A former UBS Financial Services rep from Waco, Texas, has been barred by the Financial Industry Regulatory several months after the bank sued him, claiming he misappropriated $17 million from 23 of its clients to purchase what UBS called “fake annuities” that weren’t on its platform.
On Friday, Finra barred Robert Earl Turner Jr., claiming that he recommended to his UBS customers that they put money in the fixed annuity products with a San Antonio company called Fairfax Financial Corporation. This business was formed in the 1990s by a college friend of Turner’s, Finra said, and the agency claims that the products Fairfax was selling were not annuities at all, but actually securities.
According to court documents filed by UBS in Texas last year, the managing trustee of Fairfax was Mark S. Woodward of New Braunfels, Texas. Woodward has since died. According to Texas news station KWTX, he committed suicide in December 2021 after being approached by the FBI.
The Fairfax products that Turner recommended and sold, Finra said, were represented as annuities that would invest in commercial real estate and oil and gas development projects. UBS called the investments a “sham” and claims there were no assets backing them.
According to Finra, in its disciplinary letter, “Based on Turner’s representations and quarterly ‘annuity statements’ that Fairfax sent to them, Turner’s customers believed they would be earning a fixed, guaranteed rate of return of between 4% and 8%, compounded on a quarterly basis. Turner did not disclose his affiliation with [the Fairfax owner] to any of his customers who invested in Fairfax ‘fixed annuities.’” The recommendations also violated UBS’s policies, and Finra claims Turner actively concealed his involvement in the sales by having the annuity statements sent to a personal P.O. Box.
“In the fall of 2021,” Finra said, “one of Turner’s former UBS customers sought to withdraw her entire investment from Fairfax, which the most recent ‘annuity statement’ she received had led her to believe was valued at over $450,000.” Fairfax’s founder died before the customer received any money from the investment. Following his death, “those of Turner’s customers who invested in Fairfax lost most, if not the entirety, of their investments,” Finra said.
Turner, 68, was a 25-year veteran of UBS whose team included his wife Stephanie L. Turner. In October 2021, his team jumped ship and went to Stifel Financial, which announced it wanted to beef up its Texas presence. Various news outlets reported at the time that the team had been managing $900 million. Stifel fired Robert Turner in February 2022 and Stephanie Turner was discharged in November. Neither one is currently registered, according to Finra’s BrokerCheck website. Attorneys for Robert Turner did not return calls or, when reached, declined to comment.
In Turner’s wake, UBS claimed last year in Texas court filings that it had to settle a number of lawsuits, which by last May totaled $7.8 million. Many of the cases are enumerated on Robert Turner’s BrokerCheck page, the largest settlement being more than $5 million. He filed for Chapter 13 bankruptcy on May 12 of last year in the U.S. Bankruptcy Court for the Western District of Texas, Waco Division. UBS has been trying to get the case dismissed, calling it a bad faith appeal by Turner to frustrate and delay an arbitration claim UBS made against him with Finra.
UBS said that six days before Turner’s petition, it filed a writ of attachment to seize property before judgment in the District Court of McLennan County “in order to ensure that the debtor did not abscond with, or hide, any assets prior to the commencement of the Finra arbitration.”
When contacted by Financial Advisor for comment, a UBS spokesperson said, “UBS takes its responsibility to its clients seriously and has compensated all impacted clients for any losses they incurred.” A Stifel Financial spokesperson said the firm would not comment.