UBS Financial Services Broker, Scott Rosenberg, Has Three Pending Complaints, Arising From His Recommendation That Clients Participate In The UBS Yield Enhancement Strategy
Scott Rosenberg is a Financial Advisor at UBS Financial Services Corp. in New York, NY. Scott Rosenberg entered the securities industry in 1997 and previously worked at DLJ Securities Corp.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), since 2018, Scott Rosenberg has been the subject of three customer complaints, arising from the UBS Yield Enhancement Strategy (UBS YES Strategy).
- March 2019—“Client alleges the advisors misrepresented the strategy makes money because it works like an insurance product and takes advantage of the difference in implied and realized volatility.” Damages are unspecified.
- February 2019—“Claimant’s counsel alleges unsuitability and misrepresentation regarding an options overlay strategy investment.” Alleged damages are $400,000 and the matter remains pending.
For a copy of Scott Rosenberg’s CRD, click https://brokercheck.finra.org/individual/summary/2754292#disclosuresSection
The UBS Yield Enhancement Strategy is an options strategy that was marketed by UBS as a safe method to generate supplemental portfolio income. The UBS Yield Enhancement Strategy involves the use of an “Iron Condor” options strategy, which entails selling both near-the money and out-of-the money put and call options against the S&P 500 index. In a stabilized market environment, some or all of the options will expire and the investor collects the premiums.
Conversely, in a volatile market, which we have experienced in recent months, the options get exercised. If the options get exercised and the strategy is not properly hedged, investors may experience substantial portfolio losses. In addition, because the iron condor strategy involves leveraged, short option positions, the losses become amplified.
How did UBS market the UBS Yield Enhancement Strategy?
In today’s current interest rate environment, it has been difficult for investors to identify short-term, fixed income investments that generate a stable, predictable income stream. In the absence of such opportunities, many UBS Financial Advisors pitched the UBS Yield Enhancement Strategy as a safe method to generate portfolio income. UBS Financial Advisors represented to customers that the strategy was properly hedged such that even if there were market movements, the investor’s principal was protected. In other words, the UBS Yield Enhancement Strategy was represented to be a relatively conservative investment strategy.
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses. The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org.