Investors Seek Compensation for UBS Yes Strategy Failures

Investors who lost money in UBS's Yes strategy are now seeking compensation for their losses.

The Yes strategy was a high-risk investment product offered by UBS that promised unusually high returns, but ultimately failed to deliver.

Investors were drawn to the strategy's promise of high returns, but many were unaware of the risks involved.

Some investors have reported losses of up to 90% of their initial investments.

UBS Financial Services, Inc. agreed to pay approximately $25 million to settle fraud charges related to their Yield Enhancement Strategy (YES).

The SEC Order noted that from February 2016 through February 2017, UBS marketed and sold the complex options trading strategy to around 600 investors nationwide.

During this time, UBS failed to adequately train or provide the proper oversight for their representatives.

Despite recognizing and documenting the potential risks involved with YES investments, UBS failed to disclose the information to advisors or clients.

As a result, many investors suffered substantial losses after investing in YES.

The strategy was designed to “generate modest returns during periods of low market volatility” but could (and did) lead to significant losses during high market volatility.

UBS knew of the complexities and risks associated with the strategy but did not properly train or supervise its advisors about the potential for losses.

Here are the key details of the settlement:

If you've suffered losses with the UBS YES strategy, you may be wondering what options are available to you.

FINRA arbitration provides a venue to seek compensation from UBS. This process is a binding and final resolution, avoiding the costs and timeframe of litigating in federal district court.

Several investors have successfully used FINRA arbitration to recover their losses. For example, a Houston, TX investor recovered the entire amount of $358K sought in damages.

Some investors have also filed civil suits against UBS and Credit Suisse. In some cases, UBS was successful in defending itself.

However, in several other cases, investors received awards, but not to the full extent of damages requested. For instance, two couples received $800K through a FINRA arbitration claim, but their request for interest, costs, and fees was denied.

Here are some examples of successful claims against UBS:

The statute of limitations for seeking redress through FINRA arbitration is six years from the date of the fraudulent act or omission. This means that investors who suffered losses with the UBS yield enhancement strategy in 2018, 2019, and 2020 still have time to file.

While filing early can have benefits, it's essential to note that filing sooner rather than later allows aggrieved investors to recover their losses as soon as possible.

There is no question that UBS misled many of its wealthy clients into purchasing YES investments. Several investigations have taken place, and some investors have already recovered their fraudulent investment losses through FINRA arbitration.

UBS withheld material information about its yield enhancement strategy, and advisors pushed the YES strategy on investors despite knowing the risks involved. This occurred in 2018, 2019, and 2020, when market volatility was foreseeable and foreseen by market experts.

Market volatility in late 2018 continued into 2019, and the COVID-19 crisis sent the market into a downward spiral in 2020. UBS and its advisors continued to recommend the YES strategy, which was devised to generate commissions regardless of the performance of investors' portfolios.

Investors who have sought recourse have had varying results. Some have been able to recover their losses through FINRA arbitration, while others have not received full compensation for their damages.

Here are some examples of investor recoveries:

In some cases, UBS was successful in defending itself, while in others, investors received awards but not to the full extent of damages requested.

UBS YES offers a range of investment options, including stocks, bonds, and mutual funds.

The platform provides access to a broad selection of investment products, allowing users to diversify their portfolios.

Investors can choose from a variety of asset classes, including equities, fixed income, and alternative investments.

UBS YES also offers a range of pre-built portfolios, designed to cater to different risk profiles and investment goals.

These portfolios are managed by experienced investment professionals, who actively monitor and adjust the holdings to ensure alignment with the investor's objectives.

By leveraging the expertise of UBS's investment team, users can benefit from informed investment decisions and potentially higher returns.

UBS YES investors who suffered losses have taken their cases to FINRA arbitration, seeking compensation from the firm. Many of these investors were not adequately warned about the high-risk nature of the investments and have suffered severe losses.

Investors may have a claim against the brokerage firm based on misrepresentation, unsuitability, breach of fiduciary duty, and state and federal securities laws. The brokerage firm may be held liable for its broker's failure to recommend suitable investments to its customers.

According to FINRA Rules, member firms are responsible for supervising a broker's activities when the broker is registered with the firm. This means that the brokerage firm may be liable for investment or other losses suffered by brokers who worked for the firm.

Erez Law, a securities fraud law firm, has won several FINRA cases against UBS Financial Services Inc. for YES losses, including four cases in 2022. These cases resulted in awards ranging from $687,403 to $3.8 million.

Here are some notable awards won by Erez Law in FINRA cases against UBS:

FINRA arbitration provides a venue for wealthy investors to seek compensation from the firm. The arbitrator's decision is binding, and it is only subject to appeal on limited grounds.

The statute of limitations for seeking redress through FINRA arbitration is six years from the date of the fraudulent act or omission. However, there can be benefits to filing early, and of course, filing sooner rather than later allows aggrieved investors to recover their losses as soon as possible.

Several investors have already recovered their losses through FINRA arbitration, including a Houston, TX investor who recovered the entire amount of $358K sought in damages.

If you've suffered investment losses due to the UBS YES strategy, know that you have options for recourse. Several investors have successfully recovered damages through the Financial Industry Regulatory Authority (FINRA) arbitration process.

A Houston, TX investor was able to recover the entire amount of $358K sought in damages, although he did not receive compensation for interest, costs, and fees. This outcome highlights the potential for recovery, but also the importance of understanding the process.

$800K was awarded to two couples through a FINRA arbitration claim, demonstrating that significant damages can be recovered. However, it's worth noting that UBS was successful in defending itself in some cases.

If you're considering seeking compensation, it's essential to understand the process and your options. You can reach out to a qualified law firm, such as Erez Law, which has experience representing individuals in claims against brokerage firms like UBS.

Intriguing read: Ubs Hiring Process

The SEC has taken significant actions against UBS Financial Services Inc. related to their Yield Enhancement Strategy (YES).

In June 2022, UBS agreed to pay approximately $25 million to settle fraud charges related to YES. This is not the first time UBS has faced SEC action; in 2020, the company agreed to pay over $10 million to resolve charges related to retail and municipal bond violations.

The SEC found that UBS failed to adequately train or provide proper oversight for their representatives, and also failed to disclose the potential risks associated with YES investments to advisors or clients. As a result, many investors suffered substantial losses after investing in YES.

UBS registered representatives knew or should have known that flippers were not eligible for retail priority, yet they allocated bonds intended for retail customers to flippers. This is not an isolated incident; the SEC has brought charges against broker-dealers and registered representatives for similar abuses in the past.

Here are some notable SEC actions against UBS and other broker-dealers: