UBS and ANDREW D BURISH

In a recent article from InvestmentNews, Bruce Kelly writes that a three-person FINRA arbitration panel awarded $92.2 million in damages to a group of nine investors in a high-risk trading strategy linked to a financial advisor shorting shares of Tesla Inc. The panel found UBS Financial Services liable for $69.1 million, or 75 percent the total, in punitive damage to the claimants. Punitive damages indicate that the FINRA panel wanted to punish the defendants for conduct and behavior.  The hearing was held in Des Moines, Iowa.  The FINRA panel cited Iowa state codes in its award of punitive damages, according to the award, which was published February 28, 2025.

According to the InvestmentNews article, the UBS clients’ claim against the firm and veteran financial advisor, Andrew D Burish, was filed in 2021. Andrew D Burish is based in Madison, Wisconsin, and has worked at UBS and its predecessors since 1984, according to his BrokerCheck profile.

The BrokerCheck profile states that the UBS clients alleged that from September of 2019 to July of 2020 Andrew D Burish allegedly “recommended an unsuitable and risky strategy of selling the stock of Tesla short and recommended that they continue to hold the positions in the face of mounting losses.” The clients later added a fraud claim to their lawsuit, “alleging that [Burish] failed to advise them that he was no longer shorting Tesla in his own account from July 2019 to June 2020,” according to BrokerCheck. Andrew D Burish denies the claims in his BrokerCheck report.

According to the arbitration award, UBS is liable for $23.1 million in compensatory damages to its clients, while Andrew D Burish is liable for $4.5 million in damages. Burish was ordered to pay $500,000 in punitive damages, according to the award.

Kelly writes that UBS has a history of high-cost litigation due to the sale of volatile investment products, such as the YES options strategy, the Puerto Rico bonds, and bond funds to Lehman Brothers structured notes.

According to Bloomberg News, UBS vowed to appeal the decision, which a securities expert called one of the largest he's seen in his 40 years in the industry. The clients were members of an extended family. In their complaint filed with a Financial Industry Regulatory Authority panel, the claimants had asked for just over $36 million. The arbitrators went well beyond that, in part by citing Iowa state law.

A spokesperson for UBS said the firm disagrees with the decision.

A FINRA spokesperson confirmed the award against UBS is the second-largest according to the agency's records. The largest, at $400 million, was in 2009 against Credit Suisse.