UBS Financial Services Broker Misrepresentation Complaints

When your broker approaches you with a potential investment, they must provide you with important information so you can make a balanced decision. Failure to properly inform you, even by accident, can lead to a UBS Financial Services broker fraud claim. Making an investment decision without all the facts can have significant repercussions for an investor’s finances, but FINRA arbitration provides a path to recovery.

Investors can seek recovery in UBS Financial Services misrepresentation complaints through FINRA arbitration.

Broker Misrepresentation Complaints and FINRA Rule 2020

Misrepresenting or omitting information violates FINRA Rule 2020, which states the following:

Untrustworthy brokers sometimes misrepresent or omit key facts about an investment to persuade their clients to invest in a high-commission product or agree to an unsuitable investment strategy

Brokers sometimes take advantage of their clients by:

• Misrepresenting the fees, costs, or liquidity associated with an investment
• Claiming that an investment is risk-free and guarantees high returns
• Failing to explain an investment’s trading strategy
• Failing to disclose the tax implications of an investment

Without this important information, an investor lacks a fair and balanced view of a potential investment and can’t make an independent decision.

In some cases, the firm may be found in violation of FINRA Rule 3110 by failing to supervise its brokers’ communications and trading activity. Fraudulent misrepresentation also violates several SEC regulations and can potentially lead to regulatory action.

Is All UBS Financial Broker Misrepresentation Fraudulent?

Misrepresentation may be either fraudulent or negligent. Fraudulent misrepresentation is purposeful, but negligent misrepresentation does not involve an intent to cause harm. Sometimes brokers make genuine mistakes, but this doesn’t protect them from liability for investors’ losses. Investors can still recover damages in cases of negligent misrepresentation or omission.

A securities fraud attorney can help evaluate whether your losses are the result of negligent or fraudulent misrepresentation.

Examples of UBS Financial Services Misrepresentation Complaints

While UBS Financial Services broker fraud claims can involve any investment, some products are more frequently misrepresented to investors. Complex investments can be more easily misrepresented because of their unusual structure or limited information available to investors. 

These products are more likely to be part of UBS Financial Services Broker Misrepresentation Complaints:

• Mutual fund classes have different structures and fees that can be difficult for investors to understand. Brokers may recommend a mutual fund class that earns them a higher commission and fail to accurately describe the fees to the investor, leaving their client holding an expensive and unsuitable investment.
• Insurance policies are also frequent targets of fraud. Complicated products like Variable Universal Life insurance policies (VULs) can be hard to research, and their features may not suit all investors.
• Private placements are not sold on public exchanges, and don’t require the same degree of disclosure as most investments. Because the disclosures provided for private placements can be less standardized and less thorough than what you’d receive from a public investment, investors may be left confused and misinformed.

Misrepresentations and omissions may be used to cover up other forms of broker misconduct, such as:

• Unauthorized trading
• Selling away
• Excessive trading
• Misappropriation

Fraudulent schemes often rely on the manipulation of facts. Ponzi schemes typically involve investments framed as low-risk, high-reward, with vague, undisclosed “trading strategies” that siphon funds from later investors to repay earlier investors.

Other UBS Financial Services Broker Fraud Allegations

Some cases of UBS Financial Services misrepresentation involve violations of FINRA Rule 2210. This rule requires firm and broker communications with the public (e.g., advertising) to provide a sound basis for investors to evaluate an investment.

Say a broker solicits investors subscribed to their newsletter to invest in a non-traditional exchange-traded fund (ETF). If the broker misrepresents the fund’s trading strategy and omits material facts about its costs or risks, that would be a violation of FINRA Rule 2210.

Forgery and fabrication also feature in many misrepresentation cases. Brokers may use falsified documents to illustrate an investment’s purported returns or forge their client’s signature on trade authorizations. Both actions violate the standards of ethical conduct of FINRA Rule 2010, which holds brokers to high standards of conduct.

Proving Claims of UBS Financial Services Misrepresentation

Cases of UBS Financial Services misrepresentation hinge on your broker’s communications with you. In FINRA arbitration, arbitrators will closely examine documentation such as:

• Advertising materials
• Solicitation communications from your broker
• Prospectuses and investment disclosures
• Account performance and expense records

How your broker solicited the investment and what materials they provided are crucial considerations in determining if misrepresentation occurred.

Even if misrepresentations or omissions are found to be negligible, your broker can still be held liable for your losses. The firm may also be found liable in some cases of misrepresentation and omission, especially if they involve large-scale fraud. Failure to review brokers’ communications, solicitation methods, or trading activity violates FINRA Rule 3110.

Contact Kurta Law for Help With Your UBS Financial Services Broker Misrepresentation Complaint

If you believe your broker may have misrepresented or omitted facts about an investment, contact Kurta Law today. Our experienced investment fraud attorneys will conduct a structured case evaluation and walk you through your next steps.