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UBS Claws Back $900K from Barred Broker

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An arbitration panel ordered a barred broker to pay UBS $900,000 for allegedly breaching promissory notes he signed with the firm.

The panel, which issued its ruling last week, also rejected the ex-advisor's counterclaims for damages related to allegations that UBS had changed some of the conditions in his employment contract without his knowledge, according to a copy of the award.

UBS initiated the arbitration proceedings in December 2014, two months after David Lavine left the firm.

Lavine, who was based in Houston, resigned from the wirehouse "while under review for soliciting prospective and current UBS clients to invest in private investments outside the firm," according to a note on his FINRA BrokerCheck record.

In January 2015, FINRA barred Lavine for failing to cooperate with a FINRA investigation into allegations that Lavine "exceeded the scope of an approved outside business activity and/or engaged in an unapproved private securities transaction."

He consented to the regulator's findings without admitting or denying any wrongdoing, according to FINRA disciplinary records.

Lavine, who was in the industry for nine years, had joined UBS from Morgan Stanley in 2011, BrokerCheck records show.

He could not be reached for comment. His attorney, Andrew Harvin, declined to comment.

In arbitration, UBS claimed that Lavine had breached six promissory notes. Lavine rejected the charges. He alleged that his employment contract "contained express conditions concerning his clients in the event of his separation from UBS," according to a copy of the award.

Lavine said that "these conditions were omitted from a subsequent version of the employment contract without his knowledge or consent."

At the end of hearings, he asked the arbitration panel to grant him nearly $1.2 million for misconduct including fraud, negligence and breach of contract.

The panel of three arbitrators rejected his claims and awarded UBS almost $900,000 in damages, but no attorney's fees. As is customary, the arbitrators provided no explanation with their ruling.

"UBS is pleased with the arbitrators’ decision in this matter," a spokesman said.

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