Another tragic story of settlement proceeds wasted

FORT LAUDERDALE, Fla., Oct. 13, 2009 -- Securities Fraud Attorney Mark Tepper has filed claim against UBS Financial Services on behalf of a widow who lost irreplaceable capital after placing settlement money from her husband's accidental death, under management of the financial services firm. Mark Tepper

The claim alleges that UBS Financial Services misled a widow who was caring for her elderly mother and her son who was suffering from cystic fibrosis.

The claim contends that the widow, a high school graduate who never attended college and married at 19 years old, was incapable of independently evaluating investment recommendations. "She had retired after working in a bowling alley for 23 years and had a financial situation and needs that required an income portfolio providing safety of principal. UBS placed her irreplaceable capital in an unsuitable aggressive/speculative growth portfolio which exceeded her risk tolerance, apparently to increase its compensation," the claim alleges.

"UBS enticed her to pay it a lot of money and then abused her trust. Without prior discussion or explanation, UBS dramatically and unsuitably changed her investment objective to 'growth' and her risk tolerance to 'aggressive/speculation.' She blindly followed instructions to 'sign here' because she trusted UBS to act professionally," the claim alleges.

"By using an aggressive speculative growth standard and allocating her accounts nearly 80% in stocks, ETFs and hedge funds and 20% in bonds; By failing to maintain cash reserves for her monthly income by converting her cash account to a speculative hedge fund investment; By selling investments in each account to meet her monthly cash requirement; and By charging excessive fees on her municipal bond account;" the claim contends UBS victimized the widow causing her to lose in excess of $400,000.

I'll have more commentary on this later, but this is clearly a case where a structured settlement for this type of client would have been so much more approriate and this family wouldn't be facing a disaster such as this.

Posted on December 17, 2009 .