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9/25/2008

caveat emptor - minibonds

Ultimately, it's buyer beware (caveat emptor) I REFER to Tuesday's report, 'MAS tells banks to give priority to worried investors'. It may be presumptuous of Mr Tan Kin Lian to assume that the banks erred in selling structured products to retail customers. These products are regulated under the Financial Advisers Act and the Securities and Futures Act. Only qualified advisers can market and give advice on such products. They must have a reasonable basis for any recommendation that is made on structured products and must provide investors with a fair description of all material information.... Structured products are not suitable for all investors. Each product can exhibit very different characteristics as well as associated risks and rewards. They may appear to be fixed-income instruments, but may contain embedded options which do not necessarily reflect the risk of the issuing credit. These options may be 'plain vanilla' or highly leveraged exotic options. As each is unique, the risks inherent in any one structured note may not be obvious. Hence, read carefully the prospectus or pricing statement, which explains the risks, tax treatment and other important information in detail. Ultimately, it is your responsibility to protect your own interests. If you do not understand how the product works, seek clarification with your adviser. Don't buy anything that you do not understand. Jag Kuo Soon Yong The above was posted by sgnews in Singapore kopitiam. I can agree with Jag Kuo's argument about caveat emptor and buyers should not buy unless they know what they are buying. In reality, how many people know what they are buying. But that is beside the point. What if the seller peddle these sophisticated products to the ah pek and ah sohs which could barely understand what financial instruments are? Targettting them in first principle is already wrong. Now, how many of those affected belong to such a category?

6 comments:

Anonymous said...

Buy at your own risk in Singapore.
Better don't buy in Singapore.
Now Singapore is so much different from the past.
Thanks to the technocrats.

Anonymous said...

Buy at your own risk in Singapore.
Better don't buy in Singapore.
Now Singapore is so much different from the past.
Thanks to the technocrats.

Anonymous said...

Like dat hor .. everything buyer beware will only mean consumer confidence deteriorate further.

Like singapore, you die your business, the situation can only get worse.

Why is American government trying to save the market? u think got fun meh? they are trying to shore up consumer confidence in their financial market. Long term vision.

If we want to compete with Hongkong as a financial hub, we can't just sit around and tell consumers .. you buy .. you die.

So buy from DBS like visiting geylang whores with no condom.

redbean said...

caveat emptor is not a defence when there is fraud or negligence. that is why FBI is in action.

Anonymous said...

CAVEAT EMPTOR sounds like LAW.

patriot

redbean said...

if i am a big organisation peddler junk bonds. i will lean heavily on caveat emptor and tell the buyers that they were stupid to buy my bonds. it is their fault for trusting me. hahaha.

this is the kind of logic we are hearing these few days.