Vernon Litigation Group Securities Fraud Attorneys File Another Half Million in Principal Protected Note Claims Against Ubs

NAPLES — The investor advocacy legal team at Vernon Litigation Group, in conjunction with Orlando, Florida attorney Neal Blather, filed more than half a million dollars in claims today against UBS, alleging the Wall Street firm committed securities fraud when it created and sold investment products such a Lehman notes as well as its own in-house “principal protected” structured products to Main Street investors.

Among those seeking FINRA arbitration in the claims are a retired telecommunications executive, a couple who owned a construction business, a fundraiser for non-profit organizations, and a retired dental assistant, according to the claims filed today before FINRA, the Financial Industry Regulatory Authority. The claims seek compensatory and punitive damages against UBS (NYSE: UBS).

The Vernon Litigation Group legal team represents investors with more than $10 million in brokerage fraud claims against UBS related to structured products, principal-protected notes, and reverse convertibles – referred to as “Yield Optimization Notes” by UBS.

UBS hawked these unsuitable products to risk-averse investors and assured them that “principal protected” meant their core investment was safe, according to the claims filed today.

Written material obtained by Vernon Litigation Group as part of its pre-filing investigation shows that UBS disseminated misleading product descriptions to its financial advisors that portrayed the Lehman notes as investments that put none of the investor’s principal at risk, according to the claims.

But the truth of what these investors experienced flies in the face of any principal protection that exists with any promissory note, the claims alleged. Ignoring its fiduciary duty to these investors, UBS disregarded a series of red flags that warned of the looming Lehman collapse, such as the company’s Repo 105 transactions and its Archstone REIT, or Real Estate Investment Trust, a deal that was a disaster for Lehman, according to the claims.

UBS worked to shore up the failing Lehman Brothers with non-collateralized loans from its own client base of retail investors while making a handsome profit from its own dealings with Lehman, the claims state. For much of the time that UBS was convincing its clients to loan money to Lehman through Lehman's principal-protected notes and other structured products, UBS itself was loaning money to Lehman on safer and far more profitable terms than the structured note loans, the claims say. UBS was able to negotiate these favorable loans for its own benefit because it was well aware of and taking advantage of Lehman’s desperate financial situation, the claims alleged.

“The Lehman collapse that UBS clearly saw coming left the investors in the claims filed today as well as many others holding nearly worthless investment products and standing at the back of the line of Lehman’s creditors,” Vernon said. “FINRA arbitration panels are recognizing the gross misconduct perpetrated by UBS and frequently are siding with investors.”

Vernon Litigation Group is a Naples, Florida law firm that represents UBS investors in Florida and multiple other states in the U.S.  Vernon Litigation Group’s ongoing investigation of Lehman structured note sales in the United States has expanded to sales of Lehman structured notes in Europe and South America as well as other structured products sold, such as “reverse convertibles.”  AARP Magazine recently featured Vernon Litigation Group’s Lehman principal-protected notes investigation in an article warning retirees about the dangers of structured products.

The attorneys at Vernon Litigation Group collectively have more than 30 years of experience representing investors who are victims of stock fraud and stock losses due to misconduct. Vernon Litigation Group securities attorneys are experienced in securities arbitration and assist clients in recovering losses caused by all manner of financial fraud and negligence.

Contact: Vernon Litigation Group


Christopher T. Vernon, Attorney at Law and Susan R. Healy, Attorney at Law

Website: http://www.vernonhealy.com, and http://www.lehmannotes.com

Tel: (239) 319-4434 Toll Free: (877) 649-5394

Email: mailto:info@vernonlitigation.com