UBS faces a significant setback after an arbitration panel ruled in favor of Randy S. Anderson, a financial advisor who claimed wrongful termination, breach of contract, and age discrimination.
The decision not only grants Anderson $1 million in damages but also mandates changes to his regulatory record, delivering a notable victory for the advisor in his four-year battle to clear his name.
Background on the Case
Anderson, who joined UBS in 2012, was terminated in November 2020 for alleged violations of company policy. UBS claimed Anderson executed trades in a client’s account without obtaining verbal authorization and failed to report a subsequent client complaint. These allegations were noted on Anderson’s U5, a regulatory form required by the Financial Industry Regulatory Authority (FINRA) when brokers leave a firm.
Anderson disputed the allegations, asserting the trades were discussed with the client in advance and executed in the client’s best interest to prevent additional fees. He explained that the client was unreachable for a final confirmation before the trade deadline, and a subsequent investigation corroborated his account. Despite this, the termination and associated regulatory note prompted Anderson to seek justice through FINRA arbitration.
Arbitration Decision
The three-member FINRA arbitration panel delivered a split decision, with two arbitrators siding with Anderson and one dissenting. The majority awarded Anderson $1 million in compensatory damages and ordered UBS to update the description of his departure on his U5. Additionally, UBS was directed to cover $11,250 in arbitration costs.
The panel majority criticized UBS for failing to provide credible evidence supporting its termination decision. They highlighted inconsistencies in testimony, redacted documents, and delays in complying with document requests during the arbitration process. The arbitrators also raised concerns about potentially disparate treatment of Anderson compared to other UBS advisors, although specific details of these disparities were not disclosed.
Age Discrimination Claim
Anderson’s claim of age discrimination further bolstered his case. At over 60 years old at the time of his termination, Anderson argued that the punishment was excessively severe compared to how UBS handled similar situations with younger advisors. The majority concurred, stating that Anderson’s age likely played a role in the decision. However, the written dissent noted that Anderson himself admitted he had not heard any age-related remarks from UBS during his tenure.
UBS Responds to the Ruling
UBS expressed disagreement with the arbitration panel’s decision and signaled its intention to explore further options. The bank highlighted the dissenting arbitrator’s opinion, which characterized the claims against UBS as “spurious” and accused the panel majority of displaying “a manifest disregard of the law.”
The dissenting arbitrator defended UBS’s actions, emphasizing that Anderson was an at-will employee. They noted that FINRA had investigated Anderson’s actions and issued only a cautionary letter rather than a formal penalty. The dissent also pointed out that the client involved in the disputed trades had expressed dissatisfaction, ratified the trades under protest, and ultimately transferred her accounts to another firm.
Anderson’s Perspective
For Anderson, the ruling represents the culmination of a long and arduous process. Brandon Taaffe, his attorney at Shumaker, Loop & Kendrick, stated that his client was pleased with the outcome. “It’s been a long, hard road for Mr. Anderson to clear his name and move forward with a clean record,” Taaffe said. “The panel’s decision affirms that his termination was wrongful and that his U5 should be corrected.”
Implications for Advisors and Wealth Management Firms
This case underscores the importance of clear policies, consistent enforcement, and careful documentation in employment matters. For advisors, it highlights the critical need to maintain meticulous records of client communications and decisions, particularly when managing complex or time-sensitive transactions.
The outcome also raises broader questions about how wealth management firms address claims of age discrimination and the potential for disparate treatment. Firms must ensure that disciplinary actions are applied uniformly across their workforce, regardless of age or tenure, to mitigate the risk of similar legal challenges.
A Step Forward for Anderson
Anderson, who is now with Stifel, Nicolaus in Boise, Idaho, can finally turn the page on this chapter of his career. While his initial claim sought damages of up to $2.2 million, the $1 million award and correction to his U5 mark a significant victory. The case serves as a reminder to advisors and firms alike of the high stakes involved in termination disputes and the importance of fairness and transparency in such decisions.
