YES Claimants’ FINRA Arbitration Case Alleged Misrepresentations and Negligence
A Financial Industry Regulatory Authority (FINRA) arbitration panel has awarded two investors $1.2M (plus 6% interest from June 28, 2019, through March 7, 2022) over losses they sustained in the UBS Yield Enhancement Strategy (UBS YES). This options overlay strategy, also known as the iron condor strategy, is exclusive to UBS.
The claimants contend that UBS YES was misrepresented and not in line with their investment goals and risk tolerance level. They accused the broker-dealer of fraud, negligence, breach of fiduciary duty, unsuitability, and other violations.
Our securities attorneys continue to represent investors in their FINRA arbitration claims against UBS Financial. We recently won a $405K arbitration award in Baltimore on behalf of two other investors.
If you suffered losses in the UBS Yield Enhancement Strategy program, contact us today at Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com).
What is the UBS Yield Enhancement Strategy?
For investors, participating in this Yield Enhancement Strategy (YES) is like taking a margin loan on existing holdings. The customer borrows against said holdings at the firm to make options trades. This options overlay strategy involves making several options trades with different strike prices but the same expiration dates.
Supposedly meant to lower exposure during market volatility and marketed as a way to earn supplemental income for retirement, the opposite happened in December 2018 when UBS YES investors lost nearly $700M. Further losses have since occurred.
Investors are saying that they were never fully apprised of all the risks. Dozens of them have since filed FINRA arbitration claims, in which many are reporting millions of dollars in losses.
This is even more troubling when you consider that UBS Financial Services always charged 1.75% in annual fees on the total amount of an investor’s YES borrowings regardless of how much money the firm used. There were also the underlying management fees that Yield Enhancement Strategy investors had to pay. The broker-dealer and its brokers made $100M annually from this program.
Customer losses in UBS Financial Services’ YES strategy have now exceeded $1B. Visit our UBS Yield Enhancement Strategy page for more information.
Skilled UBS YES Investment Attorneys
To schedule your free, no-obligation consultation, call our experienced securities lawyers at SSEK Law Firm today at (800) 259-9010. We have successfully helped other investors recover their UBS YES losses.