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http://newpaper.asia1.com.sg/news/story/0,4136,192145,00.html?
Elderly woman gets back entire $100k savings
Refund possibly the highest, some get up to 30% of investments
By Elysa Chen
February 08, 2009
UPSET: In September last year, a group of Lehman Minibond investors met to voice their grievances over the products. Some investors have since recovered part of their investments. --ST FILE PICTURE
AT LEAST one investor has received a refund of her entire savings of $100,000 which was placed in the Minibond notes linked to the failed Lehman Brothers.
But the investor, an elderly woman, appears to be one of the lucky few. Many others could get back only 20 to 30 per cent of their investments, said former NTUC Income CEO Tan Kin Lian.
Hers is the highest refund he knows of, and others who got back their full investment had put in less, said Mr Tan, who has been helping these investors.
Investors who have been able to prove that they were mis-sold risky structured products like DBS High Notes 5 and the Minibond programme notes have been getting refunds from the financial institutions they bought these from.
It was the woman's son-in-law who submitted her claim.
Mr Tan declined to reveal more details, due to a non-disclosure agreement that the investor had with the financial institution.
Explaining why they were able to successfully get full compensation, Mr Tan said: 'He was able to put together a convincing case to the financial institution.'
In a note thanking Mr Tan for his help, the man said they had 'positioned (their) complaint based on the advice given in (Mr Tan's) blog'.
This included preparing statutory declarations explaining how they had got involved in the investments, whom they had bought from and what they had been told about the product.
Mr Tan said: 'His mother-in-law was considered a vulnerable investor, and had probably invested in a Minibond note that is still not completely worthless.'
Also, the family had written proof that they were risk-averse, and by reaching the settlement, the financial institution was putting emphasis on customer relations, said Mr Tan.
Mr Tan said the percentage of investors getting full compensation was higher than he expected. (See box.)
But from his experience in dealing with the investors, he suspects that full compensation was given mainly to those who had put in less than $20,000 each in the notes.
Mr Tan had no official figures for the total amount refunded, but based on feedback from the ground, he said: 'I estimate that the amount that has been paid out is probably only 10 to 15 per cent of the total amount lost by investors.'
Check carefully
Mr Tan advises investors to check carefully before accepting any partial compensation because some of the notes may 'still have 90 per cent of their value'.
Different series of the notes are invested in different combinations of assets, said Mr Tan.
So some of them may have a higher underlying value and are likely to be worth more if they are held until market conditions improve.
He said: 'Financial institutions are more willing to compensate more for those series with higher underlying value. In return for compensation, you need to transfer your rights of the notes to the financial institution, so that if the market improves, they will be able to reap the benefits, if any.'
Mr David Gerald, CEO of the Securities Investors Association (Singapore) also felt that the high number of investors who are walking away without any compensation at all might be due to 'many investors who are just trying their luck'.
He said: 'I've even heard of the CEO of a financial institution who claimed that he was mis-sold a product!'
Mr Gerald said that those who received 100 per cent compensation were mostly those who had successfully proven that they were vulnerable investors who were mis-sold the products.
However, a large percentage of those who received partial compensation were offered settlements on the basis of goodwill.
'Those who fall outside the vulnerable group and are offered partial compensations will be unhappy, but the fact that they are offered something is better than getting nothing,' said Mr Gerald.
'This a reminder for companies to sell responsibly, and also for investors to invest responsibly.'
--------------------------------------------------------------------------------
PAYOUTS
1. Minibond investors needed a minimum of $5,000 to invest, while DBS High Notes 5 investors needed a minimum investment of $25,000.
