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Articles Posted in Yield Enhancement Strategy

Claimants Lose Retirement Funds in Complex Options Trading Strategy

A retired couple is suing UBS Financial Services (UBS) after they sustained at least $800,000 in losses from investing in the firm’s Yield Enhancement Strategy (YES). 

The investors contend that their UBS broker made misrepresentations and omissions when recommending this unsuitable investment strategy to them and discouraged them from leaving the YES program even as their losses mounted. Now, the investors are seeking up to $1,000,000 in damages, losses, and other costs.

Investors Claim UBS YES Strategy Was Mismarketed To Them: SEC Looking Into the Allegations

If you are an investor whose UBS broker recommended that you employ the UBS YES (Yield Enhancement Strategy) and you’ve since suffered significant losses, you may have grounds for an investment fraud claim. 

Unfortunately, UBS and its registered representatives may have been making unsuitable recommendations of this complex investment strategy to customers, as well as misrepresenting the risks involved. 

Brokerage Firm Made Unsuitable Investment Recommendations to An Inexperienced Investor

Our brokerage firm fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) have filed a Financial Industry Regulatory Authority (FINRA) arbitration against Morgan Stanley on behalf of an elderly Dallas, Texas investor.

The investor in question sustained over $500K in losses due to the unsuitable recommendations of structured products, Master Limited Partnerships (MLPs), other oil and gas equities, and investments governed by Harvest Volatility Management’s Collateral Yield Enhancement Strategy (CYES). 

Risks Tied To CYES Strategy Investments Cause More Losses During The Coronavirus

For the past year, our CYES Strategy fraud lawyers at Shepherd Smith Edwards and Kantas (SSEK Law Firm) have been working with investors who suffered losses from Collateral Yield Enhancement Strategy (CYES) Investments that were issued by Harvest Volatility Management but were sold by brokers from Morgan Stanley, JP Morgan, Fidelity, Charles Schwab, and other broker-dealers. 

Now, with all the market turbulence causing investments to drop in the wake of the novel coronavirus (COVID-19), this Yield Enhancement Strategy is experiencing even more losses. 

Coronavirus (COVID-19) Update: YES Strategy Is Vulnerable To Losses Now Markets Are Rough

The World Health Organization (WHO) has just declared the coronavirus a pandemic, with the United States President Donald Trump announcing a travel ban involving more than two dozen nations. As if these health concerns weren’t bad enough, the latest Coronavirus update has also placed the markets in a panic. Dow Jones dropped by thousands of points and the S&P 500 index has also taken a dive. 

While the stock markets do typically rebound after a sharp plunge, we are currently living in uncertain times due to COVID-19. As one Bank of America Merrill Lynch report cited in a Reuters article, the coronavirus is the type of “slow-moving train wreck” in which the market “slowly and progressively” realizes its “magnitude.”

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. 

Collateral Yield Enhancement Strategy (CYES) Damages: SSEK Investigating Merrill Lynch Financial Advisor 

Shepherd Smith Edwards & Kantas (SSEK), a law firm specializing in representing wronged investors is looking into allegations against Gordon Harper, a financial advisor with Merrill Lynch out of Upper Montclair, New Jersey. Prior to that, he worked at Banc of America and Edward Jones. 

According to allegations in a recent Financial Industry Regulatory Authority Inc. (FINRA) claim, Gordon Harper recommended something called Harvest Volatility Management CYES (also known as collateral yield enhancement strategy). Harvest is a money manager which, as the name implies, attempts to manage volatility. 

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. 

Clients of UBS Group AG (UBS) who employed the firm’s Yield Enhancement Strategy (YES) are now filing investor fraud complaints after suffering at least $60M in losses to date. YES involves options trades and borrowing that was supposed to be “safe” and low risk while earning investors positive returns.

The complex investment strategy did just that while the market was stable but the volatility that ensued last year–the worst to hit the market in 30 years– caught investors by surprise. The Wall Street Journal reports investor losses of over 13% in one month alone. However, Seeking Alpha reports that losses have been as high as 20% for some investors.

For example, according to the WSJ, Sherrie Pellini, a 60-year-old UBS customer who financially supports her mom and three kids, invested $3M in the UBS YES Strategy and was charged 1.75%. She now claims her losses were $750K. Pellini is accusing UBS broker Robert Perlman of telling her that YES had not resulted in any losses for 17 years.

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