Stock Broker Fraud Blog

UBS Financial Services Inc. and UBS Securities LLC, both units of UBS AG, have agreed to pay 19 Massachusetts public agencies and local governments over $35 million for their losses in the auction-rate securities market. The sum represents the return of principal payments by the municipalities.

The settlement agreement follows a probe by the Massachusetts Attorney General’s Office into accusations that the two UBS units misled the local entities by convincing them that the investments were low-risk enough that they were allowable for towns and cities under Massachusetts law.

According to a UBS spokesperson, the investment bank agrees that the auction-rate securities investments are not in fact permissible under this law. The spokesperson said that the repayment and agreement with the Massachusetts entities only apply because of this specific law.

Local US governments throughout the United States have invested over $300 billion in auction-rate securities markets. Auction-rate securities investments were once considered “safe.” These investments, however, have been frozen for months because of insufficient market liquidity—their value dropping as a result.

Many holders have been unable to get rid of their securities because of inevitable losses. The agreement between UBS and the Massachusetts entities allows the municipalities to recover their frozen funds.

UBS has had to note down over $37 billion in bad investments ever since the start of the subprime mortgage crisis.

Shepherd Smith and Edwards has helped thousands of US and international victims of investor fraud recover their losses.

Related Web Resources:

UBS to return $35M to Massachusetts governments, agencies in settlement over risky investments, International Herald Tribune, May 7, 2008

UBS to return $35 mln to US state over investments, AFP, May 8, 2008

UBS Financial to return $37M to cities, towns, MTA, Massachusetts Municipal Association, May 7, 2008

Massachusetts Secretary of the Commonwealth William Galvin is subpoenaing Merrill Lynch, Pierce, Fenner, & Smith Inc., UBS Securities, and Bank of America Investments because it wants information about the companies’ involvement in selling auction-rate market securities to retail investors. The companies are all registered Massachusetts broker dealers. Galvin issued the subpoenas on behalf of the Massachusetts Securities Division.

The division wants to determine whether the firms followed proper procedures in letting Massachusetts investors know of the possibilities that their investments could become illiquid. The state is also trying to determine what role big investment banks played in causing the auctions to fail and whether the investments sold to retail investors were suitable.

Many of the investors that bought auction market securities cannot get their money because the securities are frozen. Small business owners and individual investors have been especially hurt by the failures in the auction market because of the subprime mortgage collapse.

Galvin says he is not investigating why the securities are frozen but whether the investment firms were in compliance with their sales practices and in disclosing the necessary information to investors.

In February, Galvin subpoenaed Calamos Financial Services, Blackrock Financial Management, Pioneer Investment Management, Nuveen Asset Management, MFS Investment Management, John Hancock Advisers, Allianz Global Investors, Evergreen Investment Management, and Eaton Vance for information about the asset management companies’ dealings with closed-end funds following the auction failures in the auction-rate securities market.

The stockbroker fraud law firm of Shepherd Smith and Edwards is committed to helping investors recover losses brought about by securities fraud. Contact Shepherd Smith and Edwards today to request your free consultation.

Related Web Resources:

Galvin issues subpoenas in debt securities probe, Boston.com, March 28, 2008

Another Kick in the ARS, CFO.com, February 22, 2008

Massachusetts Securities Division

The Financial Industry Regulatory Authority (FINRA) announced today that five major brokerage firms have agreed to pay fines totaling $2.4 million for supervision violations and improper mutual fund sales to thousands of investors. These firms must take remedial steps to prevent such actions in the future and pay amounts estimated to exceed $25 million to their clients because of such practices.

According to FINRA, the violations include sales by these firms of load securities, meaning clients were required to pay commissions, when these investors were eligible to make fund exchanges without paying commissions. FINRA’s press release states that “Class B and Class C mutual fund shares and failure to have supervisory systems designed to provide all eligible investors with the opportunity to purchase Class A mutual fund shares at net asset value (NAV) through NAV transfer programs.”

