“UBS has never disclosed that one of its brokers collaborated with his girlfriend,” he said, to take advantage of “a little old lady.”
UBS disputes Price’s version of events. A judge will soon rule on a UBS motion to dismiss the suit.
“UBS’s motion to dismiss this lawsuit by Mr. Price shows that there is no link between his termination and his alleged whistle-blowing,” the bank said in a written statement. “With respect to his lawsuit’s unsubstantiated allegations about the conduct of UBS toward other advisers in his office, UBS followed its supervisory processes, investigated suspicious activities and terminated advisers who failed to meet UBS’s standards.”
Tsai and Melchior also reject Price’s claims and any suggestion that either engaged in wrongdoing, according to Chase Scott, their spokesman. Florida prosecutors and U.S. securities regulators conducted “lengthy, in depth” investigations “that cleared Mrs. Tsai and Mr. Melchior,” he said in a written statement. He said that Tsai and the UBS client were close and trusting friends who were generous to each other and that the spending was overseen by the client’s lawyer and accountant.
Romanian Émigré
Tsai had a 30-year relationship with the UBS client, Helga Marston, a Romanian native who emigrated to the U.S. as a young woman. In 2004, Marston’s husband died and left her millions. Childless, she turned to friends for financial guidance. A year later, she drafted an amended trust that left her Park Avenue, New York, residence to Tsai.
Another beneficiary named at the time was a UBS adviser who oversaw the trust. She would inherit $250,000 in cash. “That’s pretty odd,” says John Rogers III, a trust management expert who says banks typically require employees to reject client bequests or resign. “It runs the risk that advisers will work in their own interest rather than the bank’s.”
Tsai was granted power of attorney over the trust in 2011, the same year the trust was moved to a unit of UBS where Melchior would manage it.
Additional details about the management of the trust have emerged in the legal dispute between Price and UBS. The year before she took over the trust, Tsai was spending $50,000 a month and was at risk of going broke within seven years, according to an assessment compiled by Price’s unit. That assessment, which was conducted to evaluate Tsai’s needs as a potential client, is included in Price’s whistle-blower complaint with the SEC.
What’s more, Price says he discovered the couple used at least $35,000 from the trust to entertain prospective and existing Melchior clients. They spent $5,000 on several prospects at the Pink Tie Ball at the Trump National Golf Club Mar-a-Lago in January 2013, according to Price. He provided the SEC with Outlook calendars and trust statements as support for some of his spending claims.