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Unfair Practices
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redbean



Joined: 07 Mar 2006
Posts: 13857
Location: singapore

PostPosted: Thu Aug 28, 2008 10:55 am    Post subject: Unfair Practices Reply with quote

Payout dispute: Westcomb remisier loses suit By Chua Hian Hou ST dated 28/6/08

The High Court has thrown our a lawsuit by a former Westcomb remisier who claimed his bosses had conspired to deprive him of commissions.

Mr Ng Giap hon, a former remisier with Westcomb Securities, had accused Westcomb Financial Group founder Peter Choo, and CEO Alex Tan of not paying him commissions for stock market trades by a client he recruited.

Justice Choo Han Teck, in his six page written judgement, said that while Mr Ng was indeed the first to "formally" ask the investor to open an account with Westcomb, this was not a significant factor.

This was because Westcomb did not charge this investor any commissions. As such, Mr Ng, who would typically get a cut of Westcomb commissions, would not get anything anyway.

The ruling also stated that it was Westcomb's "prerogative" whether to charge any commission. The judge also accepted the firm's defence that it often waived commissions to favoured clients as a "matter of goodwill".

Justice Choo also noted that "there was no evidence of any concerted plan of action by the defendants". While Mr Ng had "referred to some surreptitious actions" by the defendants, he "failed to persuade me that the defendants had acted in furtherance of a coherent plan," said Justice Choo.


It was a foul practice in the industry that when a remisier leaves a broking house, the house will temporarily offer his selected clients no commission for trades for a certain period in order to retain the clients with the house. Would such practice be considered fair play or unfair practices?

How would the Competition Commission of Singapore view such cases?
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yin fun



Joined: 28 Aug 2008
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PostPosted: Sun Aug 31, 2008 9:44 am    Post subject: Reply with quote

Interesting article. Well, my thought is this:

For certain jobs/professions, especially those whereby the employee may have access to exclusive info, the employment contract may sometimes include clauses whereby upon leaving the company, the ex employee is not to join a company within the same industry for a period of time because of direct competition and the employee may disclose confidential info which may be unfavourable to the ex employers. Am not sure if such practice is still being carried out. But some financial institutions may just impose a longer notice period and withhold confidential information from the employees during such period.

In the same way, if this company exercises such actions, the ex employee may not receive income from this client anyway?

In some service related companies I suppose some high ranking officials can always poach clients who follow the official rather than the company.

Hence, I think practices where the company waives commissions for clients whom they do not want to lose due to leaving employees is just trying to prevent losing all their clients serviced by the same employee. If an employee can use their position in their company to negotiate for another job whereby they are hired purely for their clientale base, the ex employer probably can also try means to stop that from happening.

It comes at an opportunity cost to the ex employers too. They don't earn revenue for some services they provide. If this remiser is really good, this client may could still follow him and choose to pay for his services?

i only know in the accounting field, clients can freely follow the partners if they want. Up to them to negotiate a good deal to the client.
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redbean



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PostPosted: Thu Sep 04, 2008 5:54 pm    Post subject: Reply with quote

Hi Yin Fun,

Your points are valid and the practice for employees not to join competitors immediately is fair and still being practised.

The case concerned is different as the remisiers are sub contractors and the clients belong to the remisiers, not the company. In some cases when the clients were given to remisiers by the company, then it is fair that the remisiers should not bring them along.

In this case, it is unfair for the company to offer the clients no commission just to retain them. The company is a big organisation and can afford to take some losses for a short time. The subcontracts are small individuals and in such cases will be at a great disadvantage.

The law ruled here that it is acceptable practice for the company to offer better terms to their clients to keep them. Would the Competition Commission of Singapore interpret such a practice the same way as the court? If we are talking about fair play and level playing field, the smaller players must be protected from the big boys.

Microsoft was taken to task for using its big muscles to elbow out smaller players. I hope the CCS will look into such cases instead of bringing them up to the courts of law which requires a different set of rules and the proving of intent.

There are many unethical practices and underhand tactics used in the industries and often it is very difficult to prove, especially the acts of cartel. Some are unwritten or done quietly among the unofficial cartel members. Whistle blowing is not easy.

In the case of companies adopting unethical and unfair practices, this should be frown upon and stopped. Big companies must act and behave morally upright and should not take advantage of their employees or subcontractors. They have to behave as respectable corporate citizens.

