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This research post begins with two simple premises in mind:  (1) Sometimes financial advisors charge their customers excessive commissions or advisory fees; (2) When this does occur, the customer—who likely has reposed great trust in his or her financial advisor—has no idea that excessive commissions or fees were charged.  After all, it stands to reason that if customer was aware they were being overcharged, they would have objected.  

The practice of charging excessive commissions is often referred to as “churning.”  Unsophisticated, retired, elderly investors are particularly vulnerable to churning brokers.  

Here, we briefly examine six (6) ways an unscrupulous broker or financial advisor charges excessive fees or commissions in the accounts of unsuspecting customers.  

It is a longstanding principle in the securities industry that the fees and commissions brokers and financial advisors charge their clients must be fair and appropriate.  In 2003, for instance, the NASD (FINRA’s predecessor entity) issued Notice to Members 03-68 to brokerage firms, reiterating a statement it made in 1975 emphasizing that “charges must be ‘fair under the relevant circumstances and a member should be prepared to justify that its prices are fair as to each customer and transaction.’” Nonetheless, churning remains a leading source of new arbitration cases filed in the FINRA arena.  

Churning brokers and financial advisors have many techniques at their disposal to extract excessive fees and commissions from their clients.  Attorney Montgomery G. Griffin spent nearly a decade working as a financial advisor at two major Wall Street firms, giving him special insight into how brokers and financial advisors generate (and sometimes even conceal) excessive fees and commissions.  They include:    

1. Initial Public Offerings/Syndicate Purchases.  Initial Public Offerings (or “IPOs,” or “new issues” or “syndicate purchases” as they are known on Wall Street) are sold pursuant to an offering statement or prospectus.  Brokers and financial advisors often pitch IPOs to clients as though they are “commission free” and that they are doing the clients a favor by getting them in early on an investment.  However, the reality is that much of the time the broker or financial advisor is heavily incentivized to sell the IPO. Many IPOs have “selling concessions,” which are large commissions (often around 3% of the total purchase price) paid to the broker or financial advisor for selling the IPO to a client.  These selling concessions—which routinely appear on the broker’s internal “commission runs”—are hidden within the lengthy and complicated prospectuses that accompany the investments, which investors invariably never read (or usually do not understand even if they try to read them). Furthermore, because the commission is obtained indirectly through a deal with the issuing firm (rather than straight from the investor), brokers and financial advisors (and their so-called “expert witnesses”) may attempt to misrepresent to arbitration panels that selling concessions are not commissions to investors and thus have no impact on the results in an account.  When explained to arbitrators by an experienced advocate, it becomes evident that Wall Street’s position on selling concessions is disingenuous and designed to mislead. Cases relating to IPO transactions are often filled with nuanced arguments, only further exacerbating the need for an investor to have an advocate who is sophisticated and experienced in the world of securities and IPO transactions. The Law Offices of Montgomery G. Griffin have pursued multiple selling-concession-related cases with substantial success.  
   
2. Excessive Advisory Fees (or “Wrap Fees”).  It is increasingly common for brokers and financial advisors to compensate themselves in the form of a fee, the amount of which is based on the total account value being managed by the financial advisor.  These fees are commonly referred to as “advisory” or “wrap” fees. An advisory or wrap fee is charged in lieu of charging commissions in the account on a per-transaction basis. The percentage amount of the fee relative to the account’s value will vary depending on the assets under management, but fees generally are within the range of 0.10% to 2.00% annually.  The average annualized advisory fee on one million dollars under management by the advisor is approximately 1.00%.   If the client has less than a million dollars under management, the fee might be higher than 1% per year, and if the client has more than a million dollars under management, it is expectable that the fee will be lower than 1% per year.  Advisory fees in excess of these guidelines are generally a red flag worthy of further investigation.
   
