Tan Kin Lian: Investors can sue Financial Institutions

[Porfirio Rubirosa]

I wonder whether has Tan Kin Lian taken proper adequate legal advice before making such a statement? (I assume TKL does not have the appropriate legal expertise himself). Moreover, since Tan Kin Lian appears to think that there are substantive legal grounds to seek redress, what are the aggrevied investors waiting for(including the PAP TCs)? Especially since it would appear from the comments made by MM, SM, PM and FM that most of the aggrieved investors would not be compensated save for the "vulnerable group".

Saturday, November 22, 2008
Misrepresentation about the risk of CDOs Dear Mr. Tan
After reading the explanations from many financial experts, I realize that the real risk for the minibond is the 150 securities CDO.

Out of the 150 securities, if 11 or more credits events then the investor will loose some of their principal. If 13 or more credit events then investors will lose all of their principal.

The risk for this condition is extremely high because this is equivalent to any 2 credit events out of 23 securities (or any 1 out of 11.5).

Since bank should be much safer than others, it is not unreasonable to assume that on average, the risk of one security is 2 times the risk of one bank Then the risk of 13 or more credit events will be about 23 times (2 x 150/13 = 23.1) the risk of credit event for one bank

Moreover, the pricing statement did not disclose the identities of the 150 securities referenced by the synthetic CDO. This makes it difficult for us to assess the risk. The sales brochures and newspaper advertisements did not even mention the 150 securities CDO.

Can we sue the Financial Institutions for the omitting of these important information in the pricing statement/sales brochures/newspaper advertisements ?

Pang

REPLY
In my view, this omission is material. The investors can sue the financial institution.

It is better for the government to act and take action to enforce the law (i.e. Securities and Futures Act) which requires the seller of securities to provide relevant, reliable and complete information about the securities being sold to the public.
Posted by Tan Kin Lian at 10:02 AM

 

[DerekLeung]

How to sue ! It's Leegime's courts !

Even old man believes in liberalised free economies like "creative products"

These banking "creative products" guarantee that it will make Singaporeans work for life Never be able to retire just like how HDBs sells you a $400,000 "pigeon holed" apartment which they could easily sell you for a goodwill token price of $1 - $50,000 a unit.

These are marked up mechanism.
We can certainly beat behavioural mechanism, social engineering, morale beating policies and even the market with prudent decisions.

 

[DerekLeung]

Remember our time when these people were invited by governments worldwide to quests around the world to target the riches and extract individual's weath into investing in fraudulent funds.

Objective is highly indirect !

But till now it all becomes quite certain. Instead of having wars for renewal, such methods employed for renewal is quite spectacular !

 

[scroobal]

I wonder whether has Tan Kin Lian taken proper adequate legal advice before making such a statement? (I assume TKL does not have the appropriate legal expertise himself). Moreover, since Tan Kin Lian appears to think that there are substantive legal grounds to seek redress, what are the aggrevied investors waiting for(including the PAP TCs)? Especially since it would appear from the comments made by MM, SM, PM and FM that most of the aggrieved investors would not be compensated save for the "vulnerable group".

Saturday, November 22, 2008
Misrepresentation about the risk of CDOs Dear Mr. Tan
After reading the explanations from many financial experts, I realize that the real risk for the minibond is the 150 securities CDO.

Bit of a worry. What basis did he rely on for seeking legal recourse with Glenn Knight.

 

[The_Latest_H]

If you want to sue, you better read the respective laws with a fine comb, preferably with a lawyer with good credentials, before you strike.

What's more embarrassing than not suing is suing without doing your homework and then realising your situation is like stuck in the middle of the river without any paddle whatsoever.

And the PAP would win a PR coup if some of these attempts fail because of the lack of homework in the first place by the would-be plaintiffs.

 

[Porfirio Rubirosa]

TKL appears to be getting more robust on this issue. At least in his open letter to the PAP TCs, he made a caveat "if that is the case". However now in his blog to this chap, he appears to be pretty sure that there is a substantive legal case to make out misrepresentation. Like I said in another thread, since TKL appears to be pretty sure, why not just seek a reputable Silk's opinion?

Bit of a worry. What basis did he rely on for seeking legal recourse with Glenn Knight.

 

[Ramseth]

Why must be QC?

 

[scroobal]

TKL appears to be getting more robust on this issue. At least in his open letter to the PAP TCs, he made a caveat "if that is the case". However now in his blog to this chap, he appears to be pretty sure that there is a substantive legal case to make out misrepresentation. Like I said in another thread, since TKL appears to be pretty sure, why not just seek a reputable Silk's opinion?

I absolutely agree.

 

[scroobal]

Why must be QC?

QCs or SCs have a reputation to keep. They would not go to court unless they have a credible basis to stage a fight. They will also rope in specialist in the field.

They also tend to take on cases that creates a precedent or a landmark ruling.

Davindar Singh has a landmark case under his belt on the matter of "Cashier's Order" for OUB against Gentings. OUB refused to honour cashier order issued by it to Genting which must be honoured. OUB just wanted to test the waters and they won.

Glenn Knight forte is crime cases.

 

[Porfirio Rubirosa]

Not just QC but a reputable QC. Reason being this is an important issue concerning thousands of individual investors, probably prudent to get such independent expert advice under the circumstances.

Btw I would not be surprised if the material banks like DBS have long since sought reputable QC advice on this issue as a matter of prudence.

Why must be QC?