New York Securities Lawyer Blog
On April 25, 2012, Lax & Neville LLP and Deutsch & Lipner, both leading securities arbitration law firms, won a FINRA arbitration award against UBS Financial Services, Inc. for improper sales practices and fraud in connection with UBS’s marketing and sale of a Structured Product – the Lehman Return Optimization Security tied to the S&P 500. UBS is reported to have sold as much as $1 billion of Lehman’s Structured Notes to its customers. It also sold other Structured Products which were mis-marketed and sold to UBS customers in inappropriate ways.
In the case won by our team, FINRA Case No. 10-02584, the Panel awarded the Claimant damages of $154,479, plus interest from October 1, 2008 until the Award is paid in full. The award places our client in the exact same position she would have been in had Lehman not filed for bankruptcy. The Award grants her damages equal to the value the security would have had on the maturity date if Lehman had not filed bankruptcy, less the current value of the security.
This equitable result is another win for our many clients who were deceived when the product was sold to them. The Statement of Claim in the case alleged that UBS did not inform the Claimant that these supposedly principal-protected securities were in fact the unsecured debt of the then-troubled Lehman Holdings, and that UBS did not inform its clients about what it (UBS) knew about Lehman’s troubles. UBS tried to defend the case by alleging it had made full disclosure, and that the sales had been made in December 2007 — which UBS alleged was before Lehman’s troubles were known. As it had in every other prior case in which our legal team was involved, the arbitrators rejected UBS’s defenses.
To view this Award, click here.