MIAMI, Feb. 26, 2008 (PRIME NEWSWIRE) -- The securities law firm of Dimond Kaplan & Rothstein, P.A. (http://www.mystocklosses.com) announced today that it has filed a $5.2 million Financial Industry Regulatory Authority ("FINRA") f/k/a NASD securities arbitration claim against UBS Financial Services, Inc. ("UBS") seeking rescission of fraudulent auction rate securities ("ARS") transactions.
ARS include auction rate certificates, auction preferred securities, and auction rate closed-end funds. Brokerage firms, including UBS, Goldman Sachs, Lehman Brothers, Wachovia, Citigroup f/k/a Salomon Smith Barney, and Merrill Lynch, routinely marketed and sold ARS to their customers as safe, highly liquid, cash-equivalent investments. But in truth ARS securities are subject to extreme illiquidity, and they currently are very difficult or impossible to sell. Moreover, investors are also subject to significant risk of loss. Apparently recognizing the risk of such securities, brokerage firms recently have refused to invest their own money in auction rate securities, resulting in thousands of failed auctions and billions of dollars in investor money frozen in illiquid ARS.
As alleged in the Statement of Claim that Dimond Kaplan & Rothstein recently filed, UBS told its customers that the auction preferred securities that it recommended were liquid, cash-equivalent investments. But widespread auction failures have made it impossible for the claimants to sell the $5.2 million ARS in their account, and claimants cannot access their funds, which comprise the vast majority of their savings. The firm has alleged that in addition to fraudulently misrepresenting auction rate securities as liquid investments, UBS also breached its fiduciary obligations owed to the clients by refusing to participate in ARS auctions and causing the failure of those ARS auctions.
In addition to the case that Dimond Kaplan & Rothstein recently filed, the firm expects to file a number of additional cases on behalf of similarly situated clients over the next several weeks. In each of those cases, the investors were told by brokerage firms that the ARS were cash-equivalent investments that were just as liquid as a money market investment. But as a result of thousands of recent failed auctions, the investors' money remains frozen in completely illiquid ARS.
Dimond Kaplan & Rothstein, P.A. is an AV-Rated law firm that represents investors nationwide in stockbroker misconduct and investment fraud cases. They have represented investors against most major Wall Street brokerage firms in claims involving stocks, options, variable annuities, hedge funds, mutual funds, bonds, and collateralized mortgage obligations (CMOs). If you suffered securities investment losses, please contact Jeffrey Kaplan, Esq. of Dimond Kaplan & Rothstein, P.A. at (888) 578-6255 or jkaplan@dkrpa.com for a free case evaluation. You also may visit Dimond Kaplan & Rothstein, P.A. on the web at www.mystocklosses.com.
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