2. Settlements (as of Jan 14)
Full settlement
DBS High Notes 5: 8 per cent
Lehman Minibond Programme Notes: 34 per cent
Partial settlement (50 per cent and above)
DBS High Notes 5: 9 per cent
Lehman Minibond Programme Notes: 25 per cent
Partial settlement (below 50 per cent)
DBS High Notes 5: 7 per cent
Lehman Minibond Programme Notes: 16 per cent
Elderly woman gets back entire $100k savings
Refund possibly the highest, some get up to 30% of investments
By Elysa Chen
February 08, 2009
UPSET: In September last year, a group of Lehman Minibond investors met to voice their grievances over the products. Some investors have since recovered part of their investments. --ST FILE PICTURE
AT LEAST one investor has received a refund of her entire savings of $100,000 which was placed in the Minibond notes linked to the failed Lehman Brothers.
But the investor, an elderly woman, appears to be one of the lucky few. Many others could get back only 20 to 30 per cent of their investments, said former NTUC Income CEO Tan Kin Lian.
Hers is the highest refund he knows of, and others who got back their full investment had put in less, said Mr Tan, who has been helping these investors.
Investors who have been able to prove that they were mis-sold risky structured products like DBS High Notes 5 and the Minibond programme notes have been getting refunds from the financial institutions they bought these from.
It was the woman's son-in-law who submitted her claim.
Mr Tan declined to reveal more details, due to a non-disclosure agreement that the investor had with the financial institution.
Explaining why they were able to successfully get full compensation, Mr Tan said: 'He was able to put together a convincing case to the financial institution.'
In a note thanking Mr Tan for his help, the man said they had 'positioned (their) complaint based on the advice given in (Mr Tan's) blog'.
This included preparing statutory declarations explaining how they had got involved in the investments, whom they had bought from and what they had been told about the product.
Mr Tan said: 'His mother-in-law was considered a vulnerable investor, and had probably invested in a Minibond note that is still not completely worthless.'
Also, the family had written proof that they were risk-averse, and by reaching the settlement, the financial institution was putting emphasis on customer relations, said Mr Tan.
Mr Tan said the percentage of investors getting full compensation was higher than he expected. (See box.)
But from his experience in dealing with the investors, he suspects that full compensation was given mainly to those who had put in less than $20,000 each in the notes.
Mr Tan had no official figures for the total amount refunded, but based on feedback from the ground, he said: 'I estimate that the amount that has been paid out is probably only 10 to 15 per cent of the total amount lost by investors.'
Check carefully
Mr Tan advises investors to check carefully before accepting any partial compensation because some of the notes may 'still have 90 per cent of their value'.
Different series of the notes are invested in different combinations of assets, said Mr Tan.
So some of them may have a higher underlying value and are likely to be worth more if they are held until market conditions improve.
He said: 'Financial institutions are more willing to compensate more for those series with higher underlying value. In return for compensation, you need to transfer your rights of the notes to the financial institution, so that if the market improves, they will be able to reap the benefits, if any.'
Mr David Gerald, CEO of the Securities Investors Association (Singapore) also felt that the high number of investors who are walking away without any compensation at all might be due to 'many investors who are just trying their luck'.
He said: 'I've even heard of the CEO of a financial institution who claimed that he was mis-sold a product!'
Mr Gerald said that those who received 100 per cent compensation were mostly those who had successfully proven that they were vulnerable investors who were mis-sold the products.
However, a large percentage of those who received partial compensation were offered settlements on the basis of goodwill.
'Those who fall outside the vulnerable group and are offered partial compensations will be unhappy, but the fact that they are offered something is better than getting nothing,' said Mr Gerald.
'This a reminder for companies to sell responsibly, and also for investors to invest responsibly.'
--------------------------------------------------------------------------------
PAYOUTS
1. Minibond investors needed a minimum of $5,000 to invest, while DBS High Notes 5 investors needed a minimum investment of $25,000.
2. Settlements (as of Jan 14)
Full settlement
DBS High Notes 5: 8 per cent
Lehman Minibond Programme Notes: 34 per cent
Partial settlement (50 per cent and above)
DBS High Notes 5: 9 per cent
Lehman Minibond Programme Notes: 25 per cent
Partial settlement (below 50 per cent)
DBS High Notes 5: 7 per cent
Lehman Minibond Programme Notes: 16 per cent
