UBS recommended and sold approximately $1 billion in Lehman Brothers principal protected notes. Notwithstanding that the investments were sold with representations that the investments were safe, the principal protected notes actually subjected investors to far more risk than they were led to believe. Unfortunately for those investors, when Lehman Brothers filed for bankruptcy those investors lost all of their money. These investors may be entitled to recover their investment losses from UBS. Specifically, after Lehman Brothers filed for bankruptcy protection in September 2008, claiming $613 billion in debt, holders of the Lehman Brothers principal protected notes now are unsecured creditors in the Lehman Brothers bankruptcy and have to wait in line with other unsecured creditors in the limited hopes of recovering money from Lehman Brothers’ bankruptcy estate.
Many investors have filed FINRA arbitration claims and class actions against UBS alleging that UBS misled investors about the safety of Lehman Brothers principal protected notes and failed to disclose certain material information about Lehman Brothers and UBS’s own financial ties to Lehman Brothers. This includes that UBS apparently had billions of dollars of exposure to Lehman Brothers and that UBS was actively selling or divesting itself of its exposure to Lehman Brothers at the same time that it was recommending and selling Lehman Brothers investments to its customers.