Tag Archives: ubs

The Dangers of Working While Black on Wall Street

Wall Street firms have been rushing to making commitments to racial justice since the death of George Floyd, but how do the same firms behave when a Black employee comes forward to complain about racism? The answer is discouraging. Black people who complain have been ostracized, harassed, threatened and fired after speaking up. And when they have their cases heard in Wall Street’s private arbitration forum, they lose almost all of the time. I wrote about these issues in an article for The Nation, published today.

You can read it here.

In 30 Years, Only 17 Women Won Sexual Harassment Claims Before Wall Street’s Oversight Boday

For victims of sexual harassment on Wall Street, the case of Kathleen Mary O’Brien was a bad omen.

In 1988, O’Brien, then a stockbroker at Dean Witter Reynolds, filed the earliest sexual harassment case we could find in a public database maintained by the Financial Industry Regulatory Authority, Wall Street’s self-governing organization, which is overseen by the Securities and Exchange Commission.

The year before, O’Brien had sued Dean Witter in Los Angeles Superior Court, but the brokerage firm successfully argued that she was legally bound to use Wall Street’s closed-door arbitration forum, then run by a FINRA predecessor, the National Association of Securities Dealers. The arbitrators’ decision in her case would turn out to be a common one in harassment cases over the following years: The claim was dismissed. The panel, offering no explanation as to how it came to the decision, charged her $3,000 in arbitration fees.

O’Brien’s case is one of 98 sexual harassment or hostile work environment claims and counterclaims made by women that The Intercept and the Investigative Fund found in the FINRA database over the past 30 years. You can read the full story here.

How Bad Financial Advice Can Literally Make You Sick

Holly Marchak and her husband lost $2.3 million when they were defrauded in the Ponzi scheme of the so-called “Brooklyn Madoff.” Nine years later, she’s still paying for it.

She spends thousands of dollars a year on prescription drugs alone. Marchak, who lives in Orlando, Fla., began weeping as she told me the story of Philip Barry, now in federal prison, who defrauded her and her husband Alex Marchak. The money had been proceeds from the sale of a building that housed a funeral home the couple owned.

Marchak, 62, says she takes medication for anxiety, high blood pressure, asthma and heart problems. “There are times we don’t want to wake up in the morning,” she said. “My doctor has a mile-long, thick file on me and says it’s all stress-related.”

Lawyers who represent investors say the stress of a serious financial loss can trigger a whole new wave of costs for clients. Medical research has linked stress to viral infections, asthma, atherosclerosis, ulcers and increased risk for diabetesmellitus, among other diseases. More focused studies highlight the hazards of financial stress. You can read the full story here.

Never buy a financial product that’s 13 words long, and other lessons from the SEC’s case against UBS

Last week’s $19.5 million settlement between investment bank UBS and securities regulators is just the latest example of why Mom and Pop have no business getting involved with Wall Street’s most convoluted creations.

The Securities and Exchange Commission said on Oct. 13 that UBS had given investors false or misleading information about the structured debt securities known as “Medium Term Securities Linked to the UBS V10 Currency Index with Volatility Cap.”

Products with interminable names often wind up being products that are too complicated for a math Ph.D. to understand, never mind the average investor. (Or their sometimes hapless brokers, who sometimes whine like babies that they’ve been duped by their firms when products blow up.) You can learn a lot of lessons by examining the flaws in the UBS V10. I talk about those lessons in my latest column for TheStreet, which you can read here.