The Finra arbitration tribunal (Financial Industry Regulatory Authority) has awarded a group of nine investors a total of $92.2 million in damages. The dispute relates to losses from a short-selling strategy on Tesla shares, which resulted in high losses in the period from September 2019 to July 2020, according to the Finra award.

The plaintiffs had accused the financial advisor and UBS FS of recommending that investors hold the short positions, even though these securities did not match the clients’ risk profile, writes the internet portal «investmentnews.com».

The nine investors were awarded a total of $92.2 million in damages. Of this, $69.1 million are punitive damages for UBS FS.

UBS Plans Legal Action

«The arbitration award points to significant supervisory problems at UBS», a plaintiff's lawyer is quoted as saying in the article.

UBS disagrees with the decision of the three-member arbitration tribunal, according to a company spokesperson. «These experienced investors pursued an aggressive short-selling strategy for years, profiting from it, and only raised complaints after incurring losses,» the spokesperson stated. UBS plans to challenge the arbitration award in court, arguing that the punitive damages are not legally justified.

The investors initiated the proceedings against UBS and the financial advisor in 2021. The investment advisor from Wiscosin has reportedly worked for UBS and its predecessor companies since 1984.