Date: February 6, 2009
Investors who have been informed by financial institutions with respect to their complaints on their purchase of Lehman Minibond Notes, DBS High Notes 5 and Merrill Lynch Jubilee Series 3 Link Earner Notes will now have to decide whether to accept the financial institutions’ (FIs’) decisions or to refer their case to FIDReC or to the Courts. For investors who have been offered settlements by the FIs, SIAS would advise these investors to consider the following points carefully before rejecting the offer from the FIs:
- Once the complaint is filed with FIDRec or legal action begun in the Courts, then the FI is entitled to withdraw its offer. Should an investor not succeed in his/her complaint at FIDRec or the Courts, he/she will not be able to approach the FI to reinstate the FI’s earlier settlement offer.
- Before the investor rejects the FI’s offer, he/she needs to be sure that there are indeed merits for pursuing the matter either with FIDRec or in the Courts.
- The investor must also bear in mind that should he/she proceed to file the complaint with FIDRec or begin legal action in the Courts, the outcome may be more favourable or less favourable than the FI’s settlement offer. The FIDReC or Courts will consider the merits of the investor’s case, including all relevant evidence (written or oral) presented by the investor and the FI.
- In their dealings with FIDReC or the Courts, the investor should note that any statements or representations made need to be complete and accurate. Investors should also be aware that as part of the FIs’ complaints review process, FIs may have conducted background checks on details of the sales process, the investor’s investment experience and background. In making a decision on each investor’s case, FIDReC and the Courts would take into account the consistency of statements or representations made by both the investor and the FI at various stages, including statements and representations made during the FI’s complaints review process. Where there are inconsistencies, omissions or inaccuracies, adverse implications can be drawn against the relevant party.
- If an investor proceeds with his/her complaint to FIDReC, and is not satisfied with the decision, he/she can still proceed to file his/her complaint with the Courts. Investors considering taking legal action should seek legal advice on the merits of their case before bringing the matter to the Courts.
- Legal proceedings can be expensive depending on the experience of the solicitor engaged, his expertise, court charges and length of trial. In the event the investor is not successful, he/she will not only have to pay his/her solicitor’s fees but the other party’s costs as well.
- In the case of FIDReC, the investor would have to pay a nominal administrative fee of S$50 (subject to prevailing GST) per claim if their case proceeds to adjudication and the investor must file his/her claim within 6 months from the date of the FI’s final reply.
- In both FIDReC and the Courts, the attention will likely be on these issues:
- all the circumstances under which the product was sold to the investor, including whether the FI had given advice and recommended the product to the investor and whether the investor understood the key risks and features of the product explained and/or provided by the FI.
- The investors’ investment experience, the extent to which the investor has reasonably relied on any advice provided by the FI or its representative, and the investors’ ability to understand both the product and any document signed during the sales process.
SIAS will be prepared to meet with investors who feel that they require some guidance on the various alternatives available to them in the event they do not wish to accept the offer from the FIs. SIAS’ legal advisors will be present to brief and field questions. Interested persons must register with SIAS at email@example.com with his/her full name, NRIC and contact details. If there is sufficient interest, SIAS will announce the date and venue of this meeting.
|Mr David Gerald J.
President / CEO
For Management Committee, SIAS