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A UBS Financial Services options trading program marketed as a “Yield Enhancement” strategy to brokerage customers of UBS, reportedly including risk averse investors with substantial bond portfolios, suffered substantial losses approaching 20% of the capital committed in 2018 and early 2019, although customers to whom the strategy was sold had reportedly been under the impression that the maximum loss they faced in a given month was  1-2%.

money blowing in wind
UBS financial advisor Jose Cornide (CRD# 2785918) of the Edinroc Financial Group in Coral Gables, Florida reportedly faces seven customer disputes, according to his publicly available FINRA BrokerCheck report, including some customer disputes regarding the UBS Yield Enhancement Strategy (YES).  Cornide has reportedly been employed by UBS Financial Services since 2005, and works out of the firm’s Coral Gables, Florida office. Before that, Cornide reportedly worked for Goldman Sachs from 1996-2004.

Our firm currently represent other investors in claims against UBS for the sale of the Yield Enhancement Strategy, which was reportedly marketed to high net worth investors around the country as producing steady returns, with modest or minimal risk of substantial losses.  This impression of minimal risk was borne out by UBS’s marketing materials for YES, which at least strongly suggested that the central trading strategy of YES- the Iron Condor- exposed the client to finite or limited risk.  For example, one UBS marketing presentation touted historic returns that featured very few months with losses, and many months with gains.  UBS marketing materials also characterized YES’s central strategy as follows: “selling short term out-of-the-money European style puts and calls on the S&P 500 Index.  To help mitigate downside and upside market exposure, short term below-market and above-market call options are purchased with the same duration as the puts and calls sold.”

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