SOURCE: Berman DeValerio

March 13, 2008 16:30 ET

Berman DeValerio Announces Arbitration Claim Filed Against UBS Financial Services, Inc.

SANTA BARBARA, CA--(Marketwire - March 13, 2008) - An investor has filed an arbitration claim against UBS Financial Services, Inc. ("UBS Financial" or the "Company"), a subsidiary of UBS AG (NYSE: UBS), with the Financial Industry Regulatory Authority ("FINRA"), accusing the company of breaching its fiduciary duties and contract with a client, Berman DeValerio announced today.

Berman DeValerio ( filed the arbitration claim on March 12, 2008, in the FINRA Office of Dispute Resolution. Among other remedies, the statement of claim seeks rescission of approximately $51.9 million of fraudulent auction rate securities transactions. Auction rate securities are long-term debt instruments (corporate or municipal bonds) tied to short-term interest rates reset by periodic auctions, generally on a weekly or monthly basis. These securities can also be preferred stock in which dividends are set through the same auction process. UBS Financial, a subsidiary of UBS AG, is a FINRA registered broker-dealer located in Santa Barbara, California.

Many brokerages, like UBS Financial, have allegedly marketed and sold these bonds to customers as low risk, highly liquid financial instruments. The instruments are, in fact, long-term securities with maturities that may span years and are highly illiquid investments if the credit market becomes turbulent and auctions fail. Due to the current downturn in the credit market, many auctions have failed, leaving investors unable to access their investments.

The filed arbitration claim states that by ignoring the investment objectives of its client and investing their monies in complex, illiquid securities, UBS Financial: (i) breached its contract; (ii) made negligent representations and omissions upon which its client relied; (iii) breached fiduciary duties owed to its client; (iv) perpetrated a fraud upon its client; (v) negligently caused injury to its client; and (vi) violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

Berman DeValerio prosecutes class actions 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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