Deutsch & Lipner, a leading law firm representing investors in arbitration, announces the filing of the first arbitration case brought against UBS Securities for its sale of Lehman Brothers "Principal Protected" securities. The arbitration alleges that UBS deceived its customers by hiding the fact that these supposedly-safe investments were, in reality, just the unsecured, subordinated debt of Lehman Brothers Holdings.
Garden City,N.Y. (PRWEB) November 19, 2008 -- Deutsch & Lipner, a leading law firm representing investors in arbitration, is pleased to announce that it has filed what it believes is the first arbitration case brought against UBS Securities for its sale of Lehman Brothers "Principal Protected" securities.
The case has been brought before FINRA by a 65-year old New York accountant. His UBS "Financial Advisor" recommended that he purchase these investments without revealing the credit risk associated with an investment in the then-struggling Wall Street firm Lehman Brothers Holdings. Like other UBS brokers around the country, he was told the worst you can do is you get your money back.
But when Lehman Brothers filed bankruptcy in September, according to Deutsch & Lipner the ugly truth was suddenly revealed, and investors in these securities discovered that despite the advertised "Principal Protection", they had lost their money. For this 65-year-old accountant, those losses represented 1/3 of his retirement assets. UBS had told him that these assets were safely invested, a statement that was obviously untrue says Deutsch & Lipner.
In the arbitration, Deutsch & Lipner has made the following allegations against UBS:
=> UBS marketed and sold Lehman Brothers' "100% Principal Protected Notes" and "Return Optimization Securities" as low-risk investments that would provide investors with the safety associated with "capital preservation"
=> These securities, both of which promised "Principal Protection", were in fact nothing more than the unsecured, subordinated debt of Lehman Brothers Holdings, which at the time was a struggling, unregulated financial services company
=> The prospectus and other material used by UBS to sell these products hid a key risk - that the securities were in reality just loans to Lehman Brothers Holdings
=> Representations that these securities were backed by zero-coupon bonds, options or other sophisticated financial hedging techniques were false
=> UBS underwrote over $1 billion in Lehman Brothers Holdings' "structured products", earning tens of millions in underwriting fees in the process.
=> UBS promised its "Financial Advisors" extra economic incentives to sell these securities to UBS' customers
=> UBS continued to market and sell these securities as late as August 2008, without once changing its risk disclosures or recommendations
As it has for over 20 years, Deutsch & Lipner is again ahead of the crowd of lawyers who have announced that they are beginning to investigate these claims. Deutsch & Lipner has already analyzed thousands of pages of prospectuses and other material used by UBS, interviewed numerous former UBS brokers and clients, and built a powerful and compelling case of deception by UBS. For example, Deutsch & Lipner has discovered a UBS document intended for Swiss clients of the firm that discloses clearly the very risk that devastated investors in these products; the analogous document intended for US-investors conspicuously, and incredibly, omits that important risk.
Deutsch & Lipner intend to aggressively prosecute these claims in arbitration, as required by the standard UBS client-agreement. Deutsch & Lipner will be filing more arbitrations cases in the coming days.
Deutsch & Lipner is a law firm in Garden City, N.Y. that for over 20 years has been dedicated to the protection of investor rights. Its co-founder, Prof. Seth E. Lipner, is the author of SECURITIES ARBITRATION DESK REFERENCE from Thomson/West. You may learn about Prof. Lipner and the firm at DeutschLipner.com. Deutsch & Lipner represents investors on an individual basis in the FINRA arbitration forum, thereby offering investors a chance at fairly expeditious and meaningful compensation. Deutsch & Lipner is not a class action law firm.
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