Tag Archives: UBS

UBS Yield Enhancement (YES) Losses


If you sustained significant losses or were a conservative or moderate investor recommended the UBS Yield Enhancement System (YES), please call 303-300-5022 for a free and confidential consultation.

UBS brokers marketed the Yield Enhancement Strategy, or YES, to wealthy clients. During times of low market volatility the strategy generated positive returns, but it racked up losses in 2018 and 2020 when market gyrations picked up.  Because the program used borrowed money, known as leverage, investors had to either add additional money when trades went south or sell their positions at a loss.

UBS limited participation in the program to investors with a net worth of $5 million but that does not mean the recommendation was suitable or that an appropriate percentage of an investor’s portfolio was invested in YES.

Investors seeking yield often seek a conservative income strategy.  The yield strategy utilized by UBS in YES was highly speculative and always contained a high risk of loss.

Securities brokerages have a duty to recommend only suitable investments.  This includes investments consistent with the objectives and risk tolerance of an investor.  The wealth of an individual does not absolve a brokerage from making suitable recommendations.

FINRA has further has called into question the suitability of complex investments used in accounts of unsophisticated investors.  YES was highly complicated and utilized a system that only the most sophisticated investors would understand.  This, in and of itself, makes the strategy unsuitable for most investors.

The strategy utilizes the trading of options secured by the investors holdings.   Option trading is an area of high risk.  Despite the risk, the strategy is being implemented with investors who want either moderate or low risk.

Such suitability violations gives investors recourse for loss recovery.  Jeffrey Pederson is an attorney located in Denver, Colorado who has represented investors nationwide in suitability suits against securities brokers and brokerages.  Representations are generally on a contingency basis.

Attention Investors of Richard Niemann, UBS

Investors of Richard Niemann, a securities broker with UBS in Sugar Land, Texas, may have recourse for unauthorized transactions in their accounts.  Please call 303-300-5022 to speak to an attorney.

UBSFrom June 2010 through November 2017, while registered through UBS, the Financial Industry Regulatory Authority alleged that Niemann effected approximately 400 discretionary transactions, purchase or sale of stocks without the owner’s approval.  This was done in 13 accounts belonging to 11 customers without UBS having accepted the accounts as discretionary.

Although the customers had given Niemann express or implied authority to exercise discretion in their accounts, none of the customers had provided written authorization for Niemann to exercise discretion. Furthermore, Niemann did not obtain written authorization from UBS to make trades in the accounts on a discretionary basis; indeed, UBS’s written supervisory procedures prohibited representatives from doing so.

Mr. Niemann has been the subject of four prior customer disputes.  This includes a $575,000 settlement to a customer concerning the sale of auction rate securities – though Niemann asserts he was not at fault for this loss and was not name in the ultimate suit.  This level of complaint history likely means that UBS was required to give Niemann heightened supervision in his operations as a UBS broker.  UBS should have detected the unauthorized transactions.


Call 303-300-5022 to learn about potential loss recovery for investors of David Fagenson.  Mr. Fagenson was previously with Newbridge, Merrill Lynch and UBS Financial.  Initial consultations are free and most representations are done on a contingency basis.

FINRA, the regulator that oversees securities brokers, alleged that Fagenson engaged in churning and unsuitable trading in the accounts of three senior customers during the period of January 2012 and September 2016.

We believe that the problem could be more widespread.  Churning is rarely restricted to just aInvest photo 2 small percentage of a broker’s clients.  An average broker usually has over 100 investors in that broker’s book of business.

Also, Fagenson has a long history of actions that question his veracity and ability to hand the savings of others.  In addition to a felony charge in 2010, Fagenson has been the subject of eight investor lawsuits/complaints, three regulatory actions, a termination of brokerage employment for cause, and one bankruptcy.

The history of Fagenson raises questions of how he was supervised and whether he should have ever been hired by the aforementioned brokerages.  UBS has acknowledged his issues and that he Fegenson required heightened supervision.  However, even that was not enough in light of the many red flags that existed.

Jeffrey Pederson is a private attorney handling FINRA arbitration cases for investors to obtain loss recovery.




