Vernon Healy filed the claim on behalf of a Texas investor, a retired executive to whom UBS (NYSE: UBS) marketed and sold $1 million in Lehman Brothers principal protected notes. These notes were part of a Lehman Brothers’ so-called Asian Currency Basket Principal Protected Notes structured product.
Vernon Healy alleges that UBS committed gross malfeasance by representing these notes as safe, with 100 percent of the investor’s principal protected. In fact, the investment was a highly complex product designed by UBS that carried significant credit risk.
This deceptive practice is similar to what the New Hampshire securities regulators accused UBS of in June. According to the New Hampshire Bureau of Securities Regulation, UBS sold investors the same Asian Currency Basket notes and portrayed the securities as safe.
New Hampshire regulators further allege that UBS failed to caution investors about the potential risks of the Lehman Brothers structured products once Lehman Brothers began to experience financial problems.
“UBS presented these notes as simple, safe investments when in fact they are highly volatile and are subject to shifting market conditions. The safety of these products was exaggerated. We believe UBS engaged in unfair and unlawful sales practices when presenting these investments,” Jeff Spill, Deputy Director of Securities Regulation Enforcement, said in a statement when announcing New Hampshire’s case against UBS in June.
With the September 2008 bankruptcy of Lehman Brothers, many who invested in the company’s principal protected notes are likely to lose the majority of their investments. The Lehman Brothers bankruptcy is the largest such collapse in United States history, with more than $600 billion in debt.
According to Vernon Healy’s February claim, UBS was one of the architects of these Lehman Brothers structured products, and thus knew or should have known of Lehman Brothers’ troubled financial position. Yet UBS encouraged its financial advisors through internal “road shows” to pitch Lehman Brothers principal protected notes to their clients.These UBS-engineered investment products served to infuse Lehman Brothers with unsecured loans from main street investors, even as the housing market declined and the credit crisis threatened Lehman Brothers’ solvency, according the Vernon Healy claim.
The Vernon Healy law firm is representing multiple Lehman Brothers principal protected notes investors in multiple states in cases against UBS. Most of these investors suffered losses in excess of $500,000. Vernon Healy is also investigating the sale of these Lehman Brothers structured products by the Florida-based brokerage firm Raymond James.
Since Vernon Healy launched its investigation almost 18 months ago, investors from around the world, especially in the UK and elsewhere in Europe, have approached the firm for information about Lehman notes. Many of these international investors were pitched Lehman structured notes by affiliates of Credit Suisse or Citi Bank as well as UBS.
Vernon Healy is a Naples, Florida based law firm that is representing multiple Lehman structured product investors in FINRA arbitration. Vernon Healy securities attorneys represent investors who are victims of stock fraud and stock losses due to broker fraud and brokerage firm fraud and misconduct. The firm assists clients in attempting to recover losses caused by all manner of financial fraud and negligence. It focuses its practice on complex financial litigation and arbitration as well as business and commercial litigation.
