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Meeting at Speaker's Corner 18 Oct, 6-7 pm

I attend and take down names of those who attend and sell the list to ISD.
can get at least 2k.
 
tkl should organise more talks and gatherings to stop all forms of gambling including sp and irs...
 
Monday, October 20, 2008
Fraudalent misrepresentation and clear mis-selling
Extrcted from:
http://comment.straitstimes.com/showthread.php?t=14234&page=3

I am a medical doctor and have been a specialist cardiologist for 18 years. As an educated, mature and risk adverse investor, I purchased $130,000 of Lehman Brother’s Minibond Series 5 from Maybank Singapore last year.

Events over the last few weeks have shown that there has been fraudulent misrepresentation and clear mis-selling of the Minibond for the following reasons:

1) The product is not at all a bond, but calling it a Minibond, marketing it as a low risk product and offering a modest return of 5% yearly was clearly intended to mislead the purchaser into thinking that it ranks as a bond in default risk.

2) By associating the product with 5 well known banks, by highlighting the good credit ratings of these banks and by linking the default of the product with a default of any of these banks, the purchaser is made to believe that the bonds are instruments supported by these banks. In fact, the banks have nothing to do with the Minibond which is created solely for the profit of Lehman Brothers and its agent Maybank Singapore.

3) By constantly referring to the ratings of the reference banks, the impression is given that the Minibond is of similar low risk and high grade, with holders protected as would any holder of bonds issued by these banks. It is only now apparent that the Minibond is an unrated structured product; purchasers are NOT holders of bonds issued by these reference banks, and are not even considered to be holders of bonds issued by Lehman Brothers.

4) The impression is given that funds invested in the Minibond will be used to purchase high quality securities that could easily be sold to safely redeem its value if the need arises. In actual fact, even the officers of Maybank do not know what the underlying securities are and an article in the Sunday Times of 19th October reported that the value of the securities in Minibond 5 have been determined to be zero.

I write in the hope that the Monetary Authority of Singapore will take the necessary action to ensure that those dishonestly misrepresenting financial products face the consequences of their action. It is in the long term interest of Singapore as a trusted financial centre that those who behave like unscrupulous traders, mis-selling and cheating purchasers be made to fully face the music. Thank You.

Yours Sincerely,

Dr Ong Hean Teik
20th October 2008
 
Monday, October 20, 2008
Right and decent thing to do for your citizens
Extracted from:
http://comment.straitstimes.com/showthread.php?t=14228&page=2

If a war were to start today, the govt will immediately mobilise our NSmen in the country's defence, I have no doubt about that. NSmen will be reminded of their pledge to protect the nation and no doubt the PM and his cabinet will go whole hog on national TV to remind NSmen that they would be defending not only the country but their loved ones and remind them of the consequences should the enemy were to overrun this place.

But when there is a crisis such as the present when thousands of Singaporeans watch helplessly as their life savings are going to literally disappeared into thin air THE SILENCE OF THE PM AND HIS CABINET IS VERY VERY DEAFENING AND TELLING INDEED!

What has happened to all those theories about social, economic, military and psychological defence under the oft-repeated TOTAL DEFENCE concept promulgated by the govt? Are they all merely theories? Intended merely as propaganda to keep Singaporeans in line only?

This current financial threat has dealt a massive blow to not only the economic defence but perhaps more importantly, the PSYCHOLOGICAL DEFENCE OF SINGAPOREANS, thousands of whom have been accummulating through several decades of hard toil, sweat and even blood, funds for their retirement and old age, since the govt don't believe in welfarism.

Didn't the govt, esp. the MM, said many many times before that the country's reserves is for a rainy day. Hasn't it been rainly badly enough on Singaporeans lately? How really bad must things get before Singaporeans may expect the govt to deign it bad 'enough' to come to their rescue? Perhaps, some mass suicide?

It is amazing that while it is all right to dump billions and billions into the BLACK HOLE of the likes of failed/failing American and European financial institutions, the govt seems to deem it fit to watch the unfolding drama and tragedy being played out at Hong Lim Park and in the mass media, with arms folded in apparent disinterest. This it is doing against a global background of countries like Hong Kong underwriting the losses of its citizens caught in this massive fraud.

