October 7, 2019
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The family of a UBS Wealth Management managing director who died last year at age 48 is accusing the firm of violating securities laws by allegedly allowing a broker and a firm lawyer to convince him on his deathbed to sign a will and change beneficiaries on his brokerage and firm-provided life insurance accounts.
The mother of Erich Frank on Friday filed a motion in U.S. District Court in Manhattan to allow her to file an arbitration claim against UBS for approving, and failing to supervise, activities that allowed his girlfriend to obtain his account assets and open a line of credit secured by his brokerage accounts.
The Financial Industry Regulatory Authority on October 1 determined that her claims were not eligible for arbitration, in part because she was not a UBS customer, according to the court filing.
Phyllis Frank’s lawsuit, filed under power of attorney by her daughter Jayne Tuchman, argues that she is entitled to arbitration because she was allegedly a transfer-on-death beneficiary of her son’s right to arbitrate and because she conducted business with UBS employees following his death in trying to get access to his accounts.
“UBS had a hand in drafting a will and a UBS employee is the executor now of the estate,” said Adam Weinstein, the New York City lawyer representing Phyllis Frank, who he said is an octogenarian who was largely supported by her son. “I don’t know how many more connections to UBS one would need to arbitrate a claim.”
A UBS spokesman declined to comment on the lawsuit.
Frank, who worked as an advisor, branch manager, complex manager and private wealth management executive in New York and California since joining UBS in February 2004 from Smith Barney, died of colon cancer in January 2019.
In his last weeks of life, while under hospice care, White Plains, NY-based broker Frank Sabia and UBS attorney Chris Ferrera allegedly assisted in having Frank write a will, appoint the broker as executor and make his longtime girlfriend, Emily Rosen, beneficiary of his brokerage accounts and life policy, according to the lawsuit.
Frank did not previously have a will, it said.
“[A]s a financial advisor, a professional who helps clients devise their own financial plans for the unexpected, Erich Frank knew that his mother would inherit his assets, appreciated his mortality and made the intentional decision not to include Ms. Rosen as a beneficiary,” prior to his hospice hospitalization, the lawsuit said.
“UBS decided that Erich Frank’s estate plan was unfair or otherwise inadequate to address the firm’s desires to see Ms. Rosen inherit virtually all of his assets,” it said. “UBS waited until Erich Frank was on his deathbed, incoherent, incompetent, a mere shell of his former self in order to impose its will on his estate and defraud Mrs. Frank.”
Neither Weinstein nor the lawsuit discussed what motives UBS allegedly had for engineering the shift in beneficiaries. An online obituary placed by the family referred to Emily Rosen as Erich Frank’s “loving partner in life.”
Sabia, Ferrera and Rosen’s lawyer did not respond to requests for comment.
In April, the widow of a UBS broker sued the firm for denying her claim for almost $685,000 of survivor benefits. UBS, which said the broker failed to sign up for the survivor-benefit plan, earlier this month filed for a summary judgment in its favor.
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