Tracking the Minibond Saga

Work in Progress …

July 31, 2007
Do you really understand structured products?
Larry Haverkamp (Doc Money) analyzes Pinnacle Notes, and doesn’t encourage it.

Sep 15, 2008
What will happen to my Lehman Minibond?
There are a few possible scenarios:
1) There is no bailout and Lehman Brothers goes under
2) Lehman gets taken over by another party which assumes their Minibond Obligations
3) Lehman gets taken over by another party which does not assume their Minibond Obligations

Sep 18, 2008, The Straits Times
DBS High Notes investors at risk
Bank warns they may lose entire stake in Lehman-linked product
By Francis Chan

SOME local investors of a product linked to bankrupt investment giant Lehman Brothers have received late-night phone calls from DBS Bank warning them that their entire stake may be wiped out. The investors have their cash in a product called DBS High Notes 5 that the bank offered wealthier clients last year. It came with a promised annual return of about 5 per cent.

But Lehman’s collapse on Monday means the product will be unwound and investors may only get a portion of their investment back – or none at all.

Lehman Brothers could not be rescued in time, and thus had to declare for bankruptcy, sparking off a credit event.

Sep 16, 2008
Comments by MAS Spokesperson on Lehman Brothers

Sep 17, 2008
Comments by MAS Spokesperson on Lehman Brothers Minibond Programme

Sep 19, 2008
Minibonds Update
Many people have been asking why their Minibond capital is affected by the bankruptcy of Lehman Brothers when it is not one of the reference entities. I think a picture would explain this relationship very clearly.
The Sound of Silence – Is our PM competent?
PM Lee takes the effort to mention “clearing tables and returning food trays” during his NDP Speech, yet remains silent on effects as big as Mas Selamat escaping, and now, thousands of investors losing millions.
Putting it in another way, by the sound of (PM’s) silence (on national crises), we know we have overpaid an incompetent leader to be at the top.

Sep 20, 2008
Mini-bonds – ask MAS to investigate
Tan Kin Lian suggests asking MAS to investigate this structure on behalf of the small investors.
Call to MAS to take pro-active action
The New York State Attorney made Financial Institutions (FI) buy back securities that had been marketed as liquid, and were forced to buy them back from investors at no loss to investors. TKL hopes MAS can take similar action and hold FIs accountable for misselling.

Sep 21, 2008
Loss of hard earned money
Someone bought DBS High Notes 5 after his Relationship manager (RM) insisted it was a safe investment due to A rated Funds. He was not given a prospectus.
A expert view about Structured Products
– made using complex mathematical models which fails 1 out of 10 year)
– investors underwrite a financial option/insurance in exchange for small fixed premium
– essentially means huge risk for small premium
– individuals (even AIG) do not have capacity to take on such risks!
– general public do not have necessary training to understand these products
– don’t invest in a product you don’t understand
– banks have incentive to push products: they make fees and RM, good commissions.

Sep 22, 2008
Comments by MAS Spokesperson on Investments in Structured Products

Sep 23, 2008
Comments by MAS Spokesperson on Structured Products Linked to Lehman Brothers

Sep 24, 2008
MAS Press Statement on Structured Products

Sep 25, 2008
MAS Press Statement on Structured Products
Comments by MAS Spokesperson on the Petition Received by MAS on 24 Sep 2008


Oct 2, 2008
MAS and Financial Institutions to Ensure Investor Complaints are Dealt With Quickly and Fairly
MAS’ Approach in Dealing with Recent Developments Concerning the Sale of Structured Products

Oct 6, 2008
Financial Systems here Safe
“I can assure you our Singapore banks are well regulated and there is no risk and no reason whatsoever to have a run on our banks … It is not possible for anyone to say all banks are safe, but what I can say is our local banks are safe, and foreign banks in Singapore are subject to tighter regulations compared to most other places.” — Finance Minister?Mr Tharman Shanmugaratnam

Oct 7, 2008
MAS Statement on Lehman Brothers Minibonds

Oct 10, 2008
DBS(HK) offer full compensation to mini-bond holders
DBS Bank in Hong Kong has said it will offer full compensation to customers who bought mini-bonds issued by Lehman Brothers. Customers only need to prove to DBS that DBS staff misled them during the sales process … …
…The authority (HKMA) has opened an investigation into whether the banks misled investors into buying them, it said.
MAS Sets Out Resolution Process and Timeline for Investors of Structured Products

