UBS U.S. Legal Dispute Ends With a Wire Transfer

A lengthy legal battle waged ends in defeat for the Swiss bank and a multi-million dollar wire transfer to a former compliance officer in Chicago.

Having exhausted multiple appeals in a defamation suit in the United States, and with no option left other than the Supreme Court, UBS’s business in the U.S. agreed to pay a former compliance officer $14.1 million via wire transfer on April 12, ending a four-year legal dispute, according to a report from advisorhub.com.

The officer was fired in 2018, and sued the firm later that year for defamation, initially winning an $11.1 million award following arbitration. He alleged his termination filing, known as a U5, was defamatory as he had been accused of supervisory failings of employees executing uncovered options strategies. He also stood accused of giving «varied responses» when his actions were reviewed, the report said.

He was one of several people fired after a number of junior brokers cost the firm $3.7 million in options trades in employee accounts, but the former officer said he was not properly informed by the firm’s supervision office of margin calls against the brokers, and sued the firm.

He was awarded $11.1 million in December 2019 in what was the largest employee arbitration penalty that year. The award comprised $7.5 million in punitive damages, $3.1 million in compensatory damages for severance, and nearly $500,000 in legal fees.

The award was upheld by a court in January of 2020, with the judgment increasing to over $12 million as it included additional statutory interest and attorney fees.

Ultimately, UBS ended up paying around $3 million more than the initial amount due to the lengthy appeals process because of the accrued interest and increased legal costs.

Now, to continue appealing the case, the UBS would have had to petition the United States Supreme court. A UBS spokesperson declined to comment, according to the report.