Opinion ID: 814830
Heading Depth: 3
Heading Rank: 3

Heading: Carlos Ubiñas

Text: According to the facts alleged in plaintiffs' complaint, Carlos Ubiñas is Vice Chairman of the Board of Directors and Executive Vice President of each of the Funds. Like Highley and Ferrer, Ubiñas serves in multiple executive positions at UBS AG affiliates. Since 2005, Ubiñas has been the President of UBS Financial, the institutional defendant that received substantial remuneration for its services as a financial advisor to ERS and shared in $27 million in underwriting fees for its role as lead underwriter for the $2.9 billion bond offering at the heart of this dispute. He is also currently the CEO of UBS International, the same UBS AG affiliate where his fellow director Ferrer is Chairman. As both president of defendant UBS Financial and a director of each Fund, Ubiñas's loyalties would necessarily be divided in evaluating plaintiffs' demand between his obligations to the Funds and his obligations to UBS Financial. See In re Verisign, Inc., 531 F. Supp. 2d at 1189 (Directorial 'interest' exists whenever divided loyalties are present. . . .). Similarly, as President of UBS Financial and CEO of another UBS AG affiliate, Ubiñas is beholden to the UBS defendants. See In re NutriSystem, Inc. Deriv. Litig., 666 F. Supp. 2d 501, 515 (E.D. Pa. 2009) (Delaware courts have found that directors . . . lack independence because of their substantial interest in retaining their employment.); In re The Student Loan Corp. Deriv. Litig., 2002 WL -22- 75479, at  & n.3 (concluding that directors who owe their livelihood to institutional defendant could not consider demand without ponder[ing] the effect affirmative action on a demand would have on [their] future); see also Rales, 634 A.2d at 937; Mizel, 1999 WL 550369, at  (finding directors lacked independence where they could not consider the demand on its merits without also pondering whether an affirmative vote would endanger their continued employment). The district court concluded that these facts were insufficient to establish a reasonable doubt that Ubiñas could evaluate demand objectively. We disagree. Viewing the facts alleged concerning Ubiñas's circumstances as a whole, we conclude that plaintiffs have created a reasonable doubt that Ubiñas could impartially consider [the] merits of bringing a lawsuit alleging that his employer, UBS Financial, engaged in an unlawful scheme without being influenced by improper considerations. Rales, 634 A.2d at 934.