HOUSTON, April 17, 2009 (GLOBE NEWSWIRE) -- Shepherd, Smith, Edwards & Kantas LLP (www.sseklaw.com), a firm specializing in litigation/arbitration involving securities fraud and brokerage firm misconduct, has filed another arbitration claim on behalf of a client of UBS International ("UBSI") through the Financial Industry Regulatory Authority (www.FINRA.org), formerly the National Association of Securities Dealers ("NASD"). The allegations in the claim are similar to claims filed earlier this year against UBSI, a division of UBS (NYSE:UBS). The allegations in the claims center around the use of loans, from a UBSI related entity not regulated by FINRA, to purchase securities such as stocks and UBS created products.
The present case involves a UBSI broker based out of the Coral Gables office of UBSI that also had his own office in the country of Guatemala. It is unknown at this time whether supervisors and/or compliance personal at UBSI supervised this "satellite" office. Investigations have uncovered evidence that UBSI mailed client statements to the broker's office in that country instead of to the clients directly. This step may have eroded the safeguards in place that are supposed to protect the client. The broker in question, believed to be a Guatemalan native, also utilized an offshore entity, known as Americorp Trust, based in the Netherlands Antilles, to handle clients' assets.
As alleged in the claim, loans are often recommended by brokers, in an unscrupulous fashion, to increase their commissions/fees. What is usually not explained are the downsides associated with using leverage based on a fluctuating asset. In the present claim filed, the broker in question, recommended such loans along with a portfolio composed mostly of equities. As a result "margin calls" were made on the UBSI accounts. As the client was unable to come up with any more money, the assets in the account were sold off, decimating the accounts causing a loss of hundreds of thousands of U.S. dollars. It is also alleged that the transactions within the UBSI accounts themselves, which put most or substantially all of the investor's funds at risk, were unsuitable and were not appropriate. If you have any information or questions regarding the above described events feel free to contact the law firm of Shepherd Smith Edwards & Kantas LLP. All communications will be kept strictly confidential, and you will not be billed in any way for establishing contact.
Shepherd Smith Edwards & Kantas LLP has a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. Since 1990, we have represented thousands of investors nationwide to recover losses. We have represented clients in Federal and state courts and in arbitration through the Financial Industry Regulatory Authority (FINRA), the New York Stock Exchange Inc. (NYSE), the American Arbitration Association (AAA) and in private arbitration actions. Collectively, we have represented over 1,000 investors during the last 18 years in negotiation, mediation, arbitration and litigation.