UBS Clients Explore Legal Action to Amplify Their Demands for Change

In the wake of UBS’s goodwill settlements with select clients affected by losses on dollar derivatives, a wave of discontent is surging among other investors, leading some to consider legal action. The Financial Times recently reported that UBS has made goodwill payments to a subset of these clients, yet many are finding the resolution far from satisfactory, as highlighted in a report from the NZZ.

Sources indicate that a few hundred clients in Switzerland have been impacted, with negotiations still underway for additional goodwill payments. Yet, as frustrations mount, several are moving toward legal recourse. The Zurich public prosecutor has acknowledged receiving criminal complaints citing violations of the Unfair Competition Act, and these are currently under preliminary review. Simultaneously, three law firms are gearing up to file civil lawsuits against the bank.

A Case of Unfinished Business

Attorney Dominik Elmiger from the law firm Lalive, representing several disgruntled UBS clients, asserts, “The bank is acting as if the matter is nearly resolved, when in fact it is just beginning.” Many of the clients seeking recourse are elderly investors, staring down the barrel of significant losses that could run into millions of dollars if they are forced to sell their financial instruments without proper compensation. Alarmingly, these clients have yet to receive any settlement offers from UBS, prompting fears they might be left high and dry.

Pressure Builds for UBS

This environment of rising tension has led clients to escalate their response legally. The very threat of litigation could compel UBS to revisit its negotiating stance. Elmiger explains, “If UBS’s negotiations with clients are not successful, the clients will have to pursue the matter in court.” At the heart of the complaints is the allegation that UBS and its advisors did not sufficiently inform clients about the inherent risks associated with loss and margin calls tied to these products.