UBS Terminates Two Lifers Accused of Charity Solicitation Violations
(Updates in fourth paragraph with comment from director of local charity.)
In another example of how even veteran advisers with apparently good intentions can collide with conduct policies, UBS has fired two brokers in Erie, Pa., who solicited fellow employees for charitable donations and reimbursed them after the firm had made matching-fund contributions.
Paul Hakel and Robert Fabrizio worked at UBS and predecessor firms for 36 and 20 years, respectively, when they were discharged last October for violating the firm’s code of conduct, according to their BrokerCheck records.
In addition to the charitable-contribution match ploy, Hakel arranged to be paid for the “accounts of a client for which he serves as a director,” violating UBS’s external directorships and conflicts-of-interest policies, his BrokerCheck summary says. Fabrizio helped facilitate the payments, according to his database history.
Hakel was on the board of a charity Called Erie DAWN (Dwellings & Advocacy for Women in Need), according to the organization’s website. Maureen Dunn, executive director of DAWN, said the organization was not a beneficiary of Hakel’s fund raising activities at UBS.
Neither broker returned a call for comment to their new practice at Mid Atlantic Capital Corp. in Erie about the charge or their activities. They joined the independent broker-dealer and registered investment advisory firm a month after their termination from UBS, according to BrokerCheck.
A UBS spokesman did not immediately return a call for comment.
Even if the brokers had the best of intentions by trying to raise as much as possible for a good cause, they were treading on thin ice when trying to game their employer’s matching-contribution policy.
Marc S. Dobin, a lawyer in Jupiter, Florida, said the allegations raise some of the same issues about “conversion” of firm money that occurs with the rising tide of accusations about expense account violations. False claims violate the high standards of commercial honor required under Finra Rule 2010 and could create firm books-and-records violations.
They also raise issues of employees’ duties to employers and firms’ concerns about meeting their supervisory responsibilities.
“Finra will ask you this theoretical question: ‘Is it okay to rob a bank so you can make a charitable donation?’” he said, noting that he is not familiar with the circumstances of Hackel and Fabrizio’s termination. “Every mistake is being read as a character flaw that could ultimately result in the downfall of the brokerage firm.”
The terminations are also further evidence of large firms’ top-down stance toward compliance, a process that was formerly largely controlled by local managers who might have been more prone to make exceptions for large producers, Dobin said. UBS in September fired a $6 million producer on Long Island who allegedly helped an associate purchase a car and then misled firm investigators about his role.