Ubs Ordered to Pay $1 Million to Yield Enhancement Strategy (yes) Customers

On March 5, 2021, a FINRA Dispute Resolution Services arbitration panel in Denver, Colorado, ordered UBS Financial Services, Inc. (“UBS”) to pay customers over $1 million in compensatory damages. The claims, which include breach of duty, violations of the Nebraska Securities Act, and professional negligence arising out of broker Jason Dworak’s recommendations concerning the UBS Yield Enhancement Strategy (“YES”). The arbitration panel also awarded prejudgment interest to the customers.

The $1 million judgment is the second arbitration award against UBS within a matter of months. In December 2020, a FINRA arbitration panel in Boca Raton, Florida, awarded a customer nearly $90,000. The Florida arbitration panel concluded that the UBS YES was not suitable for the investor, Gerald S. Backman, a retired partner at corporate law firm Weil Gotshal & Manges.

UBS has faced numerous lawsuits from customers in the form of FINRA securities arbitrations related to YES, a complex managed options strategy that UBS marketed as safe and market-neutral. The customers have claimed that the strategy was not suitable for them and that UBS materially misrepresented and omitted the risks of the strategy.

Investors who have suffered investment losses due to UBS’s Yield Enhancement Strategy should contact experienced securities arbitration attorneys at Iorio Altamirano LLP for a free and confidential case evaluation. Partner August Iorio, who has been investigating YES for over two years, can be reached at august@ia-law.com or toll-free at (855) 430-4010.

UBS’s Yield Enhancement Strategy

UBS’s Yield Enhancement Strategy, or YES, is a complex managed options strategy that UBS marketed as a safe, market-neutral overlay that would provide incremental returns to an investor’s portfolio.

UBS brokers sold this product to customers across the country. It is believed that nearly 1,500 customers chose to follow their financial advisors’ recommendations and implement this strategy. The strategy reportedly had approximately $6 billion assets under management. According to public disclosure records, the following UBS brokers have been the subject of complaints arising out of their recommendations concerning YES:

• Matt Buchsbaum (CRD No. 2220565)
• William Montgomery Cerf (Monty Cerf) (CRD No. 2269462)
• Lance Cholet (CRD No. 3239588)
• James Coan (CRD No. 2230856)
• Gabriel Cooperman (CRD No. 5542753)
• Timothy Croak (CRD No. 840899)
• Richard (Ricky) Dellarusso (CRD No. 1976256)
• Nicholas Finn (CRD No. 2295090)

Unfortunately, many UBS financial advisors did not adequately understand the product and failed to disclose the risk associated with YES. Investors have complained that they were misled and that their financial advisors never discussed the downside risk associated with implementing the strategy.

The strategy, which involved several options trades and borrowing, has sustained significant losses when the stock and bond markets saw an increase in volatility beginning in early 2018. It is believed that investors have suffered at least $75 million in losses, likely significantly more.

UBS Yield Enhancement Strategy: How to Recover Losses

When an investor suffers investment losses due to misconduct by a financial advisor or broker-dealer, the investor can file a securities arbitration claim against their financial advisor and/or broker-dealer in an effort to be compensated. The case will be presented and defended in a FINRA arbitration proceeding to a panel of arbitrators.

Securities arbitration is a unique and complex practice area. Investors should seek out experienced counsel who can navigate the arbitration process and effectively advocate on their behalf.

Iorio Altamirano LLP is a securities arbitration law firm located in the heart of New York City. Iorio Altamirano LLP represents investors nationwide who have suffered investment losses due to securities fraud.

We have nearly 20 years of combined experience as securities arbitration lawyers and have helped investors recover investment losses in over 1000 cases.

If you suffered losses from investing in UBS’s Yield Enhancement Strategy, contact New York securities arbitration lawyer August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (855) 430-4010 for a free and confidential review of your account.