UBS Loses FINRA Arbitration over Principal Protected Notes

Swiss bank loses arbitration in flap over principal-protected notes issued by Lehman in '08

UBS AG, Switzerland's biggest bank, was ordered by a Financial Industry Regulatory Authority panel in New York to pay $432,000 to two brokerage clients who purchased securities backed by Lehman Brothers Holdings Inc.

The UBS clients bought principal- protected notes issued by Lehman in early 2008 which became almost worthless when Lehman filed for bankruptcy in September of that year, he said.

Finra's arbitration panel posted the decision, dated April 9, on its Web site. UBS was also ordered to pay the claimant's attorneys' fees of $53,000, plus other expenses.

UBS sold $1 billion of Lehman structured products to U.S. investors, according to the company.