No, not this govt here, it would seems! It would prefer to watch the carnage of its citizens, without even a speck of guilty conscience that the govt, esp. the MAS, has a part to play for the desperate situation the citizens are in because it has failed to be good gatekeepers by allowing such high risk products for sale to innocent citizens whose only fault was to stretch their dollar (so that they might be less reliant on charity in their old age and the country in general).

Instead, we see very obvious signs that the govt will be the last among nations to help its citizens AND only if whatever actions it follows will protect its competitiveness, not that it is the right and decent thing to do for your citizens.
 
Monday, October 20, 2008
Right and decent thing to do for your citizens
Extracted from:
http://comment.straitstimes.com/showthread.php?t=14228&page=2

..... Instead, we see very obvious signs that the govt will be the last among nations to help its citizens AND only if whatever actions it follows will protect its competitiveness, not that it is the right and decent thing to do for your citizens.

Why should the government use tax money to 'bail out' these investors? Taxes that hardworking citizens like me have contributed to? The greedy banks should foot the bill.
 
Why should the government use tax money to 'bail out' these investors? Taxes that hardworking citizens like me have contributed to? The greedy banks should foot the bill.

Nobody should foot the bill. Lose means lose already !! When invest correctly, clap hands clap feet, when lose cry father, cry mother, blame neighbours, blame society and gahmen. :mad::mad:
 
Monday, October 20, 2008
Interview at Bloomberg TV
I will be interviewed live at Bloomberg TV at 9.30 am on Tuesday 21 October. I shall be careful, polite and frank.
Posted by Tan Kin Lian at 2:42 PM

http://tankinlian.blogspot.com/

Why all the media exposure for TKL, and still no real solution from him?
Is he trying to be the next president?

Read this

Positive or negative?
Which group do you belong to?

Group 1- Positive
I wish to thank you for your tireless efforts in helping the investors to voice their anguish. Although, I am not optimistic about recovering my savings, given the lack of support from the authority, I nevertheless appreciate what you and your team is doing. Regardles of the outcome, you have my deepest appreciation.

Group 2 - Negative
You advised us to recover the investment from the financial institution. In my opinion, its a not a useful way to do it. It will only sapped our energy and hope and once we make a mistake, we can end up in jail for defamation or for lying. You said be truthful, so be truthful. Please do not give false hope! There is nothing we can do.

Which group do you belong to?
Posted by Tan Kin Lian at 10:31 AM 19 comments

He is hinting that you are not getting your money back, even if you are positive.
 
Views from an ex-private banker
Dear Mr. Tan

I read with interest your good work to investors on the recent debacle. I have more than 15 years experience in investment and private banking, I have quit this line as I was disillusioned with the wealth management industry.

Not only at retail level, even private banks are mis-selling products, putting bank's interest above clients interest. At the start of the credit crisis, I had foreseen the seriousness of the US credit issue, and gave a recommendation that clients sells all their money market funds. My rationale is that its no point earning additional 10-20 basis point but exposing themselves to underlying commercial papers that may default.

I was badly rapped for this recommendation, for the fact that this is not to the interest of the bank. All I could argue was that I was doing for clients' interest, but of course you can expect management's answer to me. A few months later, the US money market fund "break the buck".

Many products are mis-sold. Right from the start, these minibonds/dbs high note products are positioned wrongly - how can a credit link note be deemed as an alternative to deposit.

Is a bond the same as deposit, be it corporate or govt? Everyone knows the answer is no. Bond investor take the risk of the bond issuer, risk on default of that single name.

In this case, these products are linked to 5 credit name, which is even higher risk than straight bonds. If its higher risk than a straight bond, then why is it sold as an alternative to deposit?

Banks position these products wrongly, taught their RMs to speak the marketing story wrongly and ended up, of course, selling it to the wrong group of clients and the wrong risk profile.

Credit link notes, bonds, structured deposits, equity link notes, capital guarantee/capital protected notes, they are all not the same as deposit.

Even if Lehman's default is almost impossible at the point in time, this kind of products could never been sold as a deposit alternative. Just like a bond can never be sold as deposit.

