Ex-UBS Broker Seeks to Vacate $1.1 Million Arbitration Award
A Florida broker who was ordered in October to pay more than $1 million owed on seven promissory notes signed during his almost five-year stint at UBS Financial Service’s Boca Raton branch has asked a state court to vacate the award because of an arbitrator’s alleged mischaracterization of himself.
The case is the latest in a slew of similar cases brought by brokers who are making procedural arguments after losing underlying arguments in arbitration. Courts give strong deference to arbitration decisions, and consider challenges in only limited procedural and behavioral circumstances, including arbitrator misconduct and manifest disregard of the law.
In his November 16 petition to a circuit court in Palm Beach County, broker Anthony Mazzo argued that the three arbitrators in the previous month’s decision had “exceeded their authority” granted by the Financial Industry Regulatory Authority on five counts.
Chief among them was arbitrator Steven G. Montesi’s characterization of himself as a “non-public arbitrator” without disclosing that he listed himself in various Finra arbitrations “immediately preceding” the case as a public representative, according to Arthur Koski, a Boca Raton-based lawyer who represents Mazzo.
Montesi could not be reached for comment.
UBS Financial Services and UBS Credit Corp., which filed the underlying complaint to collect the alleged unpaid note balances in June 2016, on Wednesday filed a petition to move Mazzo’s vacate case to federal court.
“Federal courts may be more receptive to upholding arbitration awards, but in Florida appellate cases are similar,” said Koski, adding that he has not decided whether to challenge UBS’s motion to move the case.
In addition to challenging the arbitrator’s alleged mischaracterization of his status, Mazzo’s vacate complaint cited other technical actions of arbitrators that he said invalidate their decision.
They should not have ruled on a case brought by UBS Credit Corp., an entity set up to issue and collect promissory notes to brokers who receive hiring bonuses, because it is not a Finra member, the filing said. It also said that the arbitrators should not have ruled on the notes because they were not legally enforceable under Florida law because they lacked have documentary tax stamps, and because UBS did not produce the original note documents that Mazzo signed between August 2011 and October 2014.
The broker, who was also ordered by arbitrators to pay UBS $53,447 in attorney’s fees, $7,725 in costs and interest on the notes of $55,226, has worked since April 2016 as a broker at BB&T Securities in Palm Beach, according to his BrokerCheck record. He began his career as a registered representative in 1993, and has worked at eight firms, according to the database.