Ex-UBS YES Strategy Broker Accused Of Unsuitability

Pending Allegations Likely Involve UBS YES Strategy

Frederick Maximillian Kort, a former UBS Financial (UBS) broker, is facing allegations that he made misrepresentations when making unsuitable investment recommendations to customers.

According to his BrokerCheck record, there are two pending customer disputes against him, both involving an options overlay strategy. While the disclosure does not specifically state so, this is likely UBS’s Yield Enhancement Strategy, in which many of the firm’s registered representatives have come under fire for selling to investors.

Kort is no longer a registered broker. UBS fired him in 2018. He remains a registered investment advisor with IHT Wealth Management in the Chicago, Illinois area.

At Shepherd Smith Edwards and Kantas (SSEK Law Firm), our investment fraud lawyers have been speaking to investors who suffered losses because a UBS broker misrepresented the risks and/or unsuitably recommended this approach to them. Already, we have brought FINRA arbitration claims against UBS for such losses.

Former UBS Broker Was Fired by The Firm After 10 Years

Frederick Kort’s BrokerCheck record shows four customer complaints, including two from this year that were denied.

The most recent claim, filed in May 2020, accused him of placing the customer’s money in an unsuitable investment given her experience level. She also claims the risks involving this security were not properly disclosed to her. The other FINRA arbitration case that was denied, brought in March, alleges misrepresentations and omissions regarding an investment and the risks it would create for the customer’s portfolio.

The two other FINRA arbitration claims involving the options overlay strategy were submitted last year. One, filed in October 2019, has the claimant seeking $455K in damages. A different investment fraud claim from July 2019 is requesting $344K in damages.

UBS YES Strategy Promised Returns, Instead Caused Investor Losses

Touting an iron condor strategy, UBS’s Yield Enhancement Strategy uses an investors’ assets as collateral in a margin account while purchasing four options that expire at the same time yet have different strike prices. With any type of YES Strategy, it is important that strategic buying and selling is employed.

The brokerage firm and its registered representatives marketed UBS YES as low risk and that it would allow investors to make returns just above the yields in the fixed-income market. Instead, investors were blindsided—first at the end of 2018, then in February 2019, and once again this year in March 2020 in the wake of COVID-19—when, instead of making money, they suffered significant losses.

Over the last two years, UBS YES Strategy investors have come forward, saying that this options overlay strategy and its risks were misrepresented to them.

Also, according to experts with the Securities Litigation and Consulting Group, rather than taking a market-neutral approach, UBS brokers may have been betting against the market’s direction instead of going with it. This is not what investors were told would happen.

Broker Fraud Lawyers Fighting for UBS YES Strategy Investors

Led by UBS’s private wealth management division, UBS brokers sold investors on its YES Strategy. These registered representatives made a lot of money from commissions and other fees.

If you suffered losses from UBS YES and Frederick Kort or any other UBS broker was your registered representative, contact SSEK Law Firm today to request your free, no-obligation case consultation. One of our UBS YES Strategy fraud attorneys can help you determine whether you have grounds for a claim to recover damages.