The Wall Street Journal  has reported that USB Group is facing multiple customer complaints for a risky investment program that suffered significant losses in 2018.
According to the complaints, UBS brokers began targeting wealthy investors in 2015 to be introduced to the Yield Enhancement Strategy, or YES, program. The complex strategy involved buying both “calls”, which give the holder the right to buy shares of the underlying stock at a specific price, and “puts”, which give the holder the right to sell shares of the underlying stock at a specific price. UBS simultaneously bought calls and puts at different stock prices, with the same expiration date, and hoped that the stock or the index that it was betting on would stay between those prices.
During times of low market volatility, the options did generate a positive return. But, when the underlying index gyrated last year, YES clients suffered at least $60 million in losses. Losses exceeding 13% were seen in just one month on customer-account statements. Clients have complained of excessive fees – up to 1.75% – and that they were not advised properly of the risks.
If you invested in YES in 2015-2018 and suffered losses, contact us for a consultation to find out if you have a case against UBS Group.