UBS Waived Right to Arbitrate Foundation’s Mismanagement Claims

UBS Financial Services Inc. and an employee of an affiliated investment firm must face a foundation’s mismanagement claims in court because they waived their right to arbitrate, the Second Circuit ruled Monday.

UBS and the adviser, Jay Blair, “acted inconsistently with their right to arbitration” by filing a substantive motion to dismiss the federal court complaint filed by the Peter and Elizabeth C. Tower Foundation trustees, the US Court of Appeals for the Second Circuit said. The panel affirmed a district court decision allowing the case to proceed.

The influential appeals court clarified the arbitration waiver standard for courts within ...