How Do You Recover Your “UBS-YES” Investment Losses?

If you are reading this Blog, Richard Edward Ristau probably recommended that you invest in the UBS Yield Enhanced Strategy (“UBS-YES”) in what was supposed to be a “market neutral” investment strategy. Despite your UBS Financial Services, Inc. (“UBS”) stockbroker’s representations about the UBS-YES managers ability to “manage risk” and “minimize losses” through its “iron condor” option strategy you probably realized substantial losses. You are not alone because that is just what many other UBS-YES investors have told us about the pitch made to them to invest in the UBS-YES program and their recent experience.

In fact, according to FINRA’s BrokerCheck website one investor has filed an arbitration claim against UBS for its own misrepresentations about and/or mismanagement of the program and/or Mr. Ristau’s UBS-YES investment recommendations. This is in addition to a prior claim for alleged sales practice violations that was settled.

Unfortunately, UBS-YES program investors may have had the same bad experience twice in the last two years. First, in December 2018 and the first few months of 2019 and again in March 2020 during the recent COVID-19 stock market crash. This is because UBS and the UBS-YES account managers may have failed to adequately warn investors about the risk and/or managed the strategy in a manner that failed to protect investors from the market volatility.

Why did this happen two years in a row? One explanation is that volatility in the market created by the unforeseeable market events caused the loss.  UBS claims it disclosed the fact that extreme volatility could have a negative the “iron condor” option strategy it deployed; the success of that strategy was supposedly dependent upon the price of the S&P 500 Index future contracts staying within certain spreads the managers created in each separately managed account utilizing that strategy.  But that’s not how investors say the managed account program was generally represented by their financial advisors to them and some UBS financial advisors agree the risks were downplayed to them and consequently their clients.

After all, the high net worth investors – the so-called “smart money” investors – were not being promised huge returns for investing in the UBS-YES program. It was represented as a “low risk” strategy to enhance investors’ returns slightly above the yields in the fixed income market. We have heard 3% to 5% was the incremental rate of return touted by many UBS financial advisors. Yet, in late 2018, and then again in February 2019, investors in the UBS-YES strategy realized losses. In March 2020, we understand investors still in the program suffered more losses when the virus caused market panic and whipsawed the S&P 500 futures contract market. The low returns and high risk of the UBS-YES strategy really begs the question: Why would the “smart money” investors take that risk unless the UBS-YES strategy was misrepresented.

There is another explanation for the loss and that is it has been managed differently than it had been managed in the past. The theory of mismanagement has been posited by the Economic PhDs at the Securities Litigation and Consulting Group. See, McCann, Meng and O’Neal, UBS’s Yield Enhancement Strategy (“YES”) Returns – and then the Losses – Were Caused by Equity Market Exposure (2020). They contend that the money managers were not executing a “market neutral” investment strategy. Rather, they believe the UBS-YES strategy involved “actively managed directional bets on the market” and that in late 2018 and early 2019, the managers made bad bets; that is, they bet against the market direction that followed. If the experts at SLCG are correct then UBS’s representations in its marketing materials about the strategy as well as its financial advisors representations about the so-called “low risk” for an “enhanced return” investment strategy were false and misleading.

The UBS-YES strategy was run by the team of Matthew Buchsbaum and Scott Rosenberg of Flatiron Partners in the UBS private wealth management division. At its peak in 2018, the team purportedly managed close to $5 billion for over 1000 of UBS’s wealthiest clients. You needed a minimum net worth of $5 million and to pay a management fee of 1.75% per annum to be admitted to this exclusive club.  There was a huge incentive to the UBS financial advisors to recommend the strategy and get clients to commit assets in their accounts as collateral (many clients pledged municipal bond portfolios) for the option strategy.

Regardless of the reason for the cause of the loss (misrepresentation or mismanagement), there is no way you will recover your losses in the UBS-YES managed account program without some legal action. At The Law Offices of Robert Wayne Pearce, P.A., we represent investors who paid dearly for the UBS-YES strategy in FINRA arbitration and mediation proceedings. Among the claims we may file are for fraud and misrepresentation, breach of fiduciary duty, failure to supervise, and unsuitable recommendations in violation of FINRA rules and industry standards.  Attorney Pearce and his staff represent investors across the United States on a CONTINGENCY FEE basis which means you pay nothing – NO FEES-NO COSTS – unless we put money in your pocket after receiving a settlement or FINRA arbitration award.

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Contact Us For A Free Initial Consultation With Experienced UBS-YES Investment Attorneys In FINRA Arbitrations

The Law Offices of Robert Wayne Pearce, P.A.  have highly experienced lawyers who have successfully handled many managed account cases and other securities law matters and investment disputes in FINRA arbitration proceedings, and they will work tirelessly to secure the best possible result for you and your case.  For dedicated representation by an attorney  with over 40 years of experience and success in structured product cases and all kinds of securities law and investment disputes, contact the firm by phone at 561-338-0037, toll free at 800-732-2889 or via e-mail

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Robert Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $125 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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