John Burns, Ameriprise, UBS Loss Recovery

John Burns of St. Charles, MO, and formerly of Ameriprise, UBS, Edward Jones and Sagepoint, submitted an agreement settling a regulatory suit in which he was assessed a deferred fine of and suspended from association with any FINRA member in any capacity for 14 months.  Such regulatory actions rarely work to compensate injured investors and injured investors should speak to an attorney concerning their losses.  If you believe that you have suffered losses, or believe the offer to settle your matter is too low, call 1-866-817-0201 for a free initial consultation with an attorney.

Without admitting or denying the findings, Burns consented to the sanctions and to the entry of findings that he engaged in a pattern of unauthorized trading in customer accounts and made unsuitable, risky investments for a senior couple. The findings stated that Burns did not have written discretionary authority to place trades in any of these customer accounts. In some of UBSthe customer accounts, Burns executed the trades without any authorization, while in other customer accounts, Burns had some verbal authorization to exercise discretion generally, but exceeded that verbal authorization by executing trades in excess of the available funds in the account. The findings also stated that Burns made unsuitable and unauthorized investments over a twoyear period in the account of a senior retired couple, both of whom were over 65 years old. These transactions involved repeated high-risk investments in small drug company stocks which were unsuitable for the customers’ moderate risk tolerance and investment profile. The customers sustained losses in all but one of these investments in an aggregate amount exceeding $50,000.

Burns has also been the subject of five lawsuits in recent years filed by investors concerning the mishandling of their accounts.

UBS Investor Loss Recovery

UBSIf you are an investor with UBS suffering losses in investments made between 2011 and 2014 you may be entitled to a recovery.  Please call 1-866-817-0201 for a free consultation.

As reported by Rueters, UBS Group AG has agreed to pay more than $15 million to settle U.S. Securities and Exchange Commission (SEC) charges that its failure to properly train brokers led to customers buying hundreds of millions of dollars of unsuitable securities.

The SEC said on Wednesday that UBS from 2011 to 2014 sold about $548 million of “reverse convertible notes,” derivatives tied to individual stocks, to more than 8,700 retail customers who were relatively inexperienced and unsophisticated.

These notes, with mouthfuls of names as Trigger Phoenix Autocall Optimization Securities and Airbag Yield Optimization Securities, were sold to people of modest means, often with low risk tolerances, and included some retirees, the SEC said.

“UBS dropped the ball,” SEC enforcement chief Andrew Ceresney said in a statement.

Gregg Rosenberg, a UBS spokesman, in a statement said the Swiss bank was pleased to settle. It did not admit wrongdoing.

UBS’s payout includes a $6 million civil fine, $8.23 million of improper gains and about $798,000 of interest.

The case is part of a years-long crackdown by the SEC, the Financial Industry Regulatory Authority (FINRA) and other regulators to stop banks and brokerages from selling products that retail and even professional customers may not want, need or understand.

According to the SEC, UBS’s notes were designed to offer attractive yields with a lessened risk of loss.

But Ceresney said on a conference call that UBS’s training focused on describing the “potential upside” from the various products, not their volatility.

UBS Willow Fund Losses


Please Call 1-866-817-0201 for a free consultation is you suffered losses in the UBS Willow Fund.

Two UBS subsidiaries agreed Monday, October 19, 2015, to pay $17.5 million to the Securities and Exchange Commission for failing to disclose that the UBS Willow Fund, a closed-end fund they advised, had changed its investment strategy to include risky credit default swaps.

Part of investor losses in the UBS Willow Fund be recoverable from the SEC and there may likely be a significant claim against UBS for the lack of suitability of these investments recommended by UBS.  The Willow Fund had a much greater risk than represented by UBS representatives.

Of the total $17.5 million fine, $13 million will be returned to harmed investors.  Currently, it is unknown what percentage of loss individual investors will recover.

The SEC found that UBS Willow Management violated the antifraud provisions of the federal securities laws and failed to supervise UBS Willow Management, a failure that allowed the transition, and ultimate losses, to occur.

