UBS Fined $405K For Yield Enhancement Strategy (YES)

UBS has been ordered by the Financial Industry Regulatory Authority (FINRA) arbitration panel to pay hundreds of dollars each to one of two claimants in an arbitration case relating to a complex investment strategy that was developed in-house.

According to an arbitration award, Stephen Walk and Allison filed a lawsuit against UBS in June 2020. They claim that UBS breached contract, neglected and exploited elderly and disabled adults, unjust enrichment, and other infractions related to the Yield Enhancement Strategy (YES) investment UBS recommended.

This strategy allows you to make multiple options trades at different strike prices and with the same expiration dates, in order to limit market volatility.

According to their claim, the Walks claimed that UBS and its traders operated the YES program with “practically no supervision or compliance oversight” and with poor-risk controls. Finra states that they sought compensatory damages in the amount of $500,000 to $1 million-plus interest and costs. They also reserved the right not to amend the costs.

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UBS requested that the claims are denied. It also requested the removal of the matter from Central Registration Depository registration records. Adam Rogers is a UBS financial adviser who was not named in the claim.

Allison Walk sought damages in the amount of $1.14 Million, Finra states. Finra also suggested alternative arguments for an award of approximately $537,000 to $481,600.

UBS was ordered by arbitrators to pay Allison Walk $300,000.00 in compensatory damages, $30,000 costs, and $75,000 legal fees. Stephen Walk’s claims were denied by the arbitrators without giving any reason. According to the award document, the arbitrators also denied the expungement request as well as any other claims.

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