Big Short: UBS, Top Broker Face $23 Million Claim over Tesla Trades
Miriam Rozen, 26 April 2021
A UBS financial advisor in Madison, Wisconsin who oversees a 35-person team “repeatedly promoted the idea of short selling” shares of the electric car company Tesla, Inc., triggering more than $23 million in losses for four couples—all members of an extended family—and another investor, according to an arbitration claim filed with the Financial Industry Regulatory Authority.
The complaint cites Tesla short-selling recommendations–betting on the stock price’s decline–allegedly made in 2019 and 2020 by Andrew Burish, a 38-year industry veteran who started at UBS in 1984 and leads The Burish Group, one of the firm’s largest and most profitable teams in the Midwest. The team employs 14 advisors and manages more than $4 billion in client assets, according to its website.
The complaint, which was filed in February, accuses UBS and Burish of breach of fiduciary duty and violating Finra’s suitability rule and also specifically accuses UBS of failing to supervise the broker. The claimants seek actual damages of $23 million as well as unspecified punitive damages and costs.
“His recommendation focused on his conviction that lots of money would be made because Tesla common stock was overvalued and certain to lose its value,” the plaintiffs argued. “No balanced view of the risk of loss was provided by Burish.”
In early 2019, Tesla stock was trading at roughly $60 per share and since then its price has soared to more than $720 per share by press time.
