Broker-Dealer Losses Yet Another Investor Claim Involving Its Yield Enhancement Strategy
A Financial Industry Regulatory Authority arbitration panel has awarded investors $1.34M, including punitive damages, for losses sustained in the UBS Yield Enhancement Strategy. This is the latest award related to UBS Financial’s complex options trading strategy that has cost investors over $1B.
In June 2022, UBS agreed to pay $25M to settle Securities and Exchange Commission (SEC) fraud charges accusing the firm with failure to provide its brokers with proper training and oversight in the YES program even as they sold this strategy to hundreds of investors. This purportedly caused many of the firm’s financial advisors to not fully comprehend the risks involved and affected their ability to determine whether the Yield Enhancement Strategy was, in fact, in the best interests of these customers.
Many UBS clients have filed FINRA arbitration claims against the broker-dealer over their YES program losses.
Our UBS YES investment lawyers at Shepherd Edwards and Kantas (SSEK Law Firm at investorlawyers.com) represent clients whose UBS brokers marketed and sold them this Yield Enhancement Strategy.
UBS YES Program Investors Awarded $500K in Punitive Damages
This FINRA arbitration ruling was a two-to-one split decision by its three-person panel of arbitrators. It included $500K in punitive damages although without an explanation provided. The rest of the $1.34M award included $475K in compensatory damages, $325K in legal fees and $41K in costs.
What Is UBS Yield Enhancement Strategy?
Referred to as an iron condor strategy, the firm’s YES Program allows clients to borrow against an existing portfolio of securities or debt to buy and sell S&P 500 options. Investors were under the impression that UBS YES would increase yields but not overexpose underlying assets.
Find out more at UBS Yield Enhancement Strategy.
High-net-worth UBS customers invested billions in the firm’s high-risk options trading strategy. Unfortunately, many were uninformed about how risky this program was, so they were blindsided by their losses.
They claim that UBS allegedly led them to believe this was a conservative investment strategy and would give them both diversification and stable returns. Instead, the losses for many have reached millions of dollars.
SSEK Law Firm Partner and UBS YES Investment Lawyer Sam Edwards:
Seasoned UBS YES Investment Lawyers
Investment lawyers at SSEK Law Firm have successfully represented investors against UBS Financial. Our seasoned investment attorneys have over decades of experience in representing clients nationwide. Our most recent claim being a $400K arbitration award on behalf of YES Program investors. If you’re a UBS investor, you can get a free consultation for a case evaluation.
Contact us today.