Darru K. “ken” Hsu, Individually v. Ubs Financial Services Inc.

* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DARRU K. “KEN” HSU,
INDIVIDUALLY, AND AS TRUSTEE
OF THE DARRU K. HSU AND GINA T.
HSU LIVING TRUST U/A05/05/03,
INDIVIDUALLY AND ON BEHALF OF
ALL OTHERS SIMILARLY SITUATED
Plaintiff - Appellant,
v.
UBS FINANCIAL SERVICES INC.,
Defendant - Appellee.
No. 11-17131
D.C. No. 3:11-cv-02076-WHA
MEMORANDUM*
Appeal from the United States District Court
for the Northern District of California
William H. Alsup, District Judge, Presiding
Submitted December 7, 2012**
San Francisco, California
Before: O’SCANNLAIN and CALLAHAN, Circuit Judges, and EZRA, Senior
FILED
FEB 11 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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*** The Honorable David A. Ezra, Senior U.S. District Judge for the
District of Hawaii, sitting by designation.
2
District Judge. ***
Darru K. “Ken” Hsu (“Hsu”) appeals from the district court’s dismissal of
his action under the Investment Advisers Act of 1940 (“IAA”), 15 U.S.C. § 80b-1
et seq., against UBS Financial Services Inc. (“UBS”). We have jurisdiction
pursuant to 28 U.S.C. § 1291, and we affirm the dismissal of the First Amended
Complaint (“FAC”).
Hsu argues that UBS deceived clients — thereby violating its fiduciary duty
as an investment advisor under § 206 — by leading them to believe that they
waived certain “unwaivable fiduciary duties” through a series of “hedge clauses.”
He fails to state a claim because he never identifies or explains what those
“unwaivable fiduciary duties” are and therefore has not provided UBS with fair
notice of the wrongs it has allegedly committed. Cf. Cooper v. Pickett, 137 F.3d
616, 625 (9th Cir. 1997) (to satisfy Rule 9, “a plaintiff must set forth more than the
neutral facts necessary to identify the transaction. The plaintiff must set forth what
is false or misleading about a statement, and why it is false.”). Assuming that Hsu
could pursue an action for rescission based on an alleged violation of § 215, Hsu’s
claim fails because the clauses he points to do not waive compliance with any
provision of the IAA.

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3
Hsu also argues for the first time on appeal that the wrap fee contract
fraudulently provides that clients may select an investment manager of their choice
when, in practice, UBS allegedly requires clients to use a manager from a UBS-
approved list. However, “we will not consider arguments that are raised for the
first time on appeal.” Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999).
Thus, this Court affirms the dismissal of the FAC for failure to state a claim.
The Court therefore need not address which statute of limitations properly applies
to the IAA.
AFFIRMED.

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