3. Reverse Churning.  Advisory fees should not only be reasonable in amount (as discussed above), they should also be appropriate for the accounts to which they are applied based on the level of activity in the accounts.  In the words of the NASD in Notice to members 03-68, “fee-based programs are particularly appropriate for . . . those that engage in at least a moderate level of trading activity.” If there is a relatively low level of activity in a client’s account, such as when a long-term buy-and-hold strategy is being employed (often the case with bond-based or fixed income accounts), a client is likely better off paying commissions on a per-transaction basis.  The practice of charging a client an unnecessary advisory fee (due to a relatively low level of activity in the account) is referred to as “reverse churning.”  With a rise in popularity in recent years of advisory fees, reverse churning has become an increasingly pervasive problem and has received rapidly increasing attention from regulators. 

If your broker or advisor is charging advisory fees on an account while engaging in relatively little “buy” and “sale” activity in the account, you may be a victim of reverse churning fraud. 

One “red flag” indicative of reverse churning is where the broker or financial advisor enters relatively small and (in reality) essentially meaningless transactions in a customer’s account in order to try to create the impression that the account’s level of trading activity justifies charging an advisory fee.  For example, we have seen examples where a so-called “financial advisor” entered a flurry of transactions, each involving less than $1,000 in value, in a million dollar account—an obvious attempt to create the (false) impression that the account had appropriately been placed in an advisory-fee platform.

4. Churning.  It is hard to conceive of a more deceitful investment practice than churning.  In the words of the SEC, “churning occurs when a broker engages in excessive buying and selling of securities in a customer’s account chiefly to generate commissions that benefit the broker.”  One famous federal district court judge classified churning as being worse than ordinary theft since, unlike theft, the victim has no idea they are being fleeced when a broker churns an account.  

When an account is charged commissions on a per-transaction basis (as opposed to a set advisory fee), an unscrupulous broker may engage in frequent buying and selling to generate substantial commission charges.  Brokers engaged in such fraud frequently coax their clients into believing that this activity is in the client’s best interests, that it is some kind of “active” strategy designed to maximize gains or actively fend off losses, but in reality, the only gains being maximized are those of the broker and the firm. 

It can also be extremely difficult for a retail investor to determine when an account is being churned.  Aside from the fact that most retail customers struggle to understand when transaction activity in their account has become too much, trade commissions on individual transactions are frequently disclosed only on trade confirmations (but not on monthly account statements).  To make matters worse, in recent years, brokerage firms have encouraged clients to receive their trade confirmations electronically, which helps a churning broker avoid the often-asked question “why I am receiving all of these trade slips in my mailbox at home?” from the victimized customer.  Also, in the case of principal transactions, where the security is purchased by the customer directly from the brokerage firm’s own inventory, the commission may be disclosed only in the form of a confusing “markup” that requires rather sophisticated calculations to reveal the total commission charge in dollars.  

Also, in some cases, the total transaction commission may not be discernable from the trade confirmation at all, such as when the security purchased is a mutual fund with an up-front “sales load” that is disclosed in a lengthy prospectus that investors invariably either do not know about or do not read.  

Certain hidden commissions—like those often taken on municipal bond transactions or open-end mutual fund purchases—can be so large that churning can be achieved with only a few transactions in such securities. 

Churning brokers have many crafty ways of obscuring the commissions they are generating.  To determine whether churning has occurred, a complex and comprehensive expert forensic analysis must be conducted in the accounts and evaluated by an attorney knowledgeable about securities-related laws and standards.  The securities fraud Law Offices of Montgomery G. Griffin has extensive experience analyzing, prosecuting, and winning churning cases.  

5. Hybrid Schemes.  A hybrid scheme is a combination of (3) and (4) above.  In a hybrid scheme, the financial advisor talks the customer into opening both a commission account and a (wrap fee) advisory-fee account telling the customer that this arrangement will permit the customer to participate in a wider range of opportunities than would otherwise be available to the customer.  The financial advisor may then begin engaging in abusive behavior, such as by purchasing a security in the commission account (on which he charges a commission) then moving (or journaling) the security to the managed account so that he can then earn an ongoing advisory fee on the value of the position while it is held.  That same advisor also might eventually transfer the security back to the commission account to sell it so that the unknowing investor is forced to pay commission on the sale, as well.

