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UBS Faces Lawsuit from Fired Broker

March 7, 2019

A fired UBS financial advisor is suing the firm, claiming he has the right to UBS promissory notes held in the firm’s accounts, according to news reports.

UBS fired Lorenzo Esteva in June 2017 after he admitted to providing a client with bogus account information in some documents, according to Finra, FA-IQ sister publication FundFire writes. He had joined UBS two years earlier, after 24 years with Merrill Lynch, according to his BrokerCheck profile.

The industry’s self-regulator barred Esteva from the industry in September 2017 after he failed to provide requested information in relation to an investigation into his termination, according to BrokerCheck.

Esteva has since filed for bankruptcy and is now asking a bankruptcy court to prevent UBS from taking assets in an account he has with the firm, FundFire writes.

His suit alleges the firm controls close to $2 million in a joint account Esteva had opened with his wife, according to the publication. Aside from the $500,000 transferred into the account from when he was an advisor with Merrill Lynch, the funds came from UBS promissory notes, FundFire writes.

The complaint alleges UBS was “to repay him essentially the payments due under the notes as the payments came due from 2015 through 2025 if Esteva remained employed” by the firm, and the notes were to be forgiven if he met certain conditions and stayed with the firm, according to suit cited by the publication.

(Getty)

Esteva claims that since his wife didn’t guarantee payment of the notes, UBS therefore doesn’t “hold a valid security interest, lien, right of set off, or any other encumbrance against the [account],” the suit alleges, according to FundFire.

Esteva also accuses UBS of “unjust enrichment” from his $270 million book of business, which the firm kept after terminating him, the publication writes.

UBS declined comment to FundFire while Esteva didn’t comment before FundFire’s publication of the story.

By Alex Padalka
  • To read the FundFire article cited in this story, click here if you have a paid subscription.