Ex-UBS Broker Spent $4.6M of Client Money on Gifts for Women: SEC

A former UBS broker has been charged by both the Justice Department and Securities and Exchange Commission with defrauding $5.8 million from a family with several accounts at the wirehouse.

According to the SEC’s complaint, filed on Friday in U.S. District Court for the Southern District of Florida, German Nino of Weston, Florida, stole the investment funds over nearly a six-year period and spent about $4.6 million of it on “several women with whom he had romantic relationships.”

Those purchases “ranged from small gifts and vacations, to luxury cars, private school tuition, and an apartment in Colombia,” the SEC complaint alleged. He spent the remaining $1.2 million to “fully repay another advisory client from whom he had previously misappropriated funds,” according to the SEC.

“Ensuring the safety of assets our customers entrust to us is always paramount,” a UBS spokesperson told ThinkAdvisor on Tuesday. “UBS has compensated the affected customers for any losses from their UBS accounts,” he said.

Asked for comment on Tuesday about the allegations made by the SEC and DOJ against his client, James D. Sallah of the law firm Sallah Astarita Cox, told ThinkAdvisor: “While we have made a temporary appearance for Mr. Nino in the DOJ matter, we are not in a position to comment at this time.”

Nino used various methods to hide his misconduct, including creating fake account statements, forging signatures on letters of authorization and altering UBS’s records to prevent electronic notifications of wire transfers, according to the SEC.

The SEC’s complaint charged Nino with violations of the antifraud provisions of the federal securities laws and seeks injunctive relief, disgorgement of ill-gotten gains, prejudgment interest and civil penalties.

Nino was registered as a broker with UBS from July 2012 until August 2020, according to his report on the Financial Industry Regulatory Authority’s BrokerCheck website. It is the last firm he was registered with, according to the report, which says he was also previously a registered investment advisor.

He resigned from UBS after a client alleged Nino stole money from him from Feb. 23, 2018, to July 13, 2020, according to a disclosure on his report. The client requested $2 million from UBS but, in a settlement, received the full $5.8 million that was cited in the SEC and DOJ actions.

Initial Court Appearance

In the parallel DOJ case, Nino made his initial appearance in U.S. District Court for the Southern District of Florida in Miami on Monday, according to Juan Antonio Gonzalez, U.S. Attorney for the Southern District of Florida, and George L. Piro, special agent in charge of FBI Miami.

According to a federal information, filed in the same court as the SEC complaint on Friday, from about 2012 to 2020, Nino was working at a branch office of UBS in Miami, overseeing and managing UBS investment accounts for various clients, including three victims who were related and who had various investment accounts at UBS.

Nino was the broker assigned to oversee and manage the victims’ money in the accounts.

From about May 2014 to February 2020, Nino made a total of 62 unauthorized transfers from three UBS accounts belonging to the victims, which totaled $5.8 million, according to DOJ.

To accomplish the wire fraud scheme, Nino made materially false and fraudulent statements to his victims and concealed and omitted material facts including misrepresenting the actual performance, balance and rate of return on the accounts he managed, according to DOJ.

He also forged the signature of his clients on documents purporting to authorize transfers out of the accounts and prepared a fraudulent land purchase contract and forged a victim’s signature on the land purchase contract to make it look like the victim was buying land in Colombia by using money from the victim’s account, according to DOJ.

Nino allegedly removed one of the victims’ email addresses from their UBS email account profile so that victim would not receive email notifications from UBS about unauthorized transfers and also prepared fraudulent UBS account statements and client review statements that DOJ alleged falsely inflated the balance and value of the victims’ accounts.

If found guilty of the eight counts of wire fraud charged against him, Nino faces a maximum of 20 years in prison, three years of supervised release and a $250,000 fine, according to DOJ.