I note that some investors of the structured deposit linked to Lehman Brothers are contemplating a class action suit against the financial institutions (FIs) concerned, despite MAS’ advice to lodge their complaints with the individual FIs, and then with the Financial Industry Disputes Resolution Centre or Fidrec which will now hear cases involving $50,000 or more. I am concerned that such investors may end up paying huge legal costs. In my view, seeking legal redress should only be resorted to if investors are unhappy with the ruling by Fidrec.Many of these investors are uncertain and lack confidence in what the FIs will do with their complaints and whether they will be treated fairly, as inherently the FIs would also be concerned to protect their own interest.
I urge the MAS to issue a detailed standard guideline on how the individual FIs should handle the complaints and publish the process involved i.e. how the complaints will be classified, what possible outcomes investors can expect, as well as the procedure for further recourse to Fidrec should they disagree with the decision of the FIs.
MAS should also require the FIs and Fidrec to set a time frame for handling such cases before them, so that affected investors have some certainty to allay their anxieties and to decide at which point of time they should consider other options.
Low Thia Khiang
MP for Hougang
22 October 2008
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