UBS AG has avoided liability for a former broker's alleged move to steer a Seattle-based couple to purchase into a now-defuct sawmill after an arbitration panel found that the clients and their broker hid the investment from the bank. Donald and Eileen Bowman had sought more than $3 million in damages from UBS Financial Services Inc for allegedly failing to supervise the couple's now former broker, Ted Greene, according to an arbitration decision posted on the Financial Industry Regulatory Authority's (FINRA) website this week.But the three FINRA arbitrators disagreed with the Bowmans, ruling that the couple and Green had engaged in "deceptive strategies" to conceal their investment activities involving the sawmill from UBS, according to the Feb 9 ruling.The case is an example of challenges firms can face when brokers break industry rules by soliciting clients to buy investments that the firms themselves do not offer. Some investors try to recoup losses from such deals in arbitrations against brokers' firms, alleging shoddy supervision.The arbitrators found that UBS had a "robust compliance program" aimed at avoiding such situations, known as "selling away." But the couple made a big effort to conceal from the bank their investment in the now defunct factory that sawed logs to make boards in St. Helens, Oregon.
Shares of UBS traded higher by 2.6% or $0.43/share to $16.97. In the past year, the shares have traded as low as $16.01 and as high as $18.26. On average, 1261140 shares of UBS exchange hands on a given day and today's volume is recorded at 1232917.
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