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NEW YORK (Dow Jones)--The report of the bankruptcy examiner for Lehman Brothers Holdings Inc. (LEHMQ) could provide ammunition to some retail investors who bought Lehman Brothers principal protected notes.

Plaintiff law firm Zamansky & Associates wrote a letter to UBS and the Financial Industry Regulatory Authority Tuesday requesting discovery documents that relate to UBS AG's (UBS) involvement as a counterparty to Lehman's "Repo 105" transactions. At issue is whether UBS was aware that Lehman Brothers was in desperate financial condition, but continued to have financial advisors market Lehman principal protected notes to retail investors. After Lehman Brothers collapsed the notes declined sharply in value.

The Repo 105 documents "are probative of UBS' knowledge of Lehman's financial condition and of UBS' role in perpetuating Lehman's survival during the months leading up to its demise," lawyer Jake Zamansky said in the letter.

"As the Examiner's report states, UBS was one of several counterparties to repo transactions with Lehman Brothers. The Examiner's report does not suggest that those counterparties acted inappropriately," UBS said in a statement.

Zamansky has 10 pending Finra arbitration cases gainst UBS alleging brokers improperly sold clients Lehman principal protected notes.

UBS was identified in the Lehman bankruptcy examiner's report last week as one of the main counterparties to Lehman's Repo 105 transactions. Repo 105, uncovered in the examiner report, was a type of repurchase agreement in which, the report alleged, Lehman manipulated its balance sheet to give the short-term appearance of reducing assets and leverage. The report said Lehman used the transactions to conceal its deteriorating financial condition.

The report said the interest rate in a Repo 105 transaction was higher than an ordinary week-long repurchase agreement, which, the report alleged, could indicate that counterparties were aware of Lehman's "desperation."

At the same time UBS learned of Lehman's troubles, brokers were still marketing the Lehman notes to investors as safe and riskless investments, Zamansky told Dow Jones Newswires.

In December, a retail investor represented by Zamansky was awarded $200,000 after a Finra arbitration panel decided the investor's UBS broker improperly sold her Lehman principal protected notes. At the time, Zamansky argued that the notes were "speculative derivative securities" and were "unsuitable" for unsophisticated investors, according to the Finra claim statement.

-By Jessica Papini, Dow Jones Newswires; 212-416-2172; [email protected]