It is good that the CCS is being formed to help the players at the wrong end of the stick. Hope to see them take a few of the big bad boys to task.
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yin fun



Joined: 28 Aug 2008
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PostPosted: Fri Sep 05, 2008 2:30 pm    Post subject: Reply with quote

Hi there,

I do agree that you may never know what is really going on between the remiser and the exployers and they could intentionally plan for specific actions (working within the law of course) just to deprive them of commissions and keep the client. It may not be easy or even possible for individuals to stop such things even if they could see it coming.

This reminds me of the new pro family bonuses given out by the government, particularly the 4 month maternal leave etc. Then there were negative reactions by working women who claim it could affect their career as employers may fire them deliberately as they rather hire someone else who is not pregnant and could contribute for the 4 months they are away. Then there were some measures on how employers could not frivolously fire pregnant employees within 6 months I think before they are due for delivery of the baby.

Perhaps something like this could be implemented. Say, employers could not waive commissions up to a certain time before an employee leaves for no good reason? Perhaps they should set up committees (sounds so government right?) comprising mostly of these subcontractors to list the reasonable reasons where they could waive the commissions etc and when it was unjustifiable. Depending on teh circumstance, perhaps fines could even be imposed on the erring companies. At least, this could send a signal to the industry that actions will be taken to ensure a certain level of professionalism and ethics.
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redbean



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PostPosted: Fri Sep 05, 2008 5:48 pm    Post subject: Reply with quote

Hi Yin Fun,

There are many sleazy and unethical practices by seemingly respectable professionals in the industries. The sad part is that these are employees and they are fixing up employees just to look good to their bosses who are also employees. And they stride along the corridors of power appearing dignified and respectable.

The CCS should conduct an inquiry on unfair practices and shame a few of them in the media.
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redbean



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PostPosted: Wed Oct 29, 2008 3:02 pm    Post subject: Reply with quote

Japan banned short selling

Nikkei has been up strongly for two consecutive days after short selling is imposed.

SGX is still happily allowing short sellers to destroy the value of stocks. Today's hit is OCBC with the news or rumour that it may be affected by Great Eastern's lower profit forcast. And it got whacked all the way. This is how our market works. World class market.

Shit market as far as I am concerned. At the way the game is being played, any stock that has value, especially blue chips, will be bashed down at will. Unstoppable.

SGX has a provision to take to task people who cornered a stock. Would they wake up from their sleep and take these manipulators to task?
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redbean



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PostPosted: Fri Nov 14, 2008 9:23 am    Post subject: Reply with quote

The lesser beings are trembling

The lesser beans in Japan and Australia are trembling in fear of short sellings in their stockmarkets. Australia yesterday announced that they would continue to restrict shortsellings in their market.

The higher beans in paradise are still so confident that they can manage short selling in the market and are not doing anything about it. Or they are oblivious to the damage that it is causing to the investors here and the viability of the stock market in the long run.

We are simply brilliant!
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redbean



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PostPosted: Tue Jan 13, 2009 2:02 pm    Post subject: Reply with quote

DBS being shorted down again!

Is this good for the market? Is this the kind of liquidity that we want for our market? What we need is a healthy market, not liquidity for the sake of liquidity. Not liquidity where the big boys can short a stock to any price they want. This is very unhealthy. It will destroy the stock market in a matter of time.

Without a counter party to take on these big boys, they could literary set the direction and price of stocks. if this is allowed, then temasek or Gic should come in and once in a while buy up whatever short position of sound blue chips eg dbs, capitaland or other banks and push it up against the big manipulators. A few of them need to be caught in their own game, just like Nick Leeson, and sanity and rationality will return to the market.

The above was posted yesterday 12 Jan 09.
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redbean



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PostPosted: Tue Jan 13, 2009 2:07 pm    Post subject: Reply with quote

Today DBS is being played up

This extreme play of ups and downs is very destructive to the small players and the market as a whole. Yes there are a lot of liquidity, but at a great cost. The question is why are the big boys allowed practically free play to do what they want and make the money? Presumably they are foreign funds. But are they? Or they could be foreign funds playing with local money and making from the small boys.

