SocGen Makes «Goodwill Payment» to Disgruntled Airline-Linked Investors
Societe Generale will make payments to loss-makers from the recently collapsed structured product linked to Singapore Airline’s stock.
The French lender will pay 30 Singapore cents per certificate but underlined that this was done out of goodwill and not as compensation.
«The goodwill payment amount is not intended to compensate investors for all loss given the risks investors assumed in purchasing these structured products,» according to a statement from the bank.
5X Short Certificate
Investors of the structured product – DLC SG5xShort SIA – incurred significant losses after Singapore Airline’s stock price surged 20 percent earlier this month in a matter of minutes.
The structured product’s performance has a five-fold inverse relationship to the underlying asset and the quick spike in Singapore Airline’s stock price activated an «airbag trigger», the bank added.
SGX Investigation
The move to make the one-time goodwill payment follows a «Business Times» report that claimed investors were protesting against perceived lack of timely disclosure and unfair pricing.
And Following Societe Generale’s announcement, the Singapore Exchange has kicked off investigations into what led to the French bank’s most recent «adjustment announcement».
«In respect of the adjustment announcement, our regulatory focus is centered on ensuring timely disclosure,» according to a «Bloomberg» report citing a spokesperson for the bourse. «We require that adjustments be announced once it is determined, but in no event later than the market day prior to the effective date.»
