UBS Class Action Lawsuit Filed over Lehman Brothers Structured Notes

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By: AboutLawsuits | Published: November 11th, 2008

A class action lawsuit has been filed against UBS Financial Services, Inc. on behalf of all investors who were sold Lehman Brothers structured notes, also referred to as Lehman principal protection notes, by the brokerage firm.

The Lehman Brothers structured notes were a hybrid financial instrument, constructed from a combination of stocks, bonds, currencies, commodities and derivatives, which were sold as low-risk and safe investments.

UBS and a number of other brokerage firms sold the structured notes to retail investors with guaranteed principal protection from Lehman Brothers, which means that investors were assured that they would at least receive their initial investment back.

When Lehman Brothers filed for bankruptcy protection on September 15, 2008, the guarantee that the principal would be protected became meaningless, and the Lehman notes are now essentially worthless.

Many investors have reported that they were sold these Lehman structured notes even during the months right before the bankruptcy filing, and they were provided no indication that the investment bank had a severely weakened financial position as a result of heavy investments in the subprime mortgage market.

The UBS class action suit was filed last week in the U.S. District Court for the Southern District of New York, on behalf of all investors who were sold Lehman Brothers Principal Protection Notes by the brokerage firm. The complaint alleges that UBS brokers made false and misleading statements that omitted material facts about the risk associated with investing in the Lehman structured notes.

The lawsuit seeks to cancel the UBS investors’ purchases of the Lehman Brothers notes, and to allow the investors to recover what they paid for the securities.

Similar cases are also being pursued as arbitration claims against UBS and other brokerage firms for recommending the notes without disclosing the full extent of the risk. The Lehman Brothers structured note arbitration claims are being reviewed by lawyers for investors who lost over $50,000, regardless of which brokerage firm sold the security.

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There Are 53 Comments So Far • (Add Your Comments)

  1. Are the Lehman preferred shares sold by UBS part of the lawsuit ? Or do you know if there is going to be a class action lawsuit over that? UBS had sent out a notice saying they had confidence in Lehman = I received it in the mail the day AFTER Lehman filed bankruptcy!

  2. In a class action legal filing, doesn’t the law firm get the lion’s share of the money and the clients only a few cents on the dollar. Isn’t it better to file an independent action against UBS for arbitration?

  3. I have Lehman bonds purchased with UBS in the amt. of $38,000. In addition have a cd for $10,000. I don’t know if they are structured notes.
    Hard to say from the info I have.

  4. The above Lawsuit states exactly the way the fixed instrument was presented yet it appears to be anything but a fixed income vehicle for safe investing..These structured notes were to be of no risk with some conservitive reward and other than early withdrawl ,principal protected. The fact that Lehman bros offerred such notes knowing the state of the organization is unethical and they should be accountable to these investors.

  5. I too have Lehaman Brothers Stuctured Notes sold through UBS. .I want to be sure that my claim againsts UBS is included in the Class Action Suit

  6. How do we sign up for the class action suit. We were in the process of getting a lawyer to sue usb. They told my 92 year old mother that she would not loose her principle.

  7. How do we sign up for the class action suit. We were in the process of getting a lawyer to sue ubs. They told my 92 year old mother that she would not loose her principle.

  8. I was told by my broker, who talked me into making these investments back in April, that these were protected notes and if I held them to maturity I’d at least get a return of my principle investment. When I contacted him on Sept. 15, 2008, he said I had nothing to worry about.
    Unfortunately my broker is with E*Trade and I can find no class action being brought against them. Does anyone know of a similar action being brought against E*Trade

  9. Approximately two years ago I told my UBS broker to move my retirement funds into CDs since I was sixty and wanted to be more conservative. He suggested taking $100,000.00 in a Structured Note by Lehman Brothers that was “guaranteed and backed”.
    After the fact, another broker I know said “how could anything aside from a Treasury Note be “guaranteed and backed. Be it your broker, UBS or Lehman Brother..that’s simply an untrue and ill-advised statement that should NOT have been made to you”
    This is a travesty and a major portion of the funds my wife and I need to live off now!

  10. I lost over $25,000 in Lehman Bros preffered shares sold to us from a Bank Of America financial planner. How do I join a class action lawsuit and how much should we prepare for in compensation. I imageine pennies on the dollar! How long does the lawsuuit usually take from beginning to end?

  11. i’m not sure if this pertains to an advertisement i saw on tv,but maybe someone can direct, or redirect, me. My 84 year old father has his retirement account through USB. He has lost over $300,000. dollars in the last couple of months. I know he had quite a a bit into fanny mae. How can i find out if he had anything in Lehman Brothers?

  12. I purchased $100,000 Lehman bonds through Morgan-Stanley. I was assured this was very safe. My last statement quotes Lehman Bros. at $10 per share.

