BALTIMORE, June 16, 2020 (GLOBE NEWSWIRE) -- Lawyers with Shepherd, Smith, Edwards, & Kantas (SSEK Law Firm) recently filed a Financial Industry Regulatory Authority (FINRA) arbitration claim against UBS Financial Services, Inc. (UBS) on behalf of a retired couple who sustained losses in excess of $800,000 as a result of investing in UBS’s Yield Enhancement Strategy (YES).
According to the claim, Claimants were told the YES program was a way for them to gain a marginally higher yield on their existing portfolio without having to change their investments and while taking on limited risk. However, the UBS YES Strategy is, according to the claim, far riskier than advertised. To produce the marginal additional yield, YES uses an aggressive investment strategy with an undisclosed high degree of leverage. Specifically, YES involves a complex options overlay strategy, known as an iron condor, which is highly susceptible to large losses during times of market volatility.
According to the claim, UBS and its options traders ran the YES program with virtually no compliance oversight and inadequate risk controls. Although the firm’s marketing materials touted the UBS YES program as a diversification using a market neutral strategy, the claim SSEK filed alleges these supposed benefits are false as evidenced by the extreme UBS YES program losses during recent market volatility. Additionally, since the losses sustained are in options with a limited holding period, there is no chance for YES investors to recover these losses in most cases. This contradicts the UBS’s misleading claim that losses will be recovered when markets normalize.
Also, SSEK Law firm has learned UBS makes it difficult for investors to leave the YES program. Even though securities bought as part of the program are liquid, the firm only permits customers to put in an exit order during a certain window but doesn’t make the trades until later. This leaves customers without knowing what their exit price would be, which is further discouragement from exiting.
If you or your loved ones are or were a client of UBS or any other brokerage firm that marketed a Yield Enhancement Strategy and suffered significant losses, contact SSEK Law Firm today for a free, no obligation evaluation of your account.
Contact Info – (800) 259-9010
Sam Edwards: sedwards@sseklaw.com
Kirk Smith: ksmith@sseklaw.com