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UBS YES Strategy Lawsuits and Damages Skyrocket

April 28, 2021 In The News

Have You Suffered Losses with the UBS YES Strategy? UBS Is Currently Facing Multiple Investor Fraud Claims Related to Its Yield Enhancement Strategy.

Like most large investment brokerage firms, UBS has faced its fair share of scrutiny in recent years. While the firm has been the subject of investigations targeting a broad spectrum of allegations, since 2018, much of the focus has been on its brokers’ sales practices related to the UBS YES strategy.

Trading board is showing a crash in stock exchange market.

Did You Lose Money Investing in the YES Strategy with UBS?

UBS began promoting its yield enhancement strategy (YES) in 2015. In doing so, it primarily targeted wealthy investors, promising to provide diversification and stable returns through an innovative options strategy.

Essentially, how the YES strategy works at UBS is that it involves a bet that the market will neither rise above nor dip below a specified threshold. As long as the market stays in this narrow band for a long enough period, then investors can collect a profit (in the form of an “option premium”)—and they can do this over and over again to consistently generate returns regardless of whether the market fluctuates slightly up or slightly down.

For most investors, this worked until 2018.

Then, the market crashed. Suddenly, the stability that is essential to the success of the UBS YES strategy was gone. Yet, UBS’ brokers continued to push the strategy, and its wealthy investors continued to lose money while the firm continued to generate fees on every option sale. With the turmoil of 2020, many of UBS’ wealthy investors are now millions of dollars in the hole.

Spring 2021 Sees Increase in Damages Awarded to UBS YES Investors

YES investors had been successful in winning FINRA arbitration cases for YES losses, but the tides changed even more in favor of investors beginning in December 2020 with Boca Raton UBS investor recovering $90,000 in damages from UBS.

Since then, claims have increased against UBS — as have the damages recovered by YES investors. Over the past few weeks:

  • An Ohio lawsuit awarded UBS YES investors approximately $371,000 in compensatory damages.
  • In Nebraska, nearly $1 million was awarded to investors suffering YES losses.

With an uptick in awards being granted to investors, now is the time to pursue your lawsuit against UBS.

Our Lawyers are Actively Pursuing Fraud Claims Against UBS Related to Its YES Strategy

At Zamansky LLC, we are actively representing dozens of investors who have lost well over $120 million due to investing in the UBS YES strategy. We are pursuing these lawsuits in FINRA arbitration—a forum explicitly designated for investors who have fraud claims against their brokers and brokerage firms. Our investigations have revealed that UBS’ brokers knowingly misled investors about the YES strategy, inflating the upside while obscuring the details of the substantial risks involved.

Under the Securities Act of 1933 and the Securities Exchange Act of 1934, brokers and brokerage firms owe various legal duties to their clients. These include an obligation to provide their clients with complete and accurate information about the investment products they recommend. In many cases, it appears that not only did UBS’ brokers conceal the risks of the YES strategy, but they also failed to adequately disclose its fee structure—which allowed for substantial commissions regardless of how clients’ YES investments performed.

Breaking Down Unsuitability in YES Claims

Financial advisors at firms like UBS have a legal duty to provide suitable investment advice. This means that they must provide recommendations that reflect individual investors’ portfolio values, risk tolerances and other personal characteristics.

Providing unsuitable investment advice for any reason is grounds to pursue a claim in FINRA arbitration. With regard to the UBS YES strategy, our investigations have revealed that the firm’s advisors provided unsuitable recommendations for two primary reasons:

  • The investors did not adequately understand the UBS yield enhancement strategy and thus were not able to advise their clients effectively; and,
  • Due to the nature of the UBS YES strategy, the brokers and advisors were able to earn commissions regardless of the strategy’s performance in investors’ portfolios.

As a result of receiving unsuitable advice, UBS YES strategy investors did not adequately understand the downside risk associated with the strategy. They put their trust in their advisors – as they were entitled to do – and they suffered unnecessary losses as a result.

Talk to a Securities Fraud Lawyer About Your UBS Yes Strategy Losses

If you have lost money investing in the yield enhancement strategy at UBS, our lawyers can seek to recover your losses in FINRA arbitration. For more information, call us at 212-742-1414 or tell us how we can reach you online today.