When annuity marketing material needs a little embellishment, that can be a big problem in court.
Baltimore, MD, Nov. 27, 2012 (GLOBE NEWSWIRE) -- A Baltimore City jury just awarded a$1,482,898 dollarjudgment against Baltimorefinancial advisor Gordon Witherspoon, and his employer, UBS, for misconduct regarding a large life-insurance policy. Headquartered in Zurich and Basel, Switzerland, UBS has offices in more than 50 countries, including all major financial centers, and employs approximately 63,520 people.
The jury found Mr. Witherspoon liable for negligence, negligent misrepresentation, concealment, constructive fraud and conversion. The jury also found UBS liable for negligent supervision of Mr. Witherspoon. The jury also found that Mr. Witherspoon committed his concealment and constructive fraudwith actual malice, and awarded $300,000 in punitive damages against him.
"We are very pleased that the jury held these defendants responsible and accountable for their flagrant misconduct," said Andrew Slutkin, one of the members of the trial team and a founding partner ofSilverman, Thompson, Slutkin & White.STSW is one of the leading law firms in the mid-Atlantic offering clients years of experience, aunique perspective and the will to win, which taken together provide thewayto win for clients.
"This verdict serves as a strong warning to financial advisors to always put their clients' interests first, and to financial firms to closely supervise their employees," said Alex Brown, another STSW partner and member of the trial team.
Defendant Gordon Witherspoon, Jr. was an insurance agent who caused a loss of more than one million dollars from his own sisters-in-law while he was an employee of the UBS Defendants. After marrying into a wealthy family, he sold his sisters-in-law a $4 million life insurance policy (the "Policy") with an annual premium exceeding $100,000. Mr. Witherspoon collected a healthy commission on the sale, but the commission was not enough for him.
A licensed Maryland insurance agent, Witherspoon preyed on the trust his family members bestowed on him as a purported insurance expert to divert hundreds of thousands of additional dollars to himself. He agreed to serve as the broker of record for the policy and designated that all correspondence from the insurance company be sent to him at his home address. In other words, he arranged it so that all correspondence pertaining to premiums was directed to him alone.
Witherspoon told his wife's siblings that their wealthy parents would gift them the premium, in amounts small enough to escape the gift tax, as an estate-planning tool. The siblings, however, needed to be the owners of the Policy, and to personally pay the premiums, for the parents to transfer their funds out of their estate, and thus avoid estate tax on these funds.
The Policy premiums were paid through 1995, with no payment in 1996. Although paid in 1997, beginning again in 1998 and continuing through to 2003, the Policy premiums were not paid, resulting in loans being taken out on the policy to pay the premiums. Witherspoon admitted he failed to inform Plaintiffs that premiums were not paid, and that loans were occurring.
During this time, the UBS Defendants were tasked with supervising Witherspoon, their employee. The jury, however, found that UBS failed to supervise Witherspoon, allowing the premiums to go unpaid while Witherspoon, the broker of record, refused to tell the policy owners.
AboutSilverman, Thompson, Slutkin & White
STSW is a national law firm of renowned, veteran trial and appellate attorneys handling all aspects of civil and criminal litigation in state and federal courts, administrative law, business law, regulatory compliance, and Internet and privacy law. We help our clients identify, avoid and resolve a broad range of local, state, federal and international legal issues. STSW is headquartered in Baltimore with offices in New York City and Washington, D.C. For more information please call our offices at410.385.2225, someone is available to take your call 24 hours a day, or visit us on the web atwww.mdattorney.com. All consultations are complimentary.
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Source: Silverman, Thompson, Slutkin & White