According to the SEC’s order, UBS Willow Management, a joint venture between UBS Fund Advisor and an external portfolio manager, marketed the UBS Willow Fund of simply investing in distressed debt with a strategy simply reliant on the debt increasing in value.

From 2000 through 2008, UBS Willow Management invested and marketed the fund’s assets consistent with the distressed debt strategy.  However, this all changed in 2008 when the fund began to invest in ultra-high-risk credit default swaps.

Marketing material for the fund misrepresented the risk to investors.  Statements specifically misrepresented the exposure of the Fund to credit default swaps in the Fund.

The misrepresentations continued on until the liquidation of the Fund in 2012.

Investors in the fund should speak to an attorney.  While the level of compensation each individual investor may receive from the SEC recovery fund is currently unknown, an attorney can navigate the recovery process through the SEC and help the investor decide if other legal avenues exist for recovery.

We believe that other significant avenues for recovery exist.  Call the number above for more details.

Recovery for UBS Puerto Rico Funds

UBSIf you have suffered losses in Puerto Rico funds invested through UBS please call toll-free 1-866-817-0201.

As reported in Market Watch, the Financial Industry Regulatory Authority (FINRA) announced today that it has censured and fined UBS Financial Services Incorporated of Puerto Rico (UBS PR) $7.5 million for supervisory failures related to the suitability of transactions in Puerto Rican closed-end funds (CEF). In addition, FINRA ordered UBS to pay approximately $11 million in restitution to 165 customers who realized losses on their CEF positions.

FINRA found that for more than four years, UBS failed to monitor the combination of leverage and concentration levels in customer accounts to ensure that the transactions were suitable given the customers’ risk objectives and profiles creating suitability violations. The firm failed to implement a reasonably designed system to identify and prevent unsuitable transactions in light of the unique Puerto Rican economy, in which retail customers typically maintained high levels of concentration in Puerto Rican assets and often used those highly concentrated accounts as collateral for cash loans. Despite UBS PR’s knowledge of these common practices, it failed to adequately monitor concentration and leverage levels to identify whether certain customers’ CEF transactions were suitable in light of the increased risks in their existing portfolio.

Brad Bennett, FINRA Executive Vice President of Enforcement, said, “UBS of Puerto Rico operated in a unique economy and ultimately failed to tailor its supervisory systems to its specific business needs. Despite the fact the firm was very familiar with the unusual characteristics of its retail accounts, it did not supervise these transactions properly to prevent customers’ heightened exposure to risk.”

In this case, UBS solicited certain customers to open lines of credit collateralized by their securities accounts. If the customer’s account value fell below the required collateral level, the customer received a “maintenance call” and was required to deposit additional assets or liquidate securities to meet the call. Where an LOC is collateralized by a diversified account, a customer may have a variety of securities that s/he can liquidate to meet a maintenance call. However, the risk of investor loss is increased when an LOC is collateralized by a highly concentrated account – and due to the unique benefits of Puerto Rican assets for Puerto Rican residents, UBS PR customer accounts were typically highly concentrated in CEF shares. The market events of Aug. 2013 caused the value of many CEF shares to plummet, and customers who received maintenance calls were forced to realize substantial losses in order to meet them.

Municipal Bond Fund Loss

If you are invested in a U.S. municipal bond mutual fund, odds are they’re exposed to Puerto Rico’s deteriorating financial situation. But because the slow-motion train wreck has been chugging along for several years, with the U.S. commonwealth’s government publicly stating its intention to not pay its bond debt, the weekend’s news that Puerto Rico defaulted on its debt wasn’t a surprise.

This means the heightened risk of loss for municipal bond funds has been known for some time.  Like most investments, those with higher risks pay higher commissions to the brokers that sell them.  Recommending such municipal bond funds while failing to disclose this risk or to recommend such funds to someone who is trying to avoid risk is a form of fraud.

Some municipal bond investments have led to broker misappropriation.  That has been alleged in a customer arbitration suit concerning Merrill Lynch broker Christopher C. Hellman.   FINRA, the Financial Industry Regulatory Authority, investigated the matter and Mr. Hellman failed to respond to the charge.


You may be entitled to recovery of your losses if you have been recommended such funds.  Please call 1-866-817-0201.