Prudential Securities must pay an $800,000 fine, UBS Financial Services, Inc. was fined $750,000 and Pruco Securities was hit for $100,000 for improper sales of Class B and Class C mutual fund shares. These firms also agreed to remediation plans that will address over 27,000 fund transactions in the accounts of 5,300 households. Merrill Lynch, Prudential Securities, UBS and Wells Fargo must take steps regarding customers who qualified for but did not receive the benefit of NAV transfer programs. It is estimated that total remediation to fhese firms' customers will exceed $25 million.

FINRA also fined Prudential Securities, UBS, and Merrill Lynch $250,000 each for failure to reasonable supervise and offer opportunities for investors to obtain sales charge waivers through NAV transfer programs. As a result of inadequate supervisory systems FINRA found that customers of Merrill Lynch, Wells Fargo, UBS and Prudential Securities eligible for the NAV programs incurred front-end sales loads or purchased other share classes that unnecessarily subjected them to higher fees and sales charges.

FINRA found that Wells Fargo Investments failed to have reasonable supervisory systems and procedures relating to NAV transfer programs but did not impose a fine because the firm made changes before FINRA's inquiry into the practices. FINRA said the firm had initiated a review of its mutual fund sales and acted promptly and in good faith to correct its system and procedures and had reimbursed its customers over $612,000.

"Firms have an obligation to consider all relevant factors when recommending mutual fund investments, to ensure that they recommend the share class that is most advantageous to the customer," said Susan L. Merrill, Executive Vice President and Chief of Enforcement at FINRA. "The supervisory problems here led not only to the sales of inappropriate mutual fund share classes, but to the failure to identify special sales charge waiver programs on mutual fund purchases. We are pleased that through these settlements, millions of dollars will be returned to customers."

The securities law firm of Shepherd, Smith, Edwards and Kantas has represented thousands of institutional and individual investors nationwide with substantial claims for losses caused by wrongdoing of stockbrokers and their firms. Contact us today if you, your firm or someone you know could be the victim to arrange a free, confidential conference with one of our securities attorneys.

Brokerage firms involved in legal disputes are finding that they are being forced to hand over relevant electronic conversations that are resulting in large jury verdicts, regulatory fines, and the possibility that investors might re-open arbitration cases where e-mail conversations had been suppressed.

Here are a few cases where e-mail records played a key role that was generally not in the favor of the brokerage firm:

Morgan Stanley may have to pay several thousand investors anywhere from $3,000 to $20,000 after settling a case with FINRA, who says the brokerage firm did not in fact lose millions of e-mails because of the September 11 terrorist attacks. Investors had said these e-mails could have helped prove their arbitration cases against Morgan Stanley. FINRA says that millions of these e-mails had been restored to the firm’s system and Morgan Stanley tried to withhold this fact.

As part of its settlement with FINRA, Morgan Stanley paid a $3 million fine to the industry self-regulator and set up a $9.5 million fund from which it will pay investors that were affected by the omission.

Last month, a jury ordered WestLB AG to pay Claudia Quinby, a former sales employee, $2.54 million because it retaliated after she complained of sexual harassment. The e-mail records helped proved the case in Quinby’s favor.

Brokerage firms, like all businesses, are legally obligated to hang onto all evidence, including e-mails, when they are placed on notice that they are involved in a lawsuit. Federal securities laws mandate that securities firms have to keep records for a minimum of three years.

In 2005, a jury ordered UBS AG to pay $29.3 million in damages to Laura Zubulake. UBS threw away key e-mails that it should have kept after Zubulake filed a claim with the U.S. Equal Employment Opportunity Commission.

If you are an investor who has lost money because of the misconduct of a member of the securities industry , you have the right to get your investment back. Contact the law firm of Shepherd Smith and Edwards today and ask for your free consultation.

