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FINRA arbitrators deny claim brought against UBS over YES strategy

On Behalf of | Mar 27, 2023 | Financial News

UBS Wealth Management USA has won an arbitration case in the latest dispute over its investment strategy known as Yield Enhancement Strategy (YES), according to AdvisorHub.

A panel of Financial Industry Regulatory Authority arbitrators sided with UBS in a complaint brought by Worldscale Association (NYC) Inc. The three-person panel denied a claim brought against the firm for just over $664,000 that included $400,000 in damages. The complaint was filed by Worldscale over USA’s alleged failure to supervise its brokers’ recommendation of YES, a complex options strategy that has been the subject of numerous disputes with clients. No reason was provided for the decision. UBS did not request expungement of the case from the record of the brokers involved.

The ruling was the 45th arbitration decision in complaints over YES, with claimants being awarded some compensation 23 times while not receiving any money in 22 of the decisions.

In another ruling the previous week, a broker in Chicago had three YES complaints expunged from his record after an arbitrator said that the broker had properly disclosed the risks of the strategy to his customers.

Last June, UBS agreed to pay a $25 million settlement after the Securities and Exchange Commission filed fraud charges against the firm over the YES strategy. The SEC found that UBS marketed and sold YES to about 600 investors despite not giving its financial advisors adequate training and oversight in the strategy.

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 Lewitas Hyman, our attorneys’ unparalleled litigation experience comes from leveraging their industry-specific knowledge developed from working at firms such as Morgan Stanley, UBS Financial Services and EVEREN Securities, 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 securities arbitration and litigation services, please contact Lewitas Hyman at (888) 655-6002 or through our online contact form.