UBS was one of the biggest worldwide sellers of Lehman Structured Products, including Notes that UBS deceptively referred to as “Principal Protected.” However, unlike some other large investment firms that sold Lehman “Principal Protected” Notes, UBS has continued to publicly deny wrongdoing despite that it had one of the closest relationships with Lehman out of any of the large investment banks that sold Lehman Products. As a result, many former UBS clients have been forced to retain counsel and forge ahead with FINRA arbitration proceedings.
The refusal of UBS to voluntarily compensate many investors for their losses is especially troubling in light of the fact that UBS continues to profit from the Lehman debacle. Initially, UBS acted as the underwriter of Lehman notes and collected millions from the recommendation and sale of structured notes to its own client base. Simultaneously, UBS generated hundreds of millions of dollars in interest charged to Lehman from the now infamous Repo 105 transactions. UBS clients who purchased reverse convertibles –referred to by UBS as Yield Optimization Notes- tied to the price of Lehman stock subsequently received worthless Lehman stock, enabling UBS to skip on the repayment of those notes. And if all that profiteering wasn’t enough, UBS recently entered bids to purchase derivatives related to Lehman bonds. Those bonds will provide the holder with the opportunity to collect over 90 cents on the dollar from financial firms, hedge funds, and insurance companies that were on the losing side of Lehman’s credit default swaps.
Based on the foregoing, UBS continues to profit from its Lehman Brothers dealings, while publicly requiring its own former client base to accept a total loss on the structured notes – or, in the alternative, hire lawyers to take on the UBS legal team and file and pursue formal claims against UBS.
Christopher Vernon is a Naples based attorney with the law firm Vernon Litigation Group. He advocates for the rights of investors throughout the United States and abroad—both in and out of the courtroom and arbitration hearing room. Mr. Vernon currently holds an AV rating by Martindale-Hubbell, has been repeatedly recognized by his peers in The Best Lawyers in America, and has also been consistently recognized in the Florida editions of the Super Lawyers publication. Mr. Vernon has spoken at both national securities and national trial attorney conventions and has also conducted continuing education in the U.S. and abroad for CPAs, CFAs, CFPs, investment professionals, board-certified business litigation lawyers, and board-certified trust and estate lawyers, and securities regulators.