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FINRA arbitrators award couple nearly $3.9 million in dispute over UBS YES strategy

On Behalf of | May 17, 2022 | FINRA Compliance

A Houston couple has won an arbitration case stemming from their allegations that UBS Wealth Management USA’s Yield Enhancement Strategy (YES) exposed them to unacceptable risk, AdvisorHub reports.

John Oren and his wife Elise were awarded $3.86 million in compensatory damages and attorney fees by a three-person panel of Financial Industry Regulatory Authority arbitrators.
In their statement of claim, the couple asserted breach of fiduciary duty, negligence, negligent supervision, fraud, breach of contract, violation of Section 10(b) and Rule 10b-5 of the Securites Exchange Act of 1934, and violation of the Texas Securities Act. They alleged that UBS had recommended a highly speculative product that was “unsuitable and inappropriate for Claimants’ risk tolerances and investment objectives.”

The Orens were seeking between $1 million and $5 million in damages. The arbitration panel awarded them $2,896,972 in compensatory damages and $965,657 in attorneys’ fees while assessing $24,500 of $28,000 in hearing fees to UBS. A claim for punitive damages was rejected.

UBS denied the allegations and requested an award dismissing the statement of claim in its entirety and with prejudice, along with expungement of all references to the matter from Central Registration Depository records on behalf of two advisors who weren’t named in the complaint. The panel made no determination on the issue of expungement.

YES, an options strategy, has been the subject of numerous disputes with clients. Claimants have been awarded at least some compensation in 13 of the 28 cases, while UBS has won 15 of the cases entirely.

At Lewitas Hyman, our attorneys have handled hundreds of arbitrations before FINRA, the Chicago Board Options Exchange (CBOE), the Chicago Board of Trade (CBOT), JAMS, the American Arbitration Association (AAA) and other self-regulatory organizations nationwide. We have also appeared in courts throughout the United States in various types of securities-related matters. For more information about our arbitration and litigation services, please contact Lewitas Hyman at (888) 655 6002 or through our online contact form.