Oct 12, 2008
Of Choices
Investment brings in the crowd at Speakers’ Corner
Whose fault is it?
MAS – for the regulatory oversight
Financial institutions – They should not be selling these products to the public in the first place
South China Morning Post Audio broadcast on DBS HK offering compensation to minibond investors
Angry investors turn up at Hong Lim Park to seek redress
Includes Video Interviews

Oct 13, 2008
Structured products ‘too complex to understand’
Financial institutions in Singapore are expected to check a customer’s risk profile before selling investment products. But structured products – such as the Minibonds and High Notes which burnt a hole in the pockets of hundreds of Singapore investors — can be too complex for both buyer and seller to understand.
Complete news blackout by mainstream media on DBS Hong Kong’s “kind” offer to compensate affected minibond holders
National TV news fails to report anything about the above, instead choosing to report on less relevant news like China scientists break panda’s genetic code.
DBS to investigate claims of mis-selling of Lehman-related products
DBS has said it would take responsibility if customers are able to give evidence of mis-selling in relation to products affected by the collapse of Lehman Brothers.
In such cases, the Singapore lender said it would work with the customers on compensation on a case-by-case basis.

Oct 14, 2008
Minibonds : Same problem, different response.
Both Hongkong and Singapore investors are affected. Yet, the responses taken from each country is greatly different.
Lehman Bets Stoke Anger in Hong Kong
ONG KONG — Lawmakers here accused banks and regulators Monday of mistreating investors who lost millions of dollars buying risky structured products backed by Lehman Brothers Holdings Inc.
TOC TV speaks to investors at Hong Lim Park
Video interview with some present at park.
Protest outside DBS headquarters
Some people have been warned by the police against protesting outside DBS’s Shenton Way headquarters. For those who wish to take effective action, I urge that you first master your own emotions before fighting back. How would breaking the law help you? If even a small group of investors were arrested, it would terrorize the rest into sullen submission. Any attempts at trying to build a case or even to win public opinion would collapse. Do not allow yourself to be used by people with other motivations. There are groups that wish to expand their anarchical ranks and would happily urge you to break the law, but I ask that you stay within the law.

Oct 16, 2008
Creative Journalism: “Banks sound” or “Life Savings Gone?”
Somebody at ST is probably pissed about how the PAP is saying one thing about the banks: “Banks sound, system working well says Tharman”, while thousands of retirees might lose all of their life-savings due to possible mis-selling of minibond products by these same banks: $100,000 Life Savings GONE.
Singapore’s Distraught Investors of Structured Products Need Help Now! (Forum Letter)
How is the government or its elected representatives going to help these Singaporeans?
Doing nothing is hardly an option.
Very costly to trust a financial adviser these days | $100,000 life savings gone | Retiree sues bank over losses
5 case studies
Daily Discourse – DBS High Notes 5
Now, can anyone honestly dare said these old folks understood what a structured product is and all the risks behind it? Why do we hear that some of these people lost their entire life savings? Why, is it even sold to old folks whose original idea was simply to earn some honest interest from fixed deposits?
Credit crisis: Hong Kong vs Singapore
Here are two videos from our local television channel on how the countries, Hong Kong and Singapore, are handling the financial crisis and in particular, the structured products saga

Oct 17, 2008
Minibonds : No leadership in times of trouble….!
I tell you why Singapore minibond investors are lucky. They are lucky that the product was also sold in Hong Kong and Taiwan where the people are empowered to seek justice, pressure their leaders to do what is right and demand action from the authorities by protesting. I’m quite sure that the minibond investors there will eventually receive what is rightfully theirs….and the Singapore banks and authorities will be compelled to give investors the same resolution otherwise it will be too embarassing for Singapore as financial hub to continue its business.
HK: Tsang vows to get justice for minibonds investors
“Officials found guilty of misconduct in handling the Lehman Brothers minibond saga will be punished but it is not an appropriate time to see who should be responsible – all efforts should be focused on tackling the matter,” Tsang said in response to a question by financial services legislator Chim Pui- chung in the Legislative Council.
Opening Remarks by Heng Swee Keat, Managing Director, MAS, at the MAS Press Conference on the Sale of Structured Products to Retail Investors |

Oct 18, 2008
The MAS – a desperate headless chicken?
Perhaps what the MAS will be doing next is to – again – follow Hong Kong’s lead. Hong Kong has given the banks there an ultimatum to respond to its proposal to buy back the structured products from investors and it also said it was ready to top up the legal funds pool which aggrieved investors could use to initiate legal proceedings against the banks. This is something which is quite unthinkable in Singapore and to my memory, nothing of this sort has ever happened here.
In the light of the depressing lack of leadership from the Singapore Government, it is left to the investors – and public-spirited individuals such as Mr Tan Kin Lian – to do what they can to seek what they consider justice and fairness.
As for the MAS, one would hope that more initiative would be forthcoming. Else, in the words of Lucky Tan, despite paying our ministers the highest salaries in the world, Singaporeans would be given “no leadership in times of trouble!”.

