Friday, May 14, 2010

Current SEC investigation into investment banks....

"In June 2006, a year before the subprime mortgage market collapsed, Morgan Stanley created a cluster of investments doomed to fail even if default rates stayed low -- then bet against its concoction" - Bloomberg [Link]
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The US govt is current conducting an investigation into the sale of certain mortgage linked products by US investment banks and whether these banks bet against these products themselves as they sold them to unknowing customers. The investigation also hope to uncover if the banks knew that these products have a high chance of failing when they sold it. If that is the case, the banks have engaged in fraud - outright cheating.
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The structured products such as Lehman Minibonds and Pinnacle Notes were sold to Singaporeans in around mid-2007. The SEC is looking at products sold as early as mid-2006. If investment banks knew that these products were bad and sold them to Asian investors, they have engaged in fraud. The Pinnacle Notes sold to Singaporeans was a product by Morgan Stanley currently under investigation by the SEC.
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Unlike the US which has the SEC and very tight regulation, the MAS and Singapore govt takes a handoff approach on such matters always holding up the "buyer beware" principle. If US investments have engaged in fraud, to allow them to go unpunished is not just a grave injustice but sends the signals to the cheats and crooks of this world to come to Singapore and take Singaporeans for a ride.

10 comments:

Anonymous said...

It's the fate of Singaporeans that they deserve the type of MAS and the gahmen.

Unless they believe they can change their fate.

But unlikely they can succeed if they think it can be done through blogs or blogs alone.

Anonymous said...

SEC is very lax in any standard. It is just a cabal of the corrupt.

SEC has allowed derivative to free wheel without any regulations.

They have not prosecute anyone except for Madoff (for show trial).

MAS is worse, they are just maggots and cesspool of shit. We let Lehman brothers notes peddler to carry their trade here even when this is a jailable offence in USA.

Anonymous said...

greed, and more greed.
the turn of the century saw the greatest decline in the morale of the mankind.
the highest pay package of the minister illustrated its fullest greed and they got 25%increment.
ours a mere single digit..

Anonymous said...

//
Unlike the US which has the SEC and very tight regulation
//

Thats really funny.
Seriously, MAS is useless.
There is no need to use comparisons with SEC unless you are really trying to show that MAS is doing ok.

Anonymous said...

Mr Lucky

Markets looking dire.
The yen carry is so pre the great recession.
Banksters and speculators running amok.

Sigh.

The corrupt Bush and Obama administrations are simply the symptoms of the moral decay of US.

Maybe GS really is doing God's work the way Judas did for Christ.

Anonymous said...

btw, no tribute to the late Dr Goh Keng Swee?

You could say that his exit (political defeat?) was the start of our own moral decay and the rise of unfettered social darwinism.

Anonymous said...

The MAS is wrong to adopt this handsoff attitude when Singaporeans were cheated of hundreds of $million. They must correct their mistakes before the the public lose confidence in the MAS and the Singapore regulatory regime. Singapore reputation as a financial centre is at stake when such blatant cheating are allowed to get away.

Anonymous said...

Singapore will be the most attractive investment centre for foreigners if mas is as lax as it is now.

Anonymous said...

The Late Mr Wee Kim Wee, Mr Ong Teng Cheong, Mr J B Jeyaretnam and Dr Goh Keng Swee received much accolades and tributes from netizens.

Wonder what Netizens will say about President Nathan, MM Lee Kuan Yew, Mr Tony Tan and Dr Toh Chin Chye when their times are up?

Alan Wong said...

If our own Govt is just as greedy as the greedy banks, do you think that MAS will take any action ?

Just compare how DBS Bank handled the mini-bonds issue in S'pore compared to the way they behaved in HK will give us the answer why our leaders tell us to "invest with our eyes wide open" !