And not just at retail level, even at the so-called more sophisticated Private Banks, the same mistakes are being made. Its time for a overhaul in banking practice and compensation scheme, may this be the last and most bitter lesson to banks

I wish to remain anonymous as I still have many friends in private banking. But being an insider, I feel for clients and investors.

regards
 
The regime's answer to Peasant Ong is simply,

'you die your business'.
 
Former Lehman Brothers CEO subpoenaed
Dick Fuld has received grand jury subpeonas in probe of the largest bankruptcy in U.S. history.
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Last Updated: October 17, 2008: 9:36 PM ET

AMERICA'S MONEY CRISIS

* Bernanke boosts stocks
* Bernanke: U.S. should weigh stimulus
* Global effort thaws credit freeze
* Gasoline tumbles, oil soars past $73
* Stocks gain at open

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NEW YORK (CNN) -- Former Lehman Brothers CEO Richard Fuld has been subpoenaed in connection with three grand jury probes into the investment bank's bankruptcy, a source with direct knowledge of the bankruptcy filing told CNN Friday.

Lehman Brothers announced its filing on September 15, the largest such filing in U.S. history.

The shocking move followed a nearly $4 billion quarterly loss and the failure of buyout negotiations with Bank of America (BAC, Fortune 500) and British bank Barclays Capital (BCS). At the same time, U.S. regulators made it clear that they would not provide a government-backed bailout for the company.

Barclays Capital eventually purchased Lehman Brothers' North American investment banking and capital markets businesses for about $1.5 billion.

Fuld - who took home more than $45 million in salary and bonuses in 2007, according to executive compensation firm Equilar - testified before a Congressional committee earlier this month, telling lawmakers Lehman's failure centered on inaction on the part of government and a loss of confidence in the financial markets.

The New York Post first reported the subpoena issued to Fuld.

The Associated Press reported that grand juries in New York and New Jersey are investigating 12 people, including Fuld, citing attorney Harvey Miller, who represents Lehman Brothers. Miller and his firm, Weil, Gotshal & Manges, did not return phone calls made to CNN for comment.

CNN's Emily Anderson and Chuck Hadad contributed to this report.
 
Barclays: Wall Street's new gambler
When Lehman tanked, Barclays saw a juicy opportunity and snatched it up. But now the London powerhouse has problems of its own.
By Peter Gumbel and Barney Gimbel
October 20, 2008: 3:46 AM ET

AMERICA'S MONEY CRISIS

* Bush 'open' to stimulus
* Here comes stimulus - question is how
* AmEx earnings down but better than forecasts
* U.N.: Crisis will lead to 20M lost jobs
* Lots of banks interested in bailout - Paulson

bob_diamond.03.jpg
Barclays president Bob Diamond sees Lehman's U.S. investment-banking operations as a perfect fit for his bank.
barr_EUROBANKS_graphic.gif
john_varley.jpg
CEO John Varley believes he will have the wherewithal to grow Lehman despite the global slowdown in investment banking.
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(Fortune Magazine) -- Robert Diamond looks wiped. It's just after noon in London, and the president of Barclays - the newest power broker on Wall Street - is trying to snatch a few moments of calm. He ignores the gigantic TV suspended above his desk with its scrolling news of financial doom. European markets have continued to fall, despite an $87 billion British government financial bailout and a concerted round of interest rate cuts by central banks.

"There is no playbook. There is no playbook," Diamond intones about the crisis as he grimly sips lukewarm tomato soup.

An American expat whose office is lined with Red Sox gear, Diamond should by all rights be smiling. He spent the past decade building an investment-banking operation from scratch at the big but unflashy British bank founded by Quakers 318 years ago. Barclays (BCS), with assets of $2.7 trillion, grew to become Britain's third-largest bank after HSBC and the Royal Bank of Scotland.

Then, as Wall Street cratered in mid-September, Diamond, 57, and his boss, CEO John Varley, 52, saw a once-in-a-generation opportunity: Buy the stripped-clean North American business of Lehman Brothers, including most of its people, its brand name, and its clients - but not the toxic assets that bankrupted it. Overnight, the deal would make Barclays a major U.S. player, nipping at the heels of J.P. Morgan (JPM, Fortune 500) and Citigroup (C, Fortune 500).
 
