UBS wins $9.7 million Finra award
Brokerage recoups settlement costs from a lawsuit filed by the ex-wife of a former client.
UBS Financial Services Inc. of Puerto Rico has been awarded $9.7 million by Finra to compensate for costs related to a lawsuit settlement with the ex-wife of a former client of the broker-dealer.
The dispute originates in 2001 when a divorce agreement between David Efron and Madeleine Candelario led to a lien on Mr. Efron’s brokerage account at UBS to protect the $4.1 million he owed his ex-wife in the settlement.
Five-years’ worth of legal delays later, Mr. Efron had withdrawn money from his UBS account to bring the balance below what was owed Ms. Candelario, who sued UBS for the assets in 2007.
UBS lost that lawsuit and agreed to a $4.4 million payment to Ms. Candelario.
The brokerage firm then took the matter to the Financial Industry Regulatory Authority Inc., which essentially “threw the book at (Mr. Efron),” according to Adam Gana, a securities lawyer and managing partner at the law firm of Gana, who is not connected to this case.
“UBS should not have allowed the money to leave the account, that’s why they lost that suit,” Mr. Gana said. “But the lawsuit really should have gone after Efron, not UBS, that’s why UBS won in arbitration.”
According to the Finra award, Mr. Efron will have to pay UBS $9.7 million, plus attorney fees, plus filing fees, plus “costs to be determined.”
Attorneys for UBS and Mr. Efron did not respond to requests for comment for this story.
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