Naples, Fla. – UBS fraudulently misrepresented Lehman principal protected notes not only to its brokerage firm clients but also to some of its own financial advisors, according to a claim filed today by securities fraud attorneys with the nationwide investor advocacy law firm Vernon Healy.
The nearly $300,000 claim against UBS filed by Vernon Healy today, alleges that the brokerage firm giant fraudulently sold Lehman brothers principal protected notes to a retired Texas couple after it knew that Lehman Brothers was in financial trouble, according to the claim.
“UBS told the retired couple that as a worst case scenario their principal investment would be protected,” said Chris Vernon, founder of Vernon Healy. “In reality, the notes had no principal protection and were simply unsecured loans to Lehman, which were wrapped in a very complex structure, that helped conceal the lack of protection.”
Vernon Healy attorneys allege that UBS also misled the retired couple’s financial advisor by internally providing misleading and fraudulent marketing and training materials that erroneously described the notes as safe and principal protected, the claim states. UBS’s internal sales force was consistently and strongly encouraged to push sales of Lehman structured products to main street investors while UBS was propping up Lehman with ultra-high interest loans, which demonstrated UBS’s knowledge of Lehman’s desperation and lack of liquidity, the claim asserts.
At the onset of the Lehman bankruptcy, the Texas retirees joined thousands of other Lehman notes holders left standing at the back of the line with all unsecured creditors in the Lehman Brothers bankruptcy. According to the claim, UBS sold an estimated $1 billion in Lehman principal protected notes to main street investors.
In addition to compensatory damages, Vernon Healy is seeking significant punitive damages on behalf of the Texas couple in light of UBS’s gross malfeasance, the claim states.
Vernon Healy has filed more than $12 million in Lehman notes arbitration claims on behalf of investors before the Financial Industry Regulatory Authority. The firm’s investigation of Lehman notes was featured in an AARP magazine article about the dangers of investing in so-called structured products, which have been increasingly pitched by brokerage firms to retirees as safe investments. Vernon Healy’s ongoing investigation continues to reveal numerous other concerns in relation to the sale of Lehman notes to retail investors that have not been addressed by FINRA or other regulators.
Structured products are extremely complex types of debt securities that include a derivative component and whose value at maturity is governed by arcane mathematical formulas, the claim states.
For more information about Vernon Healy’s nationwide investigation of Lehman notes, visit lehmannotes.com.
The securities attorneys at Vernon Healy represent individuals and businesses nationwide in disputes involving all manner of financial fraud and negligence related to Lehman notes, structured products, non-traded REITs, hedge funds, fund of funds, bonds, mutual funds, annuities, tax shelters and other products.