UBS Wealth Group’s Legal Costs Skyrocket in Q2

Posted on August 10th, 2022 at 5:48 PM
UBS Wealth Group’s Legal Costs Skyrocket in Q2

From the Desk of Jim Eccleston at Eccleston Law.

UBS Wealth’s litigation expenses have substantially spiked in the second quarter as the firm has faced a host of investor complaints and regulatory probes into UBS’ volatile Yield Enhancement Strategy (YES).

UBS’s investor presentations illustrated that legal costs increased to $121 million in the second quarter in comparison to $52 million in the first quarter, according to the company’s most recent earnings report. While the investor presentations did not state a cause for the increase in legal costs, the spike primarily can be attributed to issues with YES. Last month, the SEC ordered UBS to pay $25 million as part of a settlement for the defrauded clients who invested in the complex options-based strategy.

Between February 2016 and February 2017, UBS invested at least 600 clients in YES, which borrowed against an existing portfolio of debt or equity securities to purchase or sell S&P 500 options, according to the SEC. Furthermore, UBS increasingly has been losing investor arbitration claims for $1 million or more with clients who invested in YES, according to recent decisions from panels monitored by the Financial Industry Regulatory Authority (FINRA). In one case, UBS lost a $3.86 million legal claim in May to clients who invested in YES.

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

Tags: eccleston, eccleston law, ubs

Return to Archive

TESTIMONIALS

Previous
Next

Fantastic news!!!!  Your professionalism, support and expertise were greatly appreciated.  You made a difficult situation much more bearable.

Marci M.

LATEST NEWS AND ARTICLES

September 17, 2025
FINRA Suspends Centaurus Dallas Broker Over Excessive Alternative Investment Sales

FINRA has suspended a Centaurus Financial broker, William Burks, for four months after finding he placed as much as 91 percent of a client’s net worth into illiquid alternative investments.

September 16, 2025
Former Morgan Stanley Advisors Win Partial Court Victory in Client Solicitation Dispute

Two former Morgan Stanley advisors in Hackensack, New Jersey have defeated Morgan Stanley’s initial effort to block them from soliciting clients, according to an August 15 order from New Jersey Superior Court.

September 15, 2025
California Young-Gun Investor Charged in Alleged $6 Million Ponzi Scheme

Federal prosecutors have accused Mihir Deepak Sukthankar, a California resident once celebrated as a teenage trading “prodigy,” of orchestrating a multi-million-dollar Ponzi scheme.