Naples, Fla. – UBS fraudulently misrepresented the investment products it was selling to an Ohio business owner, leading him to believe he was buying principal protected notes backed by UBS when in fact he was sold Lehman notes that were backed by the then financially struggling Lehman Brothers, a claim filed today by securities attorneys at Vernon Healy states.
The Ohio investor made numerous purchases for principal protected products recommended by his UBS financial advisor and totaling more than $150,000, the claim states. Even though the documents provided with the advisor’s initial sales pitch reflected UBS as the entity backing the notes, the actual purchase made on the investor’s behalf was for Lehman notes.
Moreover, the name “Lehman Brothers” did not appear on either the trade confirmation or on the monthly statements, the claim asserts. The sudden switch is especially troubling due to the fact that UBS recommended and sold the Ohio investor Lehman structured products just weeks before Lehman filed for bankruptcy. At that point, UBS clearly knew Lehman Brothers was in deep financial trouble, the claim asserts.
UBS had been well aware of Lehman Brothers financial woes long before it recommended structured products to the Ohio investor. Specifically, UBS had been propping up the faltering company with ultra-high interest loans in 2007 and 2008 while selling Lehman products to retail investors for huge profits.
“UBS engaged in a campaign to downplay and ignore concerns about Lehman’s creditworthiness,” said Chris Vernon, founder of Vernon Healy. “UBS encouraged, and in some cases even deceived its financial advisors into continuing to recommend these products to individual investors without advising them about Lehman’s credit and liquidity risks.”
Once the Lehman bankruptcy was underway, the Ohio business owner joined thousands of other Lehman notes holders left standing at the back of the line with all unsecured creditors.
In addition to compensatory damages, Vernon Healy is seeking significant punitive damages on behalf of the Ohio investor 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 structured products, which continue to be pitched by brokerage firms to retirees as safe investments. Vernon Healy’s ongoing investigation continues to reveal numerous concerns in relation to the sale of Lehman notes that have not been addressed by FINRA or federal regulators.
The securities attorneys at Vernon Healy represent individuals and businesses nationwide in disputes involving all manner of financial fraud and negligence, including Lehman notes, structured products, non-traded REITs, hedge funds, mutual funds, annuities, tax shelters and other investment products.