Related Web Resources:

Morgan Stanley, UBS No Longer Can Keep Secrets: Susan Antilla, Bloomberg.com, November 27

Morgan Stanley Must Pay Millions For Withholding E-Mails, Information Week, September 28, 2007

UBS Ordered to Pay $29 Million in Sex Bias Lawsuit, New York Times, April 27, 2005

A $2.4 million NASD Arbitration Award to a former UBS financial adviser, who was fired in 2003 by the company that preceded UBS PaineWebber Inc. is being upheld by the U.S. District Court for the Western District of North Carolina. The court said that it did not agree with UBS’s theory that the arbitration award did not honor provisions made in the arbitration contract or that it was in manifest disregard of the law.

Former financial adviser W. Van Pelt Jr. had served as a financial advisor UBS and its predecessor JC Bradford from 1999-2003. Upon his hiring, he filled out a Form U-4 industry form in which he agreed to not hold UBS liable if it provided specific information, including notice of termination.

He was let go in January 2003 during an internal probe. UBS filed a U-5 form reporting Van Pelt’s termination because of “concerns of conduct” in a matter involving a customer transaction. On the form, UBS said that Van Pelt was not under investigation because the probe was already over at that time.

Van Pelt started NASD arbitration proceedings soon after. He cited defamation, breach of fiduciary duties, and negligence among the tort claims that he cited. An arbitration panel ruled against UBS in 2005. The firm was ordered to pay the former UBS broker $2.4 million in compensatory damages and $16,579 million for expert witnesses.

The panel said that the Form-5 that UBS filled out included defamatory language in its explanation of Van Pelt’s firing and suggested that UBS revise the wording. The panel asked UBS to submit an amended form stating that Van Pelt was being investigated and to provide details of the probe.

In affirming Van Pelt’s award, the court said that even though Form U-4 did release UBS from liability regarding information it included on Form U-5, UBS could easily be held liable based on Van Pelt’s other claims, which included conversion, interference with contractual relations, or breach of duty of good faith and fair dealing.

If you are an investor who has lost money because of broker misconduct, your best chance of recovering your losses is to speak with a securities litigation attorney right away. Shepherd Smith and Edwards has helped thousands of investors across the United States get their money back.

At Shepherd Smith and Edwards, our securities fraud attorneys believe in holding shady brokers liable for their misconduct—not in rewarding them. Contact Shepherd Smith and Edwards today and ask for your free case evaluation.

Related Web Resources:

UBS

United States District Court, Western District of North Carolina

The New York Stock Exchange Regulation Inc. is disciplining nine companies and eight people for numerous violation. The firms disciplined include:

Merrill Lynch, Pierce, Fenner & Smith: Fined $100,000 for violating rule 123c about 480 times when it cancelled or submitted securities orders after the mandatory cutoff period.

Citigroup Global markets Inc: Find $300,000—half of this to be payed to NASDAQ; the other half to be paid to NYSE. The firm made inaccurate reports about short interest positions in securities that were listed on the NYSE.

Interactive Brokers LLC: Fined $250,000. The firm was fined for violations related to day-trading minimum balances.

HSBC Securities (USA) Inc.: Fined $500,000. Over a several year period, the firm recommended and sold CDs that were not appropriate for their targeted 1900 investors. The firm allegedly engaged in misrepresentations and withheld risks during these transactions.

UBS Securities LLC: Fined $150,000. The firm did not make disclosures in its published research reports about investment baking relationships and non-investment-banking connected compensation.

Eight individuals were also fined for numerous violations, including former securities specialist Freddie DeBoer, broker Stephen Mara, and Adam Lazarus.

DeBoer was fined $300,000 and was permanently barred because he intentionally defrauded customers involved in the sale or purchase of securities. Lazarus was barred for 30 months because of short term purchases sales that were “unauthorized and unsuitable” and involved four customer accounts. Mara was suspended for two weeks and censured because of his involvement in a “physical altercation” on the exchange floor

A number of other people were permanently barred because they failed to reveal that they had criminal records and for recordkeeping violations.

