National investment loss lawyers KlaymanToskes reports the Financial Industry Regulatory Authority (“FINRA”) has hit UBS Wealth Management USA with an $850,000 fine, following the firm’s decade-long series of compliance failures and broker misconduct, exposing significant lapses in the firm’s oversight and supervision.
The fine stems from UBS’s failure to properly supervise a former broker from September 2010 to July 2021. The broker, who was not named by FINRA in the settlement agreement, was purportedly Robert E. Turner (CRD# 2113736), as reported by AdvisorHub. Turner was barred by FINRA in 2023 for allegations of misconduct that align with the details of UBS’s supervision failures, which ultimately cost the firm $17 million in restitution to customers.
Turner reportedly engaged in private securities transactions by funneling $7.2 million from at least 30 customers into an unauthorized third-party investment that was a company founded by his college friend. FINRA’s investigation revealed numerous compliance failures at UBS that allowed Turner to operate unchecked for over a decade despite numerous red flags.
If you suffered losses with Robert Turner and/or any other financial advisor at UBS, contact KlaymanToskes at 888-997-9956 or investigations@klaymantoskes.com for a free and confidential consultation.
UBS’s alert system failed to detect fraudulent activities in its customers’ accounts, and did not have an alert designed to flag “many-to-one transfers,” where multiple customers wired money to the same outside bank account. This oversight was crucial, as at least 10 clients wired approximately $1.8 million directly from their UBS accounts to the third-party company through 64 wire transfers.
Furthermore, the system failed to trigger alerts even when 17 transfers explicitly marked the reason for the wire as “investment.” Additionally, a UBS supervisor failed to respond adequately to red flags, including a July 2016 email from Turner’s sales assistant requesting a fee waiver for a wire transfer to the sham annuity business. In addition to the fine, UBS has sued Turner in an effort to recoup the $17 million paid to reimburse his former customers.
This case underscores the importance of robust compliance systems and the potential risks for misconduct when brokerage/investment advisory firms fail to properly supervise their brokers. Investors may be entitled to a financial recovery if their brokerage firm failed to supervise the representative managing their brokerage account, and/or if their broker/advisor made unsuitable investment recommendations.
Further, investment firms may be held liable for any losses incurred by their customers in the event of misrepresentations or omissions of material facts, and/or an overconcentration of the customer’s portfolio in one particular investment, class, or market sector.
If you suffered losses due to broker misconduct at UBS, and/or have concerns regarding your investment portfolio, contact KlaymanToskes at 888-997-9956 or fill out a short contact form for a free and confidential consultation to discuss your recovery options. We do not collect attorney’s fees unless we are able to obtain a financial recovery for you.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
lawrence@klaymantoskes.com
www.klaymantoskes.com