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Industry Spotlight > Wirehouse Firms

UBS Must Pay $371K to Clients: FINRA Panel

By Jeff Berman

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What You Need to Know

  • A FINRA arbritration panel ruled in favor of UBS clients who alleged the firm's options-trading strategy exposed them to significant risks.
  • The claimants, however, were awarded much less in punitive and compensatory damages than they were seeking.
  • Some other disputes over the same options strategy have been decided in favor of UBS over the past year or so.

[Editor's note: An earlier version of this story incorrectly stated the amount that must be paid to two client by UBS in the headline.]

UBS Financial Services must pay nearly $371,000 in compensatory damages, expert witness fees and other legal costs to a pair of clients who alleged the firm’s Yield Enhancement Strategy (YES) — which focused on options-based trading — was presented to them as low-risk, when it actually exposed them to significant risk of loss, according to a recent FINRA arbitration award.

In the statement of claim, Matthew V. Fisher and Lisa G. Fisher asserted that UBS was guilty of “negligence, negligent misrepresentation, breach of fiduciary duty, breach of contract, negligent supervision, and violation of the Ohio Securities Act” regarding the YES options strategy.

UBS declined to comment Monday on the matter. Jeffrey B. Kaplan of the law firm Dimond Kaplan & Rothstein, one of the attorneys representing the clients, did not immediately respond to a request for comment.

The amount awarded to the claimants by the three-person arbitration panel was significantly less than the $1.7 million in total requested by the claimants at the arbitration hearing.

The amount requested included about $1,207,509 for punitive damages, as well as $432,670 in compensatory damages. (The claimants first requested compensatory damages of $455,000, pre-judgment interest at the statutory rate, costs and expenses, and punitive damages.)

The arbitration panel instead ruled that UBS must pay the claimants about $342,130 in compensatory damages, $27,875 in costs for expert witness fees, $590 in costs for copies and mailing fees, and $300 in costs as reimbursement for the non-refundable portion of the filing fee previously paid to FINRA Dispute Resolution Services.

Advisor Expungement

UBS’s request for expungement on behalf of UBS advisors Ortal Shachar, Richard Mark Held and Frederick Maximilian Kort, who were not named in the claimants’ complaint, were denied.

All three are still registered investment advisors. Shachar and Held are also registered representatives, but Kort no longer is, according to his report on FINRA’s BrokerCheck website.

This was not the first time that a FINRA arbitration panel had resolved a dispute involving the YES options strategy in recent months. Arbitration panels, however, ruled in favor of UBS in some of those cases.

Jeff Berman

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