6. Private Placements.  Commission abuses are also frequently found in private placements.  Private placements are securities sold privately to select investors, typically relatively wealthy “accredited” investors.  An investment where the client is asked to sign (an often very lengthy and complex) agreement, or fill out a questionnaire for the investment, is likely to be a private placement. 

Investments being sold through private placements frequently pay large commissions—sometimes near 10% of the client’s total investment—to the brokers and financial advisors who recommend them to customers.  Furthermore, investments sold as private placements carry a special risk of fraud and abusive structure. For example, Ponzi schemes are often conducted through private placements.  Non-public investments are rife with potential dangers and are extremely difficult to evaluate—investors would be wise to beware when their brokers or financial advisors present them with a non-public “opportunity” in a security that is not publicly-traded on a major exchange. 

The above are just some of the ways that enterprising brokers and financial advisors might extract unwarranted commissions and fees from their clients.  It is also important to note that commissions and fees are just one aspect of the costs that a client might incur in his or her accounts. Other costs, such as mutual fund expense ratios and options bid-ask spreads, may also adversely impact a client’s account performance.  The Law Offices of Montgomery G. Griffin, in combination with forensic analysis experts with whom our firm consults, can assist you in determining whether your accounts have been charged fairly or whether you might have a basis for seeking legal recovery from your broker or financial advisor for excessive commission or cost abuses.

By Montgomery G. Griffin 

In a recent edition, the Wall Street Journal reported the UBS Yield Enhancement Strategy to be, “A complex investment strategy pitched as low-risk by stockbrokers at UBS Group AG” that has “triggered a backlash from clients of its securities unit.”  The WSJ also informed, “In just one month late last year [2018], the strategy had losses exceeding 13%.”  However, the report further noted that a UBS spokesperson confirmed that as of late-August 2019 “only a small percentage of customers who invested in the [YES] program have filed arbitration claims over it.” (Quotations from the WSJ).  

UBS is not the only firm to have encouraged clients to utilize a yield enhancement strategy.  Reports have surfaced that firms such as Merrill Lynch, Morgan Stanley, and Credit Suisse recommended similar programs, such as a Collateral Yield Enhancement Strategy (“CYES”) managed by Harvest Volatility Management, to clients.  The Law Offices of Montgomery G. Griffin is actively investigating yield enhancement strategies offered by Wall Street firms.    

Read more about our Four Areas of Focus with the UBS YES Program 

Montgomery Griffin is a longtime investment loss recovery attorney based in Newport Beach, California.  He worked as a licensed financial advisor at PaineWebber from 1990-1995, during which time he attended and completed law school as a night student.  Thereafter, PaineWebber, which had been in business for 120 years, was acquired by UBS, a large Swiss bank. Today, the merged entity is typically known as UBS Financial Services, Inc.  (Herein, PaineWebber and UBS will be referred to simply as “UBS.”) In this post, Monty shares 3 things he learned during his on-the-ground work experience at UBS that today are invaluable to him and his team (including attorney Theodore Avery) when investigating investor claims for losses incurred at UBS, including most recently in the UBS Yield Enhancement Strategy (“UBS YES”) program.  To summarize, they are: (1) Recommendations designed to increase a portfolio’s yield typically come with higher risk and added costs—neither of which are always understood by the investor; (2) Financial advisors sometimes seek to transform “dead money” accounts to produce greater revenues by introducing higher commission-producing programs (which are often unsuitable); and (3) There were likely bid-ask spreads in the UBS YES program’s options transactions that generated substantial effective costs for the program’s participants.  Monty discusses details of each below.    

