Small Investor Wins Arbitration

Chalk one up for the small investor. A woman from South Carolina was awarded $200,000 by an arbitration panel in her claim against UBS . The investor’s UBS broker sold the woman “principal-protected” notes sponsored by Lehman Brothers Holdings, Inc. The investor alleged that the notes were speculative securities and were unsuitable for unsophisticated investors.

The case was heard and decided by a three member FINRA arbitration panel. FINRA is the Financial Industry Regulation Authority where almost all cases involving investment brokers are arbitrated.

UBS Financial services, the firm that sold the notes is being investigated by numerous regulators regarding the sale of these notes. The arbitration did not specify any basis for its findings. There are dozens of similar cases against UBS pending.

I’ve written before that if you do not understand what your are investing in, stay away. If the investment cannot be explained clearly and concisely, it is not for you.

A link to the Wall Street Journal article is here.

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