While UBS is seeking to overcome recent problems and embark on a global marketing drive, its US brokerage faces costly regulatory actions linked to the sale of Lehman Brothers’ debt, according to Reuters.

Investor lawyers for the past year have been criticising UBS for selling Lehman Brothers' debt with such reassuring names as "100 percent principal-protected notes" that promised robust returns with no risk of loss, the report said. These Lehman-issued notes were largely wiped out when Lehman Brothers went bankrupt in September 2008.

UBS did not respond to this publication's request for comment at the time of going to press.

A string of arbitration losses over the past year may soon be followed by a round of state lawsuits, class actions and possibly intervention by the Securities and Exchange Commission and the Financial Industry Regulatory Authority, the report said.

After Lehman Brothers, UBS was the largest seller of Lehman protected notes - zero-coupon Lehman debt linked to an index or a basket of other securities. These so-called structured products offered limited gains with the assurance that investors would get their money back if the linked securities fell, the report said.

UBS said it was "following all regulatory requirements, well-established sales practices and client disclosure guidelines" when it sold these notes, the report quoted the Swiss firm as saying. "Any client losses were the direct result of the unexpected and unprecedented failure of Lehman Brothers."