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SINGAPORE: An online petition for investors here who have bought structured products linked to the collapsed US investment bank Lehman Brothers is gaining momentum.
The petition, started on Tuesday by former chief executive of Singapore insurance firm NTUC Income, Tan Kin Lian, aims to bring together those affected to discuss how to take collective action to recover their losses.
As of Wednesday evening, more than 350 people have signed up.
Many frustrated retail investors here have expressed outrage in online forums that products such as the Lehman Brothers Minibonds and DBS Group's High Notes 5 series were actually complex derivatives.
A number of people who bought these products said they felt their financial advisers had misrepresented the products as they were marketed as low-risk and suitable for conservative investors.
While the complexity of the products may have been explained in the prospectus and pricing statement, Mr Tan said many investors were clearly not properly informed of the potential risks of the products.
"These products are clearly unsuitable. Financial institutions should not offer these to the public. These are very dangerous, high-risk products. All the more, their officers actually sold it as quite safe. Now, this is clearly, in my view, a misrepresentation."
Mr Tan said under the Financial Advisers Act, an adviser who recommends a product must make sure that it is suitable for the investor.
Mr Tan hopes the Monetary Authority of Singapore (MAS) will on behalf of the investors, bring this matter to court.
"If the authority takes action, they should also look into, not just the distributor, but the originator, the financial institution that created the product, whether they have done their duty to design a reasonable product or a product that's misleading, whether they have broken some laws or not," he said.
Separately, a group of Lehman MiniBond investors here plans to meet on Wednesday to sign and submit a petition to MAS and the financial institutions involved, to seek help in recovering their investments.
On its part, MAS has urged banks and finance companies to make it a priority to deal with worried investors holding products linked to Lehman Brothers.
It added investors who consider that they were mis-sold a product or that a product was misrepresented to them should first contact the financial institution they dealt with.
DBS, meanwhile, says it has devoted additional resources to deal with customer concerns and that it is treating this matter with priority and importance.
Meanwhile, the Financial Industry Disputes Resolution Centre here says it is still too early for it to comment about the volume of cases it has received in light of the recent developments on Wall Street.
But it says it understands the anxiety felt by affected consumers and stands ready and prepared to do everything it can to help consumers with their disputes through its resolution processes. - 938LIVE
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