UBS Prevails in One “YES” Case, But Loses Another

Posted on October 6th, 2021 at 12:44 PM
UBS Prevails in One “YES” Case, But Loses Another

From the Desk of Jim Eccleston at Eccleston Law:

UBS Wealth Management has been involved in several arbitration proceedings over its proprietary options-spread strategy, YES (Yield Enhancement Strategy), which prompted numerous client complaints after a period of market volatility. According to a UBS marketing brochure, the YES strategy was created as a market-neutral strategy to produce additional cash flow through the sale and purchase of S&P index option spreads. The YES strategy featured a “defined maximum loss”, which was limited to premiums paid as well as collecting premiums for writing options.

The results of the arbitration hearings have been mixed. For example, in one of the arbitration hearings, a Financial Industry Regulatory Authority (FINRA) panel ordered UBS to pay at least $800,000 to two couples who were harmed by the strategy. Likewise, another FINRA arbitration panel denied UBS’ request to expunge the claim from the records of two of its financial advisors, implicitly finding that the YES claims against them were not false.

Overall, however, UBS has prevailed in nine of 15 YES-related arbitration decisions. More claims – and results -- are certain to follow. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston law, ubs, finra

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