Wednesday, November 2, 2011

Singapore court sides with banks 1: Singapore Investors lost appeal against Lehman-related lost

Bloomberg reported a group of 213 investors in Singapore lost a bid to recoup S$18 million ($14 million) of losses tied to Lehman Brothers Holdings Inc. (LEHMQ), with an appeal court upholding a lower court ruling that dismissed their claim.

DBS selling toxic
It seems that DBS was pushing toxic to Singaporeans so that the bankers can get a lot of bonuses. MAS headed by Heng Swee Keat published its investigations on Lehman Saga, implicating the banks on fraud[see this]. The summaries are as below.

a) risk ratings assigned by some financial institutions to some series of the Notes that were inconsistent with risk warnings stated in the prospectus and pricing statement; (DBS told investors its a low risk product but actually its toxic)

b) insufficient steps taken by some financial institutions to ensure that all their financial advisory representatives were properly trained before marketing and selling the Notes; and

c) weaknesses in how some financial institutions ensured that their financial advisory representatives were properly equipped with accurate and complete information about the Notes.(DBS toxic pushers did not even knew the risks. In short they are untrained and unqualified, and give inaccurate info to clients.)

Judge's verdict. 
“A person who signs a contract which is set in a language he is not familiar with or whose terms he may not understand is nonetheless bound by the terms of that contract,” the judges said in the ruling. “The principle of caveat emptor applies equally to literates and illiterates.”

What about a contract signed when someone pointing a gun on your head? Currently, instead of gun, the DBS employed fraud.

A parable
A girl is bonded by a contract to work as a prostitute for 20 years, because she was defrauded by a pimp. Should she honour her contract?

The advertisement above markets Pinnacle Notes and has nothing to do with Lehman. It was taken from Lucky Tan's blog. Nevertheless, it is good in illustrating  financial sector con job. Australia, HK, SG, Singtel and Temasek were shown at the bottom to give illusion of solid backing. In reality, nothing can be more toxic and the product defaulted in the 2008 economic crisis.

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