A recent Wealth Management article details how UBS clients who were invested in a leveraged, esoteric options strategy described as a “conservative” and “low risk” way to get extra yield from their portfolios were shell shocked by losses they experienced at the end of last year. Many are now accusing the firm, as well as the two advisors who ran the so-called Yield Enhancement Strategy, of misrepresenting the dangers and have filed a series of complaints with the Financial Industry Regulatory Authority (FINRA).
The arbitration claims allege UBS, not only misled them about the risks, but the advisors also engaged in “enormous excessive trading” to try to recover what they lost during the excessive volatility in the markets at the end of last year. Some clients lost more than 20% in December alone, according to the complaints, and the total amount lost could approach $1 billion. In defense, UBS admits the large market swings in December hurt the strategy, but that those dangers were clearly disclosed to investors, who signed documents claiming they understood the risks.
If you have experience losses through this or another "high yield" investment strategy, please contact our experienced investment negligence and fraud attorney at Colling Gilbert Wright & Carter for a free case evaluation. Thank you!