Deutsch & Lipner Alleges that Schwab, Like UBS, Sold Lehman Principal Protected Notes Without Disclosing Risk
Deutsch & Lipner announces that it has filed what it believes is the first claim against Charles Schwab & Co., Inc. arising from the recommendation and sale of 100% Lehman Brothers "Principal Protected" securities without proper risk disclosures. UBS Securities was a large seller of these complex Lehman-created investments, but until now nothing was known of similar sales by Schwab.
Garden City, New York (PRWEB) June 19, 2009 -- Deutsch & Lipner announces that it has filed what it believes is the first claim against Charles Schwab & Co., Inc. arising from the recommendation and sale of 100% Lehman Brothers "Principal Protected" securities to conservative customers without proper risk disclosures. As has been widely reported, UBS was a large seller of these complex Lehman-created investments, but until now nothing was known of similar sales by Schwab.
The case filed by Deutsch & Lipner before the arbitration forum, FINRA, is based on Schwab's sales of these products to a retired Florida couple. The couple were sold two of these supposedly principal-protected investments. These individuals received telephone calls and standard-form e-mails in fall 2007 from a representative of Schwab's "Strategic Trading Group" soliciting the purchase of these so-called Structured Products. The Schwab representative recommended that the retired couple purchase the structured investments, advising them that the worst they can do is get their money back. But when Lehman Brothers filed bankruptcy in September 2008, the truth was revealed - and investors discovered these securities were not protected, and they would not be getting their money back.
Until this week, Deutsch & Lipner believed that Lehman structured products were only offered through Lehman Brothers and its co-underwriter, UBS. It now appears that Schwab was selling the product as well. Like UBS, it appears that in Schwab's sales pitch, Schwab did not disclose the true nature of the investment as the unsecured debt of that issuer.
Last week, the Commissioner for Securities for New Hampshire commenced a regulatory proceeding against UBS for improperly selling Lehman's Structured Products. It now appears that Schwab & Co. engaged in similar acts. Deutsch & Lipner has, to date, filed 17 such cases against UBS, and will be filing more in the days to come.
As we have for over 20 years, Deutsch & Lipner is pleased to be in the forefront of identifying and fighting securities fraud. Deutsch & Lipner has already read and analyzed thousands of pages of prospectuses and other material used by Lehman, UBS and others to sell these structured products, interviewed numerous former clients, and built a case of powerful and compelling deception in the marketing and sales of these products.
Deutsch & Lipner is now adding Schwab to that list. We intend to aggressively prosecute these claims, and we are working on several new claims. Deutsch & Lipner is pleased to offer a no-fee in-person or telephonic consultations with other victims of these deceptive sales.
For more information about the firm, go to www.deutschlipner.com
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