UBS Financial Services Inc. on Wednesday lost a multi-million dollar lawsuit to a client and veteran real estate broker linked to the firm’s handling of shares and options of real estate brokerage Compass Inc. around the time of its initial public offering in 2021.
The client, Kyle Blackmon, is a real estate broker with Compass. He was seeking $19.7 million in damages. According to the FINRA arbitration award, Blackmon will receive $5.375 million in compensatory damages, plus interest, and $125,000 in costs.
The arbitration panel, operating under the aegis of FINRA Dispute Resolution Services Inc., gave no reasoning for the award, typical operating procedure for industry arbitration claims.
Robert Pearce, Blackmon’s attorney, did not immediately return a phone call Thursday morning to comment.
A spokesperson for UBS declined to comment.
According to his online profile at www.compass.com, Blackmon is based in New York and West Palm Beach and has the title Head of Luxury Sales.
“Kyle is one of the most successful brokers in the nation,” according to his company profile. “In 2014, Kyle joined Compass as the 82nd agent. There are now over 25,000 agents at Compass in the country. He was named #1 broker nationwide in 2012 at his previous firm, Brown Harris Stevens.”
Blackmon’s claim related to UBS’ recommendations and management of his portfolio, according to the FINRA arbitration award, including, but not limited to, his “unexercised stock options and shares in Compass Inc., before, during and after the Compass initial public offering.”
In his statement of claim against UBS, Blackmon alleged a breach of fiduciary duties; intentional and negligent misrepresentations; negligence; violation of Regulation “Best Interest,” as well as other charges.
UBS has a history of costly litigation stemming from the sale of volatile investment products, from its YES options strategy to Puerto Rico bonds and bond funds to Lehman Brothers structured notes.
Last year, a three-person Finra arbitration hit UBS Financial Services with an award of $92.2 million in damages to a group of nine investors who alleged the firm engaged in a high-risk trading strategy linked to a financial advisor shorting shares of Tesla Inc.
The panel found UBS Financial Services liable for $69.1 million, or 75 percent the total, in punitive damage to the claimants: Dennis, Leslie, Tyler and Noelle Hansen; Bradley and Jordan Nelson; Lindsey and Nicholas Valentini; and Mark Kramer.
Punitive damages indicate that a FINRA panel wants to punish the defendants for conduct and behavior.
Teams head for W-2 independence models with practices totaling almost $1B.
Acquisition adds 400 defined benefit plans and 1.5 million participants, pushing Empower deeper into workplace benefits.
Menlo Park firm brings $900m in AUM and specialist expertise serving Apple and Google employees.
Acquisition of the Shufro-Glass Group pushes the national RIA's total client assets above $157 billion.
IRAs now hold nearly twice the assets of 401(k) plans — and most of that money didn't arrive through annual contributions.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