3 Things I Learned at UBS That Help My Team and Me to Better Analyze

Investor Claims Related to the UBS YES Program

#1.   Recommendations Designed to Increase a Portfolio’s Yield Typically Come with Higher Risks and Increased Costs   

When I worked at UBS, interest rates plummeted during my first three years on the job.  The federal funds rate declined from 8.22% in March 1990 (when I transferred my employment to UBS from Merrill Lynch) to 2.75% less than three years later—which, at that time, was the lowest federal funds rate in 25 years!  Sound familiar? When this happened, financial advisors suddenly had to manage large bond accounts with depressed yields.  Sound familiar?  Investors, including many senior citizens who had become accustomed to receiving higher rates of interest on their “safe” money, became a captive audience for ideas on how to enhance the yield of their portfolios.    

When marketing yield enhancement products in the 1990’s, elderly investors were (and, today, still are) some of the most trusting brokerage firm customers.  They are often likely to authorize a broker’s recommended changes to their portfolio since they frequently depend on the yield generated by their investments to pay their monthly expenses.  To fill this need in the depressed interest rate environment of the early 1990’s, UBS (often together with other Wall Street firms) marketed through its financial advisors a dizzying series of leveraged municipal bond funds (many managed by Nuveen).  The brokers were paid handsomely to sell these new funds to their customers, often getting gross commissions of approximately 4.5% on each purchase regardless of order size.  However, the gross commission amount for each transaction did not appear on the customer’s monthly statement or trade confirmation since it was classified as a “selling concession.”  In time, however, the funds’ performances reinforced the old adage that there is “no free lunch,” as the funds often declined in value within just months due in part to the hefty selling concessions that were paid to brokers from the proceeds of each such offering.  Later, when interest rates rose, the leveraged nature of these funds often caused larger declines in value than comparative non-leveraged investments. In my experience, little of this was understood by unsophisticated (frequently elderly) investors, who often (a) tended to believe that they had purchased these funds on a commission-free basis, and (b) did not understand the internal leverage used in the funds as a means to enhance yields.      

In 2017, as interest rates remained low, UBS ramped up its focus on recommending the YES program to customers.  Our investigation of the UBS YES program suggests that its use of the “Iron Condor” options strategy often increased risks and costs to participating customer accounts, just as UBS’s widescale marketing of the leveraged Nuveen bond funds had often done in the early 1990’s.   

The Attorney-Client Interview — Were the UBS YES Disclosures Adequate? 

Having a sound understanding of how the leverage and options trading was implemented in YES program customer accounts by UBS (for the purpose of enhancing yields) helps us at the Law Offices of Montgomery G. Griffin to thoroughly interview prospective new clients to probe whether the financial advisor adequately informed them upfront about the YES program’s added new risks and the additional costs to their portfolio.  

#2 Financial Advisors Sometimes Seek to Transform “dead money” Accounts to Produce Greater Revenues by Introducing Higher (and Often Unsuitable) Commission-producing Programs  

Most fixed-income accounts, by nature, have relatively low trading activity when handled properly.  Wall Street firms compensate their financial advisors by sharing with them a portion of the fees, commissions, and margin interest generated in customer accounts.  When large bond accounts become relatively inactive (such as, for example, when an account becomes fully invested in long-term bonds or bond funds), an advisor’s compensation can suffer.  In the securities industry, advisors often refer to the cash and securities in such inactive accounts as “dead money” (since those securities are not actively generating commissions).  

When I worked at UBS, various new programs, products, and strategies were devised and made available to the firm’s brokers which resulted in newfound additional commissions and fees for the firm and its brokers.  Sometimes these new securities were used by firm brokers to convert “dead money” customer accounts to higher revenue producing relationships. One of those programs was the advent of fee-based accounts for retail branch office customers.  FINRA and the SEC have cautioned that fee-based accounts can improperly force an unknowing customer with a relatively inactive account to pay considerably more compensation to a brokerage firm in the form of ongoing advisory fees when compared to a traditional commission structure for the same inactive account. 

