Harvest Volatility Management’s CYES Investments Prove Too Risky For Many Investors During COVID-19

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. 

Unfortunately for many CYES Strategy investors, even prior to COVID-19 and the resulting market drops, they were already grappling with losses from the huge market plunge of December 2018 that back then was considered the worst turbulence has seen in years. Now, many investors are finding that those losses were just the beginning. 

CYES Strategy Investments Are Riskier Than YES Strategy Investments 

There are Yield Enhancement Strategy Investments (YES Strategy) and there are CYES Strategy investments. YES Strategy investments are also sold by brokerage firms including UBS, Credit Suisse (CS), Bank of America’s Merrill Lynch (BAC), and others. They are marketed as low-risk ways to obtain secure returns for conservative portfolios. 

With YES Strategy Investments, small returns are supposed to come through the selling and buying of two index options spreads. This is true in calmer market waters, but that is most certainly not the case right now. CYES Strategy investments, meanwhile, are even risker. This is because they use four options on the same index that, along with its iron condor approach, can place investors in a position of risking their entire capital when the markets are rough. 

Harvest Volatility Management CYES Strategy Investors Have Been Blindsided by Losses

Unfortunately, misrepresentations and omissions were made when stockbrokers sold their customers on CYES Strategy Investments. Many investors were surprised to find out what they thought were low-risk investments that could help them make money are now costing them huge losses. 

Some of these investors should have never been sold these investments in the beginning as they were never suitable for their portfolios, risk tolerance levels and investment goals. Already, unsuitability and failure to disclose the risks complaints have been made against the brokerage firms whose registered representatives sold these investments. 

Unfortunately, even after the market volatility of December 2018, broker-dealers continued to sell YES Strategy and CYES Strategy investments to customers. One reason for this is that they practically guaranteed returns and commissions for the firms and stockbrokers that sold them. 

CYES Strategy Investor Fraud Law Firm 

These negligent actions by brokers and their broker-dealers are now proving to be even more harmful as investors are left even more vulnerable to the economic fallout from COVID-19. If you have invested in these investments with Harvest Volatility Management, contact our broker fraud lawyers at SSEK Law Firm today. We provide you with a free no-obligation case consultation with one of our CYES Strategy investment fraud attorneys.