Naples, Florida — Nationwide investor advocacy law firm Vernon Healy filed $1.1 million in securities fraud claims today against UBS for misconduct involving sales of Lehman structured products that promised investors “principal protection” but left them with virtually worthless investments.
In the past week, Vernon Healy has filed more than $2 million in claims against UBS on behalf of investor victims from Tennessee, Texas, Maryland, Pennsylvania, Missouri and Florida.
All but one of the investors for which Vernon Healy is filing claims today are retired; They include a retired newspaper advertising manager, a retired printing company employee, a retired chemical technician, a widowed homemaker and farm owner, a retired teacher, a surgeon and a CPA.
The nationwide $2.5 million fine and $8.25 million restitution order issued by the industry-sponsored Financial Industry Regulatory Authority against UBS in April won’t assist any of the victims on behalf of whom Vernon Healy is filing $1.1 million in claims against UBS today.
Attorney and founding partner Chris Vernon has blasted FINRA’s action against UBS as paltry and inadequate.
Vernon Healy represents investors with close to $11 million in Lehman structured product losses.
“Despite a public outcry in the wake of egregious misconduct by Wall Street brokerage firms during the financial crisis, we’ve seen lapdog responses from federal regulators,” Vernon said. “Investors need aggressive regulatory watchdogs that are willing to send a message that securities fraud won’t be tolerated in the future.”
UBS (NYSE: UBS) designed these Lehman structured products and marketed them to its customers as safe and 100 percent “principal protected” even though in reality, the principal protected notes were essentially unsecured loans to now-bankrupt Lehman Brothers, the claims state.
UBS was in a unique position to know of Lehman’s precarious financial position and in fact UBS engaged in predatory lending tactics in which it loaned Lehman money behind the scenes to prop up the failing firm, according to the claims. However, while UBS took steps to protect itself from a Lehman collapse in these “Repo 105” deals, UBS left its own customers totally exposed to the consequences of a Lehman failure and effectively lied and assured them that in a worst case scenario their principal investment was protected, according to the claims.
Vernon Healy’s investigation, which has been spotlighted in an AARP Magazine article, has found that UBS was distributing misleading material to its own financial advisors.
In one of the cases filed today, the broker concentrated more than 50 percent of the investor’s account in a single industry and 37.5 percent of the investor’s account in a single issuer, Lehman Brothers.
“UBS compliance and supervision apparently used the ‘principal protected’ label as an excuse to ignore concentration problems in customer accounts like (that of the investor),” the claim states. “The required industry procedures that protect a customer from the risk associated with such an extreme concentration were completely disregarded in this case.”
The securities attorneys at the Vernon Healy collectively have more than 30 years of experience representing investors who are victims of securities fraud and all manner of financial negligence. Based in Naples, Florida, Vernon Healy has conducted aggressive nationwide investigations of structured products, reverse convertibles, fixed income products, bond funds, hedge funds, non-traded reits, and various securities fraud cases and Ponzi schemes.