Articles Tagged with options strategy

On August 23, 2021, a FINRA Dispute Resolution Services arbitration panel in Baltimore, Maryland, ordered UBS Financial Services, Inc. (“UBS”) to pay $405,000 to customers who invested in UBS’s Yield Enhancement Strategy (“YES”).  The award included $300,000 in compensatory damages, $30,000 in costs, and $75,000 in attorneys’ fees.  The customers alleged that UBS and broker Adam Rogers misrepresented UBS’s Yield Enhancement Strategy, a complex and highly risky options strategy, as a way to obtain marginally higher yield on a portfolio while taking limited risks.  In actuality, the complexity and nature of YES exposed the Claimants to a significant risk of loss.  The Claimants also alleged that UBS and its team of options traders conducted the YES program with virtually no supervision or compliance oversight and with inadequate risk controls.

This order is the third arbitration award against UBS in 2021 concerning YES and the fourth since December 2020.   On March 31, 2021, a FINRA arbitration panel in Columbus, Ohio, ordered UBS to pay customers over $372,000 in compensatory damages and fees.  Earlier in the month, on March 5, 2021, another FINRA arbitration panel in Denver, Colorado, ordered UBS to pay customers over $1 million in compensatory damages.  In December 2020, a FINRA arbitration panel in Boca Raton, Florida, awarded a customer nearly $90,000.

UBS has faced numerous lawsuits from customers in the form of FINRA securities arbitrations related to YES, a complex managed options strategy that UBS marketed as safe and market-neutral. The customers have claimed that the strategy was not suitable for them and that UBS materially misrepresented and omitted the risks of the strategy.

FINRA has suspended Oppenheimer & Co. Inc. broker Cesar Hurtado from the securities industry for 45 days. Mr. Hurtado was suspended over recommendations he gave involving an unsuitable options strategy in the accounts of two customers.

Mr. Hurtado was also fined $5,000 and agreed to complete 10 hours of continuing education concerning options trading and customer suitability.

If you have lost money with Cesar Hurtado, or Oppenheimer & Co. Inc., contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.

On March 31, 2021, a FINRA Dispute Resolution Services arbitration panel in Columbus, Ohio, ordered UBS Financial Services, Inc. (“UBS”) to pay customers over $372,000 in compensatory damages and fees.  The claimants, Matthew and Lisa Fisher alleged that UBS and brokers Ortal Shachar and Richard Mark Held presented the Yield Enhancement Strategy (“YES”), an options strategy, as low risk. In actuality, the complexity and nature of YES exposed the Claimants to a significant risk of loss.

This order is the second arbitration award against UBS in March 2021 concerning YES and the third since December 2020.   On March 5, 2021, another FINRA arbitration panel in Denver, Colorado, ordered UBS to pay customers over $1 million in compensatory damages.     In December 2020, a FINRA arbitration panel in Boca Raton, Florida, awarded a customer nearly $90,000.

UBS has faced numerous lawsuits from customers in the form of FINRA securities arbitrations related to YES, a complex managed options strategy that UBS marketed as safe and market-neutral. The customers have claimed that the strategy was not suitable for them and that UBS materially misrepresented and omitted the risks of the strategy.

Today, UBS Group AG announced that its net profit almost doubled in the third quarter to nearly $2.1 billion from $1.05 billion from a year earlier.

Meanwhile, as UBS and other large investment banking firms continue to rake in huge profits, UBS’s Yield Enhancement Strategy investors continue to suffer avoidable losses.

UBS’s Yield Enhancement Strategy, or YES, is a complex managed options strategy that UBS marketed as a safe, market-neutral overlay that would provide incremental returns to an investor’s portfolio.

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