John Blair was trusted to protect a charity’s assets from the inside. Court documents allege he used that trust to hand hundreds of millions of dollars in charitable money straight to his own son.

The Setup: A Father, A Son, and a Seat at the Table

The Peter and Elizabeth C. Tower Foundation is a charitable trust. The people who created it intended its assets to serve a public purpose. In May 2006, a man named John N. Blair was appointed as the foundation’s Attorney Trustee, making him one of three voting members on the foundation’s Investment Committee.

That seat on the Investment Committee gave John Blair power over where the foundation’s money went. According to the lawsuit, he used it to steer the foundation’s brokerage accounts to a financial advisory firm called the Arthurs Malof Group. That firm employed his son, Jay S. Blair.

The Arthurs Malof Group moved through multiple investment banks over the years. In 2015, it moved from Morgan Stanley to UBS Financial Services. The foundation’s accounts followed.

The Door Slammed Shut on Basic Transparency

Once the foundation’s accounts landed at UBS, the other trustees allege they lost meaningful visibility into what was happening with the money. According to court filings, the foundation could only get information about its own investments by going through John Blair. The other trustees stopped receiving regular account statements altogether.

The foundation also alleges it never received a copy of the underlying investment advisory contract that John Blair had purportedly signed on its behalf with UBS. That contract included a clause requiring disputes to go to private arbitration, which would later become central to UBS’s legal strategy.

The Moment the Trustees Finally Said Enough

In June 2020, two of the three voting members of the Investment Committee began the formal process of replacing UBS with a different investment advisor. In September 2020, a majority of the committee voted to terminate UBS. John Blair voted against the transfer.

In November 2020, the foundation adopted a resolution specifically titled “Unanimous Vote of the Disinterested Trustees of the Peter and Elizabeth C. Tower Foundation to Remove John N. Blair as Attorney Trustee.” He was removed for cause.

In April 2022, the foundation’s trustees voted to authorize legal action against all defendants, and the lawsuit was filed on April 11, 2022.

The Non-Financial Ledger

A charitable foundation is built on a foundational promise: that the people entrusted to manage its assets will act exclusively in the interest of the mission, not themselves. When John Blair accepted his appointment as Attorney Trustee of the Peter and Elizabeth C. Tower Foundation in 2006, he accepted the full weight of that promise. The allegations in this case describe a systematic, years-long dismantling of that promise from the inside.

The trustees who eventually blew the whistle were not outsiders. They were Cynthia T. Doyle, Mollie T. Byrnes, James Weiss, and David Welbourn. These were people sitting inside the same institution, trying to do their jobs, and repeatedly hitting a wall. Court documents allege they were cut off from basic account information about money that the foundation owned. They could not get regular statements. They could not independently verify what was happening with the charitable assets they were legally responsible for. The only conduit available to them ran through the very person the lawsuit accuses of engineering the conflict of interest.

Think about what that means in practice. These trustees had a legal and ethical obligation to monitor the foundation’s investments. Fulfilling that obligation requires information. The allegations describe a setup in which that information was systematically withheld, funneled through a single gatekeeper who had a direct financial relationship with the firm managing the money. Every day that arrangement persisted, the trustees were functionally blind to what was happening in accounts they were supposed to oversee. That is not an administrative inconvenience. That is a structured betrayal of the people the foundation was created to serve.

The foundation itself never even received a copy of the investment advisory contract that John Blair signed with UBS, purportedly on the foundation’s behalf. That contract contained an arbitration clause. UBS would later attempt to use that clause to drag the entire dispute out of public federal court and into a private arbitration room where the proceedings are sealed and the public has no visibility. A contract the foundation never saw, signed by a man who the trustees would later remove for cause, was the instrument UBS tried to use to escape public accountability. The appeals court’s ruling that UBS forfeited that option is one of the few moments in this entire story where the system worked the way it was supposed to.

