Ex-UBS Broker Claims Widespread Age, Race Discrimination
UBS Wealth Management USA fosters an environment of age and race discrimination by encouraging managers to favor younger advisors, according to a lawsuit filed Tuesday by a former UBS broker in Colorado Springs.
Fermin Padilla, who identified himself as Hispanic, Asian and Native American, alleged that UBS encouraged branch managers to ease out older advisors. He was fired last year after 17 years by his manager, Scott Wilson, who also made biased comments about brokers’ ages, according to the complaint filed in U.S. District Court in the District of Colorado.
UBS fired Padilla in May 2019 for two unauthorized trades and failure to disclose non-cash compensation, according to his BrokerCheck history. The broker responded in regulatory filings that the client ratified the trades and that the “compensation” was two lunch events valued at under $25 apiece that were attended by other advisors who were not singled out.
The termination was “false and pretextual” retaliation over his complaints against Wilson, according to the lawsuit.
Wilson, who is not named as a defendant, referred requests for comment to a UBS spokesperson, who declined to comment.
Padilla, who has been registered as a broker for 24 years and now works at Cascade Investment Group in Colorado Springs, could not be reached for comment.
“Mr. Padilla’s supervisors made no effort to hide their strong belief that older financial advisors should retire and hand off their clients to younger advisors,” Padilla’s lawyer, Paul F. Lewis of Lewis Kuhn and Swan, wrote in an email. “Mr. Padilla’s case is just the first of the lawsuits we will be filing against UBS.”
The lawsuit alleges that Wilson, who began managing UBS’s Colorado Springs office in 2015, regularly told brokers they were “too old and needed to retire.” Younger Caucasian brokers received preferential “marketing resources,” it says, and at least one client of another advisor was encouraged by Wilson to work with a younger broker.
UBS’s policies and actions violate the federal Age Discrimination in Employment Act, Colorado’s anti-discrimination law, according to the complaint. It seeks unspecified damages and expungement of the U-5 report that UBS filed with regulators on Padilla’s dismissal.
He joined UBS in 2002 after six years with U.S. Bancorp Piper Jaffray.
UBS retaliated after it was aware of his plans to take legal action by delaying Padilla’s license transfer to Cascade, a state-registered investment adviser and brokerage firm, costing him “tens of millions of dollars of tradable assets” from former clients following his dismissal, according to the lawsuit.
At UBS, Padilla specialized in helping clients of companies such as Intel, Texas Instruments and Safeway manage restricted stock holdings, according to his Cascade web biography. He worked for 15 years in Safeway’s finance area before becoming a broker, it says.
He has no record of client complaints or other “disclosure” events on his BrokerCheck report, aside from the May 2019 termination.