Wednesday, October 2, 2019

UBS’s Yield Enhancement Strategy (“YES”) Returns - and then the Losses – Were Caused by Equity Market Exposure

By Craig McCann, Regina Meng, and Edward O'Neal

UBS marketed YES as market-neutral based on a combination of four options is sometimes referred to as an “Iron Condor”. UBS accounts subjected to YES treatment suffered losses of 12% to 14% in December 2018 when the S&P 500 dropped 9.2% because the overlay was more than 100%.

In this paper the authors we explain the option basics necessary to understand the YES strategy and illustrate how UBS actually implemented the strategy with predictably disastrous results. They also present how UBS described the strategy in its marketing materials. Research paper can be downloaded here

Monday, August 19, 2019

$5.88 Million Blanco v UBS of Puerto Rico Award

In August 2019, a FINRA arbitration panel in San Juan, PR ordered UBS Financial Services and UBS Financial Services of Puerto Rico to pay $4,250,000 in compensatory damages, plus interest of $1,460,937 and costs of $170,000. You can read the award here. Dr. McCann testified on liability and damages over UBS Puerto Rico's sale of UBS PR closed end funds and individual Puerto Rico municipal bonds.












Tuesday, July 16, 2019

$3.3 Million Torres v Morgan Stanley Award

In July 2019, a FINRA arbitration panel in Miami, FL ordered Morgan Stanley to pay $3,231,421 including $3 million in monetary sanctions for discovery abuse. You can read the award here. Dr. McCann testified on liability and damages over Puerto Rico closed end funds and municipal bonds.




Friday, July 12, 2019

$4.8 million Mudafort v UBS Award

In July 2019, a FINRA arbitration panel in San Juan, PR ordered UBS Financial Services and UBS Financial Services of Puerto Rico to pay $4,813,161 in capital losses calculated from February 2013 through March 2019 and $67,969 in expert costs. You can read the award here. Dr. O'Neal testified on liability and damages over UBS Puerto Rico's sale of UBS Puerto Rico municipal closed end bond funds and Puerto Rican municipal bonds.