Robert Wayne Pearce, P.A. is investigating and representing investors nationwide that were sold investments in UBS Financial Services Yield Enhancement Strategy (YES) program. UBS offered the high-risk YES program to customers whose net worth was at least $5 million. UBS financial advisers across the United States presented the YES program as a safe way to earn additional income by using existing assets at UBS as collateral. UBS further represented to its clients that the YES program had “excellent risk metrics” and would allow its clients to increase returns, while reducing risk. Unfortunately, many UBS brokers failed to adequately understand and/or disclose the risks associated with this high-risk investment program.
It also appears the UBS YES program was mismanaged. UBS presented its YES program as using a “market neutral” options strategy, which means that it is not a directional wager that the price of the underlying asset will increase or decrease in value. The strategy instead seeks to profit from a relative lack of volatility in the price of the underlying asset. Contrary to UBS’ presentation of the YES program, we believe the YES managers actively engaged in market timing and took directional positions on the market and suffered significant losses as a result. We believe the UBS YES program was, in fact, an aggressive options strategy. Consequently, YES posed a significant risk for investment portfolios, especially those that were over-concentrated in these securities. Continue Reading