Local investors suffering from loss-making structured note investments and their banks yesterday expressed dissatisfaction over compensation rulings handed down by the Bankers Association of the ROC (銀行公會) the day before in relation to investment disputes.
“We won’t recognize any decision reached by the association, which has sided with its member banks and followed no due process,” Kevin Yeh (葉添財), head of the Structured Notes Self-Salvation Organization (連動債聯合自救會), said yesterday.
The organization would only abide by future rulings if an arbitration committee is set up under the Financial Supervisory Commission with investor representatives present, Yeh added.
The organization insists that compensation paid out by banks should exceed 50 percent of the original investments. Yeh accused banks of tricking investors into buying structured products and then taking an average 20 percent profit from the proceeds.
But a banker, who requested anonymity, disagreed. She said that most banks had received nothing from the transactions other than a fee of 3 percent to 4 percent for each fund investment.
“We also fall victim to such sales,” she added.
On Thursday the bankers’ association reached decisions on the first 100 disputes relating to the investments of nearly 20,000 complaints that it has received since October.
Its arbitration committee ordered that banks pay compensation to 77 of the 100 complainants within the next two weeks, returning an average 15.64 percent of the original investments.
“Banks can’t object to our committee’s decisions, but investors can seek further legal remedies if they’re not happy with them,” Elton Li (李蔭棠), chief of the banking association’s consulting services center, said by telephone yesterday.
Li said that the arbitration committee was impartial and contained only third-party academic experts. He said the decisions were unanimous and “based on nothing but their expertise and reputation.”
He added that the committee would accelerate its review of the remaining complaints, but no timetable could be set on when rulings would be handed down.
More than 20 domestic banks are involved in the sale of the structured notes, including First Financial Holding Co (第一金控), which revealed on Wednesday that it had allocated NT$900 million (US$27.6 million) to compensate investors this year and another NT$500 million next year.
The investors’ organization, however, could take further action on behalf of the nation’s 18,000 investors following a public hearing to be hosted by Chinese Nationalist Party (KMT) Legislator Chiu Yi (邱毅) on Tuesday, Yeh said.
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