29 July 2009
An elderly woman who claims to have lost nearly HK$260 million on high-risk financial products is taking a Swiss- based investment bank to court.
Chan Wai-yee, 77, says UBS advisers talked her into buying an equity accumulator package just months before last year's market crunch.
The High Court writ filed by Chan comes less than a week after 16 Hong Kong banks agreed to buy back Lehman Brothers minibonds at 60-70 percent of their original value.
She claims she did not understand the documents she signed because they were in English, and no one from UBS informed her of the risks and nature of the investments.
The writ states that Chan was a client of Hang Seng Bank for four decades, and she opened a Prestige account there in January 2003. She was advised on investments by managers Wong Mei- lun and Shirley Cheng.
Chan says her nest egg was accumulated through hard work, and she had limited experience in stock investments. As she did not understand English, she relied on advice from Wong and Cheng.
She was only interested in low-risk investments because she wanted to preserve her capital, Chan says.
So she never went into any risky investments while her money was with Hang Seng Bank.
Then, during the market boom in mid-2007, Wong and Cheng left Hang Seng Bank to work for UBS.
Chan claims that Wong then approached her and invited her to move her assets to UBS.
She signed various documents from time to time to open an account at UBS, but never indicated to Wong, Cheng or any staff member at UBS that she was interested in changing her investment strategy.
In June 2007, Chan signed different documents, all in English, that included a client acknowledgement form, an "acceptance to be treated as a professional investor" and a "request for subscription of equity-linked notes and blocs."
Chan then transferred shares and cash from her Hang Seng account to UBS, totaling HK$260 million.
In September 2007, Chan says, Wong telephoned and persuaded her to buy a financial product known as an UBS OTC Equity Accumulator.
She claims to have been "induced" into 25 equity accumulator transactions between September 2007 and February 2008.
Last October, a total of nine equity accumulators had not been knocked out, meaning that the stock-price ceiling set in the contract with the bank had not been breached.
After taking losses of more than HK$200 million, she told UBS she wanted to terminate all investments.
As of July 23 this year, her UBS account balance was only HK$1.6 million.
Besides recovering the money, she is seeking interest, damages and costs.
Tuesday, July 28, 2009
NJ sues Merrill Lynch over $300 mln stock purchase
NEW YORK, July 28 (Reuters) - New Jersey sued Merrill Lynch for selling its pensions $300 million of preferred stock in January 2008 "based on misleading information" about the brokerage's finances, the state attorney general said on Tuesday.
Anne Milgram, the state attorney general, said in a statement that the lawsuit, filed in the Law Division of state Superior Court in Hudson County, also names Bank of America Corpas a defendant.
Bank of America acquired Merrill Lynch last year and is named as "a successor entity," Milgram said.
Anne Milgram, the state attorney general, said in a statement that the lawsuit, filed in the Law Division of state Superior Court in Hudson County, also names Bank of America Corp
Bank of America acquired Merrill Lynch last year and is named as "a successor entity," Milgram said.
Monday, July 27, 2009
For the benefit and welfare of the people
In his talk and the answers to questions from the floor, Dr. Boediono (Vice President Designate of Indonesia) said that decisions will be taken for the benefit and welfare of the people.
When asked about the policy on privatisation and the use of natural resources, he said that the key criteria is to improve efficiency and ensure that the outcome will be for the benefit of the ordinary people.
He also said that Indonesia has been transformed into a democratic country and that the recent general election has been completed peacefuly and fairly. The test of democracy is its ability to improve the lives of the people.
Indonesia has gone a long way in improving its governance structure to reflect the will of the people. Watch out for a printed copy of his talk, when it is reported in the mainstream newspapers.
When asked about the policy on privatisation and the use of natural resources, he said that the key criteria is to improve efficiency and ensure that the outcome will be for the benefit of the ordinary people.
He also said that Indonesia has been transformed into a democratic country and that the recent general election has been completed peacefuly and fairly. The test of democracy is its ability to improve the lives of the people.
Indonesia has gone a long way in improving its governance structure to reflect the will of the people. Watch out for a printed copy of his talk, when it is reported in the mainstream newspapers.
Honesty in Politics
I attended a talk given by Professor Dr. Boediono, Vice President Designate of Indonesia arranged by the Rajaratnam School of International Studies in Singapore.
One Singapore minister asked the question to Dr. Boediono, "What is your experience during the election campaign? How much of your success is due to hard politics and how much do to soft politics?" He used an Indonesian term to describe soft politics, which appealled to human emotions.
Dr. Boediono replied, "I do not know what is hard politics and what is soft politics. I only know what is correct politics, and that is being honest."
I like this answer. It confirms that politics does not have to be manipulating public opinion or the election process. It is possible to be honest and sincere and win over the trust of the people.
One Singapore minister asked the question to Dr. Boediono, "What is your experience during the election campaign? How much of your success is due to hard politics and how much do to soft politics?" He used an Indonesian term to describe soft politics, which appealled to human emotions.
Dr. Boediono replied, "I do not know what is hard politics and what is soft politics. I only know what is correct politics, and that is being honest."
I like this answer. It confirms that politics does not have to be manipulating public opinion or the election process. It is possible to be honest and sincere and win over the trust of the people.
What is the future for this country?
QUOTE:
If you, MAS people, the best educated and smartest people in Singapore, allowed such unfair things to continue, I won't cry for my money, but cry for your future. If the best educated, smartest people are not looking for justice, what is the future for this country?
GD
Read this letter.
If you, MAS people, the best educated and smartest people in Singapore, allowed such unfair things to continue, I won't cry for my money, but cry for your future. If the best educated, smartest people are not looking for justice, what is the future for this country?
GD
Read this letter.
Free market - success and failure
The free market works for certain products which are physical, transparent and easy to understand. It has produced better quality products at lower prices.
The free market has failed to work well for many services, such as financial, medical and legal services. The consumers require an expert to advise on these matters. If the experts are allowed to charge any fee and define their own standard, it is likely to lead to exploitation of consumers.
These services need to be regulated to protect the interest of consumers. It also needs a strong consumer association to help the consumers to understand and exercise their rights, and to ensure fair treatment of consumers.
In the past years, these professional services are regulated by the authority and self-regulated by the professional bodies.
The standards of regulation and self-regulation has dropped in recent years during the era of the free market. The authority believed that consumers can take care of themselves and choose the advisers who can serve them best. This view goes against empircal evidence. Many consumers are fleeced by some unscrupulous so-called experts.
The role of government is to govern. It cannot be delegated to the "free market". The government has to ensure honest and fair behaviour for the benefit of society. It has to set the example for businesses and the people to follow. It is time to re-think the role of the free market.
Tan Kin Lian
The free market has failed to work well for many services, such as financial, medical and legal services. The consumers require an expert to advise on these matters. If the experts are allowed to charge any fee and define their own standard, it is likely to lead to exploitation of consumers.
These services need to be regulated to protect the interest of consumers. It also needs a strong consumer association to help the consumers to understand and exercise their rights, and to ensure fair treatment of consumers.
In the past years, these professional services are regulated by the authority and self-regulated by the professional bodies.
The standards of regulation and self-regulation has dropped in recent years during the era of the free market. The authority believed that consumers can take care of themselves and choose the advisers who can serve them best. This view goes against empircal evidence. Many consumers are fleeced by some unscrupulous so-called experts.
The role of government is to govern. It cannot be delegated to the "free market". The government has to ensure honest and fair behaviour for the benefit of society. It has to set the example for businesses and the people to follow. It is time to re-think the role of the free market.
Tan Kin Lian
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