Oct 19, 2008
Toxic Times
It is hardrending when you read of senior citizens losing their entire life-savings in this ONE investment. But on the other hand, you cannot but feel how foolish they are for putting all their eggs in one basket. Has half a century of life and living, which probably included several recessions, not taught them about anything?
See losses in perspective, says SM Goh
Speaking about investors who have lost money in structured products, Senior Minister (SM) Goh Chok Tongsays Singaporeans “must see their losses in perspective” and be “realistic in their expectation of recovering their losses.” The SM also said that the financial institutions will investigate “each case thoroughly” and if there was any doubt, they would try and settle it “in favour of the investor”. (video also)

Oct 20, 2008
Reply to PQs on the Sale of Structured Products to Retail Investors|
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Be more ‘proactive’, MAS
‘The Minister’s answers sound like the MAS shouting across the river, while watching a fire burning,’ said Mr Low, who suggested the Government could form a committee ‘to deal with the matter directly’.

Oct 21, 2008
Has our Prime Minister gone missing again (Part Two)?
An estimated 10,000 investors are on the brink of losing all that they have saved and invested.
Yet, more than a month after the issue came to light, the Prime Minister is – as was in the Mas Selamat case – totally silent on the issue. It is left to the investors, sympathisers such as Mr Tan Kin Lian, and now Minister Lim Hng Kiang and MPs to try and “do the right thing” vis-a-vis the minibond issue.
Loss of hard earned savings
Tan Kin Lian responds to Minister Lim Hng Kiang’s remarks in Parliament
When silence is not golden

Oct 22, 2008
Breaking News: Proposals to restructure minibond notes received by MAS
Two international financial institutions have submitted proposals to MAS to restructure the Lehman minibond notes to run to maturity. The MAS says the details of the proposals are confidential but will be made known to investors “once the proposals are finalized.” The MAS said an “independent financial adviser will be appointed within the week to assess the merits of the proposal” (links to video also)
Hong Leong offers to buy back Lehman notes from some investors
The two conditions are:
– The main account holder must be 62 years or older at the time of investment
– Education level must not be higher than primary school education.
The joint account holder, if any, must also not have higher than a primary school education.
Proposals received from financial institutions on Lehman minibonds
SINGAPORE: The Monetary Authority of Singapore (MAS) says two international financial institutions licensed to operate in Singapore have submitted proposals to restructure the Lehman minibonds notes so that they can run till maturity.
This is expected to go some way in helping investors recover some of their capital.
WP concerned about “class action suit” by investors
In a press statement released by the Workers’ Party on the possibility of investors of structured products staging a class action suit, its secretary-general and MP for Hougang, Mr Low Thia Khiang, said that he is “concerned that such investors may end up paying huge legal costs.”
84-page minibond prospectus
Visit to download prospectus (pdf)
Comments by Mr Heng Swee Keat, Managing Director, Monetary Authority of Singapore, in Response to the Announcements by DBS Bank, Hong Leong Finance and Maybank

Oct 26, 2008
Govt in no position to guarantee what is safe, says PM Lee
A video clip of channel5 news
Investors to submit fourth petition to MAS
Mr Tan Kin Lian revealed at the Speakers’ Corner event yesterday that he will be asking for 1,000 signatures for a petition – the fourth so far – which he will submit to the Monetary Authority of Singapore. The petition will namely call for the MAS to “encourage the financial institutions to adopt a collective approach in offering fair compensation to investors who have been misled into investing in” the faulty structured products. (Pictures of event included)

Oct 27, 2008
“Non-vulnerable” deserve a chance at pay-out

Oct 29, 2008
MAS Statement on Update on Progress of Complaints Handling by Financial Institutions

Oct 30, 2008
Response to “Questions on Sales of Financial Products” (Straits Times Forum, 28 Oct 2008)

Oct 31, 2008
Town Councils investments – be accountable to constituents
The on-going financial crisis seems to claim victims in all shape and sizes, from all walks of life and from even the most unlikely of organizations.
Even as the various banks and financial institutions rush to contain the public anger over the failing of Lehman Brothers’ product, Channel NewsAsia (CNA) reported on 28 October 2008 that PAP Town Councils had invested in the same discredited products.


