UBS Client Can’t Sue Bank Over Broker’s Alleged Affair With Wife

(Bloomberg) — A UBS Group AG shopper, who alleges his wealth adviser had an affair along with his spouse and tried to assist her take management of household funds, can sue the dealer however not the Swiss agency, a New York choose dominated.

Richard Kallman claims UBS did not supervise Ira Walker because the managing director allegedly schemed with Kallman’s spouse to maneuver the household’s belief fund to the agency after which disburse tons of and hundreds of {dollars} from it. Kallman has stated Walker inserted himself into the couple’s divorce, demanding thousands and thousands of {dollars} on the spouse’s behalf.

Kallman has been looking for $10 million in damages from UBS and Walker, who has publicly disputed the allegations.

In a ruling on Thursday, Judge Lyle Frank stated most of the lawsuit’s claims have to be determined in arbitration, per phrases Kallman accepted as a trustee when he and his spouse, Kineret, moved the fund to UBS. However, a declare that Walker and Kineret deliberately inflicted emotional misery on Kallman can proceed towards trial, based on the ruling.

UBS declined to touch upon the ruling. Walker and Kineret Kallman didn’t instantly reply to messages looking for remark. The dealer has known as the case “factually baseless” in business data, and when reached by Bloomberg earlier this yr stated the accusations are false.

The drama, chronicled by Bloomberg in March, spotlights a difficulty that has lengthy bedeviled US monetary companies: messy fallout when brokers or funding advisers have private relationships with shoppers. Despite high-profile authorized brawls waged by rich households towards companies together with Morgan Stanley and JPMorgan Chase & Co., the business’s important regulators don’t have any rule explicitly setting boundaries for ties outdoors the workplace.

“We are gratified that this case will be tried in an open courtroom and look forward to proving the allegations contained in our complaint,” Alan Futerfas, a lawyer for Kallman, stated in an announcement.

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