Author: Attorney Jared Levy

Business Trial Group Investigates Investment Losses in UBS’s Yield Enhancement Strategy

Investor Alerts Attorney Jared Levy

Morgan & Morgan’s securities attorneys are investigating investment losses in UBS Wealth Management’s Yield Enhancement Strategy (YES).

UBS marketed YES as a conservative, market-neutral strategy and bond-portfolio enhancer. UBS told investors that YES would use a hedged, “iron condor” options strategy.  According to UBS, this strategy would generate consistent income while limiting risks to the premiums paid, even if markets turned bearish.  UBS represented to investors that YES would limit exposure to substantial market moves (up or down), and use protective options strategies to prepare for any unexpected volatility or market downturns.  Essentially, UBS sold YES as a strategy that would generate modest returns in both bull and bear markets, with limited risk.

But in reality, YES used high-risk leverage to trade options and make speculative bets that markets would remain calm and not turn volatile.  Most investors were unaware that YES offered relatively low upside with huge downside.

YES investments suffered significant losses in late 2018 when the markets became volatile, losing about 18% for the year (by contrast, the S&P 500 lost about 4% that same year).  In 2019, YES suffered losses of 2%, while the S&P 500 gained over 31%.  And YES again sustained substantial losses in February and March 2020, when market volatility returned amidst the coronavirus pandemic.

At their peak, YES investment holdings totaled about $6 billion in mid 2018.  UBS, however, may have charged excessive fees relating to YES investments.

If you have suffered losses in YES investments sold by UBS, we are here to help.  Contact us at (888) 251-2668 today to speak with an experienced securities attorney at Morgan & Morgan’s Business Trial Group.

The Business Trial Group at Morgan & Morgan helps investors recover their losses on a contingency basis.  We are only paid if we successfully recover money for you.  We have helped investors recover tens of millions of dollars of investment losses.

The Business Trial Group is part of the largest contingency law firm in the nation, with more than 500 lawyers and 50 offices.  We aggressively fight for justice against brokerage firms, investment advisory firms, and banks.

Business Trial Group Investigates Investment Losses at WestPark Capital

Firm News Attorney Jared Levy

Morgan & Morgan’s securities attorneys are investigating investment losses in pre-IPO shares and products sold by WestPark Capital, Inc.  These pre-IPO products include the Horizon Select Technology Fund LLC and Horizon Select Technology Fund II LLC (collectively, “Horizon Funds”).  Pre-IPO shares include Uber, Lyft, Palantir Technologies, Spotify, Pinterest, Dropbox, SpaceX, MagicLeap, Cloudera, AliphCom (d/b/a Jawbone), and Airbnb.

We have learned that Westpark may have solicited investors to invest in various special-purpose investment vehicles such as the Horizon Funds.  WestPark allegedly told investors that Horizon had purchased pre-IPO restricted shares of the companies listed above, including Uber, Lyft, and Palantir.  Even though investors allegedly were investing in a vehicle that had purchased shares at discounted pre-IPO prices, investors reportedly have suffered substantial losses in their investments.

WestPark may have had conflicts of interest in soliciting the investments. WestPark acted as a placement agent for Horizon.  Horizon’s manager executive, John Orlando, also was registered as a registered representative with WestPark and was branch manager of WestPark’s Fort Lauderdale office.  Some of the investment losses may be due, in part, to substantial commissions collected by WestPark and significant management fees charged by Horizon’s manager.

If you have suffered losses in pre-IPO investments sold by WestPark, we are here to help.  Contact us at (888) 251-2668 today to speak with an experienced securities attorney at Morgan & Morgan’s Business Trial Group.

The Business Trial Group at Morgan & Morgan helps investors recover their losses on a contingency basis.  We are only paid if we successfully recover money for you. We aggressively fight for justice against brokerage firms, investment advisory firms, and banks.  We have helped investors recover tens of millions of dollars of investment losses.

The Business Trial Group is part of the largest contingency law firm in the nation, with more than 500 lawyers and 50 offices.

Leveraged and Inverse ETPs Closures

Investor Alerts Attorney Jared Levy

The securities attorneys at Morgan & Morgan’s Business Trial Group are investigating investment losses in Exchange Traded Products (ETP) that recently closed after suffering massive losses this year.   

Amidst the markets’ extreme volatility in 2020, an unusually high number of Exchange Traded Funds (ETF) and Exchange Traded Notes (ETN) have closed.  Many of the ETFs and ETNs that have closed were leveraged or inverse products. 

Leveraged and inverse ETPs are extremely high-risk investments that typically are suitable only for the most speculative of investors.  As we have previously discussed on this site, while leveraged ETPs can produce outsized gains when the underlying index increases in value, they also can produce massive losses in bear or volatile markets. Inverse ETPs seek to achieve returns that are in the opposite direction of an underlying index.   

