FINRA Arbitration Panel Slams UBS for Lehman Note Sales

In June 2011, a FINRA arbitration panel ruled that UBS Financial Services must pay an investor more than $2 million to compensate the investor for losses sustained in a Lehman Brothers principal protection note that UBS sold to the investor. This FINRA arbitration award marks yet another victory for investors who have claimed that UBS misrepresented the Lehman Brothers investments. Most of the FINRA arbitration cases that have proceeded to a final hearing have resulted in an award of damages to investors. It appears that arbitrators agree with investors and plaintiff lawyers who claim that UBS misrepresented the safety of Lehman Brothers principal protection notes.

Moreover, investors and plaintiff securities arbitration lawyers are not the only ones who blame UBS for losses that investors have sustained in Lehman Brothers structured products. FINRA fined UBS $2.5 million and ordered UBS to disgorge more than $8 million on April 11, 2011 for UBS's misconduct in selling Lehman Brothers principal protection notes. Among other things, FINRA found that UBS misled investors about the "principal protection" feature of Lehman Brothers 100% Principal-Protection Notes and that UBS failed to train and educate its brokers properly about the nature of the Lehman Brothers securities. Many UBS brokers have steered their clients to FINRA arbitration lawyers because the brokers believe that UBS misrepresented the level of safety of the Lehman Brothers securities.

UBS sold Lehman Brothers principal protection notes as a security that would protect investors' money, but UBS failed to emphasize or even disclose that the Lehman principal protection notes were nothing more than unsecured debt of the financially troubled Lehman Brothers, and that the securities actually subjected investors' money to significant risk of loss. Investors in the Lehman Brothers securities now are unsecured creditors in the Lehman Brothers bankruptcy.

Dimond Kaplan & Rothstein, P.A. represents investors throughout the United States and Latin America who lost money in Lehman Brothers principal protection notes and other Lehman Brothers securities. If UBS sold you a Lehman Brothers principal protection note or a Lehman Brothers structured product, please call a securities lawyer at Dimond Kaplan & Rothstein, P.A. for a free consultation. We have reviewed hundreds of thousands of UBS's internal documents and are well-versed on the facts and information that we believe can help our clients recover Lehman Brothers investment losses from UBS.

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