  13. This happened to me with UBS also. I lost $30,000.00 but no attorney I’ve spoken with will help me as it’s not a big enough loss to interest them. I have been pursuing this on my own and have a lot of documentation.

  14. what is going on with the lawsuit?

  15. I invested $400,000 in Lehman Bro.. I would like to be included in the class action lawsuit, but how do you do the if no attorney is interested enough to return; your calls and gather information?

  16. I am a widow and have two kids to put through college. UBS didn’t even call me while the market was going down the tubes. My life insurance and savings is gone…

  17. I had Lehaman Brothers principal protected Stuctured Notes sold through UBS. I want to be sure that my claim against UBS is included in the Class Action Suit, i was told by my UBS broker that, these were principal protected structured notes, i had 130.000.00 of my life savings in it , people must post their losses too we must be heard .

  18. I was specifically told that these LB structured notes are 100% safe and that I will always be able to get my original investment. The broker said that what is risk is the interest. I bought many other srructured notes and I was lucky to get my principal back on them. Each and every notes was sold that it was safe and the equivalent of a triple AAA security. I am angry about the broker representation which was false and very misleading. UBS took the position that it is a LB instrument which I doubt. They bought these securities and clearly peddled them as their with out any risk to principal. UBS should be accountable and make me whole for false representation.

  19. I lost $38,000 in Lehman Structured Notes with UBS. W

  20. How do I get in to the class action lawsuit? I had a $35K structured that was guaranteed or supposed to be.

  21. Lost 50K in Lehman note (bond)

  22. I lost $25,000 of my teacher retirement money on Lehman Brothers structured notes. How do I get in a class action lawsuit? I told my broker I wanted to be conservative.

  23. I lost my total investments in structured notes tied to 2 publicly traded stocks. I would like to be included in a class action suit for recovery of lost funds.

  24. The problem with individual lawsuits is that you will be relegated to filing an arbitration complaint that must go through FINRA. The result, typically, is 50 cents on the dollar, minus one-third for the law firm, plus expenses, which leaves you with virtually nothing. You need to write the North American State Securities Administrators Association and ask them to investigate and order UBS to make investors whole, much like auction rate securities.


  26. Please advise how a small investor – loss of less than $50,000 – can get in on a class action lawsuit

  27. I lost $40,000.00 in them, and my broker knew that I was a conservative investor, with all the rest in CDs

  28. I bought $15.000 par value from UBS in Principle Protected Asian Currency Basket Structured Notes. I have been advised by a law firm that the amount was too small for them to represent our casse. Are there any other security fraud firms that might be interested in representing small investors ?

  29. UBS Class Action Lawsuit Filed over Lehman Brothers Structured Notes.

    We were sold this bill of goods by UBS as we left on vacation and were guarantee the return of our money at a minimum. We return less than 7 days later and were told al our money was gone.

  30. I lost a good portion of my retirement funds due to UBS’s deceptive marketing of Lehman’s Principal Protected Notes. Is there any secondary lawsuit against the United States Government for letting Lehman Brother’s fail when they’ve bailed out every other major failing bank in the USA? Basically it was then then Secretary of Treasury Paulson who had a grudge against Lehman’s that let them go under. Shouldn’t holders of “100% Principal Protected Notes” also get part of the government’s bailout money as it was the government that let Lehman’s go under.

  31. bOUGHT LEHMAN BROS PFD 2-12-08 25000@2000
    CAN YOU TELL ME IF THere has been action since then with regared
    to a class law suite
    any news would be appreciated

  32. I was sold this investment with the same guarantee of no principal loss. How do I become part of the class action law suit against UBS

  33. I was sold this investment with the same guarantee that my principal was compoeteoy safe and that the interest would be better than a CD but if it wasn’t, I was guaranteed my initial investment would be intact.
    I stressed that my number one requirement was safety of principal.

  34. I was totally mislead by my financial advisory team at UBS into purchasing Leman backed principal protected notes. I was told that these were principal protected and the worse that could happen was that I would only receive back that was invested. I’m now looking at a loss of $140,000. We are retired with a totally disabled adult daughter that we have to provide for. I feel that we were given false information by the brokerage team at UBS. We have just received a letter from UBS informing us that they have no intention of settling any claim from us. What can we do at this juncture to try to get our principal back.
    Feeling scammed after paying for financial advise.

  35. I was also sold Lehman Principal Protected Notes by UBS totalling approx. $38,000. Do I need to do anything to become part of the class action law suit ?

  36. My advisors invested $600,000 in Lehman’s “Return Optimization Securities with Partial Protection Linked to a Basket of Global Strategies.” Is this investment part of the class action lawsuit? If so, can I participate in this lawsuit?

  37. How does one join the class action law suit?
    UBS sold Lehman notes in Taiwan and the Taiwan investors want to join the law suit.

