News that a FINRA arbitration panel has sided with an investor who lost more than $200,000 on Lehman Brothers principal protected notes came as a welcome signal to other investors with high-dollar losses who are pursuing claims against brokerage firm UBS.
The Vernon Healy law firm is representing multiple Lehman Brothers principal protected notes investors in multiple states — most of whom have losses well in excess of $500,000 — in cases against UBS.
UBS pitched Lehman notes as “safe” investments in which investors’ principal investment would be protected from losses, even after warning signs surrounding Lehman’s faltering financial outlook had already begun to surface within securities industry circles that included UBS, according to Vernon Healy’s investigation.
The so-called “principal protected” notes as well as other structured notes promoted by UBS, were in fact risky, unsecured loans to Lehman Brothers, according to multiple claims filed by Vernon Healy on behalf of investors. These risks were realized when Lehman Brothers’ bankruptcy in September 2008 left holders of Lehman notes and other Lehman structured products standing at the back of the line with other unsecured creditors.
Although other firms such as Raymond James pitched some of these same products in the Southeast, UBS was the primary firm pushing Lehman principal protected notes (also called PPNs) to retail investor clients in the U.S., many of whom were baby boomers and retirees looking for safety.
Since launching its investigation more than a year ago, investors from all over the world — particularly from Europe and Asia — have sought information about Lehman notes through Vernon Healy’s blog, lehmannotes.com. Many of these international investors were pitched these Lehman structured notes by affiliates of Citi or Citi Bank as well as UBS.
Investor rights attorneys Chris Vernon and Susan Healy have received international media attention for the Naples, Florida based firm’s Lehman notes investigation.
The Wall Street Journal reported Friday that an arbitration panel of the Financial Industry Regulatory Authority ordered UBS to pay a Lehman notes investor two-thirds of the investor’s “principal” invested in a Lehman principal protected note, plus attorneys fees and interest. The total award was $200,000.
The panel held UBS accountable for misleading the investor.
In the past, complex and risky structured products were primarily sold to institutional investors. But more and more, brokerage firms began pushing these products on retail customers.
FINRA regulators warned brokerage firms to refrain from engaging in deceptive marketing of principal protected notes and other structured products in 2005. Wall Street firms like UBS were already on notice to refrain from engaging in fraud and deception regarding structured products.
For more information, contact
Chris Vernon at 239-649-5390 or contact Mr. Vernon’s assistant Andrea Costanzo at acostanzo@vernonhealy.com.