The Barclays boys went for it, and since then Diamond has mostly camped out in New York City, overseeing the fast-paced integration of 10,000 former Lehman employees into his operation. By the end of this year he wants the whole process wrapped up, including making about 3,000 job cuts once Lehman's operation is combined with the Barclays staff, Fortune has learned.

But now he's back in London to defend the deal. For the past two days he and Varley, an aloof English lawyer who edged out Diamond for the top job, have worked hard to convince nervous investors that the company remains solid and that their strategy makes sense.

"We have our feet on the ground," Varley had told investors at a Merrill Lynch conference the previous day. "We understand very clearly that the environment is difficult. But we mustn't - and won't - allow that to immobilize us. There will be growth opportunities. Now is the time to be ready for them."

Analysts are divided over whether the Lehman acquisition is a stroke of genius or sheer madness. On paper the deal looks like a steal: For $1.5 billion, Barclays got a valuable Manhattan skyscraper, two New Jersey data centers, and a role as a major player on Wall Street. But some analysts worry that the acquisition is also a risky venture for Barclays at a perilous time.

They have a point. Europe's banking scene has changed dramatically in the past few weeks as the plague that began in the U.S. subprime mortgage market has spread across the Atlantic. European banks made many of the same mistakes as their American brethren, deluding themselves into thinking there was no end to heady growth, and taking on outsized risks and leverage with complex derivatives linked to the U.S. mortgage market.

Some analysts argue that the bank does not have enough cash to finance its newly expanded operations. In the first half of 2008, Barclays wrote off $4.9 billion in assets and has an additional $6.2 billion of losses to record - a tiny fraction of its total assets.

The bank hasn't marked down the value of its holdings as aggressively as some of its British peers, raising the specter of more bad news to come. According to a Sept. 22 note to clients from the German investment bank Dresdner Kleinwort, "Barclays is Britain's least-well-capitalized bank."

The markets seem to agree with the skeptics. Since the Lehman deal, Barclays stock has fallen more than 50%, and like most British banks it has had to fight off rumors about its solvency. Barclays has tapped fresh funding several times in the past few months. Tom Rayner, a London-based analyst at Citigroup, believes the bank will have to raise much more. Varley insists that no more capital is needed.

All the bad news doesn't seem to daunt Varley and Diamond. At a time when most other banks are in retreat, the two executives have put Barclays on the offensive, seeing in the turmoil as much opportunity as risk.

"It never dawned on us that a major Wall Street firm might be available at a reasonable price," Diamond says. "You can't make this thing up."

It is true that a handful of other European banks are also taking advantage of the turmoil to grow quickly, including Spain's Santander (SBP), which has snapped up the retail operation of two troubled British banks, and France's BNP, which is buying Fortis from the Belgian government that rescued it. But so far Barclays is the only European bank that is now looking across the Atlantic.

Diamond couldn't be more pleased by the challenge. He fits every Briton's stereotype of a Yank - a hard-charging sports jock who spends weekends coaching baseball at the American School in London, and whose management motto to encourage teamwork is "No jerks." He started out in Morgan Stanley's IT department with the dream of becoming a bond trader and worked his way up.
 
Mis-selling 101 - a respond to minister’s remarks

Monday, 20 October 2008, 11:14 pm | 352 views

Leong Sze Hian / Columnist

I refer to the report “Be more ‘proactive’, MAS” (ST breaking news, Oct 20).

The report says:

“The Minister’s answers sound like the MAS shouting across the river, while watching a fire burning,’ said Mr Low (Khia Thiang), who suggested the Government could form a committee ‘to deal with the matter directly’.

Mr Low also asked if the investors’ plight was the result of a ‘less prudent regulation by the MAS’ and ‘the Government’s decision to liberalise the financial market’.

And on Mr Low’s question on disclosure and liberalisation, Mr Lim added that if financial institutions intend rolling out similar structured notes, they would have to go through a process to put out a prospectus that discloses details of the products, including a pricing statement that explains the risk.

‘So our rules allow them, if they are putting out a programme of notes like in the case of the Lehman Mini-bond series…these are all similar products, so they put out a general disclosure through a prospectus.’

