A UBS broker’s short-selling strategy on Tesla stock is at the center of a high-stakes arbitration ruling that could cost the firm $95 million. The Financial Industry Regulatory Authority (Finra) arbitration panel found UBS and advisor Andrew Burish liable for damages, siding with investors who argued the strategy was inappropriate given their risk profiles.
Burish, a Barron’s Hall of Fame advisor leading The Burish Group in Madison, Wis., faced allegations that he recommended and executed an overly aggressive trading approach. According to the Finra award, his strategy involved selling Tesla common stock short and holding those positions despite mounting losses. The investors, who were not professional traders, contended that the approach was unsuitable and risky, contradicting UBS’s marketing around asset protection and multigenerational wealth transfer.
The claim, initially filed in February 2021, asserted that Burish actively solicited and encouraged a speculative, short-term trading strategy designed for quick profits. However, when Tesla’s stock price surged—particularly in 2020—the positions became increasingly unmanageable. The investors' awarded damages range from nearly $30,000 to $51.1 million.
UBS strongly disagrees with the arbitration panel’s decision. A firm spokesperson emphasized that the investors were sophisticated market participants who had pursued short-selling strategies successfully for years. According to UBS, the complaints only arose after the investors suffered significant losses. Burish himself, in a response documented in Finra’s BrokerCheck database, categorically denied the allegations, stating that the claimants were well aware of the risks involved in short selling and chose to maintain their positions despite market volatility.
The broader context of this dispute lies in Tesla’s meteoric rise. By December 2024, Tesla shares were trading near $490, having climbed sharply in prior years. Recently, however, the stock has faced headwinds due to concerns over tariffs, declining Chinese sales, and increasing backlash to CEO Elon Musk’s political affiliations. As of midday Tuesday, Tesla shares were trading around $268.
The arbitration ruling also cited supervisory failures and potential violations of Finra’s suitability rule. The panel rejected Burish’s request to have the complaints expunged from his record. UBS intends to challenge the award in court, arguing that the punitive damages imposed were inconsistent with both the facts and legal precedent.
For wealth advisors and RIAs, this case underscores the critical importance of aligning investment strategies with client suitability and risk tolerance. Even experienced investors with past success in complex strategies may shift responsibility to advisors when market conditions turn unfavorable. The ruling highlights the regulatory scrutiny around short selling, fiduciary duty, and the need for rigorous client communication and documentation.
Burish, a 42-year industry veteran with UBS since 1984, now faces the professional and reputational ramifications of this decision. The outcome serves as a cautionary tale for advisors navigating high-risk strategies and reinforces the necessity of transparent client education, robust compliance oversight, and clearly documented risk disclosures.
