February 9, 2022 Comments Off on UBS Hit with $1.9 Million in another UBS YES FINRA Suit   Blog, Current Investigations, Securities Fraud

UBS Hit with $1.9 Million in another UBS YES FINRA Suit  

UBS Hit with $1.9 Million in another UBS YES FINRA Suit, featured by Top Securities Fraud Attorneys, The White Law Group

UBS Yield Enhancement Strategy (UBS YES) Recovery of Investment losses 

Have you suffered losses investing in UBS Yield Enhancement Strategy (UBS YES)? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Dispute Resolution Claim against the brokerage firm that sold you the investment.   

 The White Law Group is continuing to investigate securities claims involving the liability that UBS Financial Services may have for improper investment recommendations involving its Yield Enhancement Strategy.   

FINRA Award: UBS to pay Investors $1.9 Million  

This week a Financial Industry Regulatory Authority (FINRA) arbitration panel has again ruled in favor of investors who claim they were improperly placed in the in-house options trading strategy sponsored by UBS.  

This particular claim was brought against UBS in February 2020 accusing the firm of fraud, misrepresentation, unsuitability, breach of fiduciary duty, negligence and failure to supervise, among other violations in connection to their investments in the firm’s Yield Enhancement Strategy, according to a FINRA award document.  

The Yield Enhancement Strategy Program (also known as UBS YES) involves placing several option trades at different strike prices with the same expiration dates and was apparently designed to reduce exposure during market volatility. Unfortunately for UBS YES investors, the program suffered massive losses beginning in December 2018 and has led to a lengthy list of arbitration claims against UBS.  

In this particular suit, the claimants were seeking $2.2 million in compensatory damages, interest, fees, and expenses, as well as punitive damages, according to the award.  

The arbitration panel ordered UBS to pay the claimants close to $1.7 million in compensatory damages, plus pre-judgment interest, expert witness fees and the non-refundable claim filing fee but denied the claimants’ request for punitive damages, as well as UBS’ request for expungements of the two brokers of record.  

UBS YES Strategy – Massive Losses for Investors  

By 2018 the UBS YES strategy had already generated at least $60 million in losses for clients and dozens of customer complaints.   

UBS brokers reportedly marketed the Yield Enhancement Strategy, or YES, to wealthy clients. During times of low market volatility, the strategy generated positive returns, but at the end of the year when market volatility increased, huge losses resulted. According to the Wall Street Journal, because the program used borrowed money, investors had to either add additional money when trades went down or sell their positions at a loss.   

According to UBS marketing materials, the YES Strategy intended to “limit exposure” to extreme market moves, but according to the Wall Street Journal, the strategy had losses of more than13% one day last year.   

The UBS YES strategy typically involved putting on four different options trades relating to an underlying stock index, such as the S&P 500, at different strike prices but with the same expiration date.   

The strike price can be the point at which the owner of a “call” option can buy or the owner of a “put” option can sell the underlying security.   

The sale of short-term, “out-of-the-money” puts and calls on an index such as when the underlying price of the index isn’t at or better than the option’s strike price, was coupled with the purchase of short-term below-market puts and above-market calls on the index to mitigate risk, according to UBS.   

Potential Lawsuits to Recover Investment Losses   

The White Law Group continues its investigation of potential securities fraud lawsuits involving broker dealers who may have unsuitably recommended UBS YES Strategy to investors.   

If you have suffered losses investing in UBS YES Strategy, please contact the securities attorneys at The White Law Group.  For a free consultation, please call the offices at 888-637-5510.   

 The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.   

We represent investors in FINRA arbitration claims in all 50 states. Our attorneys have recovered millions of dollars from many brokerage firms in the past, including UBS Financial Services.   

For more information on The White Law Group, and its representation of investors, please visit www.WhiteSecuritiesLaw.com.   

To learn more about the investigation, please see:  

FINRA Award: UBS to Pay Investors $358,000 for YES Strategy  

UBS Yield Enhancement Strategy | Securities Investigation  

  

   

  

 

 

 

Comments are closed.