Zamansky, LLC: Protecting Clients with Yield Enhancement Strategy Losses
Investors and those who follow financial news may have become aware of the increase in lawsuits forming against UBS, Merrill Lynch, Credit Suisse and other brokerage and advisory firms. Backlash against these companies is escalating due to the sale of yield enhancement strategies (YES). Promised to be a reliable investment options, the reality is that more investors should have said NO to the YES option. Zamansky LLC, a NY-based securities fraud law firm, was recently highlighted in a Wall Street Journal article due to their representation of one of the many investors facing a YES loss.
Understanding the YES Investment Option and How it Fails
Companies like UBS marker the YES option as a safe investment with stable returns. Market volatility, however, can have devastating consequences on these investments, and the investor incurs substantial losses. As Zamansky’s website explains:
A “yield enhancement strategy” is a method of investing which involves buying options with strike prices at the top and bottom of a specified range. If the price of the underlying asset or index (most commonly, the S&P 500 index) remains within this range during the option period, then the options expire and the investor is entitled to an option premium. However, if the price does not remain within this range, an investor can lose his or her entire investment.
Investment analysts estimate that YES options have caused over $60 million in losses for clients of UBS and other firms.
Putting a Face to YES Losses
The Wall Street Journal article revealed that yield enhancement strategies are often sold to wealthier clients–such as those with a net worth of $5 million or more. Zamansky’s client, Ms Sherrie Pellini, had invested $3 million in a UBS YES option but faced a $750,000 loss. As the 60 year old was trying to support her 3 children and a mother, she had hoped for a lengthy and solid investment. Instead, she was offered the risky investment option with no warning as to the potential dangers. Zamansky has filed an arbitration against UBS on behalf of Ms. Pellini as her broker had boasted that YES investment had a “17 year history with no losses.”
Ms. Pellini’s broker denied to provide a comment as did the majority of other UBS representatives and employees contacted by the Wall Street Journal. UBS only provided a quote that said that the clients signed a document indicating that “significant” market activity could cause a loss.
Are You Facing a Yield Enhancement Strategy Loss? Contact Zamansky, LLC Today for a Free Consultation.
Over 2 dozen complaints have already been made by investors facing failed YES investments. If you would like more information about how our attorneys may be able to help you recover your losses from a yield enhancement strategy, iron condor or collateral yield enhancement strategy, we encourage you to contact our investment fraud law firm. Call (212) 742-1414 or complete our confidential contact form.