NYSE Regulation can discipline brokerage firms and brokers for broker misconduct. However, you if you want to recover any investments you may have lost because of the illegal actions of any member of the securities industry, your best bet is to retain the services of an experienced stockbroker fraud attorney. Over the years, Shepherd Smith and Edwards has recovered the losses of thousands of investors throughout the United States. Let us help you.

Contact Shepherd Smith and Edwards today and ask for your free consultation.

Related Web Resources:

NYSE Regulation

HSBC Securities

Merrill Lynch

Citigroup

Interactive Brokers

UBS Securities

NYSE Regulation fined 14 of its member firms a total of $10.4 million in fines for failing to deliver trade confirmations to their clients and other violations.

Citigroup Global Markets received the heaviest fine of $2.25 million for failing to deliver trade confirmation documents in more than a million consumer transactions. Lehman Brothers and DeutscheBank were each fined $1.25 million.

Other firms sanctioned included UBS Securities; Bear Stearns & Co.; Credit Suisse Securities (USA) LLC ; Banc of America Securities LLC; Goldman Sachs & Co.; JP Morgan Securities; Wachovia Capital Markets LLC; and Keefe, Bruyette & Woods Inc. Fines levied against these firms ranged from $375,000 to $800,000.

According to the New York Stock Exchange (NYSE) enforcement wing, the violations occurred between July 1, 2003 and Oct 31, 2004. These include failures to ensure delivery of prospectuses to customers who purchased securities and mutual funds, failure to deliver product descriptions to customers purchasing exchange traded funds and failure to establish and maintain appropriate supervisory procedures regarding such activities.

Each of the member firms also agreed to certify that its current policies and procedures are reasonably designed to ensure compliance with current federal securities laws and regulations regarding such requirements. This action was one of the final acts by the regulatory staff of the NYSE prior joining the Financial Industry Regulatory Authority (FINRA) which has taken over all former NASD and NYSE regulatory responsibilities.

Shepherd Smith and Edwards represents investors nationwide in claims against securities firms. We have represented investors in more than 1,000 securities cases. To learn whether we may be able to assist you with a claim contact us to arrange a free consultation with one of our attorneys.

UBS Financial Services, Inc. will pay $23.3 million to settle charges by New York’s Attorney General of "inappropriately steering" of brokerage customers into fee-based accounts. The NYAG said that under the agreement UBS will pay a $2 million fine and $21.3 million to approximately 3,000 customers it inappropriately placed in its InsightOne program.

According to the NYAG office, UBS charged one 91-year-old InsightOne client more than $35,000 over two years, although only four trades transpired in his account, meaning each trade cost him approximately $8,800. In another example, it says an 82-year-old paid approximately $24,000 in InsightOne fees one year in which only one transaction took place.

"UBS convinced customers to rely on its advice and then abused that trust," said NYAG Andrew Cuomo. "This major settlement is a win for customers inappropriately pushed into unsuitable brokerage accounts and a warning to the entire industry that customers' interests must come first."

UBS denied any wrongdoing, said it only settled to avoid litigation and is "disappointed with the AG's statement, which mischaracterizes the program and its operation." Meanwhile, a NYAG spokeswoman said the regulator will continue to investigate fee-based accounts of UBS and other firms statewide.

Our firm has noted that, when fees are charged on each transaction, there is an incentive to "churn" accounts. More recently we have noted that, when accounts are switched to being charged a percentage of the assets in the account, the opposite is true. The number of transactions falls dramatically and many clients are completely ignored as fees are generated.

Shepherd Smith and Edwards represents institutional and individual investors nationwide in claims against members of the securities industry. We have served thousands of victims of misconduct by investment firms and/or their representatives. To learn whether our firm may be able to assist you, contact us to arrange a free consultation with one of our attorneys.

