Lehman Good-for-Retirement Notes Worth Pennies for UBS Clients
By Bradley Keoun and David Scheer
Nov. 3 (Bloomberg) -- UBS AG, Switzerland's largest bank, faces dozens of claims in the U.S. from clients who bought ``100 percent principal protected notes'' issued by Lehman Brothers Holdings Inc. that are now almost worthless.
Six attorneys hired to represent clients in the cases say UBS brokers touted the so-called structured notes as low-risk investments and failed to emphasize they were unsecured obligations of Lehman, which filed for bankruptcy in September. State regulators are fielding so many calls about Lehman's notes they're considering a task force to investigate the sales, said Rex Staples, general counsel for the North American Securities Administrators Association Inc., a group of 67 state and provincial regulators based in Washington.
``The sales pitches were that it's good for retirement accounts, and good for the safe, fixed-income part of people's portfolios as an alternative to owning stocks, because it's less risky,'' said Seth Lipner, a lawyer in Garden City, New York, hired by two holders of Lehman notes sold by UBS, including a 65- year-old accountant who says he lost $1.4 million in retirement savings. ``Of course, it turned out to be more risky.''
Any awards for investors would add to the financial industry's burgeoning costs for compensating individuals who bought supposedly safe investments that crumbled in the credit crunch.
Banks and securities firms, including Zurich-based UBS, Citigroup Inc. and Merrill Lynch & Co., already have had to swallow more than $3.6 billion in fines and market losses on auction-rate securities they had to buy back from clients under orders from the U.S. Securities and Exchange Commission and regulators in New York, Massachusetts and other states.
- ► 2013 (345)
- ► 2012 (1270)
- ► 2011 (1873)
- ► 2010 (2369)
- ► 2009 (1655)
11/02 - 11/09
- Has MAS responded to the 3 petitions?
- Proposed terms of settlement
- Saving the Financial Industry?
- A favourable impression of Tunis
- Impact of Obama's election on the future of Singap...
- Seminars on financial risks associated with financ...
- Minibond Saga in better explained form
- SCMP:Investor cool-off pondered
- SCMP: Democrats drop legal bid after deal on Lehma...
- Is mis-selling a market misconduct?
- The New Paper: Latest structured product scandal
- Business Times: Kudos to CIMB-GK and UOB-Kay Hian
- SCMP:Repairing the damage
- US Presidential Election 2008
- Advancing the best interest of our people
- Keep sadness and hatred to themselves
- Tunis, 5 to 8 November
- Dr Lan Luh Luh – your further clarification is req...
- SCMP: Regulators have let down investors badly
- 10,000 SACRIFICIAL LAMBS
- Market Discipline and Caveat Emptor
- Open Forum with OCBC Bank/Securities
- Should financial markets be more strongly regulate...
- MAS has the power to investigate and bring a court...
- Flaws in financial planning industry
- Presence of disclaimers in prospectus
- Indicate price of Pinnacle Notes as at 20-10-08
- Spain Lets Jobless Postpone Half of Mortgage Payme...
- Mis-selling of Lehman structured notes
- Million Dollar Round Table (MDRT)
- Clarification from Dr Lan Luh Luh
- Bank claims to be "order executor"
- Petitions on Structured Products
- Fortnightly Meetings at Speaker's Corner on Struct...
- Open Forum with UOB Kay Hian
- Send your views directly to MAS
- New swap counterparty to replace Lehman Brothers
- Adolf Hitller complains about the ERP and MRT
- Buy a property that you can afford
- How to manage a crisis
- NTUC Income is different today
- Upset investor share bad experience with bank
- How to track all comments on my blog
- Political ambitions?
- Intention to deceive?
- Key features of structured products
- Reply to "Risk listed in bold"
- Stolen identity
- Collective legal action - Leonard Loo
- Reply to SP Services: Don't shoot the messenger
- ▼ 11/02 - 11/09 (50)
- ► 2007 (1803)
- ► 2006 (696)
- ► 2005 (159)