colspan="2" class="padlrt8 georgia11 darkgrey bold">By Francis Chan </td></tr> <tr valign="bottom"> <td width="330">
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According to sources, most of the investors in this group do not fall within the 'vulnerable class'. -- ST PHOTO: CAROLINE CHIA
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MORE than 165 investors who lost a total of about $20 million on Lehman Minibonds have begun legal action in a bid to get their money back.
The Straits Times understands that the investors will be serving court papers on Thursday afternoon. But the two sources declined to reveal the parties being sued until the writs have been served by end of Thursday. According to the sources, the investors are members of the Minibond Investors Action Group (MIAG), which first surfaced in February. Although the merits of the case remain unclear, MIAG told The Straits Times in February that it believed 'a class action' against the distributors and HSBC Trustee - the notes trustee - was the most effective way to 'seek redress and recoup our loss'
MIAG had hope to get about 1,000 investors to commit between $2,000 and $3,000 each for a $2.5 million war chest at the time. It also said the money will be used to fund court action, against the various Minibond distributors and the products' trustee. Legal adivser to MIAG, lawyer Conrad Campos of Conrad Campos & Company also said at the time that the complicated nature of Minibonds - sophisticated derivatives linked to various entities through credit default swaps involving collateral - may be enough in itself to build a case of mis-selling. According to sources, most of the investors in this group do not fall within the 'vulnerable class', which has had some success in gaining compensation after the Monetary Authority of Singapore (MAS) intervened early this year.
Most of them also bought Minibonds from brokerages instead of from banks. This is the second collective legal action that has been taken against financial institutions in recent months in the wake of the crisis. In July, 204 investors who lost about $17 million on another structured note called DBS High Notes 5, sued DBS Bank in a bid to get a refund. About 9,900 people lost most or all of their investments totalling about $520 million in structured products such as Minibonds and DBS High Notes 5. Ten financial institutions here were penalised, and 3,900 investors got $107 million as compensation. On Tuesday, Singapore's financial regulator decided to ban the use of terms like 'capital protected' or 'principal protected' because too many investors do not understand them. MAS said its latest action was part of its response to feedback that it had received on proposed changes in the wake of structured products fiasco.
Sep 10, 2009
165 sue over Minibonds <!--10 min-->
<!-- headline one : start --> <!-- headline one : end --> <!-- Author --> <!-- show image if available --> <table border="0" cellpadding="0" cellspacing="0" width="100%"> <tbody><tr></tr> <tr> </tr> <tr> </tr> <tr><td colspan="2" class="padlrt8 georgia11 darkgrey bold">By Francis Chan </td></tr> <tr valign="bottom"> <td width="330">
</td> <td width="10">
According to sources, most of the investors in this group do not fall within the 'vulnerable class'. -- ST PHOTO: CAROLINE CHIA
</td></tr> </tbody></table>
MORE than 165 investors who lost a total of about $20 million on Lehman Minibonds have begun legal action in a bid to get their money back.
The Straits Times understands that the investors will be serving court papers on Thursday afternoon. But the two sources declined to reveal the parties being sued until the writs have been served by end of Thursday. According to the sources, the investors are members of the Minibond Investors Action Group (MIAG), which first surfaced in February. Although the merits of the case remain unclear, MIAG told The Straits Times in February that it believed 'a class action' against the distributors and HSBC Trustee - the notes trustee - was the most effective way to 'seek redress and recoup our loss'
MIAG had hope to get about 1,000 investors to commit between $2,000 and $3,000 each for a $2.5 million war chest at the time. It also said the money will be used to fund court action, against the various Minibond distributors and the products' trustee. Legal adivser to MIAG, lawyer Conrad Campos of Conrad Campos & Company also said at the time that the complicated nature of Minibonds - sophisticated derivatives linked to various entities through credit default swaps involving collateral - may be enough in itself to build a case of mis-selling. According to sources, most of the investors in this group do not fall within the 'vulnerable class', which has had some success in gaining compensation after the Monetary Authority of Singapore (MAS) intervened early this year.
Most of them also bought Minibonds from brokerages instead of from banks. This is the second collective legal action that has been taken against financial institutions in recent months in the wake of the crisis. In July, 204 investors who lost about $17 million on another structured note called DBS High Notes 5, sued DBS Bank in a bid to get a refund. About 9,900 people lost most or all of their investments totalling about $520 million in structured products such as Minibonds and DBS High Notes 5. Ten financial institutions here were penalised, and 3,900 investors got $107 million as compensation. On Tuesday, Singapore's financial regulator decided to ban the use of terms like 'capital protected' or 'principal protected' because too many investors do not understand them. MAS said its latest action was part of its response to feedback that it had received on proposed changes in the wake of structured products fiasco.
