A UBS financial advisor has won a Financial Industry Regulatory Authority arbitration request to expunge his record in connection to a complex investment strategy designed in-house and another investment.
In September 2019, UBS settled for $165,000 a customer claim that sought $348,000 in connection to the firm’s Yield Enhancement Strategy, according to BrokerCheck and an arbitration award document published last week.
The strategy involves making several option trades at different strike prices but with the same expiration dates in a bid to limit exposure during market volatility, as reported.
The claim alleged unsuitability and misrepresentation, according to the BrokerCheck record of Brian Andrew Blackburn, who was not named as a party in the matter nor contributed to the settlement, he says in the broker comment section of the customer dispute.
In March 2021, Blackburn filed an arbitration claim seeking expungement of the customer dispute related to the YES strategy from his record, naming UBS as the respondent, according to the award document.
Blackburn also asked for the expungement from his record of a customer dispute that was denied in 2008 involving Auction Rate Securities, which are a form of security in which the liquidity can be affected by volatility, as they can be sold in a weekly auction, Finra says.
UBS did not oppose the expungement request of Blackburn, who has been registered at the wirehouse since 2001.
Last week, a Finra arbitrator granted Blackburn’s request, ruling that the YES strategy was suitable for the customers who had filed the dispute and that there was no misrepresentation about the strategy on Blackburn’s part, according to the award document.
The arbitrator also granted Blackburn’s request to expunge his record related to the Auction Rate Securities, ruling that there were no violations, Finra says.
Lawyers for UBS clients have said that the YES play has cost investors tens of millions of dollars in losses. UBS has paid out several settlements related to the strategy, but has also fought arbitration claims brought by investors who asserted various violations in connection to YES, often successfully.
In April, a Finra arbitration panel ordered UBS to pay around $371,000 to two of its former clients who claimed negligence and breach of fiduciary duty in relation to the strategy, as reported.
But the previous month, Finra arbitrators ruled in favor of UBS, denying a claim from a customer seeking $620,000 in damages.
Do you have a news tip you’d like to share with FA-IQ? Email us at email@example.com.