FINRA Arbitration Ruling Grants Largest UBS YES Award to Date
A Financial Industry Regulatory Authority (FINRA) arbitration panel has awarded a deceased investor’s family trusts $1.857M in their securities case against UBS Financial. The broker-dealer had involved the late Irving Siegel’s QTIP Trust and generation-skipping transfer trust in its UBS Yield Enhancement Strategy. This is the largest award to claimants over UBS YES losses to date.
Siegel passed away in 2013. He left the trusts for his family. The trusts accused the broker-dealer of misrepresentation, negligence, and fraud in their investor claim. A FINRA arbitration panel in Boca Raton, Florida, awarded Siegel’s QTIP trust $1.171M and his generation-skipping trust $517K. The rest of the award was for prejudgment interest and other fees.
Our Yield Enhancement Strategy investment attorneys represent investors who have suffered losses after they were unsuitably invested in this high-risk trading strategy. This includes two investors that were already awarded $400K in their UBS YES cases by a FINRA arbitration panel.
Please contact us at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) today so that we can help you explore your legal options.
Trusts Invested $8.5M in the Yield Enhancement Strategy. Yet, Were Unaware of the Real Risks
The Siegel trusts invested $8.5M in the investment strategy sold by UBS Financial. The broker-dealer told them to expect a 2-3% market increase annually. Instead, the Yield Enhancement Strategy suffered a 25% loss.
Not only that, but UBS Financial marketed this strategy, known as the iron condor strategy, as one that was “market neutral” or with “non-directional options.” Investors were told there would be limits on losses and gains.
Instead, market volatility exposed UBS Yield Enhancement Strategy investors to massive losses, which is precisely what happened in December 2018, blindsiding many investors. More losses have occurred since then. Yet UBS Financial continues to manage its Yield Enhancement Strategy for participating customers.
UBS Financial’s Yield Enhancement Strategy is Not Suitable For Many Investors
Marketed and sold to high-net-worth individual investors with a net worth of $5M or more, the UBS Yield Enhancement Strategy depends on call and put options and utilizes margin accounts. This strategy was supposed to enhance yields without overexposing underlying assets.
Considering the expected modest returns of around 4%, the risk/reward ratio was inaccurate given how much UBS Yield Enhancement Strategy investors have lost. Many thought this strategy would allow them to make supplemental retirement income. They did not expect to be filing FINRA arbitration claims requesting millions of dollars in damages.