A Chicago broker attempting to have investor complaints expunged from his record has won his arbitration claim, according to Advisor Hub.
The broker, David A. Hirsch, has been with UBS Wealth Management USA since 2016. The case involved UBS’s complex options strategy known as Yield Enhancement Strategy (YES), which has been the subject of numerous disputes.
Three investors complained they were told by Hirsch that YES was a conservative strategy when it was actually a high-risk strategy that was not suitable for them.
But in an award signed by Financial Industry Regulatory Authority public arbitrator James Stamos, it was recommended that Hirsch’s record be cleared of those complaints. The arbitrator determined that Hirsch had described the YES strategy and its potential risks properly when he met with the investors. Stamos also noted that that the investors had signed disclosure documents detailing the strategy and characterizing it as aggressive. Two of the three customers who filed the complaints are still Hirsch’s clients, the arbitrator pointed out.
In June 2022, the Securities and Exchange Commission reached a $25 million settlement with UBS over the YES strategy after filing fraud charges against the firm. The SEC found that UBS sold YES to hundreds of investors despite not giving its financial advisors adequate training and oversight in the strategy or sharing data about the possibility of its significant risk with advisors or clients.
Handling financial services disputes requires counsel with a significant understanding of the industry, the laws, rules and regulations that impact our clients and the forums in which disputes are adjudicated. At Hyman Cotter PC, our attorneys’ unparalleled litigation experience comes from leveraging their industry-specific knowledge developed from working at firms such as Morgan Stanley, UBS Financial Services, serving as outside counsel for some of the world’s largest law firms, and through prior affiliations with the SEC. For more information about our arbitration and litigation services, please contact Hyman Cotter PC at 312-291-4600 or through our online contact form.
