What You Need to Know
- An arbitration panel awarded $3.9 million to UBS clients who alleged the firm's options-trading strategy exposed them to risk.
- The claimants in this latest dispute over the UBS YES strategy were awarded less in damages than requested, as was the case in prior cases.
- But the claimants' attorney applauded the decision and award, and said his clients were satisfied.
UBS Financial Services must pay $2.9 million in compensatory damages plus nearly $966,000 in legal fees to additional clients who alleged the firm’s Yield Enhancement Strategy (YES) — which focused on options-based trading — was unsuitable and inappropriate for their risk tolerance and investment objectives, according to an arbitration award posted on FINRA’s website on Thursday.
UBS declined to comment on the arbitration panel’s decision on Friday.
In their statement of claim, John Oren and Elise Oren asserted that UBS was guilty of breach of fiduciary duty, negligence, negligent supervision, fraud, breach of contract, and violating the Securities Exchange Act of 1934 and the Texas Securities Act.
The causes of action related to the claimants’ allegation that the wirehouse recommended a “highly speculative managed account options strategy product,” YES.
In the statement of claim, the clients requested damages between $1 million and $5 million, plus unspecified punitive damages, interest, costs and attorneys’ fees.
In its statement of answer, UBS requested an award dismissing the statement of claim in its entirety and with prejudice, and expungement of all references to the matter from Central Registration Depository records on behalf of Francis Amsler and Marc Laborde, who weren’t named in the complaint.
Amsler and Laborde both served as brokers and advisors with UBS from 2008 to 2020 and are now with Rockefeller Capital Management, according to their reports on FINRA’s BrokerCheck website.
At the hearing in Houston, the claimants requested damages in the range of $2.3 million to $2.9 million, plus $2.3 million pursuant to the Texas Securities Act for damages/simple interest.
The three-person panel of public arbitrators wound up awarding the claimants $2.9 million in compensatory damages, plus $965,657 in attorneys’ fees pursuant to the Texas Securities Act. The panel also assessed $1,800 of “last-minute cancellation fees jointly and severally” to the claimants and the same amount to UBS.