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How UBS Clients are Recovering Their Yield Enhancement Strategy (YES) Losses

The UBS yield enhancement strategy (YES) was supposed to afford wealthy investors an opportunity to generate significant returns by betting against market volatility. But, when volatility struck in 2018—and continued into 2020—UBS YES strategy investors found themselves facing substantial losses. Due to the nature of the UBS YES strategy, which involves purchasing multiple uncovered options in a structure known as an “iron condor,” investors had virtually no hope of recovering their losses on the open market.

Fortunately, recovering their losses on the open market is not UBS YES strategy investors’ only option.

Investigations have revealed that UBS misled many investors regarding the firm’s yield enhancement strategy. Not only did UBS and its advisors conceal many of the significant risks associated with the firm’s YES strategy, but they also continued to recommend the strategy knowing that market volatility was imminent. In fact, even as fluctuations began to undermine the very theory on which the UBS yield enhancement strategy was based, advisors still continued to push the strategy on their clients.

Why? Because they profited no matter what.

As originally conceived, the YES strategy from UBS was supposed to be a win-win. Investors could collect option premiums by betting on market stability, and UBS advisors could collect commissions on the multiple options included in each iron condor investment. But, when market stability was no longer a safe bet, the calculus shifted: The UBS YES strategy became a losing proposition for UBS clients, but it remained a profit center for the firm and its advisors.

In this scenario, the right thing to do – and what UBS and its advisors were legally required to do – was to inform investors of the risks of the YES strategy so that they could make informed decisions. Instead, what UBS and its advisors did – and what is now leading to lawsuits against UBS – was to stay the course, continue pushing the UBS YES strategy, and continue collecting commissions at wealthy investors’ expense.

There is No Question that Wealthy UBS Clients Were Misled 

At this point, there is no question that UBS and its advisors misled many of the firm’s wealthy clients into purchasing YES investments. There have been several investigations, and several investors have already recovered their fraudulent investment losses through FINRA arbitration. Our attorneys have obtained marketing materials and other documents which clearly show that UBS pushed the yield enhancement strategy without adequately warning investors of the risks involved.

Not only did UBS withhold material information about its yield enhancement strategy, but the firm’s advisors also pushed the YES strategy from UBS on wealthy investors despite knowing that market volatility threatened the very foundation of the strategy. This occurred in 2018, 2019 and 2020. Volatility that began in late 2018 continued into 2019, and the COVID-19 crisis sent the market into a downward spiral in 2020. In each scenario, the volatility was not only foreseeable—but actually foreseen—by market experts, and yet UBS and its advisors continued to recommend the YES strategy UBS had devised as a way to generate commissions regardless of the performance of investors’ portfolios.

How Can Clients Recover Their UBS YES Investment Losses in FINRA Arbitration?

For wealthy investors who have lost money with the UBS YES strategy, FINRA arbitration provides a venue to seek compensation from the firm. Brokerage firms such as UBS are required to submit to FINRA arbitration for the resolution of investor claims. If a FINRA arbitration proceeding results in an award of damages, the defendant (i.e. UBS) is required to pay the damages awarded within 30 days.

While FINRA arbitration avoids the costs and protracted timeframe of litigating a dispute in federal district court, it still offers a final and legally enforceable resolution. The arbitrator’s (or arbitration panel’s) decision is binding, and it is only subject to appeal on limited grounds. 

Since the statute of limitations for seeking redress through FINRA arbitration is six years from the date of the fraudulent act or omission, all wealthy investors who suffered losses with the UBS yield enhancement strategy in 2018, 2019 and 2020 still have plenty of time to file. However, there can be benefits to filing early, and of course filing sooner rather than later allows aggrieved investors to recover their losses as soon as possible. One December 2020 FINRA arbitration awarded an UBS investor $90,000 in compensation due to a yield enhancement strategy loss. Spring of 2021 has already seen two more successful claims against UBS with damages of $371,000 and nearly $1 million being awarded for YES losses.

Zamansky’s most recent win for YES investors was an award of $358,000 for an UBS yield enhancement strategy investor.

What Should You Do if You are a UBS Yield Enhancement Strategy Investor?

If you invested in the YES strategy UBS and its brokers recommended to wealthy investors—and if you suffered substantial losses as a result—you should consult with an investment fraud attorney promptly. You will need experienced legal counsel to pursue your claim against UBS in FINRA arbitration, and you will specifically want to choose a firm that has already had success pursuing UBS YES strategy fraud claims.

At Zamansky LLC, we have been aggressively pursuing YES strategy fraud claims against UBS on behalf of wealthy investors, many of whom have lost hundreds of thousands or millions of dollars. We have decades of experience representing aggrieved investors in FINRA arbitration, and we have particular experience with claims against UBS. This includes claims involving YES strategy investments, the Puerto Rico bond fraud saga, and other instances of large-scale investment fraud.

Once you engage Zamansky LLC to represent you, our lawyers will thoroughly examine your UBS account statements, and we will pour over all of the documents and communications you have received from UBS and your advisor. We will also use our knowledge gained from prior UBS yield enhancement strategy fraud cases to build a targeted strategy. We will file your claim with FINRA, and then we will shepherd your case through the arbitration process while leveraging the available evidence to negotiate for a favorable settlement on your behalf.

Speak with a Lawyer About Your UBS YES Strategy Losses

If you would like more information about recovering your UBS yield enhancement strategy losses through FINRA arbitration, we encourage you to get in touch. To speak with a senior investment fraud attorney at Zamansky LLC in confidence, please call 212-742-1414 or tell us how we can contact you online today.