Lawyer says some hurt by Lehman collapse have sought him for help
By Selina Lum 22 October 2008
For the past two days, investors burnt by the financial crisis have been filing in and out of the law offices of Leonard Loo & Company in Tagore Lane along Upper Thomson Road.
They are getting legal briefings by Mr Loo, especially on whether they stand a shot at getting their money back from the banks via a class action suit.
The lawyer, who has been practising for 12 years, says a handful of investors who lost money in products linked to Lehman Brothers sought him out after he appeared on TV commenting on the issue.
He met others during protests held at Speaker’s Corner by former NTUC Income chief executive Tan Kin Lian. The number has snowballed to 120, he said.
Investment bank Lehman Brothers filed for bankruptcy protection on Sept15. According to the Monetary Authority of Singapore (MAS), about 10,000 retail investors had pumped over $500million into structured products linked to the US bank.
At his briefings, Mr Loo, who also acted for over 400 China workers cheated by a remittance company in 2002, has been handing out a two-page set of frequently-asked questions (FAQs), on the recourse investors have, as well the possible claims they can make against banks.
He told The Straits Times he felt sorry for many of the investors, who stand to lose almost all of their investment funds.
The FAQs came with caution: they should not rely on it without independent legal advice.
It spelt out the choices they have, including turning to the Financial Industry Disputes Resolution Centre (Fidrec). It said that, as the centre can only hear disputes involving up to $50,000, this ‘does not help the present investors as most of them invested on average $100,000’.
However MAS managing director Heng Swee Keat said last week that Fidrec had agreed to hear deserving cases of structured products, even if they exceeded $50,000.
Elaborating on what direction a class action suit, which usually involves multiple plaintiffs who have suffered a common harm, can take, Mr Loo cited mis-selling, negligent professional advice and misrepresentation. One example of misrepresention was the use of the term ‘Minibond’. ‘It is not a bond but a complex investment product.’
He is of the view that those thinking of suing should not communicate with their banks in case what they say is used as evidence against them. ‘We’re of the view that the lodging of a formal complaint to the bank may be of limited effect.’
His advice seems to fly in the face of steps MAS has suggested: that investors talk to banks first, then go to Fidrec.
In Parliament on Monday, Trade and Industry Minister Lim Hng Kiang said legal action would be counter-productive, and would result in financial institutions taking legal defensive actions.
Mr Loo’s response: ‘These investors are not looking to the Government for any compensation. At the same time, the Government cannot legally compel any party to compensate these investors. Who will compensate these investors? These investors may have to seek their own legal recourse in the form of a class action or class law suit.’
Among those who turned up at Tagore Lane on Monday was a 33-year-old shipping coordinator who was with her husband. She said talking to the banks was a ‘waste of time’.
‘If I act alone, nobody’s going to help,’ she said.
At the office were people from all walks of life, from young parents to retirees. Some came with product brochures and documents they had signed.
Mr Loo, speaking in English and Mandarin, asked them to recount how they were sold the products, and told them that banding together was more effective than suing as individuals. It would mean putting up a deposit of $1,000 to $2,000, much cheaper than taking on a bank solo.
A 62-year-old English-speaking retiree who gave his name as Mr Tan said a lawsuit was his last option, as it could turn out to be a long drawn-out affair going against big banks and big law firms.
Another investor, a 55-year-old retiree who is an American citizen, has hired Mr Loo. ‘I have already sent in a cheque for $1,000,’ he told The Straits Times.
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Investors ponder legal suit
Lawyer says some hurt by Lehman collapse have sought him for help
By Selina Lum
22 October 2008
For the past two days, investors burnt by the financial crisis have been filing in and out of the law offices of Leonard Loo & Company in Tagore Lane along Upper Thomson Road.
They are getting legal briefings by Mr Loo, especially on whether they stand a shot at getting their money back from the banks via a class action suit.
The lawyer, who has been practising for 12 years, says a handful of investors who lost money in products linked to Lehman Brothers sought him out after he appeared on TV commenting on the issue.
He met others during protests held at Speaker’s Corner by former NTUC Income chief executive Tan Kin Lian. The number has snowballed to 120, he said.
Investment bank Lehman Brothers filed for bankruptcy protection on Sept15. According to the Monetary Authority of Singapore (MAS), about 10,000 retail investors had pumped over $500million into structured products linked to the US bank.
At his briefings, Mr Loo, who also acted for over 400 China workers cheated by a remittance company in 2002, has been handing out a two-page set of frequently-asked questions (FAQs), on the recourse investors have, as well the possible claims they can make against banks.
He told The Straits Times he felt sorry for many of the investors, who stand to lose almost all of their investment funds.
The FAQs came with caution: they should not rely on it without independent legal advice.
It spelt out the choices they have, including turning to the Financial Industry Disputes Resolution Centre (Fidrec). It said that, as the centre can only hear disputes involving up to $50,000, this ‘does not help the present investors as most of them invested on average $100,000’.
However MAS managing director Heng Swee Keat said last week that Fidrec had agreed to hear deserving cases of structured products, even if they exceeded $50,000.
Elaborating on what direction a class action suit, which usually involves multiple plaintiffs who have suffered a common harm, can take, Mr Loo cited mis-selling, negligent professional advice and misrepresentation. One example of misrepresention was the use of the term ‘Minibond’. ‘It is not a bond but a complex investment product.’
He is of the view that those thinking of suing should not communicate with their banks in case what they say is used as evidence against them. ‘We’re of the view that the lodging of a formal complaint to the bank may be of limited effect.’
His advice seems to fly in the face of steps MAS has suggested: that investors talk to banks first, then go to Fidrec.
In Parliament on Monday, Trade and Industry Minister Lim Hng Kiang said legal action would be counter-productive, and would result in financial institutions taking legal defensive actions.
Mr Loo’s response: ‘These investors are not looking to the Government for any compensation. At the same time, the Government cannot legally compel any party to compensate these investors. Who will compensate these investors? These investors may have to seek their own legal recourse in the form of a class action or class law suit.’
Among those who turned up at Tagore Lane on Monday was a 33-year-old shipping coordinator who was with her husband. She said talking to the banks was a ‘waste of time’.
‘If I act alone, nobody’s going to help,’ she said.
At the office were people from all walks of life, from young parents to retirees. Some came with product brochures and documents they had signed.
Mr Loo, speaking in English and Mandarin, asked them to recount how they were sold the products, and told them that banding together was more effective than suing as individuals. It would mean putting up a deposit of $1,000 to $2,000, much cheaper than taking on a bank solo.
A 62-year-old English-speaking retiree who gave his name as Mr Tan said a lawsuit was his last option, as it could turn out to be a long drawn-out affair going against big banks and big law firms.
Another investor, a 55-year-old retiree who is an American citizen, has hired Mr Loo. ‘I have already sent in a cheque for $1,000,’ he told The Straits Times.
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