Related Web Resources:

Office of New York Attorney General Press Release: "Largest Ever Settlement In Fee-based Brokerage Account History", with attached Complaint and Settlement Agreement

NYSE Regulation says it has ordered Swiss American Securities Inc. (a unit of Credit Suisse Group) and UBS Securities LLC to pay fines for a number of securities violations.

The regulatory arm of the New York Stock Exchange says UBS Securities is being fined $95,000 for canceling or entering limit-on-close and market-on-close orders in a number of securities after relevant cut-off times. These violations happened between June 2005 and February 2006. Other violations were also cited as reasons for the fine.

Swiss American Securities was fined $100,000 because it failed to maintain control or possession of all excess and fully paid margin securities that it held for customer accounts (in 2004 and 2005), as well as other violations.

Both UBS Securities and Swiss American Securities have not admitted or denied the accusations. They have, however, agreed to censures and to paying the fines.

NYSE regulation also disciplined 15 people for violating federal securities regulations and exchange rules involving sales practice violations, misappropriation, and failure to reveal prior criminal records.

Also called an at-the-close order, a market-on-close order is a market order that must occur as close as possible to the end of the exchange day.

A limit-on-close order is an order to sell or buy shares near the market close but only if the closing price is better than the limit price. This type of order expands on the market-on-close order in that it adds a limit condition that puts a minimum on the selling price and a maximum on the entry price.

Although securities regulators are there to oversee the securities industry and issue suspensions and fines, investors have to file a claim to recover any losses. If you are investor who has lost money from an investment because of inappropriate actions by members of the securities industry, you are more like to obtain a recovery if you hire an attorney to represent you.

Shepherd Smith and Edwards has helped thousands of investors recover their losses. Call Shepherd, Smith, and Edwards today to schedule a free consultation.

Related Web Resources:

NYSE Regulation

UBS

Swiss American Securities Inc.

The U.S. Attorney’s Office announced the unsealing of criminal actions against a dozen individuals for allegedly stealing and trading on inside information from Morgan Stanley and UBS Securities, LLC, two Wall Street brokerage firms. The SEC also filed charges against these individuals in a separate civil case.

Former Morgan Stanley attorney Randi Collotta and former UBS Securities LLC executive Mitchell Guttenberg are two of the individuals out of more than a dozen people being charged by the U.S. Attorney’s Office for two bribery schemes and two insider trading schemes. Participants made over $8 million in illegal trading profits. U.S. Attorney Michael Garcia says all of the criminal defendants are in custody. Four of them have pleaded guilty.

Garcia said that the defendants violated the trust that had been given to them, made money illegally, and took extensive measures to hide their alleged illegal actions. Concealment measures included secret meetings, paying cash kickbacks, and communicating in code using disposable cell phone.

The SEC says that they have charged 3 entities and 11 individuals—the alleged misconduct earning the defendants over $15 million in illegal trading profits from thousands of trades. The SEC called the case "one of the most pervasive Wall Street insider trading rings since the days of Ivan Boesky and Dennis Levine." Lawyers, registered representatives, hedge fund portfolio manages, and compliance personnel are among those charged in the SEC case.

Morgan Stanley says that they are angered that a former employee allegedly stole certain confidential information, which was used in the alleged insider trading scheme. The firm has promised to cooperate fully with authorities.

According to the US Attorney’s Office, Morgan Stanley attorney Randi Collotta allegedly provided the non-public information about upcoming acquisitions and mergers to her husband Christopher and to longtime friend Marc Jurman. Jurman traded on the confidential information and offered the same information to Robert Babcock, a former Bear Stearns & Co registered representative, who also traded using the information, then passing it on to Erik Franklin (a Wall Street trader) and Ken Okada (also a former registered Bear Stearns & Co. representative). Profits were in the hundreds of thousands of dollars. Franklin, Jurman, Babcock, and David Glass, who ran the Jasper Capital LLC trading firm, have all pleaded guilty—Franklin to conspiracy, bribery and securities fraud, and Jurman, Babcock, and Glass to conspiracy and securities fraud. The other criminal defendants face securities fraud, conspiracy, making false statements, and commercial bribery charges.

