ARS and Lehman Brothers Principal Protected Notes Sales Pushed by UBS: A Double Dose of Disgust

Vernon Litigation Group’s ongoing investigation of the sale of Lehman Brothers structured notes by UBS is turning up evidence consistent with the allegations of wrongdoing made by New Hampshire securities regulators against UBS.

The Vernon Litigation Group investigation and the claim from securities regulators reveal a pattern of behavior by UBS that shows that the firm aggressively marketed Lehman Brothers principal-protected notes and other Lehman structured notes to its own clients despite Lehman Brothers’ precarious financial position.  In one of the claims filed so far this year by Vernon Litigation Group, the law firm alleges that UBS committed similar misconduct involving both auction-rate securities and structured notes, including Lehman structured notes, much to the misfortune of main street investors.

Vernon Litigation Group filed the claim on behalf of a surgery assistant who experienced mishandling of her retirement nest egg when UBS built her a retirement account that consisted of auction-rate securities and structured notes backed by the financial sector.

Vernon Litigation Group does not believe this is a unique situation within the UBS system.

“This double whammy of it coming to light that UBS misled investors about auction-rate securities and soon thereafter coming to light that UBS also misled investors about structured notes has created a sense that UBS has effectively betrayed both its clients and undercut the credibility of its own financial advisors — some of whom have now left the firm in disgust,” investor rights attorney Chris Vernon said.

The Vernon Litigation Group claim on behalf of the investor described above alleges that UBS urged the investor to buy auction-rate securities after UBS already knew that the auction-rate securities market was deteriorating and similarly urged the investor to buy Lehman and other structured notes from the financial industry after it knew that Lehman and the financial industry were having problems.

The claim filed by New Hampshire securities regulators alleges something similar. In that filing, regulators accuse UBS of failing to warn investors about the potential risks of its structured investment products once Lehman Brothers began to experience financial problems.

Vernon Litigation Group, based in Naples, Florida, represents investors nationwide who are victims of stock fraud and stock losses due to negligence and misconduct. Vernon Litigation Group securities attorneys are experienced in complex financial litigation, including FINRA arbitration. The firm is currently representing multiple Lehman structured product investors in FINRA arbitration.

Categories