Last Updated: March 9, 2025
If you’ve suffered investment losses while working with Michael Seth Lehman, call 800-950-6553 or complete our online form to schedule your no-obligation case evaluation.
Investors who worked with Michael Seth Lehman (CRD# 4999885) and experienced losses in alternative investments may have recovery options through FINRA arbitration. Currently employed with Ameriprise Financial Services in Farmington Hills, Michigan, Lehman’s FINRA BrokerCheck report reveals a concerning customer dispute that investors should be aware of.
Key Details About Michael Lehman and the Pending Customer Dispute
Michael Seth Lehman is currently registered with Ameriprise Financial Services, LLC (CRD# 6363) in Farmington Hills, Michigan, where he has worked since August 25, 2017. His FINRA BrokerCheck report shows a pending FINRA arbitration case that raises significant concerns for investors.
The pending arbitration (Case #24-01773) was filed on January 15, 2025, alleging:
- Failure to conduct adequate due diligence on a fund of funds
- Recommending unsuitable investments
- Failure to disclose all relevant risks to investors
According to the disclosure report, the claim specifically alleges that UBS Financial Services Inc., Lehman’s former employer, “failed to do adequate due diligence on a fund of funds, which counsel alleges was unsuitable for any investor, and as a result all relevant risks were not disclosed to investors.”
The complaint covers activity from May 2012 to 2023 and involves alternative investments with alleged damages of $300,000.
Understanding Alternative Investment and Fund of Funds Misconduct
The allegations against Michael Lehman involve alternative investments structured as a “fund of funds,” a complex investment vehicle that deserves careful scrutiny.
What is a Fund of Funds?
A fund of funds is an investment strategy in which a fund invests in other investment funds rather than directly in securities, stocks, or bonds. This structure creates multiple layers of fees and can significantly increase complexity and risk while reducing transparency.
Key characteristics include:
- Multiple layers of fees: Investors typically pay fees at both the fund of funds level and at the underlying fund level.
- Reduced transparency: The layered structure often makes it difficult for investors to fully understand what assets they actually own.
- Complex risk profiles: Risk assessment becomes challenging as each underlying fund may have its own unique risk factors.
- Limited liquidity: Many funds of funds invest in alternative investments with significant restrictions on withdrawals.
- Potential conflicts of interest: Fund managers may have financial incentives to include certain funds regardless of their suitability.
Due Diligence Failures
The allegation that UBS Financial Services and Lehman failed to conduct adequate due diligence is particularly concerning. Proper due diligence for a fund of funds should include:
- Thorough investigation of each underlying fund’s strategy, management team, and track record
- Analysis of fee structures at both the fund of funds level and underlying fund level
- Assessment of liquidity provisions and redemption restrictions
- Evaluation of risk management protocols
- Verification of third-party service providers (administrators, auditors, custodians)
- Review of regulatory history and any prior investor complaints
When financial advisors fail to perform these critical steps, they may recommend investments that are inappropriate for their clients’ risk tolerance, investment objectives, and financial situation.
Suitability Concerns
FINRA Rule 2111 requires that brokers have a reasonable basis for believing their recommendations are suitable for their clients based on:
- Investment objectives and time horizon
- Risk tolerance
- Financial situation and needs
- Investment experience
- Tax status
The claim against Lehman suggests these complex fund of funds investments were “unsuitable for any investor,” indicating potential systematic issues with the investment products themselves. Even if a product might be suitable for some highly sophisticated investors, it may be entirely inappropriate for retail investors seeking more conservative investment strategies.
Risk Disclosure Failures
Perhaps most concerning is the allegation that “all relevant risks were not disclosed to investors.” Securities laws and FINRA regulations require full and transparent disclosure of all material risks. When advisors fail to properly disclose:
- Fee structures and their impact on returns
- Liquidity restrictions and lock-up periods
- Conflicts of interest
- Historical performance data
- Specific investment strategies and associated risks
- Potential loss scenarios
Investors are deprived of the opportunity to make fully informed investment decisions, which may constitute securities fraud.
Professional Background and Registration History
Michael Lehman’s employment history shows he worked at UBS Financial Services from January 2007 to September 2017 before joining Ameriprise Financial Services in August 2017. This timing is significant as the alleged misconduct involving alternative investments occurred during his tenure at UBS.
His current registrations include:
- FINRA (since August 25, 2017)
- Registered in 30 U.S. states and territories
- Licensed as an Investment Adviser Representative in Michigan and Texas
His examination history demonstrates qualifications as both a registered representative and supervisor:
- Securities Industry Essentials Examination (SIE) – October 2018
- General Securities Representative Examination (Series 7) – January 2007
- General Securities Sales Supervisor Examinations (Series 9 and 10) – March/April 2008
- Uniform Investment Adviser Law Examination (Series 65) – December 2010
- Uniform Combined State Law Examination (Series 66) – September 2007
These supervisory qualifications (Series 9 and 10) indicate Lehman was permitted to supervise other financial advisors’ activities, which may be relevant in assessing his understanding of suitability and disclosure requirements.
Red Flags for Investors in Alternative Investments
If you invested with Michael Lehman, particularly in alternative investments or fund of funds structures, watch for these potential red flags:
1. Excessive or Unexpected Fees
Fund of funds investments typically carry multiple layers of fees that can significantly erode returns:
- Management fees at both the fund of funds level and underlying fund level
- Performance fees (often 20% or more of profits)
- Administrative fees
- Marketing fees (sometimes called “placement fees”)
- Transaction fees
If your investment statements show lower returns than expected or discussed, excessive fees may be a contributing factor.
