October 1, 2021

JHVEPhoto – inventory.adobe.com

In an uncommon blended resolution in a promissory be aware case, UBS Wealth Administration USA has recouped practically $1.9 million from a Scottsdale, Arizona dealer who left the agency 4 years in the past for Wells Fargo Advisors, however was additionally ordered to pay its former worker $300,000 in damages, in keeping with an arbitration award issued this week. 

The three-person panel sided with the wirehouse in holding William J. Paynter, a 24-year trade veteran, answerable for the remaining stability on 4 promissory notes when he left the agency after two-and-a-half years. It additionally held him answerable for 75% of the curiosity on the notes ranging from his April 2017 resignation and ordered him to return any buyer contact data he could have improperly taken to his new agency. 

However the panel additionally lower the dealer a break and awarded him $200,000 in damages for his counterclaim of constructive discharge and $100,000 for allegations that the agency had misrepresented its mortgage program, in keeping with the award. 

The choice, together with the diminished curiosity, marks a uncommon partial victory in promissory be aware instances, which usually are issued solely within the agency’s favor, in keeping with Paynter’s lawyer, Laurence M. Landsman, a accomplice at Latimer LeVay Fyock in Chicago. 

“I’m very proud of the findings of constructive discharge and negligent misrepresentation,” Landsman stated. “It’s a crack within the armor of how these instances go.” 

Landsman declined to touch upon the specifics of his consumer’s counterclaim citing the non-public nature of the Monetary Trade Regulatory Authority arbitration discussion board. Paynter had sought unspecified damages “properly in extra of $1 million” in his counterclaim filed January 2018, in keeping with the award.

Landsman in March 2019 had secured for one more ex-UBS dealer a discount within the be aware stability owed to the agency, and a few compensatory damages.

A UBS spokeswoman declined to remark. UBS had $1.82 billion in excellent forgivable mortgage balances tied to recruiting within the U.S. on the finish of the second quarter. 

In separate instances earlier in September, UBS prevailed within the entirety of its promissory be aware claims in opposition to two different brokers, together with one who like Paynter had counterclaimed for damages in opposition to the wirehouse. 

As is customary if the events don’t request an defined award, the panel didn’t present a written motive for its resolution within the instances. The three arbitrators ordered every of the events to bear their very own authorized prices and to separate the $28,000 in complete listening to session charges evenly.

Paynter, who stays with Wells, had joined UBS in 2014 after a three-year stick with Morgan Stanley, in keeping with his BrokerCheck report. He had began his brokerage profession in 1997 with a three-month stint at Joseph Charles & Associates earlier than becoming a member of Prudential Securities later that 12 months. From there, he moved in 1999 to U.S. Bancorp Piper Jaffray, in 2002 to First Monetary Fairness Corp., and in 2007 to Wells for his first sojourn with the agency, in keeping with the database. 

Two settled consumer disputes courting to Could and June of 2017, shortly after his departure from UBS, seem on Paynter’s BrokerCheck report. Each have been associated to alleged unsuitable investments, in keeping with the ‘disclosure’ occasions.

Within the bigger settlement, Paynter had been accused by an aged couple of unsuitable investments and over-concentration in oil and power investments from 2010 to 2017. The declare settled for $130,000 of $500,000 in damages requested, with UBS paying $80,000, Morgan Stanley paying $15,000 and Paynter contributing $15,000, in keeping with his dealer remark.

“FA denies the allegations and claims of their entirety, and believes the claims are with none advantage in anyway,” Paynter had written within the remark. “The case was settled to keep away from the time, expense and threat of arbitration.”

The opposite unsuitable investments dispute, involving unspecified securities from 2013 to 2014, settled for $35,000 of $500,000 requested. Morgan Stanley paid the complete quantity “to keep away from the prices and uncertainties of litigation,” and Paynter once more denied the allegations, in keeping with BrokerCheck.


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