Former UBS Strategist Says He Was Pressured to Mislead

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UBS AG was sued by a former senior commercial mortgage-backed securities strategist who claims he was terminated for telling supervisors he was being pressured to publish misleading reports.

Trevor Murray was employed by UBS Securities LLC from May 2007 until he was fired in September 2009, and then returned to the company in May 2011, he said in a lawsuit filed today in federal court in Manhattan. He said was terminated in February, a month after his most recent complaint.

“Plaintiff was the target of a concerted effort by members of UBS Securities involved in CMBS trading and commercial mortgage origination to skew his research to appear more favorable to those UBS Securities CMBS products and trading positions,” Murray said in the suit.

UBS, based in Zurich, is Switzerland’s biggest lender. Murray’s lawyers said in a statement that they also filed a complaint with the U.S. Occupational Health & Safety Administration.

Karina Byrne, a spokeswoman for UBS in New York, declined to comment on the lawsuit in an e-mail.

Murray said he worked for UBS Securities in its mortgage strategy group and special assets group from May 2007 to September 2009, when he was laid off. He then joined CapRok Capital LLC as a managing director and CMBS analyst in October 2009.

Formal Offer

UBS Securities solicited him to return in early 2011 and gave him a formal offer in April of that year, Murray said in the complaint. He resigned from CapRok in May 2011 and joined UBS Securities as a senior CMBS strategist and executive director -- a higher position than he had earlier held -- with a base salary of $250,000.

“Senior employees of UBS Securities assured plaintiff that the company was fully committed to the CMBS business and that plaintiff would be an integral member of that business as it grew in the coming years,” Murray said.

The people recruiting him to return to UBS pointed as sign of their commitment to the concurrent hiring of Ken Cohen, formerly of Lehman Brothers, and most of his former team to run UBS Securities’ CMBS trading and commercial mortgage originations, Murray said.

Incentive Compensation

Murray said he was told that his incentive compensations would range from about three-fourths of his base salary in “difficult years” to twice as much in “strong, profitable years,” according to the complaint.

Murray, who was responsible for research and reports about CMBS products that were distributed to UBS clients, said Cohen and others pressured him to “skew his published research in ways designed to support UBS Securities’ ongoing CMBS trading and loan origination activities,” the suit said.

Cohen declined to comment on the lawsuit in a telephone interview.

Murray alleged Cohen urged him to “improve conditions in the CMBS market” because it was going to be a “significant revenue generator” for UBS Securities’ investment bank. He claimed Cohen stopped him in the hallway in December 2011 and “admonished” him for publishing a report that was “too bearish.”

Murray said he repeatedly told superiors about attempts to influence his research, yet no one acted to stop the interference.

The case is Murray v. UBS Securities LLC, 12-cv-5914, U.S. District Court, Southern District of New York (Manhattan).

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