Lehman Brothers’ Principal Protected Notes

Lehman Brothers’ Principal Protected Notes (PPN) were recommended as safe income-producing investments. Brokers at UBS and other firms pitched these products as similar to buying a basket of stocks (such as the S&P 500), but with the added benefit of up to 100% principal protection if the market went down. However, Lehman Brothers declared bankruptcy in September 2008 leaving investors as unsecured debt holders of Lehman Brothers. Retail customers who bought the Lehman Brothers’ PPN’s suddenly had no principal protection, did not own a basket of stocks, and were holding worthless pieces of paper. Chastising UBS, one government regulator recently said, “UBS presented these notes as simple, safe investments when in fact they are highly volatile and are subject to shifting market conditions.” If you lost money in Lehman structured products, please contact Darren Blum for a free consultation.

Blum Law Group’s investigation of UBS’ sale of PPNs has been complemented by numerous regulatory investigations and actions. These regulatory actions have publicly disseminated shocking evidence of UBS’ sale of Lehman structured products, including the PPNs.

On June 3, 2009, the New Hampshire Bureau of Securities Regulation filed a cease and desist order against UBS alleging unfair sales practices and unsatisfcatory procedures for recommending Lehman structured products to New Hampshire investors. Link to New Hampshire’s Press Release and Cease and Desist Order.

More recently, on April 11, 2011, FINRA fined UBS $2.5 million and ordered $8.25 million in restitution for UBS’s misconduct in selling Lehman so-called Principal Protected Notes. Link to FINRA’s Press Release and Link to FINRA’s Detailed Settlement.

FINRA’s settlement with UBS reveals UBS’ improper sales tactics relating to Lehman structured products. Although sanctioning UBS almost $11 million, it provides restitution for only a limited number of customers and specifically holds that investors are free to pursue their claims directly against UBS.

Blum Law Group is representing many institutional and retail customers with losses between $50,000 and in excess of $10 million dollars in Lehman structured products with UBS and are attempting to recover their investment losses in FINRA arbitration.

If you lost money in Lehman structured products, contact us for a free consultation. Darren Blum, managing partner of Blum Law Group can be reached at 1-877-STOCK LAW (1-877-786-2552) or blum@stockattorneys.com.