UBS asked to pay damages for sale of failed Lehman note

June 13 Mon Jun 13, 2011 6:02pm EDT

June 13 (Reuters) - UBS Financial Services must compensate former president of the Philadelphia 76ers Pat Croce for a $2 million investment in a note from the now-bankrupt Lehman Brothers , a securities arbitration panel ruled.

The panel found the wealth management firm liable for $2 million in damages, less $480,000 -- the residuary value of the note -- and interest from September 2008.

The damages, together with the interest, amount to about $2.25 million, according to Croce's lawyer Jacob Zamansky, of Zamansky & Associates.

Croce and his wife Diane filed their claims against the unit of UBS AG in January 2010, according to documents on the ruling by a Financial Industry Regulatory Authority panel.

UBS spokeswoman Karina Byrne said the company "respectfully disagrees" with the ruling and added the losses on the notes were due to the Lehman's unprecedented and unforseen bankruptcy.

"We continue to believe the vast majority of Lehman notes were sold appropriately," Byrne said. (Reporting by Jochelle Mendonca in Bangalore and Joseph Giannone in New York; Editing by Maju Samuel) (jochelle.mendonca@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: jochelle.mendonca.reuters.com@reuters.net))

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