Mr Lim also added that with each new series FIs put out, it would come with a pricing statement that explains the risk and set price.

‘It’s a better approach than to say that every time you put out one of a series of notes, you have to come out with a whole process of the full prospectus.’

Mr Lim also addressed Mr Low’s question on whether structured products were low-risk or safe.

The Minister said that the product’s prospectus would have outlined the risks: ‘These are explained in the first page or second page , that these are structured products and it’s in bold print, that you can lose everything.

‘So MAS has never said that these are risk-free products or low-risk products or safe products.’”

What is “mis-selling’?

I refer to the article, “Time to maker sellers beware not just buyers”, Dr Huang Shoou Chyuan’s letter “How will Govt help buyers of structured products ?” (My paper, Oct 16), and media reports that some financial institutions will in specific cases whereby evidence of mis-selling is established, they will take responsibility and compensate investors.

I checked a few dictionaries and Wikipedia, but there is no such word as “mis-selling”.

However, “mis” means “bad or wrong”, and “selling” means “to influence or induce to make a purchase”.

In the context of the structured products at issue, does “mis-selling” mean mis-information was given to the investor, or a mistake in the “selling” process ?

So, how does an investor prove “mis-selling” ?

Examine systemic issues

Instead of focusing on the sales transaction that took place, I would like to suggest that we also examine any systemic issues that may have contributed to possible “mis-selling”.

For example, what training, script, tools and marketing materials were given to and used by the representatives of the various financial institutions ?

In this connection, according to the Guardian newspaper of 8 October, the largest fine ever of 7 million pounds was meted but by the United Kingdom’s financial regulator, on a financial institution that was caught training staff to pressure customers into buying an expensive financial product.

Investors have also written to newspaper forums, citing that the product summary and brochures of some of the structured products in Singapore had wording like “for defensive investors seeking exposure to high grade assets that provide steady and enhanced yields”, “low risk and easy to understand”, etc.

In light of the above, has “mis-selling” occurred, in a sense, even before the sales transaction ?

What is “suitable” and “reasonable basis”?

I understand that according to the Financial Adviser’s Act, the investment product recommended must be suitable for the investor, and there must be reasonable basis for the recommendation.

So, what is “suitable” and “reasonable basis” ?

In my view, the test for “suitable” and “reasonable basis” is whether there is any conflict between the investment advice or product recommended, and the investor’s objectives, concerns, circumstances, risk profile, etc.

In this regard, I believe that most of the structured products’ sales transactions may have been documented as “no advice” or “product advice” only.

What this may mean could be that the question of “suitable” on “reasonable basis” may not arise, because the investor did not provide any information pertaining to his or her objectives, concerns, circumstances.

There will always be risk in investing. What in my view is the crux of the issue is not so much that some investors have lost money, but rather that so many people of modest means have lost their life savings in products which they thought were “safe”.

Notwithstanding the above issue on “reasonable basis”, the failure to address diversification , as enshrined in ISO 22222 (Personal Financial Planning), could be another consideration particularly for long-time existing customers who have their entire savings and investment portfolio with the same financial institution.

On hindsight, perhaps the lesson to be learned is that there is no free lunch in investing - how could one think that getting a few per cent more interest (payout) than fixed deposits, and some with the potential of extra returns, could be “low-risk” ?

MAS must address conflict of interest issue

I also understand that some investors have expressed concern about a possible conflict of interest, over media reports that the independent persons appointed to oversee the financial institutions’ own investigations into complaints, can negotiate their fees. To allay such perceptions, I would like to suggest that the Monetary Authority of Singapore (MAS) determine the fee and apportion it by charging the financial institutions involved.

Although the MAS’s proposed fair dealing guidelines for the board and senior management of financial institutions have not been implemented yet (consultation stage has been completed), the eyes of the world, may in a way, be on Singapore on the resolution of this saga.

The reputation of Singapore as an international financial centre may be at stake.

Financial institutions have an opportunity now to restore if not gain even the greater confidence of consumers.

http://theonlinecitizen.com/2008/10/mis-selling-101-a-respond-to-ministers-remarks/
 
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