The cause of action in both arbitration cases arose out of investments in UBS’s Yield Enhancement Strategy (“YES”), a complex and highly risky options strategy.

Customers across the country have filed securities arbitration claims against UBS, alleging that the brokerage firm misrepresented the options strategy as a safe way to obtain marginally higher yield on a portfolio of securities. In actuality, the complexity and nature of YES exposed customers to a significant risk of loss. Customers have also alleged that UBS and its team of options traders conducted the YES program with virtually no supervision or compliance oversight and with inadequate risk controls.

These awards represent the fourth and fifth wins for UBS YES customers in 2021 and the sixth award since December 2020. Last month, on August 23, 2021, a FINRA arbitration panel in Baltimore, Maryland, awarded UBS YES customers over $405,000 in compensatory damages ($300,000), costs ($30,000), and attorneys’ fees ($75,000). On March 31, 2021, a FINRA arbitration panel in Columbus, Ohio, ordered UBS to pay customers over $372,000 in compensatory damages and fees. Earlier in the month, on March 5, 2021, another FINRA arbitration panel in Denver, Colorado, ordered UBS to pay customers over $1 million in compensatory damages. In December 2020, a FINRA arbitration panel in Boca Raton, Florida, awarded a customer nearly $90,000.

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 (646) 330-4624.

UBS’s Yield Enhancement Strategy

UBS’s Yield Enhancement Strategy 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’s 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.

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 (646) 330-4624 for a free and confidential review of your account.

Robinhood’s latest public filing discloses that Robinhood continues to face regulatory, legal, and reputational backlash for its past business practices.

The filing also discloses that the SEC and Financial Industry Regulatory Authority (“FINRA”) are investigating whether any Robinhood employees traded “meme stocks,” including GameStop Corp. and AMC Entertainment Holdings, Inc., before the public announcement that Robinhood would impose trading restrictions on those securities on January 28, 2021.

Robinhood is already facing regulatory investigations and litigation, including securities arbitrations, related to its decision to place trading restrictions on “meme stocks,” such as GameStop (NYSE: GME), AMC (NYSE: AMC), Blackberry (NYSE: BB), Nokia (NYSE: NOK), Koss Corporation (NYSE: KOSS), and Express, Inc. (NYSE: EXPR), on January 28, 2021.

Robinhood is also facing regulatory investigations and customer arbitration disputes related to its options trading approval process.

Iorio Altamirano LLP, a securities arbitration law firm in New York, is filing claims on behalf of Robinhood customers who suffered harmed due to the January 2021 trading restrictions or who were approved to trade options by Robinhood but did not satisfy eligibility requirements. For more about the investigations, click on the following links:

Iorio Altamirano LLP Investigating Robinhood for January 2021 Trading Restrictions

Investor Alert: Iorio Altamirano LLP Investigates Robinhood for Failing to Exercise Due Diligence Before Approving Options Accounts

January 2021 Trading Restrictions

Robinhood and its Co-Founder and CEO, Vladimir Tenev, among others, have received requests for information, and in some cases, subpoenas and requests for testimony, related to investigations and examinations of the early 2021 trading restrictions from the United States Attorney’s Office for the Northern District of California (“USAO”), the U.S. Department of Justice, Antitrust Division, the SEC staff, FINRA, the New York Attorney General’s Office, other state attorneys general offices and several state securities regulators. Also, a related search warrant was executed by the USAO to obtain Mr. Tenev’s cell phone.

Robinhood has also received inquiries from the SEC’s Division of Examinations and FINRA related to employee trading in certain securities that were subject to Robinhood’s trading restrictions on January 28, 2021, including GameStop Corp. and AMC Entertainment Holdings, Inc. According to the public filing, the regulatory probes relate to whether any employee executed trades in the subject securities in advance of the public announcement of the early 2021 trading restrictions on January 28, 2021.

In addition, Robinhood has received information and testimony requests from certain committees and members of the U.S. Congress, and Mr. Tenev, among others, has provided or will provide testimony concerning the January 2021 trading restrictions.

Many individual retail investors felt cheated and wronged when Robinhood restricted customers from purchasing specific securities on January 28, 2021, and are filing lawsuits in the form of securities arbitration complaints and class actions to recover losses.

Robinhood’s public filing also discloses that approximately 50 putative class actions have been filed relating to the early 2021 trading restrictions. The public filing does not disclose the number of FINRA arbitrations that customers have filed, but upon information and belief, dozens, perhaps hundreds, of claims have been filed.

Recently, a 26-year-old truck driver from Connecticut, represented by Iorio Altamirano LLP, filed a securities arbitration claim alleging that Robinhood’s decision to halt the purchase of securities by retail investors caused the share prices of the publicly traded companies to fall, resulting in losses.

Options Trading Approval Process

On June 30, 2021, FINRA and Robinhood entered into a Letter of Acceptance, Waiver, and Consent, whereby Robinhood consented to pay the largest financial penalty ever levied by FINRA, $70 million, for alleged systemic supervisory failures and significant harm suffered by millions of customers. Among those supervisory failures was the firm’s failure to exercise due diligence before approving options accounts.

