KlaymanToskes announced today that it filed a securities arbitration claim against UBS Financial Services (NYSE: UBS) seeking recovery of $300,000 for losses sustained in Lehman Brothers 100% Principal Protection Notes and Fannie Mae Preferred Stock. The Claimants filed the case against UBS for, among other claims, misrepresentation and unsuitable investment recommendations based on their stated investment objectives and risk tolerance. The claim was filed with FINRA Dispute Resolution.
In discussing their savings with their UBS advisor, the Claimants made it very clear that they only wanted investments that were 100% guaranteed. In response, their UBS advisor recommended that the Claimants invest in Lehman Brothers 100% Principal Protected Notes. The UBS advisor explained that the Lehman Brothers Note was “principal protected” and that there was “no risk to the principal.” However, in making the recommendation, UBS failed to disclose to the Claimants the true risks associated with the Note. UBS, who underwrote and sold the Note to the Claimants, misrepresented and omitted material information concerning the fact that the Note was actually a senior unsecured note, and failed to disclose the risk that Lehman Brothers might be unable to repay the Note at maturity. The Claimants’ UBS advisor also solicited them to purchase Fannie Mae preferred stock, stating that Fannie Mae was 100% guaranteed by the Federal Government and that there was no risk to the product.
Contrary to UBS’ representations regarding the safety of the Lehman Note and Fannie Mae preferred stock, the two investments declined substantially in value. Lehman Brothers filed for bankruptcy leaving the Note worthless and the Fannie Mae stock crashed. Had the Claimants been aware of the risks associated with the Lehman Note and the Fannie Mae stock, they would not have placed their savings in these products. As a result of the wrongful acts of UBS, the Claimants sustained damages of approximately $300,000.
Presently, KlaymanToskes is prosecuting numerous arbitration claims against UBS, on behalf of investors who sustained losses in “structured notes”, including Lehman Brothers 100% Principal Protection Notes. Believing these Notes were safe and secure, KlaymanToskes’s clients placed a significant amount of money in these products. In reality, however, the Notes were much different and carried significant risks which UBS failed to disclose to the clients, including the risk of default. With the bankruptcy of Lehman Brothers, the investments in the Lehman Principal Protection Notes are now worthless.