  38. What about those who bought Lehman principal protected notes through Raymond James?

  39. I had a structered note from Lehman principal protected. My statement actually states PP or Principal protected for 35,000. Should I be proactive in getting my money back or sit and wait till someone contacts me, My note was sold by UBS.

  40. My financial advisor, who now works for Wachovia securities sold me the “principal protected notes” and promised that my principal wouldn’t be touched and that the only risk is not making any additional money on top of my principal while I hold the notes. Now my $30,000.00 is worth $4500.00. Hopes and dreams, gone. I wish I could get a hold of this guy, literally.

  41. My advisor was also at UBS an is now at Wachovia. I am out 100,000 total in pricipalprotected notes. I wonder if is the same advisor? D.M.
    I too wonder if the class action suit will settle or ifI sould pursue FINRA arbitation. Any advise?

  42. I was told even after these investment started to sour, and they already had published documents to that effect., would be fine. I told my broker I was conservative and did not want to loose anything I had invested and gained to that point. I wanted to purchase gold but he would not let me do so. It was at approx 669 at that time. Lies ,Lies, Lies. These guys were out for themselves, investors be damned.

  43. I was sold $100K worth of a Lehman instrument by my broker at UBS.
    Needless to say, it was a disaster.. A pig with lipstick it was!!!

  44. It was a Pig with lipstick that was vigourously sold to me

  45. I loss 2 million dollars on lehman shares, my life savings. How can I participate in a suit against the company.

  46. I wanted a $30,000 loan but the loan broker blended some small notes (with no payments and low interest) and made a large loan with payments 3 times my disability income. Of course, that was disastrous for me, but I didn’t realize it was also illegal and predatory until recently.
    After that, I got a 2nd from him and then a refi, as it was always intended that I couldn’t pay it… Now that he has 1/2 of the equity in my home locked up i n loans that did nothing for me, but repay them, I guess he’s happy.

  47. Are there ever answers to these questions?

    How would I know if Lehman Bros. had anything to do with my loans?

    How does one find a class action to join? Is there any benefit to a class action if your home is in foreclosure? How can I find a lawyer who knows about predatory lending and would diligently pursue such a suit?

  48. My UBS broker sold me 100k of this garbage. How do I get into the class action lawsuit. One would think this should be a class action case if all the arbitration cases are going against UBS. This reminds me of the auction rate preferreds they had to pay on earlier.

  49. I was fraudulently placed into 30% of my annuity approximately 130,000 dollars into lehman brothers by david william prockter of UBS in white plains NY. He is a broker there. One month later LehmanBrothers collapses and files for bankruptcy. Furthermore, Prockter has 2 prior complaints against him which are facing arbitration before FINRA. I complained to Erich Frank the UBS white plains Branch Manager. Nobody gives a damn unless u sue. And you have to publicize these bloodsuckers for what they are. Leeches upon humanity. I explicitly told them I wanted to retain my principal and make the money grow so I could establish a NON PROFIT to help animals. Prockter and Frank need to be fired from UBS and they will once they lose money in my suit agst them

  50. We purchased $100k thru the Salt Lake City UBS office 2-3 months before the bankrupcy. Do I have any recourse?

  51. I was with the same trusted financial advisor for about 10 years. Was always in conservative mutual funds or ETFs. Modest returns and rarely any losses even with the Dot Com buble bursting. He decides to move from the firm in Westchester and starts his own on Long Island at the same time moving all his clients’ money to UBS. Being an accountant, he states that there are tax dis-advantages to owning mutual funds. He reccomends individual homdings over mutual and ETFs.
    In addition to stocks, UBS puts me into “structured products” which I did not fully understand but he said they were 100% safe with the principal protected. Even as these were losing value he said to stick with them. Again, they were protected and guaranteed. After they were delisted, UBS and the advisor said that when litigation is complete, UBS would make up the amount lost, making the investors whole. For that reason only, my UBS account remains open with my 108k investment worth 9k. Both the investment advisor and UBS have ignored any inquiries about UBS making individual investors whole again. Not only is UBS liable for these “investments”, the “CFAs” who worked with UBS should be called to account for their erroneous advice. Those independent advisors who brought investors money to UBS’ table should share in the loses that UBS might have to bear.

  52. My mom also invested with UBS and lost over 100,000.00 How do I find out what to do next?

  53. Just like JT above I have been with the same financial advisor for about 14 years now. He too changed firms and went with UBS in Salt Lake City, moving my account to other funds including the Lehman PPN’s. My investment went from 61K to about 6K but I was assured by the advisor not to worry because UBS has been accruing money to make the investors whole. This making whole action, he says, will occur as soon as we receive the $0.26 on the dollar we are due from the settlements. He told me UBS has been holding off because they do not know exactly how much their clients are due. I feel like I am getting led on just like when I was advised to purchase the PPN’s, and intend to remove all my holdings from UBS (except the PPN’s) by the end of 2012 if they do not come through on their promises.

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