In the UBS scheme, UBS Securities LLC executive Mitchel Guttenberg is accused of selling non-public material on upcoming downgrades and upgrades in securities recommendations that were made by UBS analysts for hundreds of thousands of dollars to Erik Franklin and David Tavdy, two Wall Street traders. The two men worked at different hedge funds and/or brokerage firms and used the information to carry out profitable transactions in various brokerage accounts that they were in charge of. Both men allegedly made more than $4 million each. Tavdy, Franklin, Franklin’s co-worker Mark Lenowitz, Babcock, Glass, and Okada also traded on the UBS information.

Laurence McKeever and Samuel Childs, both former registered representatives of Assent LLC, a broker dealer, face charges of accepting tens of thousands of dollars in bribes to cover up the UBS insider trading scheme that they learned about from Glass. A Banc of America representative, Paul Risoli, faces charges of allocating initial public offerings shares and secondary offerings to Q Capital Investment Partner LP—a hedge fund—in exchange for $10,000 in cash kickbacks. The hedge fund made at least $160,000 by selling shares from these allocations.

The SEC case names nearly all of the criminal defendants, as well as Andrew Srebnik, a former Bear Stearns stockbroker, a day trading firm, and two hedge funds in its civil securities fraud action. DSJ International Resources Ltd., Q Capital, and Jasper Capital are the entity defendants that have been named in the case.

The SEC says that Franklin, Guttenberg, Tavdy, and their tippees illegally made close to $14 million in the UBS scheme. In the Morgan Stanley scheme, Jurman, the Collottas, and their tippees allegedly made over $600,000 in unlawful profits.

The SEC is asking that the court order disgorgement plus prejudgment interest, permanent injunctions, and civil penalties. The investigation is ongoing.

If you are an investor who has lost money because of an insider trading scheme or because of securities fraud, Shepherd Smith and Edwards can help you file a claim to recover your losses. Contact Shepherd Smith and Edwards today for your free consultation.

Related Web Resources:

SEC Accuses Workers at UBS, Morgan Stanley Of Insider Trading, CNBC.com, March 1, 2007

Insider trading still doesn't pay, Marketplace, March 1, 2007

The U.S. Attorney’s Office says that Justin Paperny, a former account vice president at UBS Financial Services, Inc., has pleaded guilty to helping Capital Management Group founder Keith Gilabert bilk at least $2.5 million from investors.

Paperny pled guilty to wire fraud, securities fraud, and conspiracy to commit mail fraud, while admitting that he helped Gilabert fraudulently run GLT Venture Fund. Paperny also said that he lied to investors so that they would invest in the fund, took kickbacks from Gilabert, and conspired with him to mislead investors about the hedge fund’s performance history, the oversight of Capital Management Group by his brokerage firm, and any risks connected to investing in Capital Management Group.

That said, Paperny also says that he informed management at the brokerage firm that GLT had not been adhering to its investment strategy and that authorities at his firm knew of Gilabert’s fraudulent behavior. The investigation is pending. Paperny faces a possible 5-year federal prison term. He has agreed to cooperate with investigators as a condition of his guilty plea.

In 2006, Gilabert pled guilty to conspiracy charges for his role in the scheme. He said that for 4 ½ years (from September 2000 to January 2005), Capital Management Group collected over $7 million from over 40 clients and offered investments in GLT. He said he lost and misappropriated most of these funds.

Last year, the SEC had also filed a lawsuit charging Gilabert and Capital Management Group with offering and selling limited partnerships in GLT, in addition to raising $14.1 million from nearly 40 investors. Investors were told that a portfolio of stocks and options would be established and that GLT could generate average annual returns that ranged from 19% to 36%. Investors were also told that Gilabert and GLT would only receive compensation that was based on performance if the company became profitable. The company lost $7.8 million, with $1.7 million misappropriated for the company and Gilabert’s personal use. $4.6 was misused in new investor funds to pay current investors.

