UBS And Credit Suisse Involved In Arbitration Over YES Accounts

It was an investment strategy that was supposed to have limited ties with the market or even a single stocks position. The plan was to deliver consistent income with a minimal amount of risk.

Touted as a low-risk alternative to traditional investing, the YES strategy offered an alleged safer  investment with a strong probability of successful returns.

Unfortunately, that’s not quite what happened.

The YES Strategy

Developed by four investment advisors while at Credit Suisse, the Yield Enhancement Strategy, or YES, was offered to the firm’s most affluent and experienced advisory clients. When they moved to UBS, they took this investment strategy with them.

The UBS YES Strategy was marketed as a secure managed-options scheme that was so complicated, even the financial advisors selling it didn’t completely understand it, either.

Some investors have alleged that investors made money while the market stayed within pre-set levels. While the market kept that equilibrium, the YES investors made money. But in 2018, the market became highly volatile, then collapsed. When the market dropped from the YES parameters, investors began losing a considerable amount of money. In addition to those losses, investors were required to contribute additional funds to their accounts to cover the margin calls.

Yet, no matter how the market performed, the YES accounts always generated considerable commissions and fees for both their brokers and the firms selling them. The brokerages will still make money no matter how much the YES customers gain or lose.  Even after the market drop, UBS advisors continued to promote YES to their customers.

After the increased market turbulence in 2020, many YES investors lost a significant amount of money, and went looking for answers.

YES Strategy Lawsuits

Investors who bought into the YES Strategy and lost substantial sums have taken to filing FINRA arbitration and civil lawsuits against both Credit Suisse and UBS to recover at least some of their funds, with many investors winning awards. More than a dozen have been filed, including:

• An investor in Houston, TX, won the full $358,000 in requested damages, but not his fees, costs and interest.
• Two couples were awarded $800,000 by FINRA who lost their funds in a UBS YES investment
• Two Nebraska investors were also awarded $1 million in damages

UBS has prevailed in some of these cases. In others, investors received substantial awards, but not the full amount of requested damages.

Margin Calls

In essence, the strategy was very similar to buying stocks on margins. When the market takes a downward dip, an account requires an infusion of cash to continue trading and keep the account open.

If you’re a savvy, experienced investor, you’re familiar with margins and margin calls that allow you to buy additional stock without additional money. Unfortunately, that’s based on the value of each individual stock. When the stock value decreases, the broker issues a margin call, asking you for more money to cover the value of the account. Otherwise, the stocks are sold at the current price, and you have to make up the deficit to clear the account.

Buying securities on margins are for the sophisticated investor who understands how they work and who can afford to absorb any potential losses. Investors who aren’t completely familiar with margins should avoid investing with them, as well as complicated and confusing strategies like YES.

Are You An Investor In The YES Strategy?

If you invested in YES, you’re encouraged to contact Silver Law Group for additional information and to help us in our investigation.

Silver Law Group is a nationally-recognized class action law firm representing victims of investment fraud. Our attorneys represent investors in class action lawsuits against issuers in state or federal court and investors in securities arbitration claims against Wall Street firms for stockbroker misconduct.

Scott Silver, Silver Law Group’s managing partner, is the chairman of the Securities and Financial Fraud Group of the American Association of Justice. Contact us for a consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.