The Securities Law Firm of KlaymanToskes announced today that it filed additional securities arbitration claims against UBS Financial Services (NYSE: UBS) on behalf of investors for losses sustained in Lehman Brothers 100% Principal Protection Notes. These Lehman Notes have also been referred to as Principal Protected Notes. The Claimants filed these cases against UBS for misrepresentation and unsuitable investment recommendations based on the Claimants’ stated investment objectives and risk tolerance. The claims were filed with FINRA Dispute Resolution. KlaymanToskes has received numerous inquiries from investors who sustained substantial losses in Lehman Brothers Principal Protection Notes. Moreover, KlaymanToskes is preparing to file more securities arbitration claims on behalf of investors who lost money in the Notes.
Earlier this week, FINRA announced that it fined UBS $2.5 million and ordered the broker-dealer to pay $8.25 million in restitution, as a result of “omissions and statements made that effectively misled some investors regarding the ‘principal protection’ feature of 100% Principal-Protection Notes (PPNs) Lehman Brothers Holdings Inc. issued prior to its September 2008 bankruptcy filing.” According to FINRA: “From March to June 2008 as the credit crisis worsened, UBS advertised and some UBS financial advisors described the structured notes as principal-protected investments and failed to emphasize they were unsecured obligations of Lehman Brothers, which eventually filed for bankruptcy in September 2008.”
Further, FINRA said, “This matter underscores a firm’s need to be clear and comprehensive in disclosing risks of the structured products it sells to retail investors. In cases, UBS’ financial advisors did not even understand the complex products they were selling, and as a result, they neglected to disclose necessary information to customers about the issuer’s credit risk so investors would understand the magnitude of the potential losses.” Almost $1 billion of Lehman Notes were sold by UBS, and the $10.75 million ordered by FINRA represents about 1% of the value of those Notes. In light of this result, KlaymanToskes will continue to fight for investors in securities arbitration to recover losses sustained in the Lehman Notes.
Many investors of the Lehman Notes have filed claims in the Lehman Brothers bankruptcy proceeding, and are hoping to recover their losses in the Notes through that process instead of filing an individual securities arbitration claim against UBS. However, it is unclear how long that process will take, or whether investors will recover more than a nominal amount. Accordingly, investors should avail themselves of all remedies in attempting to recover their losses, including filing a securities arbitration claim against UBS. Further, investors should determine if they have to contend with any statute of limitations issues.
Additionally, while a class action lawsuit has been filed relating to the Lehman Notes, KlaymanToskes reminds investors of the benefits of filing an individual arbitration claim, as opposed to participating in a class action lawsuit. According to Lawrence L. Klayman of KlaymanToskes, “We have consistently said that investors who lost more than $100,000 in their brokerage account should pursue an individual arbitration claim rather than participate in a class action. The Awards coming out in these Lehman Note cases confirm our position.”
To date, investors who filed claims against UBS in the FINRA arbitration forum have won seven of eight cases. The sole case which did not prevail was filed by a pro se investor. Collectively, the eight cases sought damages of $3,642,688, with Panels handing out 95% of that amount, or $3,461,438. Five of the seven successful cases won 100% of the damages sought. The other two cases won an average of 67% of the damages. The high win rate in these cases stands in stark contrast with the results obtained by investors from 2006 to 2010. During this time frame, investors won about 43% of the time.
By participating in a class action lawsuit, an investor may only recover a nominal amount. However, if one has experienced significant investment losses, it may be more beneficial for them to file an individual securities arbitration claim. In 2003, KlaymanToskes conducted a detailed study of securities arbitration versus class action. The study concluded that investors who file a securities arbitration claim traditionally obtain an overall higher rate of recovery as opposed to participating in a class action lawsuit. To view the full results of the comparison, please visit our web-site: https://klaymantoskes.com/documents/classvr.pdf
Investors who have sustained losses in Lehman Brothers Principal Protection Notes or other structured products issued by Lehman can contact KlaymanToskes to explore their legal rights and options. The attorneys at KlaymanToskes are dedicated to pursuing claims on behalf of investors who have suffered investment losses. KlaymanToskes, an experienced, qualified and nationally recognized securities litigation law firm, practices exclusively in the field of securities arbitration and litigation. It continues its representation of investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms.