UBS Claws Back More Than $1 Million in Notes Owed by Two Former Brokers
UBS Wealth Management USA this week was successful in clawing back from two of its former brokers more than $1 million owed in promissory notes.
In the larger of the awards, a Bank of America private banker who had left UBS in September 2016 has been ordered by a panel of Financial Industry Regulatory Authority arbitrators to pay back more than half a million dollars owed in promissory notes, according to an award finalized Tuesday.
Jason L. Seifert, based in Cleveland, Ohio, had joined UBS in 2011 from FifthThird Securities, according to his BrokerCheck record.
The wirehouse initially sought the notes balance of $514,721.69, plus interest and other costs and fees, and during an evidentiary hearing this month pegged that amount at $582,256.73, according to the letter. The firm had also requested $120,000 in attorneys’ fees and that all forum fees be assessed to Seifert, but the panel ordered UBS and Seifert to split the $11,700 in hearing fees.
Like many major firms, UBS pays top brokers signing offers structured as ‘forgivable’ loans that can reach three-times a brokers’ annual revenue, including back-end deferred bonuses, but also require them to stay at the firm for upwards of a decade before the loans are fully forgiven. UBS had $1.82 billion in outstanding forgivable loan balances tied to recruiting in the U.S. at the end of the second quarter, down 6% from $1.93 billion a year ago, according to the Swiss bank’s most recent earnings report.
Seifert denied UBS’ allegations and in an April 2020-filed counterclaim accused the firm of making “substantial errors and misrepresentations regarding FINRA Protocol” prior to hiring him that caused damage to his client relationships, reputation, income and “ability to succeed” at the firm, according to the letter. He had requested $3,554,936 in compensatory damages and $764,000 in exemplary damages, the letter said.
His counterclaim was ultimately denied by the three-person Finra panel, which included two ‘public’ and one ‘non-public’ arbitrators.
Seifert did not respond to a request for comment. His attorney, Jeffrey C. Miller with Cleveland-based law firm Brennan, Manna, & Diamond, declined to comment on the arbitration or underlying matter.
A spokeswoman for UBS, which had denied Seifert’s counterclaims, also declined to comment on the dispute.
Between his UBS exit and joining BofA’s private bank in February 2020, Seifert did a roughly three-and-a-half-year stint with Key Private Bank during which time he was not registered as a broker, according to his BrokerCheck report and his LinkedIn profile. He had started his brokerage career in 2005 at Natcity Investments, leaving four years later for Fifth Third, according to his BrokerCheck report.
In the second dispute, finalized Thursday, UBS clawed back from a former San Antonio, Texas-based broker $538,122.48 in notes plus pre- and post-judgment interest. The broker in that case, Ricardo Turlan, had been discharged from UBS in 2019 over allegations of exercising discretion in two client accounts without written authorization and excessive trading, according to his BrokerCheck report, which indicated he has not worked in the industry since his termination.
Turlan, who had logged 14 years in the industry, did not make an appearance in the arbitration or respond to UBS’ allegations. He could not immediately be reached for comment.
In a court filing in July, UBS said it had spent over $60,000 in legal fees as part of a promissory note dispute involving another broker who left the firm 16 years ago, underscoring the amount of time, effort and money wirehouses are willing to expend pursuing brokers who leave without paying back note balances.