Arbitrators Order Honored UBS Broker, Firm to Pay $125K in Client Dispute
An arbitration panel has ordered UBS Wealth Management USA and two brokers in North Carolina to pay $125,000 to two investors for damages and refused to expunge their records of underlying allegations of unsuitability, but denied the customers’ much higher damage claims.The affected brokers are Samuel Boyce Rankin and George “Mason” Rankin, whose Charlotte-based team manages $946 million, according to Barron’s 2019 list of top-in-state brokers. The assets were credited to Samuel, who ranked 16th in the poll of North Carolina brokers.
Customers Roger K. Brown and Jamie R. Brown sought damages at the close of their six hearing sessions of $517,670 to $655,709 for breaches of fiduciary duty, various claims of fraud and negligent misrepresentation, according to the award issued on Friday by an all-public panel of three arbitrators.
The panel denied the Rankins’ and UBS’s request to expunge the complaints from their BrokerCheck records but also dismissed the customers’ fraud claims with prejudice, meaning the Browns cannot bring another action on the same claims.
The Rankins’ separate BrokerCheck records say the customers in 2017 sought almost $850,000 for misallocating their accounts in overly aggressive investments—in Samuel’s case—and for “downplaying” the alleged misallocation, in Mason’s case. Mason is Sam’s nephew, said a person familiar with their practice.
Sam, who began his brokerage career in 1975 at Reynolds Securities and joined UBS in 2009 after more than 20 years at Smith Barney and predecessor firms, is a managing director and leads a seven-broker, 13-person team at the Rankin Group, according to his website. Mason began his 14-year career at Smith Barney.
Neither returned requests for comment left at their UBS office, and a firm spokesman said he could not immediately comment on the firm’s response to the arbitration decision.
Jonathan E. Neuman, a lawyer in Garden City, New York, who represented the Browns, did not return a call for comment.
The 2017 client complaint is the only disclosure on Mason’s BrokerCheck history.
His uncle’s history includes seven other customer complaints. Among the six that were made before 2011, three were denied and three were settled.
The seventh pending complaint alleges that Sam’s “aggressive risk allocation” in unspecified securities countered their moderate risk tolerance. “[O]nce the misallocation was discovered the FA proceeded to concoct a cover-up in hopes that the clients might be deceived,” his BrokerCheck record said.
Customers in the underlying arbitration claim against Mason said he “attempted to downplay the alleged misallocation of one of their accounts by referring to the allocation of [their] overall portfolio.”
Sam Rankin was a former seat owner on the New York and American Stock Exchanges, according to his UBS biography, and was one of Smith Barney’s “largest portfolio managers.”