We believe that a comprehensive investigation of the UBS YES program, including of its deployment of options transactions and advisory fees, must include an analysis of whether the YES-implemented changes to an account resulted in a higher percentage of fees and other costs relative to the overall net equity in the account.  A recent article in the Wall Street Journal reported that one UBS YES investor was charged a fee of 1.75% on a $3 million YES account. In our assessment, and as suggested by the Wall Street Journal, fees above 1% per year for investors with assets under management over $1 million are likely excessive. See our blog post on some of the ways brokers charge customers excessive fees and commissions.    

Since 1996, Monty Griffin has represented investors in arbitration cases against UBS for alleged financial advisor misconduct, including securities fraud.  We are investigating the UBS Yield Enhancement Strategy program on behalf of investors. If you believe your portfolio suffered losses in the UBS YES program, contact us for a free consultation.         

#3 There Were Likely Bid-Ask Spreads in the UBS YES Program’s Options Transactions that Generated Substantial Trading Costs for Investors  

By its own admission, the UBS YES program is an options strategy that uses a customer’s existing portfolio as collateral to attempt to generate incremental yield.  In 1983, the Chicago Board of Options Exchange (“CBOE”) launched the trading of OEX index options, contracts based on the Standard & Poor’s 100 Index. During the 1990’s, when I spent over five years as a financial advisor at UBS, the popularity of index options trading exploded in the United States.  Indeed, by 1997, the index had a 2-for-1 split.   Financial advisors, including me, who included index options trading in the services offered to clients knew two things: (1) trading index options was a fast-moving, high-risk endeavor, typically only suitable for the most aggressive investors; and (2) options transactions typically had sizeable bid-ask spreads, which meant that purchasing and selling them predictably incurred a bid-ask spread trading cost that was ultimately born by the customer. 

While the Iron Condor options strategy used by UBS with its YES program may have sought to substantially reduce some of the risks involved in options trading by selling an out-of-the-money put (or, short put) while simultaneously selling an out-of-the-money call (or, short call), each executed transaction nonetheless had its own inherent trading cost as a result of the bid-ask spread in existence at the time of the execution of the transaction.  We have handled many options cases over the years, including some involving extremely large multi-million dollar accounts of elderly investors. These experiences have included situations where the trading costs alone have exceeded a million dollars.  Although there can often be multiple categories of costs to an investor when trading options, it has been our experience that the largest cost category is often the cumulative total of the bid-ask spread from all of the options transactions combined. In our experiences, we have found that most retail investors are unaware of trading costs resulting from bid-ask spreads.  It is our opinion that a proper forensic expert analysis of a customer account that was placed in the UBS YES program should include a complete set of calculations of the bid-ask spread trading costs incurred by the customer, as well as pointed attorney interviews of each client related to what, if anything, the financial advisor explained regarding this foreseeable category of cost to YES program participants.  

If you lost money in the UBS YES program, contact us for a free consultation.  We are especially eager to speak with you if your UBS financial advisor did not explain to you that the UBS YES program could, in some scenarios: (1) substantially increase the risks to your account, and/or (2) significantly increase the costs of investing to you. 

It is a disturbing and unfortunate fact that senior citizens are among the most targeted groups for financial abuse.  Indeed, it is estimated that seniors in the United States lose as much as $36.5 billion to financial exploitation annually, with many believing that such estimates are dramatically understated due to the fact that they rely on figures from reported cases of financial abuse—and as many as 44 out of 45 cases of elder financial abuse go unreported. 

These statistics are no accident: seniors as a group have many qualities that make them ideal prey for financial abusers. After years of working and fostering nest eggs for retirement and legacy planning, seniors are likely to have relatively substantial savings.  Additionally, seniors often have preoccupations (such as with medical challenges they or their friends and family might be facing), infirmities, technological challenges, travel itineraries, and other vulnerabilities that make them especially reliant on others and incapable of effectively protecting themselves and detecting misconduct.  In short, exploiting seniors is profitable, easy to do, and easy to get away with, making it a prime practice for enterprising miscreants.        

