Ex-Broker Files Whistle-Blower Complaint Against UBS Financial Services

Timothy P. Flynn, an ex-UBS broker, has filed a whistle-blower complaint. Flynn alleges that UBS Financial Services forced him to resign as part of the firm’s retaliation because he cooperated with regulators. Flynn, who sold $30 million in auction-rate securities to the Massachusetts municipalities, testified earlier this year at the request of Massachusetts Attorney General Martha Coakley. who was investigating the sale of auction-rate securities to Massachusetts municipalities.

Flynn told investigators that UBS had told its brokers that the auction-rate securities were safe alternatives to cash. Flynn claims that UBS shut him out of his office and work e-mail files soon after he gave testimony and he was told to resign or face termination.

In his lawsuit, Flynn alleges that UBS knew the market could be on the brink of collapse but kept telling brokers to inform customers that the securities were safe investments. He filed his whistle-blower complaint with the Occupational Safety and Health Administration in New York. The former broker’s lawyer says his client filed the complaint to preserve his reputation and enforce his rights.

As part of the firm’s settlement with Massachusetts municipalities, UBS agreed to purchase back some $37 million in auction-rate securities investments sold by UBS to the Massachusetts Turnpike Authority and 17 towns and cities. However, the Massachusetts Securities Division recently filed civil fraud charges accusing UBS of misrepresenting the risks involved with auction-rate securities and failing to disclose conflicts related to their sales. UBS plans to mount a defense against the charges.

The Wall Street firm also denies Flynn’s allegations and says that he resigned without being prompted by anyone to do so. The firm says it will defend itself against the ex-broker’s allegations.

The stockbroker fraud law firm of Shepherd Smith Edwards & Kantas LTD LLP represents not only investors with complaints against brokerage firms, but we also represent brokers against their former firms. Ask for your free consultation today.

Related Web Resources:

Massachusetts Securities Division

Office of the Massachusetts Attorney General