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April 9, 2019

UBS Broker’s Widow Sues for Survivor Benefit of $685K

by Jed Horowitz
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News
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UBS
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The widow of a veteran broker who died unexpectedly at age 63 last June has sued UBS Financial Services and one of its benefit plans for denying her claim of survivor benefits equal to his 2017 pretax payout.

The estate of Denis Delia was entitled to $684,606 under terms of the employment contract he signed when he joined the firm from Morgan Stanley in 2013, according to the lawsuit that his wife, Gina Delia, filed Monday in federal court for the Southern District in New York City.

UBS denied the payment because he had not signed up for the survivor benefit plan even though he had allegedly received four “blast” emails in early 2016 informing him of his need to enroll by March of that year, according to the lawsuit.

The notice was premature because Delia was not eligible to apply for the survivors’ benefit when the emails were sent, according to the filing. UBS also violated its ERISA fiduciary obligations by failing to notify Delia of his actual eligibility in December 2016 after his three calendar years of service.

“We believe that Denis should have been enrolled in the UBS FA Survivor Plan,” his wife wrote in appealing the plan administrator’s decision three weeks after her husband’s death. “We do not believe that he was even aware of its existence, or (if he was) that he was aware of any sort of opt-in component to a benefit that was not costing him anything.”

A spokesman at UBS Wealth Management USA did not immediately respond to a request for comment on the firm’s response to the lawsuit.

Lawsuits from advisors’ estates are relatively rare, although the widow of a Merrill Lynch broker in January sued the firm for $30 million, claiming she was entitled under the Family and Medical Leave Act to profits that the firm was making from continuing to service her late husband’s clients. She subsequently withdrew the lawsuit.

Lawyers said that UBS’s rejection of the estate’s claim underscores for advisors the need to carefully review  employment contract agreements.

The unnamed administrator of the FA Survivor Plan was biased to reduced payments from the unfunded plan in order to preserve UBS’s general assets, according to the lawsuit.

“UBS was in the process of scaling back the Plan due to its escalating financial costs,” it said, noting that “the cost of the survivor benefit has increased significantly since we started the program.”

In 2014, the bank increased the time new employees must work before becoming eligible for the program, according to the lawsuit.

Delia’s widow sued on six counts, including “misrepresentation” and breach of the “implied covenant of good faith and fair dealing,” naming UBS Financial Services, the Financial Advisor Survivor Benefit Plan and the plan’s administrator as defendants. In addition to seeking the $684,606 of compensatory damages, she asked for legal and attorneys’ fees as well as unspecified punitive (“exemplary”) damages.

Denis Delia first registered as a broker with E.F. Hutton in 1983, and worked at successor firms Lehman Brothers and Smith Barney in New York City before joining Morgan Stanley for a four-year stint in 2009, according to his BrokerCheck history.

UBS recruited the Westchester County, New York, resident in early 2013 because of his “spotless record within the securities industry and his business consisting of more than $130 million of assets under management built over the preceding 30 years,” according to the lawsuit.

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Comments (10)
  • on Apr 9 2019, D Graham says:

    UBS , the street’s “ gotcha “ firm doing what they do best….hide , Evade and omit.

    > Reply to D Graham
  • on Apr 9 2019, Tradewind Tom says:

    Nice move , UBS. It’s isn’t enough that you try and covertly slip a “ non compete “ in front of FAs without appropriate notice , or that you respond to your staff with total BS , you’re now stopping to going after widows and their orphans . Fitting.

    > Reply to Tradewind Tom
  • on Apr 9 2019, SageGriot says:

    An FA fails to enroll in his own survivor benefit plan and his broker fails to follow ERISA guidelines. How’d you like to be a client of these clowns?

    > Reply to SageGriot
    • on Apr 12 2019, DD says:

      I’m sorry, reading comprehension much? The blast emails were sent BEFORE he was eligible. The man died unexpectedly. Shame on UBS for hiding behind formalities.
      At the end of the day an impeccable employee lost his life and they attempted to short change his family.
      The only clown here is you for spewing such stupidity.

      > Reply to DD
  • on Apr 9 2019, Happily Free of UBS says:

    A new low for the firm that couldn’t shoot straight. Sell your inventory of Puerto Rico bonds to your clients, help US citizens in French citizens evade taxes and now I’ll steal money from widows and orphans.

    > Reply to Happily Free of UBS
  • on Apr 10 2019, Hodor says:

    At some point , Mad Max and others in Congress will discover how overtly ridiculously poor this company performs. They handily dismiss and terminate employees for minor infractions as a self serving maneuver,they dismiss international taxing authorities, they damage clients by jamming products like Lehman Brothers Notes and Puerto Rico bonds , they screw their own equity shareholders while others on the street are reaping rewards and in the meantime the few old Paine Webber legacy fools in their sycophant management roles smile as they’re doing it. Disgusting firm.

    > Reply to Hodor
  • on Apr 10 2019, John Henry says:

    As a private client of UBS, it is disappointing to hear that UBS, a top Swiss Bank, would not honor a widow’s death benefit for an Advisor who suddenly passed away & had an excellent record. I would encourage UBS to honor the death benefit as described & I would also think UBS would want to do the right thing in honoring this benefit for the family. I’m a family oriented person and hold values to be of the utmost importance. I don’t like to hear about cases where widows are denied death benefits. It does not put a good taste in my mouth. My best wishes to the family involved & I hope UBS will reach out to the family to fix this.

    > Reply to John Henry
  • on Apr 10 2019, Christina Carlson says:

    This is disturbing news! As a private client of UBS, I am leaving the firm. If they treat a widow and her children in this manner, how will they treat me?

    > Reply to Christina Carlson
    • on Apr 10 2019, John Henry says:

      You’re right. I’m going to leave the firm as well. I’m going to move all of my money over to JP Morgan. I

      > Reply to John Henry
  • on Apr 11 2019, AJM says:

    This is not an isolated event – they held back payment to an FA’s wife – the FA went out on short term disability in December and returned to work in March but passed away in November – UBS provided a clause that stated the FA had to be at work the first day of business January even though he was out on disability

    > Reply to AJM

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