Ironically, and tragically, many of the qualities that make seniors vulnerable to financial abuse are also qualities that make them exceptionally sensitive to it.  As they are usually retired, seniors frequently do not have a meaningful stream of income from work or other sources outside of their savings, meaning that it is inordinately difficult for them to recuperate losses.  Additionally, as people age, their costs are liable to increase due to expenses like health care costs, long-term care needs, and an increased reliance on third-party professionals generally. The emotional toll that financial abuse can take on seniors also cannot be overstated.  The anxiety, shame, confusion, and sense of isolation a senior may experience as a result of discovering financial abuse can place an enormous burden on him or her. In fact, the Securities Industry and Financial Markets Association (SIFMA)—the leading trade association for broker-dealers, investment banks and asset managers—has itself recognized that beyond mere economic losses, elder financial abuse frequently leads to loss of independence, reduced quality of life, poor health outcomes, and even self-harm and suicide. 

Given the enormity of this problem, some states have taken the initiative of enacting special laws designed to thwart financial elder abuse and compensate its victims.  Of special importance in the case of financial abuse at the hands of brokers and financial advisors, California and Florida—two states with significant senior populations—have enacted civil financial elder abuse laws that enable seniors to pursue enhanced remedies against their financial abusers.  

California’s Elder Abuse Law

In California, pursuant to section 15610.30 of California’s Welfare and Institution’s Code, to demonstrate financial elder abuse, one must show that:

1. The respondent (or defendant) engaged, or assisted, in taking, secreting, appropriating, obtaining, or retaining real or personal property.  This element is deemed met whenever the elder is “deprived of any property right.”  Cal Wel & Inst Code § 15610.30(d).
   
2. Of an elder.  An elder is defined as anyone age 65 or older.  Cal Wel & Inst Code § 15610.27.
   
3. For a wrongful use or with intend to defraud (or both).  One takes property for a “wrongful use” if one “knew or should have known that [the] conduct is likely to be harmful to the elder . . . .”  Cal Wel & Inst Code § 15610.30(b).

Given how broad the elements of financial elder abuse are under California law, almost all cases of broker and financial advisor misconduct against someone 65 or older in California are actionable as financial elder abuse.  

If a claimant (or plaintiff) demonstrates financial elder abuse by a preponderance of the evidence, he or she is entitled to recovery of his or her reasonably attorneys’ fees and costs in addition to normal compensatory damages.  Cal Wel & Inst Code § 15657.5(a).

California has also enacted Civil Code section 3345.  Section 3345 states that in cases involving senior citizens where punitive damages are allowed (as they are in the case of a financial elder abuse action), the trier of fact should consider three factors:

1. Whether the defendant knew or should have known that his or her conduct was directed to one or more senior citizens or disabled persons;
   
2. Whether the defendant’s conduct caused one or more senior citizens or disabled persons to suffer . . . substantial loss of property set aside for retirement;
   
3. Whether [the senior citizen] . . . [was] substantially more vulnerable than other members of the public to the defendant’s conduct because of age, poor health or infirmity, impaired understanding . . . [or] disability, and actually suffered . . . economic damage resulting from the defendant’s conduct.
   

It is a sad fact that many financial elder abuse cases match some or all of these factors as well.  If the trier of fact (such as the panel of three arbitrators in a FINRA arbitration) makes an affirmative finding for any of the above factors, section 3345 permits the trier of fact to impose a penalty in the form of multiplying the damages it would otherwise award by three (i.e., trebling damages).  