The latest SEC filing includes the disclosure of several regulatory investigations and enforcement actions related to Robinhood’s options trading approval process.

First, the filing discloses that the SEC is conducting an examination, and FINRA and certain state regulatory authorities are conducting investigations regarding Robinhood’s options trading and related customer communications and displays. The SEC, FINRA, and state regulatory authorities are reviewing, among other things, how Robinhood displays cash and buying power to customers and its options trading approval processes.

Second, the filing discloses that on February 8, 2021, the family of Alexander Kearns, a Robinhood customer who traded options, filed a lawsuit in the Superior Court of the State of California, County of Santa Clara, against RHF, RHS, and RHM in connection with Mr. Kearns’s death by suicide in June 2020. The lawsuit asserts claims for wrongful death, negligent infliction of emotional distress, and unfair business practices under a California statute, and seeks damages and other relief.

Third, the Amendment to the Form S-1 discloses that on December 16, 2020, the Enforcement Section of the Massachusetts Securities Division filed an administrative complaint against Robinhood. The Complaint alleges three counts of Massachusetts securities law violations regarding unethical and dishonest conduct or practices, failure to supervise, and failure to act in accordance with the Massachusetts fiduciary duty standard. Among other things, the Massachusetts Securities Division alleged that Robinhood’s product features and marketing strategies, outages, and options trading approval process constitute violations of Massachusetts securities laws.

Finally, the public filing discloses that Robinhood is engaged in discussions with FINRA regarding a possible negotiated resolution of certain FINRA matters, including options trading and related customer communications and displays noted above.

Recently, a 36-year-old nightclub doorman, represented by Iorio Altamirano LLP, filed a securities arbitration claim alleging that he suffered losses as a result of Robinhood’s failure to exercise due diligence before approving his options trading account, a direct result of Robinhood’s overreliance on technology and its failure to supervise the operation and maintenance of its technology.

Iorio Altamirano LLP

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY, representing investors in securities arbitrations against Robinhood.

Iorio Altamirano LLP pursues individual FINRA arbitration claims nationwide on behalf of investors to recover financial losses from brokerage firms’ wrongful conduct.

Customers of Robinhood who suffered losses as a result of trading restrictions placed on or about January 28, 2021, or due to options trading are encouraged to contact Iorio Altamirano LLP using the following form for a free and confidential consultation. Iorio Altamirano LLP can review and analyze potential claims and advise individuals of their legal rights without obligation or cost.

Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.

This order is the third arbitration award against UBS in 2021 concerning YES and the fourth since December 2020. On March 31, 2021, a FINRA arbitration panel in Columbus, Ohio, ordered UBS to pay customers over $372,000 in compensatory damages and fees. Earlier in the month, on March 5, 2021, another FINRA arbitration panel in Denver, Colorado, ordered UBS to pay customers over $1 million in compensatory damages. In December 2020, a FINRA arbitration panel in Boca Raton, Florida, awarded a customer nearly $90,000.

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 (646) 330-4624.

UBS’s Yield Enhancement Strategy

UBS’s Yield Enhancement Strategy 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’s 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.

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 (646) 330-4624 for a free and confidential review of your account.

The public filing also revealed that the firm has experienced rapid growth and became profitable in 2020. In 2020, Robinhood generated net income of $7.45 million on net revenue of $959 million, compared with 2019, when the firm lost $107 million on $278 million in revenue.

Robinhood’s also disclosed the following information:

• $522 million Q1 2021 Revenue
• 18 million Accounts (net cumulative funded accounts)
• 7 million monthly active users
• $81 million assets under custody
• >50% of Robinhood’s customers are first-time investors.
• $30 million was paid in compensation to Chief Legal Officer Daniel Gallagher in 2020 (former SEC Commissioner).
• 31 years old is the median age of Robinhood’s customers.
• 81% of Robinhood’s revenue in Q1 2021 was from market makers, which routed customers’ stock, option, and cryptocurrency trades, in a practice known as “payment for order flow.”
• Citadel Securities LLC, Robinhood’s largest market maker, accounted for 27% of Robinhood’s $420 million in transaction-based revenue in Q1 2021, or over $113 million.

Robinhood’s filing also reveals that it is still dealing with customer-service, regulatory, and legal fall out from its decision to place trading restrictions on “meme stocks,” such as GameStop (NYSE: GME), AMC (NYSE: AMC), Blackberry (NYSE: BB), Nokia (NYSE: NOK), Koss Corporation (NYSE: KOSS), and Express, Inc. (NYSE: EXPR), on January 28, 2021.

Customer-Service Fallout

In the first quarter of 2021, roughly 206,000 Robinhood accounts that held $4.1 billion, or about 5% of the company’s assets under custody, were transferred to other brokerage firms. In 2020, the firm only received an average of 22,000 transfer requests per quarter.

