A former UBS employee has been awarded about $11.3 million that must be paid by the firm to resolve defamation claims, according to a regulatory panel. The award includes $7.5 million in punitive damages and $3.15 million in compensatory damages.
In addition, UBS must clear the termination, or Form U5, record of Mark Munizzi from May 2018, according to the Financial Industry Regulatory Authority panel, which released the panel’s decision earlier this week. The form must now state that Munizzi was “terminated without cause.”
When he was let go by UBS in early 2018 while serving as a market area, Munizzi worked with Mark Pent. Pent’s FINRA record states UBS fired him for failure “to adequately supervise employees in association with the risks of an uncovered options strategy in employee and employee-related accounts.”
The records also stated that Pent “gave varied responses during the review,” according to UBS.
Pent responded in his FINRA record that “inadequate risk procedures, later revised, caused loss occasioned by failure of broker to close out naked options positions in a related account that the broker, assisted by the operations manager, [had tied] to an old account that was transferred … five days earlier with a large margin debt by circumventing normal ACATs procedure, so that the positions would not appear on reports that I reviewed … . There were no material inconsistencies in any statements made to management.”
Munizzi’s his first role at UBS was as an assistant branch manager in 2007 and he became a regional supervisory officer in 2012. He began his career in financial services in 1989 at Smith Barney Shearson as an operations manager, according to his LinkedIn profile.
The Chicago-based arbitration process included 26 hearing sessions, a pre-hearing session with a single arbitrator and a pre-hearing session with the panel.
The panel did not detail the reasons for its decision but stated that it had considered “the pleadings, the testimony and evidence presented at the hearing, and the post-hearing submissions.”
It added that the panel arbitrator recommended expungement “based on the defamatory nature of the information.”
“UBS strongly disagrees with this unfounded award, which was contrary to the substantial evidence demonstrating that UBS acted properly and consistently with regulatory expectations and its responsibilities to the industry,” the firm said in a statement.
“UBS cannot understand how the panel could have come to this conclusion. We intend to pursue all avenues to challenge the award,” it added.