Saturday, November 5, 2011

DBS High Notes

This article by BT's Michelle Quah on 4/11/2011 tells about the DBS High Notes investor's disappointment.

Did DBS really win?


 The 220 investors who collectively lost $18 million when the DBS High Notes 5 structured product went belly up in 2008 have expressed their disappointment in the Court of Appeal's decision on Wednesday to dismiss their claim against DBS Bank.
'We are disappointed that the court appears to have resolved this inconsistency and based its decision by relying on documents that did not involve us, that did not form part of our contract with DBS and which we never saw until after the hearing of the appeal,' the investors said in a statement yesterday.

'Nonetheless, given that there are no other avenues of recourse, we have no choice but to accept the decision. We have tried our best to recover some of the life savings that so many of our group members have lost and are sad that we have been unsuccessful,' they added.

At the heart of the investors' claim was that the credit event redemption amount (CERA) to be paid out to them, in the event that Lehman defaulted, was defined differently in four different instances in the DBS High Notes 5 pricing statement, thereby rendering the notes void for uncertainty.

The Court of Appeal agreed there were inconsistencies between the four definitions of CERA in the pricing statement and directed DBS to produce the product's reference notes.

The court found that the definition there was the same as the third CERA description in the pricing statement.

'The result was that owing to Lehman's bankruptcy, the CERA payable to HN5 holders on their investment was indeed zero,' the Court of Appeal ruled.

It agreed with an earlier High Court ruling that the DBS High Notes 5 contract was not void for uncertainty and dismissed the investors' appeal with costs.

The 21 investors, who brought the lawsuit against DBS on behalf of 199 others, were represented by Siraj Omar of Premier Law LLC. DBS was represented by Senior Counsel Davinder Singh and Una Khng of Drew & Napier.

Some 9,900 people here have lost most, if not all, of their investments totalling about $520 million in Lehman-linked products, such as the DBS High Notes, Minibonds, Merrill Lynch Jubilee Series 3 LinkEarner Notes and Morgan Stanley Pinnacle Series 9 and 10 Notes, distributed by DBS and other financial institutions.


My Thots....

Losing money an a high note.
Lost monies in the DBS High Notes 5 structured product, lost in the verdict;  possibly,  have to pay for the high flying lawyers that DBS hired to win the case.

Legally, DBS won.
In terms of Goodwill, I wonder.....

Would anybody trust the RMs pushing financial products at the counters ( or Cubicles), anymore?

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