First, on September 15, 2021, a FINRA Dispute Resolution Services arbitration panel in Houston, Texas, ordered UBS Financial Services, Inc. (“UBS”) to pay customers over $357,000 in compensatory damages. Then, on September 17, 2021, arbitrators in Boca Raton, Florida, awarded customers over $691,000 in compensatory damages, more than $115,000 in prejudgment interest, and nearly $41,000 in expert witness fees.
The cause of action in both arbitration cases arose out of investments in UBS’s Yield Enhancement Strategy (“YES”), a complex and highly risky options strategy.
Customers across the country have filed securities arbitration claims against UBS, alleging that the brokerage firm misrepresented the options strategy as a safe way to obtain marginally higher yield on a portfolio of securities. In actuality, the complexity and nature of YES exposed customers to a significant risk of loss. Customers have 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.
These awards represent the fourth and fifth wins for UBS YES customers in 2021 and the sixth award since December 2020. Last month, on August 23, 2021, a FINRA arbitration panel in Baltimore, Maryland, awarded UBS YES customers over $405,000 in compensatory damages ($300,000), costs ($30,000), and attorneys’ fees ($75,000). 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.
Investors who have suffered investment losses due to UBS’s Yield Enhancement Strategy should contact experienced securities arbitration attorneys at Iorio Altamirano LLP for a free and confidential case evaluation. Partner August Iorio, who has been investigating YES for over two years, can be reached at firstname.lastname@example.org or toll-free at (855) 430-4010.
UBS’s Yield Enhancement Strategy
UBS’s Yield Enhancement Strategy 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.
UBS’s brokers sold this product to customers across the country. It is believed that nearly 1,500 customers chose to follow their financial advisors’ recommendations and implement this strategy. The strategy reportedly had approximately $6 billion assets under management.
Unfortunately, many UBS financial advisors did not adequately understand the product and failed to disclose the risk associated with YES. Investors have complained that they were misled and that their financial advisors never discussed the downside risk associated with implementing the strategy.
The strategy, which involved several options trades and borrowing, has sustained significant losses when the stock and bond markets saw an increase in volatility beginning in early 2018. It is believed that investors have suffered at least $75 million in losses, likely significantly more.
UBS Yield Enhancement Strategy: How to Recover Losses
When an investor suffers investment losses due to misconduct by a financial advisor or broker-dealer, the investor can file a securities arbitration claim against their financial advisor and/or broker-dealer in an effort to be compensated. The case will be presented and defended in a FINRA arbitration proceeding to a panel of arbitrators.
Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who can navigate the arbitration process and effectively advocate on their behalf.
Iorio Altamirano LLP is a securities arbitration law firm located in the heart of New York City. Iorio Altamirano LLP represents investors nationwide who have suffered investment losses due to securities fraud.
We have nearly 20 years of combined experience as securities arbitration lawyers and have helped investors recover investment losses in over 1000 cases.
If you suffered losses from investing in UBS’s Yield Enhancement Strategy, contact New York securities arbitration lawyer August Iorio of Iorio Altamirano LLP. August Iorio can be reached at email@example.com or toll-free at (855) 430-4010 for a free and confidential review of your account.