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After being fired in January, a former Union Bancaire Privée, SA (UBP) general counsel has taken the Swiss bank to court for breach of oral contract and fraud. Elena De Madariaga was recruited to serve as GC and managing director of UBP subsidiary Union Bancaire Privée Asset Management (UPBAM) in early 2008. She helped the bank through two major securities fraud exposures after its clients were swindled by Thomas Petters and Bernard Madoff. At the end of her first year, Madariaga’s performance had exceeded expectations, according to the complaint, and she was given a higher bonus than what had been promised. For the 2009 calendar year, Madariaga was again told she’d done a great job. In recognition of her Madoff-related work, the bank tacked on an extra bonus. But the total was significantly lower than what she’d earned the previous year. When Madariaga expressed disappointment, the bank allegedly promised her that the dip would be “made up for” in 2010. In order to keep Madariaga at the bank, UBPAM promised a compensation package commensurate with her peers. The bank told her they would give her a figure in early 2010. Richard Wohanka, chief executive officer for UBP’s asset management business, hired an independent firm to conduct a market-based compensation survey. That survey was to provide bonus targets for the bank. But wasn’t until November 17 that Wohanka and Larry Morgenthal, another UPBAM executive, disclosed the actual target bonus. Madariaga was shocked. “When they came back to her, their estimate of the market was at least a million dollars off,” said Madariaga’s attorney, William Brewer III, a partner with Bickel & Brewer. The bank estimated the bonus range to be $250,000-$750,000, with Madariaga’s target bonus at the upper end of that range. “Elena did a great job,” said Brewer. “She worked them through a dark period.” “She gave up significant opportunities based on a promise,” he said. “When she fulfilled her end of the bargain, she was shocked to learn the bank did not intend to pay her what she was promised and what she was worth,” said Brewer. To add insult to injury, on Jan. 19, 2011, the bank informed Madariaga that she’d be terminated at the end of March. “They fired her for questioning what they had done and for standing up for her rights,” said Brewer. The complaint was field in New York state court. Rubenstein Associates, Inc., which is handling media relations for UBPAM, declined to comment on the case.

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