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The Law Office of Jeffrey M. Haber Investigates UBS Financial Services in Connection with The Sale of Single-Stock Linked Reverse Convertible Notes

  • Posted on: Sep 30 2016

New York, N.Y.  – September 30, 2016 – The Law Office of Jeffrey M. Haber (the “Firm”) has commenced an investigation into potential securities and regulatory violations related to the sale of single-stock linked reverse convertible notes (“RCNs”) by UBS Financial Services (“UBS”).

On September 28, 2016, the Securities Exchange Commission (the “SEC”) announced that UBS had agreed to pay over $15 million to settle charges that it failed to educate and train retail brokers on the sale of almost $11 billion of complex structured products.

According to the SEC, from 2011 to 2014, UBS sold RCNs to 44,000 customer accounts, about 20% of whom had “modest reported income and net worth” and “primarily moderate or conservative investment objectives.” Some of the customers were retirees. Although the RCNs had features that made them more complex than commonly traded options, UBS gave their brokers less information about the risks and potential volatility of the products than it did to issuers of the notes.

UBS agreed to a censure, disgorgement of $9 million in revenue and interest and a $6 million penalty, without admitting or denying the findings. The money will be paid to the U.S. Treasury since the SEC did not require that a so-called fair fund be established to reimburse investors.

“Brokers and their supervisors should recommend complex derivative products only to sophisticated investors, given the complexity and risk of loss of such products,” said The Law Office of Jeffrey M. Haber. “It is not suitable to sell these products to investors of ‘modest reported income and net worth’, especially when they have expressed ‘primarily moderate or conservative investment objectives.’”

The Firm’s investigation is “focused on whether investors were properly advised of the complexities and risk of loss of these products and whether they were suitable for their accounts,” said The Law Office of Jeffrey M. Haber.

Customers who purchased RCNs from UBS and have questions about their investments or information relating to this investigation are encouraged to contact The Law Office of Jeffrey M. Haber at (212) 209-1005, or info@jhaberlaw.com.

About the Firm:

The Law Office of Jeffrey M. Haber is dedicated to representing corporations, small businesses, partnerships and individuals involved in a broad range of complex business and commercial litigation matters and violations of the securities laws. The firm combines the sophistication and counsel of a large national law firm with the economy, flexibility, commitment and personal attention of a small firm.

Contact:

The Law Office of Jeffrey M. Haber
708 3rd Avenue, 5th Floor
New York, NY 10017
Tel. (212) 209-1005

Fax. (212) 209-7101
info@jhaberlaw.com
www.jhaberlaw.com

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