(Reuters) - A UBS AG unit must pay more than $4.7 million to a customer’s former spouse who alleged that the firm improperly released accounts worth $12 million to her ex-husband despite a court order freezing those assets, a U.S. federal judge has ruled. UBS Financial Services Inc of Puerto Rico was negligent in releasing the accounts to David Efrón, a Puerto Rico lawyer who withdrew all but $1.2 million from the account during a nine-month period, U.S. District Judge Pedro Alberto Delgado-Hernández in San Juan wrote in an opinion on March 31. Efrón on Monday said that most of those funds were negotiable instruments that UBS was holding as collateral. Efrón and the plaintiff in the case, Madeleine Candelario del Moral, had been locked in a post-divorce dispute when UBS released the accounts to Efrón in 2007, according to the opinion. About $800,000 of the remaining $1.2 million was used to repay a loan UBS made to Efrón. The long-running federal court case, filed in 2008, hinged on a 2006 oral ruling by a local Puerto Rico superior court judge in the couple’s post-divorce litigation. That judge said from the bench that he was setting aside a previous superior court order to freeze the accounts, which were at issue in the couple’s divorce. The oral ruling, however, was not a valid order because a transcript of the judge’s remarks had not been signed or certified, the U.S. federal court ruled. “UBS respectfully disagrees with the court’s decision in this matter,” a UBS spokesman said, adding that the firm intends to appeal. The case “arose out of a divorce proceeding that had nothing to do with UBS.” The firm’s employees acted “entirely properly in response to specific instructions from a Puerto Rico court,” the spokesman said. But there were other signs that the oral ruling and the 23-page transcript of the ruling that Efrón presented to the firm were not sufficient for releasing the accounts, Delgado-Hernández wrote. The parties, for example, did not receive formal notice of the ruling, or a transcript the judge had signed, as Puerto Rico superior court rules required. Efrón was not a party in the federal proceeding and was not alleged to have engaged in wrongdoing. “Any lawyer will tell you that anytime a judge orders something from the bench, it’s as strong as if it were a written order,” Efrón said on Monday. Delgado-Hernández declined to impose sanctions on UBS, after Candelario del Moral alleged the firm’s conduct caused the case to drag on. The eight years of proceedings were the result of “factors not uncommon in complete litigation” and not because of misconduct by UBS, Delgado-Hernández wrote. Reporting by Suzanne Barlyn; Editing by Dan Grebler
A unit of UBS, UBS Financial Services, has been ordered by a Puerto Rico judge to pay over $4.7m to a customer's former spouse who accused the bank of releasing accounts worth $12m to her ex-husband despite a court order freezing those assets. US lawyer, David Efron and Madeleine Candelario del Moral had been locked in a post-divorce dispute when UBS released the accounts to Efron back in 2007; Efron withdrew all but $1.2m from the account over a nine-month period.