By Francis Chan

Almost a year has passed since he got that late-night call from his relationship manager. There was bad news: he might lose his entire $50,000 investment in DBS High Notes 5.

Fast forward 12 months and the story only gets worse for the man, the first investor here to alert The Straits Times of the plight facing many others like him, who had bought the complex structured products.

The investor and thousands like him have since lost huge sums of money as the valuation of the credit-linked notes plummeted to zero with the collapse of US investment bank Lehman Brothers on Sept 15 last year.

'I will never trust DBS again when it comes to whatever they say is a good and safe investment,' said the investor, who did not want to be named.

'The $50,000 is a small amount to the bank, but to people like my wife and me who are nearing retirement, it can go a long way. I would have retired earlier if I hadn't lost that money.'

The 53-year-old is one of more than 6,000 angry investors in Singapore who have been unsuccessful in getting their money back from the 10 financial institutions that sold the risky products.

About 9,900 people here lost most, if not all, of their investments totalling about $520 million in products such as DBS High Notes, Minibonds, Merrill Lynch Jubilee Series 3 LinkEarner Notes and Morgan Stanley Pinnacle Series 9 and 10 Notes.

In the aftermath of a public outcry against the institutions, the Monetary Authority of Singapore (MAS) rolled out a list of proposed changes relating to the marketing and sale of such products.

The latest came last Tuesday when the MAS said it will ban the use of terms like 'capital protected' or 'principal protected' as many people did not understand them.

While the proposed regulatory changes promise to improve industry practices, thousands hurt by the fiasco are either still waiting for their cases to be settled through lawsuits and private arbitration, or have all but given up on getting any money back.

Some elderly investors like Madam Ling Ah Moi, in her 70s, and her husband, retired shopowner Ling Jun Zhi, 78, are still nervously waiting for their case to be decided.

Despite their age and inability to speak English - factors the MAS said require special consideration by institutions - the couple, who sank $100,000 into Minibonds, have yet to receive a settlement acceptable to them.

Investigations into complaints resulted in about 3,900 investors getting $107 million in compensation. The number was out of some 6,200 cases involving people who claimed they were misled into investing.

The rest were not compensated mainly because they were deemed to have understood what they were getting into, said the institutions that sold them the products.

Although more than 60 per cent of investors whose cases have been decided have been offered full or partial compensation, the amounts remain a fraction of their total stake.

For example, DBS Bank, which sold the DBS High Notes series, ruled on 866 complaints and offered compensation to 197 investors.

Of the total of $84.1 million collected from the sale of the notes, DBS offered only $7.6 million in settlements.

The low compensation amounts and slow settlement processes have caused several investors to initiate their own lawsuits.

Meanwhile, the institutions that distributed the products have also suffered.

Aside from hits to their reputation which experts said may take years to restore, they have also been penalised by the financial regulators.

In July, the 10 institutions involved were banned by the MAS from selling - or advising customers on - new structured products for between six months and two years.

Still, bankers told The Sunday Times that consumer confidence and trust is returning.

Interest in relatively safer and more transparent variations of structured products is picking up again, though demand is still a far cry from the boom in 2007.

But some things will not be making a comeback.

For example, Lehman's operations in Singapore - where it used to run a commodities and foreign exchange trading unit - now bears the name Nomura.

The Japanese financial giant bought over Lehman's Asia-Pacific unit late last year.

This article was first published in The Straits Times.