It has come to my attention that one of the ways which the Lehman Brother’s MiniBomb was sold was via an Introducer. One victim of the fiasco told me that she bought the MiniBomb through a person acting as an Introducer for a bank. The Introducer did all the paper transaction. The victim did not meet with any other representative from the bank. The victim was fully aware that the person was acting as Introducer. However, the Introducer was the person who gave the investment advice (“it is very safe and those crab”). Here is what I found out about the role of Introducer:

• According to regulation (HERE), an Introducer is not permitted to give investment advice and provide recommendation on the product introduced.
• The Introducer could provide factual information about the product (which in this case turns out to be a lot of crab).

The irony is that this Introducer was an IFA. Still, as far as this product is concerned if it is only acting as an Introducer, this IFA cannot give any advice nor recommendation.

In the meantime, the bank is also at fault to accept transactions from an Introducer. How could they allow this to happen to permit an unauthorise person to transact? Cow-boy town is it? I thought Singapore is a “fine” city, I did not know it is now a cowboy city.