Florida’s Elder Abuse Law

Florida financial elder abuse law is similar to California but with some important differences. Florida Statute section 415.1111 provides that a “vulnerable adult who has been . . . exploited” may bring a financial elder abuse (or “exploitation”) action in Florida.  Like California, if the vulnerable adult prevails, he or she is entitled to recover reasonable attorneys’ fees and costs in addition to normal compensatory (and potential punitive) damages.  A “vulnerable adult” is defined as any person 18 years or older “whose ability to perform the normal activities of daily living or to provide for his or her own care or protection is impaired due to a mental, emotional, sensory, long-term physical, or developmental disability or dysfunction, or brain damage, or the infirmities of aging.”  F.S. § 415.102(27) (bold added).  “Exploitation” is defined as including breaches of fiduciary relationships, unauthorized taking of personal assets, misappropriation, misuse, or improper transfer of money.  F.S. § 415.102(8). Thus, as in California, many cases of broker and financial advisor misconduct against a senior will be actionable as financial elder abuse in Florida, though there may be some additional hurdles in the form of having to demonstrate impairment due to “infirmities of aging” or the like under Florida law.  

And these remedies are not merely theoretical in the world of broker and financial advisor misconduct; there are multiple examples where arbitration panels have significantly ratcheted up a damages award and specifically cited California or Florida’s financial elder abuse laws as their authority for doing so.  For instance, in FINRA Arbitration No. 13-00549, the FINRA arbitration panel awarded attorneys’ fees and $1.54 million in costs and witness fees to the claimant, citing Florida Statute 415. More recently, in FIRNA Arbitration No. 16-00847, the panel awarded the claimant approximately $1.3 million in punitive damages and attorneys’ fees pursuant to California’s financial elder abuse laws.  Accordingly, the Law Offices of Montgomery G. Griffin often pleads and pursues financial elder abuse damages in appropriate cases. Further, the firm makes special efforts to educate the arbitration panel on applicable elder abuse laws in appropriate cases so that the panel does not fail to recognize its power to award attorneys’ fees, punitive damages, and other enhanced damages.  

If you are a senior and believe that you have been harmed as a result of broker or financial misconduct, do not hesitate to contact the Law Offices of Montgomery G. Griffin today.

It has been widely reported (including by the Wall Street Journal) that some investors around the United States—including some seeking low-risk, steady yields—incurred losses in the UBS Yield Enhancement Strategy program.  The program involved, among other things, the use of options transactions, which included added costs due to options bid-ask spreads and fee-based advisory fees. Our work on behalf of aggrieved investors since 1996 has often found that, when options transactions are made, retail customers do not understand the impact that option bid-ask spreads have on an account’s prospects for success.  

The ongoing investigation of the Law Offices of Montgomery G. Griffin into the UBS YES program is focused on the following four factors:

1. Whether the UBS YES program was unsuitable for investors, with special focus on whether certain investor accounts were unsuitably leveraged with excessive amounts of borrowed funds; 
2. Whether UBS financial advisors fully and fairly disclosed all material risks associated with investing in the UBS YES program when making oral sales presentations to their customers; 
3. Whether UBS fully and fairly disclosed all costs associated with investing in the YES program when making oral sales presentations to their customers; and
4. Whether the options trading utilized by UBS as part of the YES program was consistent with the strategy disseminated in writing to UBS clients, including as presented by UBS via the use of certain slide decks.    

Monty Griffin served as a financial advisor for UBS’ predecessor firm, PaineWebber, during the period of 1990-1995.  Since 1996, Monty has been prosecuting arbitration claims for investors against UBS Financial Services. His experiences as a former financial advisor are invaluable to him and his team when representing aggrieved investors.  Read more about 3 Things Monty Learned at UBS That Help Him and His Team to Better Analyze Investor Claims Related to Yield Enhancement Programs, Including UBS YES.  

If you were an investor in the UBS YES program and suspect that (a) it may have been an inappropriate strategy for you, or (b) you did not sufficiently understand the risks and/or costs involved, Contact Us for a free consultation.