HOUSTON, Dec. 23, 2008 (GLOBE NEWSWIRE) -- Shepherd, Smith, Edwards & Kantas LLP (www.sseklaw.com), a firm that specializes in litigation/arbitration involving securities fraud and brokerage firm misconduct, is investigating claims on behalf of clients of UBS International ("UBSI"). The law firm represents, and has spoken to, UBSI clients, both out of the Miami and Houston offices, who are potential victims of improper conduct on the part of UBSI financial consultants and management. Specifically, the allegations center around UBSI financial consultants recommending to their clients the use of loans, usually through UBS AG bank, to purchase securities, such as stocks or mutual funds, and also to fund potentially unnecessary life insurance products. The loan is usually provided through the use of a foreign currency such as the Japanese Yen.
Use of such leverage can be extremely risky and may be wholly inappropriate for an investor seeking to preserve and maintain the family's wealth. Such a recommendation may have been made by the financial consultant for potentially dubious reasons. For example, if a client has $1,000,000 to invest, the financial consultant can receive commissions based on that $1,000,000. However, if the financial consultant convinces the client to borrow $500,000, he and the brokerage firm can make commissions and/or fees based on $1,500,000. This type of scheme is potentially dangerous for the client because the loan is in one type of currency and the investments in his account are U.S. dollar denominated. If, for example, the Yen falls, a shortage may be created in the account which could require sale of investments. If both the Yen and the U.S. stock market fall, catastrophe could ensue.
In some instances, UBSI clients have lost their entire families' assets at UBSI because of forced liquidation of investments by UBS AG bank. Sometimes use of such leverage may be suitable, other times it may not. If you have dealt with UBSI, or any brokerage firm, that recommended the use of leverage to purchase investments although you had the cash to invest without leverage, please contact the law firm of Shepherd, Smith Edwards & Kantas LLP.
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.