A former broker of a UBS AG unit can keep $1 million of a signing bonus he received when joining the firm, despite leaving earlier than terms of the bonus required, according to a ruling by an arbitration panel.

Pericles Gregoriou, who worked at UBS Financial Services Inc from 2007 to 2009, was found not liable for failing to repay amounts he owed to UBS for a signing bonus, according to a Financial Industry Regulatory Authority arbitration panel ruling dated Friday. UBS sought $1 million.

The case is a rare win for a broker trying to oppose the return of unpaid bonus money, say lawyers.

Signing bonuses, often referred to as employee forgivable loans, are paid upfront and structured as loans forgiven over time, usually a seven-year period. Brokers who leave the firm, or whose employment is terminated before the loan is fully forgiven, must return part of the payment.

The vast majority of these cases are victories for the firm, said Francis Curran, a securities lawyer at McCormick & O'Brien LLP in New York. It is typically difficult for brokers to defend against bonus repayment cases, unless they can document specific instances of problems that affected their business, he said.

UBS lured Gregoriou and a partner from Merrill Lynch in 2007, according to Paul Lieberman, a securities lawyer from Stark & Stark in Lawrenceville, New Jersey who represented Gregoriou. The team advised high net-worth and institutional clients who invested through managed accounts, a type of portfolio tailored to an investor's specific needs, according to Lieberman.

A lack of support and other problems at UBS eventually led to a split between Gregoriou and his partner, according to Lieberman. Gregoriou lost about half of his accounts, said Lieberman. Gregoriou is no longer working for a brokerage, according to regulatory filings.

The FINRA panel denied a $3.24 million counterclaim that Gregoriou filed against UBS and other individuals, according to the ruling. He alleged that he was fraudulently induced to join UBS, among other things, according to the ruling. The panel did not provide reasons for its decisions, as is customary in FINRA arbitration cases.

UBS is disappointed in the panel's ruling on this matter and intends to explore all available options, said UBS spokeswoman Karina Byrne.

Mr. Gregoriou was clearly obligated to repay his loan when he voluntarily resigned and his counterclaims were wholly without merit, she said.

(Reporting By Suzanne Barlyn; Editing by Richard Chang and Steve Orlofsky)