Shepherd Smith and Edwards represents investors who have sustained financial losses because of the inappropriate actions of brokers or their firms. Our law firm offers a free consultation to prospective clients who contact us via e-mail. Contact Shepherd Smith and Edwards today.

Related Web Resource:

Second Broker Enters Guilty Plea in Bogus Fund, The Signal.com, February 27, 2007

SEC Charges Southern California Hedge Fund Manager and His Firm in a Multi-Million Dollar Securities Fraud Scheme, SEC.gov, May 1, 2007

The New York Attorney General’s Office is suing UBS Financial Services, Inc. for defrauding thousands of its customers. The lawsuit provides detailed information about a scheme where UBS moved clients from regular brokerage accounts to UBS’s “InsightOne” brokerage program, even though these investors were actually not well-suited for the program. UBS is a leading brokerage firm in the United States.

With InsightOne, brokerage customers had to pay an asset-based fee instead of a per-transaction commission. Asset-based fees, however, are not appropriate for investors who hardly ever trade securities or hold no-load mutual funds, a large amount of cash, or similar assets. UBS is being accused of falsely promoting InsightOne as being a brokerage program that offers personalized advice and other types of financial planning services.

Instead of discouraging investors who were inappropriate for InsightOne from joining the program, the N.Y. Attorney General’s Office says that UBS:

· Used false and misleading promises to persuade investors who were not right for InsightOne to join the program.
· Generated conflict of interest for its brokers who were encouraged to enroll and keep unsuitable investors in InsightOne. Financial incentives were offered for enrolling these investors.
· Encouraged UBS brokers to churn their clients’ InsightOne accounts in order to keep innapropriate investors in the program. This means that brokers were asked to take part in trading for the purposes of surpassing the minimum trading requirement.

The NY Attorney General’s Office has provided correspondence from USB brokers acknowledging that their actions were wrong and asking UBS to consider their mandates.

Because of UBS’s fraudulent behavior, investors who enrolled in InsightOne have had to pay tens of millions of dollars more in additional InsightOne fees than they would have had to pay in traditional brokerage account commissions, including:

· A 91-year old client paid UBS over $35,000 for just four trades over a two year period. That’s $33,000 more than she would have paid if she had a traditional brokerage account.
· One InsightOne client paid about $24,000 in fees for just one transaction in 2003.
· A retiree who had a yearly income of $11,000 and $56,000 in her InsightOne account had to pay a $1250 fee fin 2003 for trading just twice that year. That’s 10% more than her yearly income.
· An 83-year-old investor paid $4,300 per trade for four trades over a three year period. This amount was nearly 8% of her yearly income.
· A farming couple paid over $23,000 per trade for two trades over a three year period. This was $46,000 more than they would have paid if they had enrolled in a traditional account instead of InsightOne.

Filed in December 2006 in the New York Supreme Court in Manhattan, the Attorney General’s civil lawsuit is charging UBS with violating state anti-fraud laws, breaches of fiduciary duty, and common fraud law. They Attorney General’s complaint is seeking disgorgement, injunctive relief, damages, and restitution from UBS.

At Shepherd, Smith, and Edwards, it is our job to help investors who have lost their savings and retirement when their brokerage accounts were mishandled to recover their losses. Our attorneys and staff have more than 100 years of collective past experience in securities regulation and/or in the securities industry. We offer a free consultation to potential clients who contact us online. Send us an email today.

State Lawsuit Alleges Fraud In UBS Brokerage Accounts, NY Attorney General's Office, December 12, 2006

Related Web Resources:

UBS Complaint and Summons (PDF)

UBS Financial Services Inc.

InsightOne