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Zamansky LLC Wins $358,000 Arbitration Award for UBS YES Strategy Investor

September 17, 2021 Blog

Our UBS Yes Strategy Lawyers Score a Big Win

On September 15, 2021, our firm succeeded in securing a $358,000 arbitration award on behalf of a UBS yield enhancement strategy (YES) investor. The three-member arbitration panel also ordered UBS to pay more than 90 percent of the fees incurred for the arbitration proceeding. As reported by AdvisorHub, the arbitration decision “is the latest in a long string of claims involving the YES strategy[,] but marks the first time that the claimants have won the full amount of their [compensatory] damage claims.”

Strategic Approach Leads to Full Compensatory Damages Award Against UBS

Crucially, while AdvisorHub notes that UBS has prevailed in eight of the 13 arbitration decisions issued regarding YES strategy claims thus far, the firm’s strategic approach may shift the tides for future cases.  Rather than focus on the “directional” nature of the YES strategy as other firms have done previously, we chose, in this case, to focus on UBS’ lack of risk disclosures in its offering materials. After considering the evidence during seven hearing sessions held over the course of four days in August, the arbitration panel decided that our client was entitled to full compensatory damages, and it refused UBS’ brokers’ requests to have the case expunged from their registration records.

Investors Still Have Time to File Arbitration Claims Against UBS

As AdvisorHub explains, the YES strategy was “designed as a market-neutral strategy that could ‘generate additional cash flow from lower-yielding assets’ through the sale and purchase of S&P 500 index option spreads, according to a UBS marketing brochure.” UBS told investors that the strategy had a “‘defined maximum loss’ that would be limited to premiums paid as well as assured income from collecting premiums for writing options.”

However, UBS’ YES strategy relied on market stability, and, in 2018, the fundamental assumptions underlying the YES strategy failed. By UBS’ own account, investors’ returns dropped by 20% when the S&P 500 tanked in December 2018, and YES strategy investors suffered losses in excess of 40% during the market volatility triggered by the COVID-19 pandemic in 2020.

Despite these losses, our investigations have revealed that UBS brokers continued to recommend the strategy to investors, as the structure of the YES strategy allowed these brokers to earn commissions regardless of the performance of their clients’ portfolios. Our investigations have also revealed that UBS brokers failed to disclose the risks associated with the YES strategy to investors—telling them that they could earn three to four percent annually in “assured income” while omitting the fact that they could lose up to 35 percent of their investment.

We are continuing to represent dozens of investors in YES strategy fraud claims against UBS, and most investors who have not yet filed claims still have time to file. If you believe that you may have a claim, we encourage you to contact us for a complimentary consultation.

Speak with a Lawyer at Zamansky LLC About Filing a UBS YES Strategy Fraud Claim

If you have suffered losses with the UBS YES strategy and would like to speak with a lawyer about filing a claim, please contact us to arrange a confidential initial consultation. Call 212-742-1414 or request an appointment online now.