UBS Ex-Strategist Tells Jury He Refused to ‘Shill’ for BankBy
Study clashed with UBS plan for Fontainebleau hotel, he says
Trevor Murray claims whistle-blower protection, seeks millions
A former UBS Group AG senior strategist who now makes ends meet with an hourly job at a grocery store says the Swiss bank’s planned financing for the iconic Fontainebleau Miami Beach hotel in 2012 conflicted with his bearish reports on the industry, helping end his career.
Trevor Murray, who is suing the bank over his dismissal, was a lead researcher on commercial mortgage-backed securities at UBS from 2011 to 2012. He told a Manhattan federal jury on Thursday that he was let go shortly after he ignored a request to scrap a report about how a double-dip recession could hurt the hotel industry’s real estate.
Kenneth Cohen, who at that time led commercial real estate finance at the bank, told Murray in a hallway of UBS’s Manhattan office not to “write anything negative about the hotel sector” because the bank was working on financing for the Fontainebleau, Murray said on the second day of trial. He said he wrote the report anyway, alerting clients to his concerns.
“At that point, I was fed up,” Murray, 46, told jurors.
By then, Murray said, he’d already been rebuffed by his boss after complaining that his relationship with his internal clients had become untenable, that the bank’s CMBS traders wanted him to be “a shill for the industry.”
He said his boss told him to accept their demands and not alienate himself by issuing conflicting reports. Murray said he’d also been excluded from UBS client meetings at a key industry conference and told that his reports needed pre-clearance before publishing, he testified.
Cohen didn’t respond to email messages seeking comment. Bill Halldin, a spokesman for Bank of America Corp., where Cohen works now, referred questions to UBS.
Murray, who relocated to Charlotte, North Carolina, filed his lawsuit in August 2012. He’s seeking back pay worth more than $3 million plus unspecified damages for allegedly violating the whistle-blower protections enacted as part of the 2002 Sarbanes-Oxley law.
The Fontainebleau’s financial woes around that time tracked the fluctuation in travel and leisure spending during and after the financial crisis. UBS in 2012 arranged the hotel’s $412 million mortgage, which was sold to CMBS investors.
Murray, who was responsible for research and reports about CMBS products that were distributed to UBS clients, said in his complaint that he was asked to “skew his published research in ways designed to support UBS Securities’ ongoing CMBS trading and loan origination activities.”
UBS’s lawyer, Gabrielle Levin, told jurors on Wednesday that Murray was never a whistle-blower. She said that his termination was part of a broader reduction in staffing caused by the bank’s poor financial performance and that more than 100 people were let go from his division. She said there was a “shocking” lack of evidence backing his claim, such as emails or text messages that might have described the alleged wrongdoing.
Marsha Askins, a UBS spokeswoman, declined to comment on pending litigation. Daniel Park Chung, one of the bank’s attorneys, began his cross-examination of Murray on Thursday but hasn’t yet touched on his claim about the alleged Fontainebleau hotel conversation.
The case is 14-cv-00927, U.S. District Court, Southern District of New York (Manhattan).