SOURCE: Berman DeValerio

April 16, 2008 17:56 ET

Arbitration Claims Against UBS Financial Services Seek Monetary Recovery, Berman DeValerio Announces

WEST PALM BEACH, FL--(Marketwire - April 16, 2008) - An investor lost nearly $1.3 million when UBS Financial Services, Inc., a subsidiary of UBS AG (NYSE: UBS) (collectively, "UBS"), lowered the value of securities that the broker had purported to be a safe investment, according to an arbitration statement of claim filed by Berman DeValerio.

Berman DeValerio ( amended an arbitration claim yesterday that was originally filed with the Financial Industry Regulatory Authority ("FINRA") on March 12, 2008, to include claims for financial damages. The original arbitration claim sought rescission of approximately $51.9 million of fraudulent auction-rate securities transactions after UBS acknowledged that the funds had become illiquid because the securities had "failed en masse," according to the complaint.

The amendment comes after UBS informed its clients that it was lowering the values of their auction-rate securities by as much as 20%.

"UBS ignored the financial wishes and objectives of investors who thought their money was safe, sound and secure. Now we find out that not only have they lost the liquidity of their investment, but the value of their underlying principal has also dropped significantly," said Michael Pucillo, a partner at the firm's West Palm Beach office.

Berman DeValerio recently filed another statement of claim with FINRA on behalf of investors who lost access to approximately $5 million of funds that should have been placed in secure, liquid investments. The claimants in that case are seeking rescission of their money, plus accrued interest.

Auction-rate securities are long-term debt instruments -- corporate or municipal bonds -- that are tied to short-term interest rates reset by periodic auctions on a weekly or monthly basis. When auctions began to fail, investors were unable to access their money.

The arbitration claims filed by Berman DeValerio state that by ignoring the investment objectives of client and investing their monies in complex, illiquid securities, UBS: (i) breached contracts with its clients; (ii) made negligent representations and omissions upon which its clients relied; (iii) breached fiduciary duties owed to its clients; (iv) perpetrated a fraud upon its clients; (v) negligently caused injury to its clients; and (vi) violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. UBS Financial Services, Inc., is a FINRA registered broker-dealer located in Santa Barbara, Calif.

Berman DeValerio pursues litigation nationwide on behalf of institutions and individuals, chiefly victims of securities and antitrust law violations. The firm has 30 lawyers in Boston, San Francisco and West Palm Beach, Florida.

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