Den of The Lion Investor

The details of this last meeting for all credit linked notes investors (DBS High Notes, Jubilee, Minibond, Pinnacle) at Hong Lim Park are as follows:

Date: Saturday 27 December 2008
Time: 5 to 7 pm

Agenda
1. Update of complaints to financial institution, FIDREC
2. Update on collective legal action
3. Speech by lawyer organising the class action

This will be the last meeting to be held at Speaker’s Corner. Subsequent meetings will be organised by the group leaders for the various notes, and will be held at other venues.

Special Meeting for Pinnacle Note Holders

The committee of Pinnacle action group wishes to meet all pinnacle notes holders this Saturday at the same venue. The agenda is to explore alternative ways to seek relief for losses incurred by the Pinnacle notes.

Those who are unable to attend can email their particulars to pinnacle.action.group@gmail.com to be kept in the loop.

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More than two months ago, MAS spelt out the timeline for handling of disputes with regards to the sale of structured products like the Minibond, DBS High Notes, Jubilee and Pinnacle. Among other things, it spelt out that financial institutions should:

• acknowledge receipt of a customer’s complaint within two working days;
• have an interview with each customer who files a complaint within two weeks;
• complete the review of a customer’s complaint and update the customer within four weeks of the interview.

Yesterday, MAS released another press release that mentioned:

• they have conducted on-site visits to access the handling and review of complaints;
• they are also looking into selling practices and policies within the financial institutions;
• that financial institutions have indicated to MAS that they will complete the review of complaints no later than end January 2009.

The complete MAS press release can be found below:

MAS ensures progress in complaints resolution

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Question

Ms Sylvia Lim: To ask the Senior Minister (a) whether structured notes similar to Lehman Brothers products were sold to small retail investors in the United States and in the same manner as in Singapore through bank branches; (b) if so, how disgruntled investors are being handled by the American Federal Reserve, compared to Singapore; and (c) if not, why such products were allowed for sale to small retail investors in Singapore in such a manner.

Mr Siew Kum Hong: To ask the Senior Minister (a) if he will provide an update on the progress of investigations by MAS into alleged mis-selling by financial institutions and the progress of the review of the marketing and sale of structured products; and (b) whether MAS is satisfied with the progress of the financial institutions in resolving customers’ complaints.

Main points of reply from Finance Minister, Mr Tharman Shanmugaratnam:

• It is conducting formal inquiries into the financial institutions and will take firm and appropriate regulatory actions where there are breaches of law or regulations.
• It is doing a review of its current regulatory regime. Care will be taken not to come up with overly prescription rules.
• Other than regulation, all stakeholders have a share to play. CEOs of all the financial institutions have been told to review their sales process.
• MAS has been following up with the financial institutions to ensure they are handling all complaints. All cases will be dealt with fairly, regardless of whether they fall into the vulnerable group or not, as long as there is mis-selling.
• Similar structured products have also been sold in other countries, including the UK, Australia, Germany, France, Hong Kong and Taiwan. Reports indicate that some investors have approached lawyers to look into pursuing arbitration claims with the Financial Industry Regulatory Authority (FINRA).
• In Singapore, a 3-step dispute resolution process has been set up.

To read the entire reply, you can refer to this news release on the MAS website.

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Morgan Stanley have officially announced today that a mandatory redemption event of Pinnacle Notes 9 and 10 has occured. Unfortunately, investors will be getting back nothing. 

Morgan Stanley have published a FAQ on this event that occured to series 9 and 10.

They have also uploaded information on all the different Pinnacle series at their website:

Morgan Stanley Pinnacle Notes Website

MAS has provided some advice to investors who would like to file a complaint:

MAS on Pinnacle Notes

If you are a Pinnacle Notes investor and would like to talk to the press (can be anonymous), please  contact me with your contact details.

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There are news that Pinnacle Notes series 9 and 10 had a forced liquidation event. This is due to defaults in the underlying securities some of which are Lehman Brothers, Freddie Mac, Fannie Mae and Kaupthing banki. Investors will likely be getting back nothing. 

Series 1, 2, 6 and 7 are also in danger as they will experience forced liquidation if any more defaults take place.

Other credit-linked series that might be affected could be series 3 and 5.

Series 8, 15 and 16 are safe for now as they are not linked to credit default events.

Pinnacle investors can call the Morgan Stanley hotline from 9am-12pm at 68346510/68346512  to find out more information.

If you know anything, please post the information here.

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