AFX News reports that UBSW Securities is being sued for 460m won (£230,000) by a private investor in Seoul, South Korea, who claims that he suffered loss as a result of the firm's ' abrupt' downgrade of Samsung Electronics in May this year.
UBSW maintained a 'strong buy' on the company stock until May 10th, when it downgraded to 'hold'. The investor claims he purchased shares on the back of the 'strong buy' recommendation just days before the rating was changed and suffered loss when the shares fell following the new rating.
UBS has confirmed that it has received notice of the claim, but says that it has no liability. A spokeman has said that the firm is 'in the business of servicing profesional domestic and global institutional clients and does not service individual clients.' In other words, the investor shouldn't have relied on UBSW's advice in the first place as it was not meant for the likes of him.
The matter now looks likely to be resolved in the courts.
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