UBS Financial Services Inc. and two of its brokers have lost a particularly bitter arbitration claim worth a stunning $4.6 million.
The money will be awarded to a former rep who claimed ex-colleagues spread lies about him, specifically that he was heading toward a nervous breakdown and posed a risk to the firm.
Last month, a three member arbitration panel in Dallas awarded the ex-
UBS broker, Sammy Joe Gordon, $1.7 million in compensatory damages, plus interest, as well as $2.5 million in punitive damages.
Punitive damages are extremely rare in such cases.
The FINRA Dispute Resolution panel also ordered Mr. Gordon to be paid $391,000 in attorneys’ fees.
The panel determined that
UBS Financial Services, which is based in Weehawken, N.J., along with Jeffrey Carroll and Rebecca Gadus,
UBS reps based in Fort Worth, Texas, were jointly liable for the damages and attorneys fees.
Mr. Gordon worked for
UBS from 2004 to 2005.
He currently works for the Detroit-based H&R Block Financial Advisors Inc. in Fort Worth office.
The arbitrators’ report of the award, which was dated Nov. 26, gave details of the allegations, with both sides filing claims and counter-claims.
“Gordon alleged that Gadus and Carroll conspired to steal Gordon’s clients by embarking on a campaign to disparage Gordon’s name and reputation by repeatedly telling malicious lies about him, including that he was on the verge of a nervous breakdown and a risk to the firm,” the award statement said.
Mr. Gordon “further alleged that even though he exhibited no signs of impaired mental health,
UBS concocted a pretextual basis to terminate Gordon by accusing him of improperly giving clients documents without management approval and then lying when questioned by management,” the statement said.
The arbitrators decided that Mr. Gordon did not break his separation agreement and solicit clients from
UBS or the other brokers.
The panel also said Mr. Gordon did not interfere in any business relationships of the others, and he also did not disparage on
UBS or Mr. Gadus or Ms. Carroll.
"
UBS disagrees with the findings and the decision rendered by the arbitration panel,” said spokesman Kris Kagel in an e-mail.
“We will explore all of our available options as they relate to this case."
For more on this story, see the upcoming Dec. 10 issue of InvestmentNews.