2. Liquidity Restrictions
Many alternative investments and fund of funds have:
- Lock-up periods preventing withdrawals for specified timeframes
- Limited withdrawal windows (quarterly, annually, etc.)
- Gates limiting the percentage of investment that can be withdrawn at once
- Suspension of redemptions during market stress
If you’ve experienced unexpected difficulty accessing your funds, this may indicate the investment’s liquidity risks were not properly disclosed.
3. Complexity Beyond Your Understanding
Alternative investments should be explained in clear, understandable terms. Warning signs include:
- Investment documents exceeding 100+ pages of dense terminology
- Inability to explain exactly what assets you own
- Complex investment strategies involving derivatives, leverage, or specialized trading techniques
- Difficulty obtaining straightforward answers about performance or holdings
4. Performance Inconsistent with Representations
Be wary if:
- Returns consistently fall short of initial projections
- Performance significantly lags comparable investments
- Valuation methods seem arbitrary or unexplained
- Statements lack transparency about how returns are calculated
Potential Recovery Options for Investors
If you believe you were misled about the risks, fees, or suitability of investments recommended by Michael Lehman, several potential recovery paths exist:
1. FINRA Arbitration
The most common method for recovering investment losses is through FINRA arbitration. This process offers several advantages:
- Typically faster than court litigation, often concluding within 12-18 months
- Lower costs than traditional litigation
- Industry expertise among arbitrators
- Binding decisions that are difficult to appeal
FINRA arbitration is particularly appropriate for claims involving:
- Unsuitable investment recommendations
- Misrepresentation or omission of material facts
- Failure to perform adequate due diligence
- Breach of fiduciary duty
- Excessive fees or undisclosed compensation
2. Class Action Participation
When many investors have suffered similar losses from the same misconduct, class action lawsuits may provide an efficient recovery mechanism. These cases allow investors to pool resources and collectively seek recovery.
3. Direct Claims Against Multiple Parties
In many investment fraud cases, multiple parties may share responsibility:
- The Individual Broker (Michael Lehman)
- Current Firm (Ameriprise Financial Services)
- Former Firm (UBS Financial Services, where the alleged misconduct occurred)
- Product Issuers (the fund of funds managers/sponsors)
An experienced securities attorney can help determine which parties may be liable for your losses.
4. Regulatory Complaints
Filing complaints with regulatory authorities can support your arbitration case and help protect other investors:
- FINRA – The Financial Industry Regulatory Authority oversees brokers and brokerage firms
- SEC – The Securities and Exchange Commission regulates securities markets
- Michigan Division of Securities – State regulators where Lehman currently operates
While regulatory complaints typically don’t result in direct monetary recovery, they create an official record of your allegations and may lead to investigations that support your arbitration claim.
Time Limitations for Filing Claims
Investors should be aware of important time limitations for investment fraud claims:
- FINRA arbitration claims typically must be filed within six years of the events giving rise to the dispute
- State securities law claims often have shorter statutes of limitations, typically 2-3 years
- The discovery of the fraud or misconduct may extend some deadlines under certain circumstances
Given that the allegations against Lehman cover activity dating back to May 2012, the window for filing claims based on the earliest investments may be closing. Affected investors should consult with a securities attorney promptly to determine if their claims remain viable.
Steps to Take If You Invested with Michael Lehman
If you invested with Michael Lehman in alternative investments or fund of funds structures and experienced losses, consider these important steps:
- Gather Documentation – Collect all account statements, marketing materials, emails, and notes from meetings
- Review Investment Performance – Compare actual returns against what was promised or projected
- Identify Discrepancies – Note any differences between what was represented and what actually occurred
- Request Your Complete Client File from UBS Financial Services and/or Ameriprise
- Consult a Securities Attorney experienced in FINRA arbitration and alternative investments
- Act Promptly before applicable statutes of limitations expire
The Importance of Specialized Legal Representation
Recovering losses from alternative investments and fund of funds structures requires specialized experience. These cases involve:
- Complex investment structures with multiple layers
- Sophisticated analysis of disclosure obligations
- Knowledge of specific FINRA rules governing alternative investments
- Expertise in calculating appropriate damages
Our attorneys have successfully represented numerous investors in cases involving alternative investments and have specific experience with fund of funds structures similar to those at issue in the pending arbitration against Lehman.
Michigan Investment Fraud Protection
For Michigan investors who worked with Michael Lehman at his Farmington Hills or Bloomfield Hills offices, it’s important to note that Michigan’s Uniform Securities Act provides specific protections against investment fraud and misrepresentation.
Michigan law prohibits:
- Making untrue statements of material fact
- Omitting material facts necessary to make statements not misleading
- Engaging in any practice that operates as a fraud or deceit
These state-specific protections may provide additional legal avenues for recovery beyond FINRA arbitration.
Free Consultation with an Investment Fraud Attorney
Our firm specializes in representing investors who have suffered losses due to broker misconduct and unsuitable investment recommendations. We understand the complex nature of alternative investment fraud and have successfully represented clients in FINRA arbitration proceedings against major financial institutions, including UBS Financial Services and Ameriprise.
If you invested with Michael Seth Lehman and experienced losses in alternative investments or fund of funds products, contact us today for a free, confidential consultation. Our securities attorneys work on a contingency fee basis, meaning you pay nothing unless we recover money for you.
Don’t let the statute of limitations expire on your potential claims. Call 800-950-6553 or complete our online form to schedule your no-obligation case evaluation.
Disclaimer: The allegations referenced in this article are taken from FINRA BrokerCheck records and have not been proven in arbitration or litigation. All individuals are presumed innocent until proven otherwise. This article is for informational purposes only and does not constitute legal advice.
