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Articles Posted in UBS

UBS YES Strategy Losses May Be Grounds For A Claim

Our investment fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) are continuing to offer free, no-obligation case consultations to investors that lost money in the UBS Yield Enhancement Strategy (YES). SSEK Law Firm represents clients throughout the United States. 

Investor fraud claims over UBS YES Strategy losses continue to grow. Among the allegations against UBS are that its brokers made unsuitable recommendations of this complex strategy and misrepresented its risks to many customers, causing at least $60M in losses, with some reports saying that this figure could be much higher. 

UBS Financial Broker Accused Of Unsuitable Recommendations 

If UBS stockbroker, Christopher Wayne Tolman, recommended that you employ UBS’s Yield Enhancement Strategy (YES) for your investments and you sustained significant losses as a result, our securities fraud attorneys at Shepherd Smith Edwards and Kantas (SSEK Law Firm) want to talk to you. 

Unfortunately, investors have lost about $60M from using this complex investment strategy that many were under the impression was safe and low risk. 

UBS Loses Another Puerto Rico Bonds & Closed-End Fund Case

More than six years after thousands of investors lost many millions of dollars from investing in Puerto Rico bonds and closed-end bond funds, UBS Puerto Rico (UBS-PR) is still being held to account for the financial losses faced by many of its clients. 

This includes one claimant who was recently awarded over $150,000 in compensation plus interest, other costs, and fees in her Financial Industry Regulatory Authority (FINRA) arbitration case against the firm.  

UBS Group Fined $51M By Hong Kong Securities Regulator

The Hong Kong Securities and Futures Commission (SFC) is ordering UBS Group AG (UBS) to pay a $51M fine for overcharging clients between 2008 and 2017. It is also ordering the Swiss banking giant to pay more than $25M in compensation to customers that were harmed. 

According to the Hong Kong regulator, about 5,000 clients paid more than they should have in approximately 28,700 transactions. This happened after UBS advisors and assistants added padding to spreads involving bonds, as well as structured note trades and charging extra fees. UBS Group is accused of not disclosing to clients that they were paying these fees. 

SSEK Investigating David Fagenson, A Former UBS Brokerage Investment Advisor 

If you are an investor who worked with former UBS broker, David Fagenson, and suffered substantial losses or suspect you may have been charged excessive fees and commissions, please contact our broker fraud lawyers at Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) today. 

David Fagenson was suspended by the Financial Industry Regulatory Authority (FINRA) last year after he allegedly engaged in unsuitable trading in the accounts of three senior investors ranging in age from their 70s to mid-90s. However, this is not the first fraud allegation in which Fagenson has been involved. 

UBS Financial Services (UBS) brokers Matthew Buchsbaum and Scott Rosenberg are currently the subjects of multiple investor fraud claims by firm clients who blame them for losses they sustained from the UBS YES Strategy. This Yield Enhancement Strategy (YES) is a complex investment strategy and it is not suitable for every investor.

Involving an options overlay strategy, the UBS YES Strategy uses four options having the same expiration date but different strike prices. It employs the strategic buying and selling of SPX options spreads.

UBS YES Strategy investors were told to expect “incremental returns” along with the chance to earn income through low yield assets. 

A Financial Industry Regulatory Authority panel (FINRA) has awarded one of our clients, a 91-year-old widow, $550K in her Texas broker-dealer fraud case against UBS Financial Services (UBS). The claimant, who is from Texas, contends in her Houston senior investor fraud case that because her UBS broker made unsuitable investments on her behalf, she lost hundreds of thousands of dollars in her retirement accounts.

While the FINRA arbitration award doesn’t name the broker, Shepherd Smith Edwards and Kantas lawyer David Miller identified him as former UBS broker William Andrew Hightower. Attorney Miller said that Hightower, who headed up Hightower Capital Group, recommended that the claimant invest in leveraged and inverse exchange traded products and structured products,  as well as his own private investments. These investments were not suitable for her.

Hightower is now accused of operating a $10M Ponzi fraud. Among the unsuitable investments that he made on our client’s  behalf were those involving private placements Reproductive Research Technologies and Isospec Technologies, which were part of his alleged scam, and one fake private annuity.

U.S. District Judge Sidney H. Stein is refusing to grant class action certification to a group of investors suing UBS Puerto Rico over its sale of proprietary closed-end mutual funds. In particular, the class action complaint dealt with a series of 23 closed-end bond funds that UBS Puerto Rico developed and marketed exclusively to Puerto Rico residents.

These proprietary closed-end funds were comprised of at least 2/3 Puerto Rico debt (and often much higher), resulting in a geographic concentration that placed the owners of such funds at a great risk if anything negative happened on the island. Additionally, the UBS closed-end funds were highly leveraged, typically borrowing $1 for every $1 invested, meaning that any losses in the closed-end funds would be significantly increased.

Notwithstanding the above, the plaintiff investors say that UBS falsely depicted these closed-end mutual funds as safe and secure investments that would garner fund holders tax-free income when, in truth, the mutual funds were “ticking time bombs” that were actually very risky.

Roanoke, VA – August 1, 2014

Lawyers with the Securities Law Firm of SHEPHERD SMITH EDWARDS & KANTAS LLP, www.sseklaw.com, are investigating claims involving Donna Tucker and UBS Financial Services, Inc.  Donna Tucker worked as a broker with A.G. Edwards for four years until she joined UBS Financial Services in November of 2007.  After working at UBS for about six years, Ms. Tucker was permanently barred from the industry by the Financial Institute Regulatory Authority (“FINRA”).  FINRA began conducting an investigation sometime in 2013, during which it requested information from Ms. Tucker.  When Ms. Tucker refused to comply with that request, her license was suspended, and she was later permanently barred from working in the industry.

Recently, the Securities and Exchange Commission charged Donna Tucker of operating a Ponzi scheme for almost the entire period of time she was working at UBS.  According to the SEC complaint, Ms. Tucker stole over $730,000 from her clients between January 2008 and April 2013.  She did this by forging checks drawn on client accounts, establishing margin loans on customer accounts without the knowledge or approval of the client, and used those funds to repay other customers.  To hide her actions, she ensured that her clients only received electronic statements, which Ms. Tucker knew her elderly clients would not check, and then falsified records that did not show anything amiss.  Ms. Tucker then used this money to fund a lavish lifestyle for herself, including vacations, multiple cars, expensive clothing, and a country club membership.

In the U.S. Securities and Exchange Commission’s (SEC) Puerto Rico bond fraud case against ex-UBS Puerto Rico broker Jose Ramirez, a federal judge has found that Ramirez committed fraud and was in violation of securities laws when he directed customers to use lines of credit to purchase Puerto Rico closed-end funds.  In 2015, the SEC had filed charges against Ramirez accusing him of misleading customers regarding the Puerto Rico closed-end funds while advising them to use money from UBS Bank USA credit lines to buy UBS Puerto Rico fund shares. Ramirez allegedly made an additional $2.8 million in commissions as a result. The brokerage firm fired Mr. Ramirez in 2014.

According to U.S. District Court Judge Pedro Delgado-Hernandez, who granted the SEC’s motion for summary judgment, the ex-UBS Puerto Rick broker lied to customers and failed to tell them that if their collateral went down in value and reached a certain point, the customers might need to have their accounts liquidated to pay back the loans.

In 2013, following a number of credit downgrades, the Puerto Rico closed-end funds saw a substantial drop in value.  By September 2013, more than three dozen of Ramirez’s customers had $37 million in “margin maintenance calls” that required many clients to have their accounts liquidated.

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