Regulatory Fallout

The filing also disclosed that its recent $70 million settlement with FINRA did not address all matters that FINRA is investigating, including those related to the early 2021 trading restrictions. FINRA is also investigating conduct related to account takeovers, customer support procedures, and customer arbitration agreements.

Separately, Robinhood’s filing discloses that the SEC Examination Division conducted an examination that identified deficiencies related to processes for approving or rejecting certain accounts for options trading.

Iorio Altamirano LLP, a securities arbitration law firm in New York, is investigating claims on behalf of Robinhood customers who were approved to trade options by Robinhood but did not satisfy eligibility requirements. For more about the investigation, click on the following link:

Investor Alert: Iorio Altamirano LLP Investigates Robinhood for Failing to Exercise Due Diligence Before Approving Options Accounts

Robinhood also disclosed that the SEC’s examination identified deficiencies in other areas, including account takeovers, identity theft in connection with new account opening, and customer support response times.

Several state regulatory authorities are also conducting investigations regarding Robinhood’s options trading and related customer communications and displays.

Legal Fallout

Many individual retail investors felt cheated and wronged when Robinhood restricted customers from purchasing specific securities on January 28, 2021, and are filing lawsuits in the form of securities arbitration complaints and class actions to recover losses.

Robinhood’s public filing also discloses that approximately 50 putative class actions have been filed relating to the early 2021 trading restrictions. The public filing does not disclose the number of FINRA arbitrations that customers have filed, but upon information and belief, dozens, perhaps hundreds, of claims have been filed.

Recently, a 26-year-old truck driver from Connecticut, represented by Iorio Altamirano LLP, filed a securities arbitration claim alleging that Robinhood’s decision to halt the purchase of securities by retail investors caused the share prices of the publicly traded companies to fall, resulting in losses.

Iorio Altamirano LLP

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY, representing investors in securities arbitrations against Robinhood.

Iorio Altamirano LLP pursues individual FINRA arbitration claims nationwide on behalf of investors to recover financial losses from brokerage firms’ wrongful conduct.

Iorio Altamirano LLP is a bilingual law firm, fluent in both English and Spanish.

See Also:

Breaking News: Robinhood Ordered to Pay $70 Million, the Largest Financial Penalty Ever Ordered by FINRA

John Griner was registered with Morgan Stanley in Athens, Georgia from March 2011, until his employment was terminated in October 2019. Morgan Stanley allowed Mr. Griner to voluntarily resign after allegations arose concerning whether certain options trades were properly confirmed with the client before they were placed.

If you have suffered financial losses investing with John Griner or suspect that Ms. Griner did not have your best interest in mind when recommending investments, contact New York securities arbitration law firm Iorio Altamirano LLP for a free and confidential review of your account.

Iorio Altamirano LLP represents investors that have disputes with their financial advisors or brokerage firms, such as Morgan Stanley.

FINRA Letter of Acceptance, Waiver, and Consent No. 2019064538201

John Griner and FINRA entered into a Letter of Acceptance, Waiver, and Consent (“AWC”) on January 7, 2021, over allegations related to Mr. Griner’s conduct between May 2017 and September 2019. FINRA alleged that Mr. Griner exercised discretion without written authorization in four customer accounts, in violation of NASD Rule 2510(b) and FINRA Rules 3260(b) and 2010. Specifically, FINRA alleged that Mr. Griner effected multiple trades in four customers’ accounts without first speaking with the customers on the days he effected these trades.

Under FINRA rules, to exercise discretionary power, a broker must have prior written authorization from a customer before executing a trade. FINRA rules require that a customer sign a discretionary disclosure, which allows the customer to place limits on the discretion being granted to the broker. Additionally, the firm must approve the account to be discretionary. A broker can then use his discretion and place trades without obtaining the customer’s authorization first. A discretionary account is often referred to as a “managed” account. However, without such written authorization by the customer and firm approval, a broker who receives verbal authorization from a client to execute a trade and makes the transaction violates FINRA rules. Oral permission to execute a trade is not sufficient.

In non-discretionary accounts, customers retain discretion, and brokers must always obtain their customer’s permission before placing a trade. You can read more about unauthorized trading in the context of both discretionary and non-discretionary accounts here: Unauthorized Trading.

Morgan Stanley – A Duty to Supervise

Financial institutions, like Morgan Stanley, must properly supervise financial advisors and customer accounts. Brokerage firms are required to establish and maintain a reasonably designed system to oversee account activity, such as the improper use of discretion, to ensure compliance with securities laws and industry regulations. When a brokerage firm fails to supervise its financial advisors or the investment account activity sufficiently, it may be liable for investment losses sustained by customers.

How to Recover Financial Losses or Obtain a Free Consultation

If you have lost money with financial advisor John Griner or Morgan Stanley, contact New York securities arbitration attorney August Iorio of Iorio Altamirano LLP. August Iorio can be reached at august@ia-law.com or toll-free at (646) 330-4624 for a free and confidential evaluation of your account.

Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. Iorio Altamirano LLP pursues FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by stockbrokers and brokerage firms.