Alex Padalka
Jul 25, 2022
In the latest case, the claimants sought between $1 million and $5 million in compensatory damages and unspecified punitive damages.
UBS is on the hook for more than $250,000 in connection to its Yield Enhancement Strategy, the firm’s in-house options trading strategy. Dennis Ainbinder and Nadine Ainbinder, as trustees of the 1992 Ainbinder Family Trust, filed a claim against UBS in 2019 alleging breach of fiduciary duty, negligent supervision and fraud, among other violations, in connection to the strategy, according to a letter of acceptance, waiver and consent published by the Financial Industry Regulatory Authority.
The Ainbinders sought between $1 million and $5 million in compensatory damages, interest, rescission, unspecified punitive damages, lawyers fees’ and costs and any other relief deemed appropriate by the arbitrators, the industry’s self-regulator says.
UBS sought the dismissal of the claims with prejudice as well as the expungement of the matter from the records of financial advisors Christopher Aitken and Roy Kenneth Tonning, neither of whom were named in the claim, according to the award document.
Earlier this week, the arbitrators ordered UBS to pay approximately $147,200 in compensatory damages, around $60,700 in costs, roughly $44,160 in lawyers' fees and the $600 non-refundable portion of the filing fee, Finra says.
The arbitrators didn’t explain their reasoning for the award.
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June 30, 2022UBS Settles with SEC for $25M Over YES Options Program
June 28, 2022UBS Ordered to Pay $976K Over YES Program
The YES program involves placing several option trades at different strike prices with the same expiration dates and is intended to reduce exposure in times of market volatility, but the strategy saw significant losses starting in December 2018.
The program has been at the heart of multiple arbitration claims against UBS, half of which went in the company’s favor while the rest resulted in millions of dollars awarded to investors.
Last month UBS agreed to pay around $25 million over alleged fraud tied to the strategy in a settlement with the Securities and Exchange Commission.
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