INVESTOR ALERT—Recovery Options For Investors Who Lost Money In The UBS Yield Enhancement Strategy (“YES”)

• March 11, 2019
• UBS Financial Services, Inc.

The Wolper Law Firm is currently investigating potential claims against UBS Financial Services, Inc. in relation to its marketing and implementation of an options based “Yield Enhancement Strategy”, or “YES,” in customer accounts.

What is the UBS Yield Enhancement Strategy?

The UBS Yield Enhancement Strategy is an options strategy that was marketed by UBS as a safe method to generate supplemental portfolio income.  The UBS Yield Enhancement Strategy involves the use of an “Iron Condor” options strategy, which entails selling both near-the money and out-of-the money put and call options against the S&P 500 index.  In a stabilized market environment, some or all of the options will expire and the investor collects the premiums. 

Conversely, in a volatile market, which we have experienced in recent months, the options get exercised.  If the options get exercised and the strategy is not properly hedged, investors may experience substantial portfolio losses.  In addition, because the iron condor strategy involves leverage and short options positions, the losses become amplified. 

How did UBS market the UBS Yield Enhancement Strategy?

In today’s current interest rate environment, it has been difficult for investors to identify short-term, fixed income investments that generate a stable, predictable income stream.  In the absence of such opportunities, many UBS Financial Advisors pitched the UBS Yield Enhancement Strategy as a safe method to generate portfolio income in substitution of traditional strategies.  UBS Financial Advisors represented to customers that the strategy was properly hedged such that even if there were market movements, the investor’s principal was protected.  In other words, the UBS Yield Enhancement Strategy was represented to be a relatively conservative investment strategy.

How do I know if I have a claim to recover my investment losses in the UBS Yield Enhancement Strategy?

Financial advisors have a legal and regulatory obligation to recommend only suitable investments and investment strategies that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients.  To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.  

If your Financial Advisor failed to disclose the risks associated with the UBS Yield Enhancement Strategy, or otherwise “soft-peddled” the risks, this may provide the factual basis for a claim of misrepresentation, omission or breach of fiduciary duty. 

If you are an investor in the UBS Yield Enhancement Strategy, and are looking for an attorney to evaluate your legal options, contact the securities litigation and arbitration attorneys at the Wolper Law Firm, P.A. for a free consultation.

The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis.  Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities.  Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters.  We can be reached at 800.931.8452 or by email at mwolper@wolperlawfirm.com.