The Levin Papantonio law firm is currently investigating UBS Financial Services, Inc. in connection with their sales practices related to Yield Enhancement Strategies (“YES”) and an even more complex version known as the “Iron Condor”. It appears that UBS employed YES Strategies for clients nationwide through Flatiron Partners, a private wealth management division.
According to news sources, the so-called “Yield Enhancement Strategy,” or YES was pitched by UBS financial advisors to their customers as a supposedly safe and efficient mechanism to enhance yield from a generally conservative portfolio. But investors have suffered unexpected losses in the supposedly safe strategy. In reality, the strategy was fraught with risk.
UBS allegedly pitched the YES strategy as a neutral or low-risk strategy that simply required customers to allow margin to be placed against the customer’s portfolio which would be used to generate returns through an “iron condor” options trading strategy.
An iron condor is an options strategy that entails writing a series of options, typically all at once or around the same time. The iron condor structure entails writing two near money options that are short, in addition to purchasing two deeper out-of-the money options that are long.
The first component of an iron condor involves selling an out-of-the money put (short put), while simultaneously selling an out-of-the money call (short call). The iron condor is a purportedly limited risk, non-directional option trading strategy that is designed to have a large probability of earning a small limited profit when the underlying security is perceived to have low volatility.
Wealth Management reports that the Yield Enhancement Strategy is run by two investment professionals, Matthew Buchsbaum and Scott Rosenberg, who have operated YES for more than a decade, beginning at Credit Suisse and now working out of UBS’s Flatiron Partners.
According to his FINRA-maintained BrokerCheck report, Mr. Buchsbaum has received eleven customer complaints as of June 19, 2019. Most concern the Yield Enhancement Strategy, and seek damages amounts including $10 million, $2 million, $1 million, and $800,000. According to his FINRA-maintained BrokerCheck report, Mr. Rosenberg has received five customer complaints as of June 19, 2019. Three concern the Yield Enhancement Strategy, and one seeks $400,000 in damages.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, UBS Financial Services Inc. may be liable for investment or other losses suffered by its customers.
Our firm has extensive experience in working with UBS investors who have lost money due to alleged misconduct by UBS advisors such as, over concentration, suitability.
Contact our investment fraud attorneys at the law offices of Levin Papantonio or fill out our free claim evaluation form on this site. Or call 800-277-1193. There is no cost and no-obligation; you may be entitled to recover your losses.
Page Poerschke https://www.levinlaw.com/attorney-profiles/page-poerschke
Laura Dunning https://www.levinlaw.com/attorney-profiles/laura-dunning
Michael Bixby https://www.levinlaw.com/attorney-profiles/michael-bixby