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MIAMI, Nov. 17, 2016 -- The securities arbitration law firm Dimond Kaplan & Rothstein, P.A. (http://www.dkrpa.com) has filed a FINRA arbitration claim against UBS Financial Services, Inc. on behalf of a 90-year-old retiree who lost money in risky UBS Trigger Yield Optimization Notes. The timing of this case coincides with FINRA’s recent effort to put in place rules designed to prevent financial elder abuse.
The investor alleges that the Notes were unsuitable. More specifically, he alleges that his UBS broker, Robert DeForest, used trading discretion to buy the securities, which are reverse convertible notes that exposed investors to significant risk while providing only limited potential upside. The Notes apparently were linked to volatile energy and technology stocks.
Many convertible-debt securities give investors the benefit of all the linked stock’s upside. But the Notes were capped at an 8% to 11% return plus the return of invested principal. And if the value of the linked stocks dropped below pre-determined “trigger” prices by the Notes maturity date, then investors were not entitled to a return of any principal. Rather, UBS then would “put” to investors shares of the stock that were worth substantially less than the principal invested. In other words, investors in the Notes had massive downside risk, with only limited upside.
Investors were in a similar position to those who sold naked put options on the linked stock. Of course, selling naked puts is an aggressive and speculative investment strategy that can be unsuitable for many investors -- especially elderly retirees. The capped investment return on the Notes also may not have sufficiently compensated investors for the significant risks of the Notes.
If you lost money in UBS Yield Optimization Notes, contact a Dimond Kaplan & Rothstein investment fraud lawyer for a free case evaluation at (888) 578-6255 or [email protected]. You may have a valid FINRA arbitration claim to recover your UBS investment losses. You also can visit Dimond Kaplan & Rothstein, P.A. on the web at www.dkrpa.com.
Contact: Jeffrey B. Kaplan, Esq. [email protected] 2665 S. Bayshore Drive, PH-2B Miami, Florida 33133 * Offices in Miami, Los Angeles, New York, and West Palm Beach (305) 374-1920 (888) 578-6255 URL http://www.dkrpa.com
