Securities Lawyer Blog | Victim of Securities Fraud?

TAG | Massachusetts UBS yield optimization notes




The Soreide Law Group is investigating claims on behalf of investors purchasing UBS Yield Optimization Notes. UBS’ Yield Optimization Notes are also known as reverse convertibles. Reverse convertibles are esoteric structured products based upon the performance of a short put option, or derivative. Reverse convertibles are attractive to investors seeking income because of the above average income the product provides. However, this income product has substantial risk of loss of principal. The income comes from the premium received from the sale of a put on the underlying stock. Surprisingly, UBS does not mandate its registered representatives to perform option suitability analysis or have investors fill out options account forms. As a result, investors, including retirees, without options investing experience can been sold complicated option laden reverse convertibles.
UBS is one of several firms that are under investigation by the State of Georgia for improper reverse convertible sales. Georgia securities regulators are not alone, the State of Massachusetts is also investigating how firms are selling reverse convertibles to investors. The SEC is also investigating whether the risks and fees of reverse convertibles were properly disclosed to investors. In addition, the SEC is investigating whether investors overpaid for reverse convertibles. Recognizing potential sales abuses associated with reverse convertibles, FINRA issued Notice to Members 10-09, which was a reminder to firms of their disclosure obligations under NTM 05-59. Members are required to provide balanced risk disclosures to investors purchasing reverse convertibles. In 2011, FINRA began conducting regulatory sweeps to monitor how members were selling reverse convertibles to investors. FINRA has subsequently issued NTM 12-03 which seeks heightened supervision for complex products such as reverse convertibles.
If you or a loved on has purchased UBS Yield Optimization Notes or a reverse convertible product call Lars K. Soreide of the Soreide Law Group at 888-760-6552 for a free consultation or visit

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