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Investor Protection

Customer Imposter Hit Up UBS Account for $367,000

November 22, 2019

by Howard Haykin



You’re a brokerage customer with UBS Financial Services and you learn that your account was hit with 5 unauthorized disbursements totaling $367,000. An initial state of shock sets in and you can only think about who to sue at UBS. Minutes later you regain your composure and begin looking for a logical explanation - comforted by the notion that UBS will surely compensate you for any losses. BUT, IF THEY DON'T, THEN YOU CAN AGAIN THINK ABOUT SUING EVERYONE IN SIGHT.



As it turns out, the culprit was your broker who apparently committed several grievous lapses in judgment.


On December 14th, … the broker received an email requesting that UBS send $68,740.55 from your brokerage account to a third party (“Third Party A”). The email was actually from an imposter purporting to be you, who was responding to an earlier email chain between you and your broker. The broker erred by filling out a client contact attestation form and falsely attesting that she spoke with you to confirm the request – when she had not.


On December 28th and January 10th, … the broker received more emails from an imposter purporting to be you, requesting that 2 checks be sent to Third Party A and 2 checks be sent to another third party (“Third Party B") for a total of $298,646.92. On each occasion, the broker processed the check requests and completed the client contact attestation forms, falsely attesting that she had spoken to you to confirm the disbursement requests - when she had not.



JUST DESERTS FOR BROKER'S CONDUCT.    Despite having worked on Wall Street for 21 years - with Merrill Lynch, Barclays Capital, UBS Financial Services - and sporting a spotless record, this broker got what she deserved: resignation from UBS, a $5,000 fine and a 2-month suspension. For all intents and purposes, this broker is finished on Wall Street, and she currently serves as a sales agent with Allstate Insurance.



CUSTOMER PROTECTION.    Take comfort knowing that large brokerage firms have policies, procedures and controls that, if carried out, will adequately protect your brokerage accounts from unauthorized disbursements. If the firm or its associated persons don't follow those guidelines, then you have solid legal standing for compensation.


That said, all investors should still review their monthly statements, with a keen eye toward large and unusual entries. Investors who are unable to police their own accounts should seek help from a friend, family member or trusted ‘financial watchdog'.



[For further details, click on FINRA Case #2019061427301.]