UBS Hit with $737,000 FINRA Arbitration Award Over Mismanaged Tesla Options Strategy
From the desk of Jim Eccleston at Eccleston Law
UBS Financial Services has been ordered to pay $737,000 in damages and fees after a former Tesla executive accused the firm of mishandling an options strategy involving his concentrated stock position. According to InvestmentNews, the decision, issued by a three-person FINRA arbitration panel, marks the second time this year that UBS has faced a costly loss tied to Tesla shares.
The FINRA panel awarded the client a total of $737,000, broken down as follows: $388,000 in compensatory damages, $96,000 in interest, $87,000 in costs, and $193,000 in attorney’s fees. As is typical in FINRA arbitration, the panel did not provide a written rationale for its decision. The hearing took place in San Francisco.
The client alleged that UBS failed to properly implement an options collar strategy to hedge his concentrated Tesla holdings.
According to InvestmentNews, the latest arbitration defeat follows a February decision in which UBS was ordered to pay $92.2 million to nine investors over an alleged high-risk short selling strategy involving Tesla. UBS has since filed a motion in federal court to vacate that award, which remains pending.
Both Tesla-related disputes are unrelated in fact, though they underscore growing scrutiny of UBS’s handling of concentrated stock positions and complex investment strategies. The firm declined to comment to InvestmentNews on the most recent award.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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