Published by Herskovits PLLC

Former UBS Broker Wins $3 Million in Defamation Case

Former UBS Broker Wins $3 Million in Defamation Case

A FINRA arbitration panel has just awarded James L. Springer Jr.; a Sarasota investment adviser, $3 million in damages, to be paid by his former employer, UBS. Springer, who managed  $350 million in client assets during his 12 years with the company, claims UBS defamed him in a desperate attempt to keep his clients after he decided to leave.

In 2014, the broker prepared to leave UBS for a lucrative position at Merrill Lynch. Two days before he was supposed to resign, UBS fired him and proceeded to make allegedly false statements to his former clients. 

UBS claimed Springer was being fired because he had used a corporate credit card to make personal purchases. The dollar amount of the purchases was, however, insignificant, especially when considering that the broker’s work yielded multi-million dollar profits for the company.

As a spokesperson for Springer Jr. put it, “You don’t fire a four-million dollar producer for a couple of hundred-dollar expense account errors.”

Springer’s initial demands included at least $63 million in damages and the expungement of the reason for termination. Still, the FINRA panel’s decision was seen as a victory for the broker, and I personally view it as a landmark resolution, since the $3 million award is one of the largest ever granted in a defamation case.

According to Springer’s claims, UBS falsely told his former clients that he had routinely acted against their best interests. After being hailed as one of UBS’s top 50 advisers, his reputation underwent radical change.

Immediately after Springer left UBS, his former clients were allegedly bombarded with calls and emails saying he had overcharged them on their fee-based accounts.

In order to retain the majority of Springer’s clients, UBS also offered them thousands of dollars in reimbursements, allegedly, to make up for losses connected to Springer’s practices. 

As a result of UBS’s alleged defamation, Springer’s annual production was halved to $2 million. Upon learning of the firing, Merrill Lynch withdrew its job offer and the broker ended up with a total of 18 client disputes on BrokerCheck, which he is now looking to expunge.

Following over 50 hearing sessions initiated in 2016, on October 25, the FINRA arbitration panel found UBS liable, but denied Springer’s bid for punitive damages and attorney fees. As he awaits FINRA’s resolution in regards to his expungement request relating to UBS-client disputes, a spokesperson for Springer referred to the implications of the FINRA decision for the future, saying it will deter broker-dealers from using “these types of inappropriate tactics to retain clients.”

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Related topics: FINRA rulings (37)


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