The Straits Times journalist asked for my views about the dismissal of the appeal by the High Notes investors against the earlier judgement. I replied that I am sad to learn about this outcome for the following reasons:
- The investors already lost all of their investments. They now have to bear their legal expenses and, possibly, the expenses of the DBS lawyer.
- This decision came around the same time as the good news received by the Pinnacle Notes investors that the New York court has agreed to hear their class action against Morgan Stanley. Furthermore, the New York case is being heard under a "success fee" arrangement where the investors do not have to bear any legal cost, if they do not succeed in the case.
- The High Notes were created by DBS and sold to its own customers. This gives a higher responsibility to DBS, as they should be aware of the risk of this product and should have communicated it clearly to their customers The other credit notes were created and sold by different banks.
I hope that DBS Bank will at least undertake to bear the legal cost of both sides, so that their customers do not have to bear any further loss. It would have been nicer if DBS Bank had offered to give an ex-gratia payment to the investors, instead of having this case decided in court. I believe that DBS Bank might have sold a similar product in Hong Kong and they probably had agreed to compensate the investors in some way - but I do not really have the facts.
Tan Kin Lian