NAPLES, Fla., March 31, 2010 (GLOBE NEWSWIRE) -- Investor advocacy attorney Chris Vernon's analysis of the recent 2,200-page Lehman Brothers Bankruptcy examiners report will likely help wronged investors who were sold Lehman structured notes by UBS. Vernon says that the report provides further proof that UBS wronged its clients by selling them Lehman structured notes while simultaneously making high interest loans to Lehman under a program called Repo 105.
"(F)or much of the time that UBS was convincing its own clients to loan money to Lehman on an unsecured basis through principal protected notes and other structured products, UBS itself was loaning money to Lehman on far safer and far more profitable terms than the structured note loans," says Chris Vernon. "UBS was able to negotiate these favorable loans for its own benefit because it was well aware of and taking advantage of Lehman's desperate financial situation."
Vernon's law firm is also investigating how UBS (NYSE:UBS), despite profiting so handsomely from billions of dollars in secured, high interest loans to Lehman (Pink Sheets:LEHMQ), had less than $300 million in counterparty exposure at the time of the Lehman Brothers bankruptcy in the latter half of 2008.
"We are especially troubled that UBS so successfully reduced its own exposure to the risk of a Lehman failure while leaving its own structured note client base so fully exposed to that very same risk," according to Vernon.
Through Repo 105, Lehman temporarily hid toxic assets by "selling" them to counterparties, one of which was UBS. These loans were backed by more than 100 percent of the loan value in collateral.
Vernon, of the Naples, Florida-based investor advocacy law firm of Vernon Healy, says this analysis can only help investors who were sold Lehman structured products, should they decide to file a claim against UBS with the Financial Industry Regulatory Authority (FINRA). To date, UBS has lost several FINRA arbitrations regarding its sale of the Lehman notes to investors.
The Vernon Healy Law Firm is currently representing multiple Lehman structured product investors in FINRA arbitration and filed almost $2 million in arbitration claims against UBS on behalf of Lehman note investors in the past 6 weeks.
UBS has stated that the report does not say that "counterparties acted inappropriately," but Vernon says this misses the point of the report since it did not focus on the actions of UBS but rather those of Lehman Brothers prior to its bankruptcy.
Vernon says the Bankruptcy examiner's report just adds more weight to the body of evidence that UBS intentionally or recklessly ignored red flags about the state of Lehman Brothers while it continued to sell Lehman structured products. UBS also knew: Lehman was the lowest rated of the investment banks; Lehman's Archstone deal was a disaster for the company; Lehman's illiquid balance sheet assets rose 300 percent from 2006 to the first quarter of 2008; Lehman underwrote more mortgage-backed securities in 2007 than any other firm, resulting in a astounding percentage of Lehman's overall equity being tied up in risky assets; and Lehman had staggering write-downs.
A cross section of Vernon Healy's clients with Lehman structured note claims, including baby boomers, a teacher, a hospital employee, wealthy retirees, and a charitable foundation reveals how aggressively and indiscriminately that UBS was selling Lehman structured notes as late as March 2008 -- after the Bear Stearns melt down that rocked Wall Street and ignited panic among Wall Street insiders. This indiscriminate sale is further evidenced by the fact that international investors, especially from the U.K., are now seeking to retain Vernon Healy to assist them in pursuing UBS in connection with the sale of Lehman structured notes.
The Vernon Healy law firm represents investors throughout the United States who are victims of stock fraud and stock losses due to broker fraud and brokerage firm fraud. Vernon Healy securities attorneys are experienced in securities arbitration and litigation. The Naples, Florida-based law firm assists clients in recovering losses caused by all manner of financial fraud and negligence.
URL: http://www.lehmannotes.com/2010/03/lehman-bankruptcy-examiners-report-is-more-evidence-that-ubs-wronged-structured-products-investors.html