By Kenneth Corbin

If he'd waited a few years, the strategy might have paid off. Instead, a UBS broker's strategy of short selling Tesla stock could cost the brokerage firm $95 million. That strategy, which the clients claimed was "unsuitable and risky," involved selling shares of Tesla common stock and holding those positions "in the face of mounting losses," according to the award.

An arbitration panel convened by brokerage industry regulator Finra ruled against UBS and the broker, Andrew Burish, who leads The Burish Group practice in Madison, Wis., and is a Barron's Hall of Fame advisor. UBS says it will ask a court to review the arbitration award.

Investors who said they suffered losses from Burish's strategy initially brought their claim in February 2021. They alleged that Burish "solicited and recommended an aggressive, high-risk trading strategy designed to produce speculative, short-term profits," according to the Finra arbitration award, which was issued on Thursday. The awards for the investors range from just under $30,000 to $51.1 million.

The clients noted that they aren't professional investors, and said they received "boilerplate paperwork" describing a strategy that involved "holding highly risky positions at odds with the asset protection and multigenerational wealth transfer advertised as its marketing offering."

In a response to the investors' complaint in the online database BrokerCheck, Burish "adamantly denies these allegations."

"Claimants were wealthy and experienced short traders who were well advised of the substantial risks of short selling and chose to initiate and hold their short positions in the face of losses and volatility," he said.

"We disagree with the arbitrators' decision," a UBS spokesman says. "These experienced investors had been pursuing an aggressive shorting strategy profitably for years and complained only after they took losses."

Tesla stock began a steep rise in 2020, and shares were trading near $490 in December 2024. In recent weeks, however, the company has been battered by a combination of factors including the prospect of looming tariffs and weak Chinese sales, as well as the mounting backlash to CEO Elon Musk's work with the Trump administration. Shares were trading around $268 midday Tuesday.

The investors who joined in the claim against UBS and Burish alleged that the advisor had breached his fiduciary duty and violated Finra's suitability rule. They also made claims of supervision failures and fraud.

Burish is a 42-year industry veteran who has been with UBS since 1984. The arbitration panel denied his request to expunge the complaints from his record. UBS says it will ask a court to review the award. It intends to argue that, "among other grounds, the punitive damages were inconsistent with the facts and the law ."

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March 04, 2025 13:17 ET (18:17 GMT)

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