The award comes amidst a deluge of investor arbitration actions and lawsuits regarding UBS’s YES strategy. An arbitration panel ordered UBS in May to pay nearly $3.9 million in a dispute with a couple who accused the company of negligent supervision and breach of fiduciary duty related to a “highly speculative” options investing strategy.
Clients John and Elise Oren won their arbitration award after 20 hearing sessions that stretched from December to March, according to the arbitration award. The couple accused UBS of breach of fiduciary duty, negligence, negligent supervision, fraud, breach of contract, and violations of securities laws.
The award comes as an investor Christian Dumontet seeks class action status on behalf of himself and 1,500 other clients who invested approximately $5.7 billion in the firm’s YES, according to his lawsuit filed Dec. 5 in federal court in New York.
The company denied the allegations, a UBS spokesman told Barron’s at the time. “The YES strategy is an appropriate strategy for experienced, wealthy investors, with a long, successful track record. UBS disclosed all relevant risks to investors,” the spokesman said in a statement. “This new action is meritless and UBS intends to continue to defend it vigorously.
In August, 2021, UBS was ordered by a different Finra arbitration panel to pay hundreds of thousands of dollars to another investor who filed a claim relating to the YES strategy.
According to the arbitration award, Stephen and Allison Walk filed their complaint against UBS in June 2020, claiming the firm breached contract, neglected and exploited elderly and disabled adults, unjust enrichment and other infractions related to the Yield Enhancement Strategy, which UBS recommended.
The Walks claimed that UBS and its traders operated the YES program with “practically no supervision or compliance oversight” and with poor-risk controls
UBS was ordered by arbitrators to pay Allison Walk $300,000.00 in compensatory damages, $30,000 in costs and $75,000 for legal fees. Stephen Walk’s claims were denied by the arbitrators without giving any reason. According to the award document, the arbitrators also denied the expungement request as well as any other claims.