Boca Raton, Florida (BUSINESSWIRE) – October 9, 2015 – The Securities Arbitration Law Firms of Klayman & Toskes, P.A., www.nasd-law.com, announces an investigation into UBS Financial Services, Inc. (UBS), a wholly owned subsidiary of UBS Group A.G. (NYSE:UBS), for Financial Industry Regulatory Authority (FINRA) sales practice violations related to UBS Exchange Traded Access Securities (ETRACS) whose performance is linked to declining commodity and energy prices. UBS manages ETRACS Exchange-Traded Notes (ETNs), commonly known as structured securities products, to generate greater returns through the use of embedded derivatives designed to track the performance of a volatile security, index, commodity or currency, many times without any principal protections.
FINRA sales practice rules require a fair and balanced representation to investors that UBS ETRACS ETNs are more complex and risky than a simple “interest rate” credit when based on a volatile index or commodity. UBS underwrites, manages and markets billions of dollars in UBS ETRACS NTNs to its customers, including the following:
- UBS ETRACS Alerian MLP Index ETN (NYSE Arca: AMU)
- UBS ETRACS 2X Monthly Leveraged S&P MLP Index ETN (NYSE Arca: MLPV)
- UBS ETRACS Alerian MLP Infrastructure Index ETN (NYSE Arca: MLPI)
- UBS ETRACS 2X Monthly Leveraged Long Alerian MLP Infrastructure Index ETN (NYSE Arca: MLPL)
- UBS ETRACS CMCI Energy Total Return ETN (NYSE Arca: UBN)
- UBS ETRACS CMCI Total Return ETN (NYSE Arca: UCI)
- UBS ETRACS Bloomberg Commodity Index Total Return (NYSE Arca: DJCI)
On August 24, 2015, the Securities Exchange Commission (SEC) issued a National Exam Program – Risk Alert Report which reviewed sales practices violations of major Wall Street brokerage firms related to the supervision and sales of Structured Securities Products, similar to UBS’ proprietary ETRACS ETNs. According to the SEC examination, deficiencies were found in some brokerage firms’ supervisory and sales practices related to the determination of “suitability” and “levels of concentration” in customer accounts.
Our investigation relates to UBS’ sales practices related to its proprietary ETRACS ETNs. UBS’ violations of FINRA sales practice violations may include misrepresentations and omissions of material facts, conflicts of interest, unsuitable investment advice, securities concentration or the failure to supervise its financial advisors. Our investigation relates to investments in UBS ETRACS ETNs designed to track the Price of Oil, MLP Pipelines, Indexes, Commodities Baskets, and in some instances leveraged up to 200%.
About Klayman & Toskes, P.A.
Klayman & Toskes, P.A., an experienced, qualified and nationally recognized securities litigation law firm, is currently investigating FINRA sales practice violations of UBS related to the sale of its proprietary UBS ETRACS ETNs. Investors who have knowledge or experience related to the sales practices of UBS and its financial advisors’ recommended investment in UBS ETRACS ETNs, contact Steven D. Toskes, Esq. at 888-997-9956.