SOURCE: Shepherd, Smith, Edwards & Kantas

February 26, 2009 20:05 ET

Shepherd, Smith, Edwards & Kantas Has Filed Another Claim Against UBS International for a Latin American Client

HOUSTON, TX--(Marketwire - February 26, 2009) - Shepherd, Smith, Edwards & Kantas LLP (, a firm specializing in litigation/arbitration involving securities fraud and brokerage firm misconduct has filed another arbitration claim on behalf of a client of UBS International ("UBSI") through the Financial Industry Regulatory Authority (, formerly the National Association of Securities Dealers. The allegations in the claim (FINRA Case# 09-00970) are similar to a claim (FINRA Case# 09-00571) filed earlier this year against UBSI, a division of UBS (NYSE: UBS). The allegations in the claims center around the use of loans, including through UBS AG bank, to purchase securities such as stocks, mutual funds, and UBS created offshore CD type instruments. In addition, as alleged in the claims, the loans were obtained through the use of foreign currency contracts based on the Japanese Yen and the Swiss Franc.

It is unknown at this time whether supervisors and/or compliance personnel at UBSI had cross-reference information on the UBS AG account to properly perform the supervisory duties mandated by regulators. It is also unclear, because of the lack of transparency in the UBS AG account, if the currency positions would have violated applicable margin requirements if the transactions had occurred in the UBSI brokerage account, or if the goal was to circumnavigate FINRA supervisory rules.

Because the loans were made in Yen, which fell in value relative to the US Dollar, "margin calls" were made on the UBSI accounts which, unmet, decimated the accounts causing a loss of almost $500,000 in the recently filed case, and up to $30,000,000 in the earlier filed case. It is also alleged that the transactions within the UBSI accounts themselves, which put most or substantially all of the investor's funds at risk, were unsuitable.

Shepherd, Smith, Edwards & Kantas LLP has a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. Since 1990, we have represented thousands of investors nationwide to recover losses. We have represented clients in Federal and state courts and in arbitration through the Financial Industry Regulatory Authority (FINRA), the New York Stock Exchange Inc. (NYSE), the American Arbitration Association (AAA) and in private arbitration actions. Collectively, we have represented over 1,000 investors during the last 18 years in negotiation, mediation, arbitration and litigation.

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