dbs high notes 5 investors lose appeal

in what has been an eagerly awaited response to an appeal by dbs high notes 5 investors, the court of appeal has dismissed a bid by investors to retreive losses they incurred after buying into a highly complex financial product from dbs bank.

the court - comprising of chief justice chan sek keong and judges of appeal chao hick tin and v.k. rajah - released its judement today.

the collapse of lehman brothers in september 2008 resulted in more than 1,400 retail investors in singapore with massive losses of some $103 million worth of the dbs high notes 5 product.

my comments:

although i have no vested interests here and my empathies are with the dbs high notes 5 investors, consumers should always be alerted by the aeons old warning of "caveat emptor".

this is the basic principle that should guide anyone and everyone in terms of signing on the dotted line prior to any other consideration when parting with one's hard earned money.

what is interesting in the judges' ruling is significant and i quote:

"we think it apposite and timely to remind the general public that under the law of contract, a person who signs a contract which is set out in a language he is not familiar with or whose terms he may not understand is nonetheless bound by the terms of that contract."

chief justice chan sek keong added:

"illiteracy, whether linguistic, financial or general, does not enable a contracting party to avoid a contract whose terms he has expressly agreed to be bound by."

this is a sobering reminder that your signature is key to any contract and even grounds like illiteracy, whether linguistic, financial or general will not cut any ice with our courts, as exemplified by this decision handed down by the court of appeal.

therefore, in all financial products and no lesser for insurance contracts with the accompanying 'fine print' should be properly scrutinised and thoroughly digested. but i suspect most of us will usually give this a miss citing a lack of time or does not assign a priority to doing this.

and because many of today's financial products no longer fall into the plain vanilla category, it remains a 'jungle' out there.

which begs the question; whether u should opt for a diy approach or engage a professional and competent financial advisor?