Justia Lawyer Rating for Adam Julien Gana Super Lawyers The National Trial Lawyers Martindale-Hubbell AVVO

UBS Options Program - Yield Enhancement Strategy (YES)

UBS created, advertised, and sold investors on an option-based trading strategy referred to as a Yield Enhancement Strategy (YES). The YES strategy sought to increase returns for investors through the trading of options. UBS brokers are alleged to have advertised the Yield Enhancement Strategy as involving trading call or put options to try and accomplish increased returns in their portfolios. Investors were often presented with slide presentation which advertised the Yield Enhancement program. The slide deck represents that the YES strategy has “limited correlation with the market or a single stock position, the YES Strategy may provide portfolio diversification.” The strategy also claims to use upside and downside protection to prepare for “unexpectedly volatile market conditions” and that the options strategies are designed to limit risk.

The UBS YES program is alleged to have included the Iron Condor options trading strategy. The iron condor is an options strategy structure where investors write two short near money options and purchase two long out-of-the money options.

In July of 2017, the UBS YES group managed $3.4 billion. That total grew to $4.5 billion as of June 2018 according to the bios of UBS managers. UBS charged 1.75% on the YES strategy earning the firm revenues of at least $87.5 million per year. It has been alleged that only 80 basis points of that fee was used to cover trading costs which allowed UBS to generate large profits for the firm.

However, investors are now paying the price for the Yield Enhancement Strategy. While the YES strategy was marketed as a way to seek additional returns many investors instead suffered significant losses and margin calls instead. Yield Enhancement Strategies are risky because any opportunity to profit relies on stock market stability – an impossible long-term scenario.

The YES investment strategy involves the purchase of multiple uncovered options versus safer covered options. When an option is covered the investor holds an offsetting stock position in the asset underlying the option. The stock position can help offset the risk of the short position of the option. However, with an uncovered option the investor has unmitigated risk. If the underlying stock substantially drops or increases in value for an uncovered position the YES investor have only two options. Either the investor has to let the options expire and lose the entire investment or buy the stock at a disadvantageous price.

With respect to UBS’ iron condor strategy, the maximum losses is the price of the four options purchased that constitute the strategy. But if an investor buys the options on margin while pledging other investment assets as collateral then an investor’s losses can multiply as the investor will not have to sell securities at low prices to satisfy margin.

Investors who have suffered losses due to a Yield Enhancement Strategy are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.

Client Reviews
Thank you Adam and all your colleagues for the professionalism and diligence in the final settlement of our securities fraud case. When a past law firm group turned our case down, you and your firm took on the case and we thank you for the great outcome. We would highly recommend your firm. Gloria K.
I will never forget how much you helped me by winning my case! I never thought I would see any money from my investment. I admire the way you fight for everyday people against big companies. Thank you so much! Myra W.
Adam is an outstanding lawyer. I have worked on several cases with Adam and look forward to working with him again in the future. Rob D. - Co-Counsel.
If you want an attorney that is easy to talk to and genuinely cares about your legal situation, contact Adam Gana. He helped me settle a difficult contract dispute. When you work with Adam, he makes you feel as if you are his top priority. He will call you regularly to stay on top of the situation and submits all necessary legal documentation in a timely manner. His writing is excellent, his demeanor professional, and his work exceptional. Nancy N.
Adam helped me recover money from my broker when I thought all was lost. My house was about to be foreclosed, and I lost everything. Adam came in and saved my life. Jean C.