February 10, 2009 – Crosby & Higgins LLP Files Arbitration Claim Against UBS Financial Services, Inc. Arising Out of the Sale and Marketing of Auction Rate Securities in the Months Immediately Following the Market Collapse
February 10, 2009
Crosby & Higgins LLP has filed an arbitration claim with the New York office of the Financial Industry Regulatory Dispute Resolution Corp. (FINRA-DR) against UBS Financial Services. UBS, a major retail brokerage firm, marketed and sold several million dollars worth of auction rate securities to a New York business owner after the auction rate securities market collapsed during the week of February 11, 2008. UBS continued to market these securities as conservative, liquid investments and did not disclose to the Claimant the risks inherent in the market. In the aftermath of the market collapse, UBS continued to sell certain auction rate securities to customers by emphasizing the temporarily higher rate of returns those securities were paying in relation to their underlying credit quality. UBS failed to inform customers, including the Claimant, of the enormous risk of illiquidity these securities carried, especially in the wake of the colossal auction failures just days before. UBS, and other major brokerage firms, settled with regulatory investigators and agreed to redeem certain securities purchased by customers prior to the market collapse on February 11, 2008. However, because these auction rate securities were sold after February 11, 2008, UBS has refused to redeem them even though they were sold based on the same misrepresentations that led customers to buy auction rate securities in the first place. The arbitration claim seeks substantial compensatory damages together with consequential and punitive damages, as well as attorneys’ fees.