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UBS Yield Enhancement strategy turns into destruction strategy

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The YES or “Yield Enhancement Strategy” was pitched by the financial advisors of UBS as an efficient and safe mechanism for enhancing the yield from a conservative portfolio. This strategy was considered a low-risk or neutral strategy that required the customers to place a mandate against the portfolio of the customers to generate returns via an “iron condor” The iron condor may be a restricted risk trading strategy designed to possess vast profitability to earn a small profit if the underlying security has low volatility. However, the strategy failed as the market experienced volatility.

Panicked customers are going through huge losses and they are constantly asking the financial investors of UBS for advice and explanations. The portfolio managers who run UBS Yield Enhancement strategy are looking for a way to recover the losses suffered by the client portfolios. Many investors were not aware of the fact that was engaged in a very risky option strategy that needed them to be qualified for high risky options. The clients have to face numerous obstacles before they are given permission to trade options. Many clients who paid for YES strategy were not qualified, and investors are fighting back to recover their losses. 

Investment fraud

Investment fraud definition is much wider compared to what many investors think it to be. Many people picture this scam from a movie, but, in several cases investment fraud include practices, which are not mundane. Investment fraud includes a wide range of improper advisory and brokerage practices which leads to investors making very poor investment decisions unknowingly. This includes advisors’ and brokers’ attempts to make a profit at the expense of the investors. It includes cases where investors get unsuitable recommendations or cases where they are not provided with much-needed information they require to protect themselves.  

Investors suffered unexpected losses

The lawyers who are representing the investors who suffered losses in the USB Yield Enhancement Strategy claim that the strategy was an option strategy, which was marketed as a secure and safe manner to increase the income or yield on investments. However, investors suffered unexpected losses that they consider a safe strategy. In this investment fraud loss, USB represented to its investors that the Yield Enhancement Strategy or “YES” offered a low-risk manner to offer investors with an additional income. However, in reality, this strategy was dull of risk and it ultimately resulted in investor losses.