The Financial Industry Regulatory Authority (Finra) in April fined UBS Financial Services, Inc. S2.5 million, and required UBS to pay SS. 25 million in restitution for omissions and misleading statements regarding structured products based on Lehman Brothers debt.
The group of products, 100% Principal-Protection Notes (PPNs) Lehman Brothers Holdings Inc., were issued prior to the September 2008 Lehman bankruptcy. PPNs are fixedincome security structured products with a bond and an option component that promise a minimum return equal to the investor's initial investment.
According to Finra, UBS advertised, and some UBS financial advisors described, the structured notes as principal-protected investments and failed to emphasize they were unsecured obligations of Lehman Brothers.
Finra Chief of Enforcement Brad Bennett said in the release, "This matter underscores a firm's need to be clear and comprehensive in disclosing risks of the structured products it sells to retail investors." Bennett added that in some cases, "UBS's financial advisors did not even …