What’s your opinion on wealth advisors? I used to think they were some maths geniuses who could see the market in a way I never could. But then I came across the Eric J Hynden case.
I know you’d find it interesting as well:
Arbitrators Rebuke UBS, Award $260K Over Ignored Complaint
As part of a strongly worded verdict that was handed down on Wednesday, a panel of arbitrators from the Financial Industry Regulatory Authority in Atlanta ordered UBS Wealth Management USA and one of its brokers to pay a total of $260,000 in damages and costs.
To “send a clear message” about the repercussions of “outrageous, intentional conduct” by UBS and Florida broker Eric J. Hynden, the three public arbitrators included a total of $150,000 in punitive damages. They stated that this was essential to “send a clear message.” According to the ruling, the claimants, who are sisters named Lindsay M. Francis and Maggie M. Browney, accused Hynden of violating a duty of secrecy by exposing personal and confidential information about their accounts to another individual without first obtaining authorization.
According to the judgement, UBS also breached its regulations by failing and refusing to undertake a comprehensive investigation into a complaint that Francis and Browney had submitted through the wirehouse’s system. This was a violation of the award.
In their letter, the panel stated that “[S]uch outrageous and intentional conduct erodes the confidence upon which customers and the public should be able to rely about their financial advisors and institutions.”
UBS is required to pay emotional damages of $10,000 and attorneys’ expenses totalling $100,000, in addition to the $800 filing charge that was reimbursed to them. Their award also included reimbursement of the filing price.
A representative from UBS declined to comment on the matter. Compared to the $7 million in compensatory and punitive damages that the plaintiffs were seeking, the total amount of $260,000 was a small fraction of that amount.
According to the award, the individual with whom Hynden discussed the sisters’ accounts was a friend of his who was also a former client and also had the potential to become a future client. The sisters were distressed because the individual was a defendant in a case that had been brought against them over a trust that they had inherited from their father, according to their attorney, Cortney Alexander of Kent & Risley, LLC. The lawsuit had been filed against the sisters because of the trust that they had inherited from their father.
Alexander stated that the United States Bureau of Security ought to have been aware that this was a circumstance that they ought to have monitored very carefully. Although the UBS was aware of the situation, it did not take any action.
Alexander stated that he did not have permission from Francis and Browney to talk further on the circumstances or the information that was revealed. He declined to comment further on either of these topics.
Despite the fact that Hynden has nearly forty years of experience, he did not respond to a request for comment that was made at his office at UBS. According to BrokerCheck, he began his professional career in 1984 with Merrill Lynch and later obtained employment at FSC Securities Corp. before joining UBS in 2012. However, there is no record of this week’s arbitration award or any client complaints filed against him.
In addition to his wife Sherri and their two boys, Benjamin and Daniel, Hynden is also employed at UBS as a client associate, as stated on their company webpage. On Forbes’ list of the greatest next-generation wealth advisors in the state this year, Daniel came in at position number 27. According to the report, the team was responsible for managing assets worth a total of $271 million.
Cases Similar to Eric J Hynden:
In the high-stakes world of wealth management, trust is everything. Clients share intimate financial details, from investment holdings to retirement plans, relying on their advisors to safeguard that information. But when that trust is broken—especially through breaches of confidentiality—the consequences are serious and far-reaching.
Case 1: The Midnight File Grab
A top advisor managing over $165 million at a major financial firm quietly accessed confidential client data during odd hours before jumping ship to a competitor. After her departure, she contacted multiple households and successfully transferred over $14 million in assets to her new firm.
Consequences:
- Her former employer sued to block further client contact.
- The case moved into financial industry arbitration.
- She faced possible damages and a court-ordered ban on using the client data.
Case 2: Trade Secrets on the Move
An advisor left his firm to join a competitor and allegedly brought along sensitive information—client names, account balances, investment strategies, and even fee structures. He reportedly onboarded over 50 former clients representing tens of millions in assets.
Consequences:
- He was sued for breach of confidentiality and non-solicitation.
- He risked serious financial penalties and reputational damage.
- Legal orders could restrict future client communications or employment terms.
Case 3: A Data Dive Before Exit
Before resigning, another advisor at a national firm accessed over 1,600 client records in a rapid-fire session. The firm claimed he used this data to reach out to high-value clients once he was at a new firm.
Consequences:
- A lawsuit alleged violation of data security policies.
- The firm sought an injunction and recovery of the misused data.
- The case highlighted aggressive legal steps firms take to protect proprietary information.
Case 4: When Firms Fight Firms
In a battle between two large firms, one accused the other of encouraging new hires to retain unauthorized client data—including Social Security numbers and account numbers. This escalated into dueling lawsuits, with both firms accusing the other of misconduct and defamation.
Consequences:
- Courts ordered audits to scrub sensitive data from personal devices.
- Advisors were forced to hand over phones and laptops for inspection.
- Legal battles moved into industry arbitration, with potentially career-altering outcomes.
Why Confidentiality Matters in Wealth Management
| Risk | Impact |
| Misuse of personal financial data | Legal exposure, loss of client trust |
| Unauthorized client solicitation | Violates non-compete and non-solicit agreements |
| Use of proprietary firm info | Can trigger lawsuits and permanent injunctions |
| Reputational fallout | Clients may leave, firms may blacklist offenders |
The Fallout
When advisors breach confidentiality:
- Legal Action Follows: Lawsuits, injunctions, and damages are common.
- Arbitration is the Norm: Many of these cases go through FINRA, the financial industry’s dispute resolution body.
- Reputation Takes a Hit: Both advisors and firms suffer when client trust erodes.
- Technology Gets Scrutinized: Courts may order forensic audits of personal devices to track misuse of data.
The Eric J Hynden Case: Conclusion
Confidentiality isn’t just a clause in a contract—it’s the foundation of the client-advisor relationship. When that foundation cracks, the fallout can include lawsuits, job loss, and irreversible reputational damage. In an industry built on trust, one breach can cost everything.