Nov 1, 2008
1,017 have signed fourth petition to MAS
The petition calls for “fair compensation” for investors of failed credit-linked securities who were “misled by sales reps and/or sales material” which described the products as low risk. It also calls on the MAS to restore investor trust in the financial institutions (FIs) and Singapore’s international reputation as a financial hub.
Speaker’s Corner 1 November 2008 – Speech
Transcript/Outline of speech.

Nov 8, 2008
Letter to TOC: Minibonds investors given runaround
A Layman’s Guide to Minibonds sold by Brokerages – using an analogy of the ‘minicure’

Nov 11, 2008
SCMP:Two investors reach settlement with bank before court case [HK]
Two investors in Lehman Brothers derivatives who filed a case seeking refunds reached settlements with Wing Lung Bank yesterday, saying they will dismiss their suit after they receive compensation
SCMP:Time to reconsider class action lawsuits [HK]
Hong Kong lacks a legal tool that is available to people in the US and Australia, as well as certain European jurisdictions – that of the class action lawsuit. A class action lawsuit is one where a large number of people collectively bring a claim to court. One advantage is that a single class action lawsuit aggregates a large number of individual claims into one representational lawsuit. It can save time and money.
SCMP:Legco likely to pass bill on minibond investigation
Lawmakers look likely to pass a resolution tomorrow invoking their special powers to investigate the Lehman Brothers saga, as intense lobbying from small investors increased the pressure on them.

Nov 12, 2008
Reply from MAS on the 3 petitions
MAS Press Release: Actions Taken to Protect Interests of Noteholders of the Lehman Minibond Notes Programme

Nov 13, 2008
Structured Products fiasco- What’s reasonable, what’s not
Terminology used, Lack of understanding of products by sales personnel, Poor financial advic
Also check out Mr Tan Kin Lian’s blog for a lot more articles (english) on this. For chinese articles, check out Singapore Alternatives, which also contains translations of Mr Tan’s speeches.
Minibond Justice to be imported from Hong Kong.
Singaporeans will get to know the truth because of the proactive stance of the HK govt. I used to think that integrity is something important to the PAP govt ….but how do you have integrity without a desire to seek the truth. The refusal of the PAP govt to do more in the minibond saga tells us a lot about how much the PAP values integrity.
SCMP:Divine intervention in Legco debate [HK]

Nov 14, 2008
Investors to lose principal
ABOUT 700 people here who invested a total of $26 million in complex structured products look certain to lose their entire stake.
The products – called Pinnacle Notes Series 9 and 10 – have been battered by the financial crisis and are likely to be wound up for little more than small change.
Another one bites the dust – Pinnacle Notes 9 and 10
The Straits Times has reported that “Investors to lose principal” for Pinnacle Notes series 9 and 10 as these were also affected by the credit event that is known to be the collapse of Lehman Brothers. It’s really tough on those who have invested their hard-earned monies into these products.

Nov 15, 2008
How can MM Lee come to this conclusion?
I do not understand how MM Lee has come to conclusion that Minibond investors invested with their eyes open.
This especially after many financial experts have expressed their views that the minibond products are too complex for any ordinary investor to comprehend.
The following are quotes from the financial experts:

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6 Responses to “Tracking the Minibond Saga”

  1. The Void Deck Says:

    Hi Justina

    Informative reference material!

  2. smallvice585 Says:

    Not comprehensive enough. News of Lehman Brothers’ potential demise were already out in public domain since July 2008 yet neither the local press in Singapore reported it nor the financial institutions informed their retail investors about Lehman Brothers’ potential demise. There is criminal negligence in the financial institution’s role as financial advisor.

  3. Tim Reynolds Says:

    Nice post. Thank you for the info. Keep it up.

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    […] for 19% of insurance premiums for 2007and the dominant sales distribution for unit trusts, recent events involving structured products and cases to FiDREC have shaken the confidence of banks to provide good financial advice. For […]

  5. Justin Says:

    there is hope for Lehman minibond notes victims.
    a legal action group has engaged a lawyer to seek redress.

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