UBS, Credit Suisse and Other Wall Street Firms Continue to Face Scrutiny for Yield Enhancement Strategy (YES) Investments Sold to Individual Investors


Similar to all other consumer industries, there are fads in the retail investment market. One recent fad promoted by big Wall Street banks like UBS and Credit Suisse is the “yield enhancement strategy,” also known by the acronym, “YES.” Despite its catchy name, and despite being pitched as a low-risk alternative to traditional investing, the reality is that these extraordinarily-complex investment structures can result – and have already resulted – in substantial losses for uninformed investors.

As a result of the risks associated with yield enhancement strategies, UBS, Credit Suisse and other Wall Street banks are currently facing scrutiny for pitching these investments to individual investors. At Zamansky, LLC, we are actively pursuing arbitration claims against these banks on behalf of multiple clients. These arbitration claims, which have been filed with the Financial Industry Regulatory Authority (FINRA), allege that investors are losing substantial sums as a result of relying on self-interested and unsuitable advice from their Wall Street brokers.

The Fine Print Couldn’t Protect Investors from Yield Enhancement Strategy Losses

Of course, the banks selling yield enhancement strategies have attempted to cover themselves by including warnings and disclaimers in the fine print of their investment presentations. For example, the fine print we reviewed in one case warns:

“Significant market moves either up or down may result in losses. . . . Selling options involves a high degree of risk and is not suitable for all investors. . . . Suitability requirements include financial sophistication and the ability to withstand losses. During periods of high volatility positions may be adjusted, at our discretion, to seek to provide additional protection or to increase returns. This could potentially result in the realization of additional losses.”

In other words, these banks know they are pitching investments that are not suitable for unsophisticated investors and that carry a “high degree of risk.” They are also reserving the discretion to enter into transactions that “could potentially result in the realization of additional losses.” The fact that these admonitions are contained in marketing materials pitching YES strategies to individual investors says it all: These banks know what they are doing is dangerous, and yet they are aggressively pushing these strategies on unsuspecting investors.

If these investments are so risky, why are UBS, Credit Suisse and other Wall Street banks pushing them? The answer is simple: They generate substantial fees and commissions. With each individual yield enhancement strategy investment involving multiple fee-generating call and put options, brokerage firms stand to benefit regardless of the outcome for individual investors. Do you trust your brokerage firm? If you have suffered losses in YES investments, the answers should be, “No.”

Speak With an Investment Fraud Lawyer at Zamansky, LLC

If you have lost money as a result of investing in a yield enhancement strategy, we encourage you to contact us for a free consultation about your legal rights. To find out if you are eligible to recover your YES losses, call 212-742-1414 or request an appointment online now.