SSEK Law Firm Wins UBS YES Award for North Carolina Couple

Third Yield Enhancement Strategy Investors Award for Seasoned Securities Fraud Law Firm

Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) is thrilled to announce that on September 1, 2022, a Financial Industry Regulatory Authority (FINRA) arbitration panel ordered UBS Financial Services (UBS) to pay $468,126 to two customers and their trust over losses they sustained in the firm’s UBS Yield Enhancement Strategy program. The award was a unanimous ruling by three FINRA arbitrators. It was a full recovery for the investors, including more than $343,000 in compensatory damages, more than $100,000 in legal fees, and over $24,000 in costs.

On September 2, 2022, InvestmentNews reported on SSEK Law Firm’s win against UBS and interviewed our Managing Partner Sam Edwards. This is our firm’s third UBS YES loss attorneys’ arbitration award that we’ve won for investors who were never fully apprised of the risks involved in the firm’s options overlay strategy, experiencing securities fraud. Our securities attorneys’ earlier wins were a $400K Yield Enhancement Strategy award on behalf of Maryland investors and another award on behalf of a Texas investor.

Why UBS YES Investors Have Suffered Such Big Losses

UBS YES was sold to many of the firm’s high net worth investors as a way to provide “incremental income” on an existing portfolio. YES is an “options overlay strategy” that involves borrowing against an existing portfolio to buy and sell S&P options. YES was advertised as a traditional “iron condor” options strategy that provided significant protection against any losses while increasing the yield on investments during times of low market volatility. YES, however, was not a traditional iron condor options strategy, but rather, a high-risk and leveraged bet on the stock market, very different than how it was marketed.

UBS downplayed or omitted many of the known risks of YES when marketing the program to investors.

At its highest point, the UBS YES team managed almost $6 billion in customer “mandates” and sometimes risked more than $1 billion in daily losses. The real risks of the UBS YES program began to materialize in 2018, culminating in a huge loss in December 2018 alone. The following year, YES lost more money, and in 2020, during the pandemic, YES suffered another catastrophic loss.

Customer losses in YES have now exceeded $1 billion. Meanwhile, UBS Financial and its brokers were charging as much as 1.75% in yearly fees on the total amount of an investor’s YES borrowings regardless of how much of their money was being used by the brokerage firm. The broker-dealer and its wealth management team were earning nearly $100 million a year from this program, even while UBS YES customers were losing almost 20% in one year.

While still technically in existence, after losing money for three straight years and in three different markets, the UBS YES program has fallen from $6 billion in assets under management to less than $700 million, an almost 90% reduction.

In 2022, UBS reached a settlement with the US and Exchange Commission (SEC) in which UBS agreed to pay about $25 million to resolve investor fraud allegations related to YES. The regulator accused the firm of improperly supervising its financial advisors and inadequately training them about this iron condor strategy when YES was first brought onto UBS’s platform. This purportedly contributed to UBS brokers being unable to fully advise clients of the potential risks.

Why You Will Need To Pursue Your UBS YES Losses Through FINRA Arbitration

As a UBS investor, and with any brokerage firm, when you agreed to open a brokerage account with UBS, you signed an agreement in which you consented to resolve any disputes through arbitration and not litigation. Because of this, your UBS YES loss claim will need to be brought through FINRA arbitration before a panel of arbitrators.

You want skilled FINRA attorneys representing you as this is a very specialized process that requires specific knowledge of FINRA and its rules.

Why Retain SSEK Law Firm As Your Securities Attorneys

At SSEK Law Firm, representing investors against an investment firm and advisors is all that we do. Our securities attorneys have over a century of combined experience in securities fraud law and the securities industry, making us uniquely qualified to fight for investors. We have gone up against the largest firms on Wall Street, including UBS, and won hundreds of millions of dollars on behalf of thousands of wronged investors.

Call (800) 259-9010 today.