Many investors may not realize that leveraged or inverse products can lead to results that are different from a simple doubling, tripling, or inverse of the underlying benchmark’s return.  This occurs because these products re-balance on a daily or monthly basis and the compounding math.  The results may be amplified in volatile markets.  These products are not suitable for investors who intend to buy and hold them.

Over 90 ETPs have closed in the first quarter of 2020. Many of those ETPs were leveraged or inverse products that sustained tremendous losses.  Some of the ETPs that have closed are as follows:

  • ETRACS 2x Leveraged Long Wells Fargo Business Development Company Index ETN; 
  • ETRACS Monthly Pay 2x Leverage Dow Jones Select Dividend Index ETN; 
  • ETRACS Monthly Pay 2x Leveraged MSCI US REIT Index ETN; 
  • ETRACS Monthly Pay 2x Leveraged Closed-End Fund ETN; 
  • ETRACS Monthly Pay 2x Leveraged Diversified High Income ETN; 
  • ETRACS Monthly Pay 2x Leveraged Mortgage REIT ETN; 
  • ETRACS Monthly Pay 2x Leveraged Wells Fargo MLP Ex-Energy ETN; 
  • ETRACS Monthly Pay 2x Monthly Leveraged S&P MLP Index ETN Series B; and
  • ETRACS Monthly Reset 2x Leveraged ISE Exclusively Homebuilders ETN.
  • Columbia Sustainable Global Equity Income ETF
  • Direxion Daily MSCI Developed Markets Bear 3x Shares
  • Direxion Daily Natural Gas Related Bear 3x Shares
  • Direxion Daily European Financials Bulls 2x Shares
  • ProShares UltraPro 3x Crude Oil ETF
  • Credit Suisse X-Links Monthly Pay 2xLeveraged Alerian MLP Index ETN
  • Velocity Shares 1x Long VSTOXX Futures ETN
  • ProShares UltraPro Short Financial Select Sector
  • Columbia Sustainable Global Equity Income ETF
  • Franklin Liberty International Opportunities ETF
  • iPath US Treasury Long Bond Bear ETN
  • Invesco China Real Estate ETF
  • Invesco DWA NASDAQ Momentum ETF
  • Invesco Russell 1000 Momentum Factor ETF
  • WisdomTree Dynamic Bearish U.S. Equity Fund
  • WisdomTree CBOE Russell 2000 PutWrite Strategy Fund

If you invested in an ETF or ETN that recently closed, you may have suffered large losses.  The securities attorneys at Morgan & Morgan’s Business Trial Group are here to help. 

The Business Trial Group is part of the largest contingency law firm in the nation, with more than 500 lawyers and 50 offices.  We have helped investors recover investment losses totaling tens of millions of dollars. We are only paid if we successfully recover money for you. Please contact us today at 888.251.2668 for a free consultation.

Investor Losses from Oil and Energy Stocks

Investor Alerts Attorney Jared Levy

Morgan & Morgan’s securities attorneys are investigating losses in oil and energy investments, including losses in the United States Oil Fund LP.  

Oil prices have crashed to multi-decade lows amidst drastically reduced demand during the COVID-19 pandemic.  The most heavily traded crude contracts recently fell to their lowest level in over 20 years.  And one futures contract for U.S crude fell into negative territory for the first time ever – meaning that sellers had to pay buyers to take barrels. Oil companies simply can’t shut their wells quickly enough to deal with the reduced demand, and the world is running out of places to store oil.

Energy producers like Royal Dutch Shell PLC and BP PLC have collectively lost hundreds of billions of dollars in market value this year.  

The oil crash has also led to losses for investors in oil ETFs and other oil and energy-related products.  For example, the United States Oil Fund LP has lost almost 80% this year.  Other oil funds and limited partnerships have suffered huge losses as well.  Many of these oil-related investments are not suitable for individual investors because they are too risky and volatile.  

Investors also may have experienced substantial losses if their investments were over-concentrated in energy stocks and other energy products.

If you have suffered losses in oil or energy investments, we are here to help. Contact us at 888.251.2668 today to speak with an experienced securities attorney at Morgan & Morgan’s Business Trial Group.  

The Business Trial Group at Morgan & Morgan helps investors recover their losses on a contingency basis.  We are only paid if we successfully recover money for you.  We aggressively fight for justice against brokerage firms, investment advisory firms, and banks.  We have helped investors recover tens of millions of dollars of investment losses. 

The Business Trial Group is part of the largest contingency law firm in the nation, with more than 500 lawyers and 50 offices.