UBS urges jury to reject self-proclaimed whistle-blower's story
A lawyer for UBS Group AG urged a New York jury to reject the tale of a former senior commercial mortgage-backed securities strategist who claimed he was fired for refusing to let the Swiss bank's traders influence his research reports.
Trevor Murray alleged he was dismissed in 2012 for blowing the whistle on CMBS colleagues who wanted to "preclear" drafts of his independent reports to ensure they didn't conflict with the bank's positions.
But Murray didn't flag the conduct to UBS's human resources or legal departments, tell a compliance officer who sat next to him, or use an anonymous system set up by the bank for employees to report wrongdoing, UBS attorney Daniel Chung told jurors on Dec. 20 in federal court in Manhattan after two weeks of testimony.
"There was nothing to report. There was no scheme," Chung said during closing arguments. “If you step back and think about it, it just doesn’t add up.”
Murray sued UBS, claiming it violated the whistle-blower protections enacted as part of the 2002 Sarbanes-Oxley law. His suit describes a "concerted, extended effort" by managers and colleagues to get him to write bullish assessments. Murray, who worked at the bank for about a year, testified that he gave in to the demands even though he said they were illegal and unethical.
Chung highlighted what he called inconsistencies in Murray's case, including details about how he allegedly got articles precleared by the bank's lead CMBS trader, David McNamara.
Murray testified he would print out drafts, walk them over to McNamara's desk, then publish the article later if he didn't hear any objections. Murray said something different when asked in 2012 by an investigator with the Occupational Safety and Health Administration whether he actually supplied drafts of his articles to anyone, Chung said, citing a transcript of that conversation.
"No. This is all prior to me actually spending the time of writing the article," Murray told the OSHA investigator, according to a transcript displayed to the jury on Dec. 20.
Chung also pointed to Murray's testimony about a meeting with his former boss, Kenneth Cohen, on June 3, 2011. Cohen allegedly told Murray to write an article to "smooth over" concerns among investors about various CMBS practices. Murray testified that writing such an article would have been dishonest and that Cohen's request was illegal.
Murray wrote to Cohen after the meeting, thanking him for his time and asking to "keep the dialog going," according to a copy of the email shown to jurors.
"If you thought someone had told you to go do something illegal, you would want the dialog to stop," Chung said. "His story is completely inconsistent."
Murray's attorney, Robert Herbst, argued that his client suffers from depression as a result of his firing and inability to get a comparable job. He’s seeking at least $3 million in damages.
Herbst sought to undermine the bank's claim that Murray's firing was part of layoffs of over 100 people in his division due to financial troubles, presenting evidence including an email in which Cohen told an acquaintance at Morgan Stanley that UBS’s problems wouldn't hurt the bank's CMBS business.
The case is Murray v. UBS Securities, 14-cv-00927, U.S. District Court, Southern District of New York (Manhattan).