Legal Receipts: The Record Speaks

“Defendant John Blair hatched a scheme that ultimately resulted in the creators of the Foundation, Peter and Elizabeth C. Tower, placing hundreds of millions of dollars of assets under the investment stewardship of his son, defendant Jay S. Blair.” — Plaintiffs’ Complaint, as cited in Doyle v. UBS Financial Services, Inc., Second Circuit Court of Appeals, July 14, 2025

“The Foundation was unable to obtain information regarding its investments except by proceeding through John Blair; the other Foundation Trustees did not receive regular statements for the accounts; and the Foundation never received a copy of ‘the underlying investment advisory contract purportedly made by the Foundation and UBS.'” — Court record summarizing the Complaint’s factual allegations, Doyle v. UBS, Second Circuit, July 14, 2025

“UBS and Jay Blair expressly failed to state that [the litigation] should be stayed for another reason: that UBS would be seeking to compel arbitration. It is only now, having lost their motion to dismiss and facing the prospect of answering discovery and defending the claims in federal court, that UBS and Jay Blair suddenly claim they are entitled to compel arbitration against Plaintiffs. It is too late for them to take that position.” — Plaintiffs’ brief to the District Court, quoted with approval by the Second Circuit, July 14, 2025

“Arbitration is not a fallback position. It is not a second bite at the apple. Rather, a party with a claim to arbitration faces a binary choice: litigation or arbitration. One cannot have it both ways.” — Second Circuit Court of Appeals, Doyle v. UBS Financial Services, Inc., July 14, 2025 (citing Ohio-Sealy Mattress Mfg. Co. v. Kaplan, 1983)

“The UBS Defendants sought to proceed in another venue – arbitration – only after their motion to dismiss was denied. It makes no difference that the UBS Defendants characterized their filing as a ‘response’ and claimed only to ‘join’ John Blair’s motion to dismiss; by seeking dismissal in the District Court, the UBS Defendants availed themselves of the District Court’s authority to resolve the claims against them.” — Second Circuit Court of Appeals, Doyle v. UBS Financial Services, Inc., July 14, 2025

Societal Impact Mapping

Economic Inequality: When Charity Becomes a Piggy Bank for the Connected

Charitable foundations exist to move money away from private accumulation and toward public benefit. That is their entire legal justification for existing. The Tower Foundation held hundreds of millions of dollars in assets. The allegations in this case describe a situation in which that enormous pool of charitable wealth was effectively co-opted, through insider positioning, to generate fees and business for a private financial advisory operation run by the son of the man controlling the foundation’s investment decisions.

This is how economic inequality compounds at scale. It is rarely a single dramatic theft. More often it is a quiet, durable arrangement: a trusted insider, a family connection, a contract the other trustees never saw, and a decade-plus of business flowing in one direction. The beneficiaries of the foundation, whoever they are, had no seat at the table while this was happening. The trustees who tried to change it were kept in the dark until they finally voted to take action in 2020.

The legal fight over arbitration is itself an economic inequality issue. Mandatory arbitration clauses embedded in contracts that consumers and nonprofits never see, signed by people who may be acting against the organization’s interests, are one of the primary mechanisms corporations use to avoid public accountability. UBS attempted to invoke exactly such a clause here. The appeals court’s ruling closes that escape route in this case, but the broader practice continues to shield corporate misconduct from public scrutiny across thousands of disputes every year.

The Cost of a Life Metric

What Now: Who to Watch and What to Do

Key Parties Still In Play

The Second Circuit’s ruling is a procedural victory only. It means the lawsuit can proceed in federal court. It does not mean UBS has been found liable, and the merits of the underlying fiduciary duty claims have not yet been decided. The following parties remain in the active litigation:

• ▸ UBS Financial Services, Inc. — Named defendant on fiduciary duty and respondeat superior claims
• ▸ Jay S. Blair — Named defendant on fiduciary duty and negligence claims
• ▸ John N. Blair — Named defendant on aiding and abetting claims; his case proceeds separately from the arbitration dispute

Regulatory Bodies to Watch

What You Can Do Right Now

If you are a donor to any charitable foundation, you have the right to ask whether the foundation publishes its investment advisor contracts publicly, whether trustees have disclosed all potential conflicts of interest with the advisory firm, and whether the foundation has adopted a mandatory conflict-of-interest policy that bans self-dealing arrangements. These questions are not optional niceties. They are the basic due diligence that protects the mission from the inside.

Support organizations that fight mandatory arbitration clauses, including the American Association for Justice and the National Consumer Law Center. Push your elected representatives to strengthen state laws governing charitable trustees and fiduciary accountability. Locally, mutual aid networks and community foundations governed by publicly accountable boards represent a direct alternative to the concentrated-power models this case puts on full display.