Who are they and whose money are they trading?
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redbean



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PostPosted: Fri Jan 16, 2009 4:15 pm    Post subject: Reply with quote

Irresponsible corporations

People are running out of liquidities. Investors too are running out of cash. But many organisations are planning to issue rights at this difficult time to raise more cash and build up their war chests. The positioning is sound, raise more funds to buy out other struggling companies and assets in bad times. But would they care to consider if the shareholders still have spare cash to pour into a bottomless pit? Another few corporations doing it after DBS will suck the market dry.

Corporations must be responsible and not to do things that may benefit one or two of them but cause more harm to an already tough market and forcing shareholders to cough out more money when money is hard to come by.

The short sighted and selfish acts of corporations must be reined in just like the irresponsible acts of retrenchment as the easy way out.
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redbean



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PostPosted: Tue Dec 29, 2009 11:00 am    Post subject: Reply with quote

Internet trading of stocks on the rise

If this could be true, but that's what I heard or read, that more investors are trading stocks on their own using online platforms. Oops, don't tell the bosses. It is cheaper, easier and no need to rely on a stockbroker/remisier. The stock market will be more vibrant indeed if more investors trade online. But this could only happen with a bit of encouragement from the right places.

Let's start from the offices of the CEOs. The CEOs should set an example by trading online themselves and give the go ahead for their employees to do so. I can imagine the furious tradings that will take place online if this happens. All the employees will be online, glued to their seats, in their chairs, trading happily in the stockmarket. They may not even go out for lunch. The volume of trades will surely soar to the sky.

Hi CEOs, Heads of Ministries, Divisions and Depts, please give the go ahead to let employees trade online and give the stock market the special buzz that it needs.

Will it really happen? Or will these CEOs, Heads of Ministries etc etc be watching to see which employee would dare to use office time and computers to trade stocks?

Sorry, this is a great joke to end the year. But I really hope that it is true, that this is not a joke. Then we can be the real financial centre of the world with everyone trading happily online.
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redbean



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PostPosted: Wed Jan 13, 2010 8:49 am    Post subject: Reply with quote

Saying no to hot money and substandard stocks

What is happening, China and Hongkong going mad or what? China is concerned about the hot money that is flowing into the country and pushing up property prices. Now wait a minute, how could that be a concern? Money coming in, hot or cold, is good money. Take it, grab it and reinvest in some other things. Liquidity is good.



Same goes to Hongkong. There is increasing concern of sub standard stocks being listed and Hongkong is getting the reputation of being slack in its listing rules and thus attracting the substandard stocks from China and now Russia to list there. Hongkong is becoming the first stop of choice by substandard Chinese companies, and less than full disclosure, misrepresentation, delisting is becoming a common issue.



But why, it is good money for the exchange! Never mind the substandard stocks or frauds. Listing means good income. Got money donít want meh? After all it is the exchange that is making the money. The losers are the gullible and ill informed investors who did not do their homework and they should take the blame for being greedy and not thinking.



This is getting unbelieveable. Should ethics be an issue when making money is concerned? Why bother with hot money and high property prices? Those who cannot afford to buy because of high prices should buy within their means.
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redbean



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PostPosted: Tue Jan 19, 2010 10:38 am    Post subject: Reply with quote

Does the reporter know what he is talking about?

Business Times - 19 Jan 2010
Hock Lock Siew
Time SGX moves to T+1, scraps contra
By R SIVANITHY

In the article the reporter recommended that SGX should move to T+1 for settlement of trade and do away with contra trading. He also suggested that there is room to reduce commission rate further by removing the credit risk. His reasons, other bourses can do it, why can't we? How simplistic can one be?

My immediate reaction, does this reporter know what he is talking about or was he parroting someone's pet idea, no need for remisiers, no need for contra trades, force the remisiers to trade with the fund managers in derivatives that the remisiers are at a big disadvantage?

"For one, because contra effectively gives punters free leverage for several days (up to a week, in some cases), there is thus a disincentive for short-term players to trade leveraged products such as structured warrants, single-stock futures and SGX's recently introduced but rapidly failing extended settlement or ES contracts. Do away with contra and demand for these products must improve because punters looking for leverage would be forced to venture into these products, where credit risks are less of an issue as margin payments are required upfront."

Is this the intent, to force the remisiers to do something which they did not want to because they will be made to be like taxi drivers racing with Formula One drivers?

