UBS Sued For Alleged Misappropriation Of Customer Funds

UBS registered representative Derek Michael Nierman (CRD#: 2302164, Scottsdale, Arizona) has indicated on his FINRA BrokerCheck Report that his activities have resulted in five customer-initiated investment-related disputes. Those disputes relate to Derek Michael Nierman’s conduct at Morgan Stanley Smith Barney, UBS Financial Services Inc. and Citigroup Global Markets Inc. Altogether, customers alleged that Derek Michael Nierman was responsible for unauthorized and unsuitable trades, and misrepresenting securities. A summary of those complaints follows:

August 27, 2018 FINRA Arbitration Involving Dereck Michael Nierman

On August 27, 2018, a customer of UBS Financial Services Inc. filed FINRA Arbitration #18-02996 in regards to Nierman’s activities. The UBS customer contended that a financial advisor had moved $200,000.00 worth of the customer’s assets from a credit line at UBS to another account at Wells Fargo so that a real estate investment could be purchased. According to the customer; however, there was no real estate investment that the customer’s funds had been placed into. Instead, the financial advisor had used the customer’s money for the advisor’s personal benefit, paying off the financial advisor’s debts and addressing other financial obligations. Not surprisingly, the customer did not approve those outside investments, and claimed that funds had been misappropriated. The arbitration is still pending a resolution.

May 16, 2014 FINRA Arbitration Involving Dereck Michael Nierman

Records show that on May 16, 2014, a Morgan Stanley Smith Barney customer filed FINRA Arbitration #14-01419, referencing Nierman’s alleged transgressions. The customer alleged that Nierman, or someone under Nierman’s control, made unsuitable exchange traded fund trades in the customer’s account between 2007 and 2014. Because of those allegations of unsuitability, the customer demanded $1,000,000.00 in damages. Ultimately, Morgan Stanley Smith Barney agreed to pay the customer a total of $625,000.00 in damages on February 10, 2015 to settle the customer’s claims.

May 15, 2014 Complaint Involving Dereck Michael Nierman

A Morgan Stanley Smith Barney customer lodged a complaint with the firm on May 15, 2014. From the customer’s standpoint, Nierman, or someone who Nierman supervised, made purchases of FIO stock in the customer’s account without obtaining the customer’s permission. Evidently, on June 30, 2014, Morgan Stanley Smith Barney denied the customer’s allegations of unauthorized trading.

February 27, 2010 Complaint Involving Dereck Michael Nierman

On February 27, 2010, a customer of Morgan Stanley Smith Barney brought a written complaint in reference to Nierman’s conduct. The customer alleged that the financial advisor placed very aggressive exchange traded fund trades in the customer’s managed account. The advisor reportedly held those aggressive ETFs in the customer’s account even after the ETFs continued to decline in value. Apparently, the advisor committed other sales practice violations as well. Morgan Stanley Smith Barney denied the claim on February 14, 2011.

April 14, 2008 Complaint Involving Dereck Michael Nierman

Nierman reported that a Citigroup Global Markets Inc. customer complained about Nierman’s activities on April 14, 2008.  The complaint indicated that Nierman made false or misleading statements to the customer about auction rate securities. As a result of those alleged misrepresentations , the customer purchased those auction rate securities and then sustained investment losses. After filing the complaint, the customer took no further action.
Nierman worked at Citigroup Global Markets Inc. (Scottsdale, Arizona) from July 31, 1993 to June 1, 2009. He was registered with Morgan Stanley (Scottsdale, Arizona) from June 1, 2009 to May 14, 2014. After leaving Morgan Stanley, he became registered with UBS Financial Services Inc., where he was with the firm from May 2, 2014 to January 8, 2018.
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