HOUSTON, Jan. 21, 2009 (GLOBE NEWSWIRE) -- Shepherd, Smith, Edwards & Kantas LLP (www.sseklaw.com), a firm specializing in litigation/arbitration involving securities fraud and brokerage firm misconduct, is preparing to file an arbitration claim on behalf of a client of UBS International ("UBSI") through the Financial Industry Regulatory Authority (www.FINRA.org), formerly the National Association of Securities Dealers ("NASD"). The investigation of claims for the client has uncovered that he suffered almost thirty million dollars in losses within a six month time period while his accounts were with UBSI. Specifically, the allegations center around the use of loans, including through UBS AG bank, to purchase securities such as stocks or mutual funds and to fund unnecessary life insurance products. In addition, the investigation has uncovered that some of the loans were obtained through the use of a foreign currency contracts based on the Japanese Yen.
It is unknown at this time whether supervisors and/or compliance personal 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 the entire $30,000,000. It is also alleged that these transactions, which put substantially all of the investor's funds at risk, were unsuitable. Shepherd Smith Edwards & Kantas has also recently signed up an additional client who had an account out of UBSI's Miami office whose fact pattern is almost identical. It is likely there are many similarly situated UBSI clients who have yet come to light.
Shepherd Smith Edwards & Kantas LLP is involved in a number of high profile cases, including a $200 million dollar case, on behalf of five school districts in Wisconsin, against Stifel Nicolaus & Co., Inc. and Royal Bank of Canada (RBC) for losses incurred after the bank and brokerage firm sold the districts "Credit Default Swaps," (also called "CDS" or complex credit derivatives). The firm's founder, William Shepherd, was also recently featured as a guest on Fox News where he spoke on the Bernard Madoff controversy.
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.