Oh, the reporter also dismissed the fear that by removing contra trade and settlement date to T+1, trading volume would drop. His proof is that volume actually increases after settlement date was changed from T+5 to T+3. Does he know why the volume actually increases when most of the investors have lost their money and out of the market? Does he know who is generating the 'huge volumes' and whether these are translated into real revenue for anyone?

I will like to see which smart alec will be foolhardy enough to put these changes in place and risk the market going kaput. Don't think that our market is as big as America, or even Hongkong. The number of traders in the market has gone down so badly that the market is supported by a few big market makers trading from left hand to right hand and programme trading.

The number of penny stocks in our market is a good indicator of the health of our market. And when penny stocks are voluntarily delisting here to be relisted in other markets, does it say anything? Or if the better China stocks chose to list in Hongkong and not here, what does it say?

Forcing remisiers to trade in derivatives? Are remisiers that stupid to go into an area that they are at a huge disadvantage? Why would remisiers want to trade with fund managers whose primary job is just to trade derivatives, and with a huge war chest to fight with?

The article is copied from Asian Correspondent?
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redbean



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PostPosted: Wed Jan 27, 2010 8:51 am    Post subject: Reply with quote

The blind followers of western financial systems

George Soros said in Davos that the world needs an international police to regulate the financial system which was developed practically in Wall Street. After the 1998 fiasco and near collapse, no one is blinking an eye , I mean the stupid Asians, to wonder what was happening. Only the western financial experts and Obama's team are scratching their heads on how to rein in the financial crooks and revamp the whole system. Otherwise, the blind Asian followers are just happily plodding alone as if nothing was wrong and everything is fine.

The whole financial system has been transformed from banking and finance to simply gambling and cooking the books. And everyone is in it for a quick buck. Under the old system, it was steady and cautious growth. But that would not be able to pay the greedy bankers huge bonuses in double quick time. They needed a system to bring in quick bucks and in big numbers to pay themselves. And they developed a system, convinced all the asses that this is the way it works and the way to go. And the asses lapped them up. And all the big funds were invited into their casinos with open arms and all patting each other's backs that they have created vibrant and high volume financial centres churning big money.

Let's face it, the funds are there not for growth but for quick profit. And whose money will be turned into their huge profits? The small investors of course. And the big investors with their financial advisors are not much wiser and are also there to feed the fund managers and their funds. Now it seems that the investors have their pockets cleaned and not many are left kicking. Oh, they pay high rentals, provid the buzz and employment, and maybe pay taxes. No they don't. It is the investors that are paying for them and lining their pockets with huge profits. It is daylight robbery!

Then some bright ass came out with the idea of forcing the remisiers to trade with the fund managers, thinking that the remisiers are up to it and have enough money to keep the market running. A financial centre cannot depend on a handful of remisiers to churn the trades. In no time, if they are foolish enough, they too will be taken to the cleaners. The most cocky thing is for people to even think of forcing remisiers to trade in something that they do not want to, knowing very well that they are in to be killed.

The banking and financial systems with all the high leverage products that are actually worth nothing must be cleansed. Go back to the fundamentals of slow and steady growth. The Lehman bonds, toxic products and derivatives are poison and harmful to the health of the world financial systems. It is time to rein in the madness and greed and do some proper business. Davos must come out with something strong and effective to curb the wild fire that is burning across the global financial industry.

The article is copied from Asian Correspondent.
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redbean



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PostPosted: Thu Feb 04, 2010 8:49 am    Post subject: Reply with quote

While Obama is reining in the beasts...

While Obama is trying hard to rein in the beasts in Wall Street and the banks, what are the stupid Asians doing? Obama is not going to allow the beasts in the financial industry to coninue to run wild, taking high risks and gambling with other people's money, and issuing all kinds of toxic notes and derivatives, but in the Asian financial centres they are tweedling their thumbs and think that all is well under heaven. The big funds are still gambling away using all kinds of technologies and advantages to exploit the simple minded Asians and robbing their coffers unhindered, in fact with collaborations from the regulators, and laughing all the way to the banks.

Asian financial regulators must wake up from their drunken stupor and do something similar to what Obama is doing to complement him. If not, the beasts and consmen will continue to do untold damages to the financial system and siphoning as much money as they could lay their hands on. But my cry may be in vain. The party is still swinging and everyone is high on drugs.

The article is copied from Asian Correspondent.
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