Two former UBS financial advisors have filed a putative class action complaint alleging the company has failed to reimburse advisors for necessary business expenses, timely pay wages and pay final wages at termination or quitting, and has taken unlawful deductions from advisors' wages.
Andrew Hutcheson and Scott Fosmark, through a lawsuit filed earlier this month in California Superior Court for Marin County, seek reimbursement, penalties, restitution and other relief for themselves and others employed as UBS financial advisors during certain periods.
The plaintiffs and proposed class members “routinely incur reasonable and necessary business expenses without reimbursement by UBS,” the complaint alleges, citing travel, parking, mileage, education, client entertainment, marketing and support staff wages, among other costs.
Many of these expenses are paid through deductions from wages, the suit contends, adding that California law requires employers to indemnify employees for “all necessary expenditures or losses incurred by the employee” in discharging their duties.
The complaint alleges UBS violates state regulations prohibiting employers from taking unauthorized or improper deductions from wages, and requiring wages be paid to quitting or terminated employees by certain times.
Because UBS pays financial advisors commissions according to a fixed grid rate, “commissions are reasonably calculable when the trade closes. However, UBS does not pay the commissions within 10 days of the close of the pay period,” violating the state labor code, the complaint contends.
The plaintiffs accuse UBS of unfair business practices, unfair competition and unlawful deductions.
Fosmark, now an advisor and broker with Commonwealth Financial Network, was registered with UBS from 2008 to 2020, according to his BrokerCheck record with the Financial Industry Regulatory Authority.
Hutcheson, now with Wedbush Securities and Onward Advisors, was registered with UBS from 2011 to 2017, according to his BrokerCheck record.
Last year, without admitting or denying FINRA findings, Hutcheson consented to a $5,000 penalty, a one-month suspension and entry of findings that he engaged in an outside business activity without providing written notice to his firm, Raymond James, in 2020.
UBS had no comment on the case, a spokesperson told ThinkAdvisor by email Tuesday.
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