UBS sued by client: If it sounds too good to be true...


UBS AG (UBS) is being sued in Hong Kong for allegedly inducing a 77-year-old woman into buying highly risky derivative investments that cost her $25.8 million in losses.

According to the complainant, Chan Wai-yee, the Swiss bank's advisers led her to sign numerous documents in English, including one that made her a "professional investor" under local securities regulations. Chan, who doesn't speak English and didn't finish primary school, asserts that she was also talked into buying an equity accumulator package just months before last year's market crunch. The suit claims that UBS bankers never spelled out the risk and potential losses, thus acting negligently and with reckless misrepresentation.