A FINRA arbitration ordered Neuberger Berman, an asset management firm, to pay three investors $5.5 million for damages related to the sale of failed Lehman structured products.
Neuberger was a unit of Lehman until 2009. It was found responsible for recouping the initial investments of the clients, plus interest and legal fees, after selling the Lehman-backed notes between June and August 2008. Lehman Brothers filed for bankruptcy a month later, leaving the investors with essentially worthless investments. The investors complained that the Neuberger failed to adequately disclose that the investments were actually Lehman debt instruments, not investments in the underlying indices.
This Panel’s award is similar to recent awards entered into by FINRA arbitration panels across the country related to Lehman structured notes, including principal protected notes. Claims that broker-dealers failed to disclose the specific material terms of the Lehman Brothers notes and obscured the risks inherent to the Lehman Brothers notes, namely that the principal was only protected by Lehman Brothers, continue to gain traction with FINRA arbitration panels. As recently as June, in a similar ruling, a FINRA arbitration panel awarded $2 million to NBA Philadelphia 76ers President Pat Croce against UBS Financial Services for an investment he made in a Lehman Brothers principal protected notes.
Blum Law Group, a nationally recognized law firm, is representing investors in FINRA arbitration claims who suffered losses as a result of losses in Lehman principal protected notes and other Lehman structured products by recommendation of their broker. Please contact us for more information and a free consultation.