Top-Ranked UBS Broker Clears His Record with an Assist from His Former Firm
A top-ranked New Jersey broker at UBS Wealth Management USA’s private wealth management unit has cleared his record of a customer complaint thanks in part to an unusual assist from his former firm.
On July 26, a panel of three Financial Industry Regulatory Authority arbitrators recommended expungement of the sole red mark that marred Red Bank, New Jersey broker Ira Allen Walker’s BrokerCheck record. The ruling followed Morgan Stanley lawyers testifying that the customer complaint in the underlying case had no merit and that the firm settled to avoid extensive legal fees, according to the award and a description on Walker’s BrokerCheck. (The disclosure remains until Walker confirms the award with a court.)
The assistance is rare as firms have little incentive to back a former broker and is even more notable given that Walker had left Morgan Stanley in 2008, said Jennifer Farrar, a lawyer from Tomball, Texas who regularly represents brokers seeking expungements.
“Securing the witness testimony from Morgan Stanley’s attorney is unique,” Farrar said. “Kudos to the broker for hiring a great advocate who put together a strong expungement case.”
The panel ultimately granted the expungement on the grounds that Walker was “not involved in the alleged investment-related sales practice violation.”
Walker, a 45-year-industry veteran, who Forbes ranked this year as the top advisor in New Jersey and last year ninth in its national ranking, did not respond to a request for comment.
The broker appears to have an influential practice with $974 million in client assets under management and a $5 million minimum on new accounts, according to Forbes.
His lawyer, David E. Robbins, a partner in New York’s Kaufmann Gildin & Robbins, did not respond to a request for comment for this story. Nor did a Morgan Stanley spokesperson and its lawyers for the Finra hearing, William D. Briendel, a shareholder, and Joseph A. Sack, of counsel at Greenberg Traurig in White Plains, New York.
Walker was not named in the clients’ complaint, according to both Walker’s BrokerCheck comment and the Finra panel’s award.
The customer complaint dates back to 2007 and related to allegations that Morgan Stanley had overcharged them by allocating some trades to commission accounts rather than a wrap-fee program, which would have been cheaper.
The customers, Stephen and Aldred Papetti, had sought $8 million in damages, according to Walker’s BrokerCheck record. Morgan Stanley settled with the client in 2019 for $245,000, according to the record. Max Folkenflik, a partner in New York’s Folkenflik & McGerity, who represented the clients, also did not return a request for comment.
Walker had “objected to any settlement with these customers, who had never complained to me or to my staff about anything,” he writes in his comment. Walker and two of his assistants testified at the Finra hearing that the complaining clients contacted them “numerous times every day for approximately 10 years,” but “never complained,” he adds in the comment.
The complaining clients did not attend the Finra hearing or object to the expungement, the Finra award states. In May 2021, the two sides filed a settlement agreement and, at the same time, the expungement request was also filed, the award states.
The arbitrators—Julian F. Santos and Fred Pieroni, as public representatives, and Andrea Horowitz, as the non-public member—recommended expungement based on the testimony and documents Walker presented, they wrote.
The events underlying the complaint took place 12 to 18 years ago, and the clients, who “never complained” during the time the questioned trades were made, moved their accounts to UBS when Walker left Morgan Stanley, the arbitrators wrote. Morgan Stanley sent monthly statements to the clients, their accountant, and their attorney, the arbitrators added.
“Mr. Walker and other witnesses testified that Claimants would call daily and come into the office frequently, at times placing unsolicited orders which they were authorized to place only outside the managed account which was the corporate rule. Unsolicited transactions could not take place within the managed account. All testified that the Claimants were well aware of these distinctions,” the arbitrators wrote.
The arbitrators assessed Morgan Stanley for half of the $6,450 hearing sessions costs, and held the complaining clients responsible for the remainder.
A UBS spokesperson declined to comment on this story.