High-Risk Collateral Yield Enhancement Strategies Have Cost Investors Millions

Sonn Law is investigating firms that sold Collateral Yield Investment Strategies. We represent investors in the United States for claims against brokers and brokerage firms for wrongdoing. If you have experienced investment losses, please call us at 866–827–3202, or complete our contact form for a free consultation.

Why Your Broker Might Recommend a Collateral Yield Enhancement Strategy

Many broker-dealers, including Morgan Stanley and Merrill Lynch, offer investments through what is called a Collateral Yield Enhancement Strategies, or CYES.

These kinds of investments are high-risk options strategies that have a high potential for investor losses. They are still often offered because of their potential for generating high commissions.

In the past few months, UBS Financial Services is one of several firms that became involved in a lawsuit regarding the sale of yield enhancement strategies, resulting in nearly $60 million in investor losses.

CYESs are “iron condor” investments. In an iron condor, the trader sells a call spread and a put spread with the same expiration day on the same underlying instrument. By simultaneously selling and buying calls and puts, an iron condor strategy can generate income as long as the price stays within the breakeven points created by the spreads.

Why You Might Have a Case

Unfortunately, sudden price swings can push the price outside of the breakeven points, resulting in losses. This kind of price swing happened early last year when the DOW plunged over 1,000 points in February 2018.

Because broker-dealers are responsible for supervising their brokers to make sure that only suitable recommendations are made to investors, they may be held liable when there is misconduct. Under FINRA Rules, investors can recover some or all of their investment through FINRA arbitration or lawsuits if necessary.

Get Help From Our Investment Fraud Attorneys Today

At Sonn Law Group, our securities fraud lawyers are currently investigating claims involving the collateral yield enhancement strategy or CYES strategy. We hold negligent brokers and broker-dealers accountable. To get a free, fully confidential initial legal consultation, please contact us today. We serve investors nationwide.

Sonn Law Group has a great deal of experience in representing investors who have sustained losses due to the negligence or misconduct of their broker and/or brokerage firm, including cases involving complex options strategies. We will aggressively pursue claims to recover your Collateral Enhancement Strategy or other investment losses. If you are looking for an investment fraud attorney to review your rights and options, the lawyers at Sonn Law Group represent individual and institutional investors who have lost money as a result of unsuitable investment advice, negligent advice, investment fraud or stockbroker misconduct. Our attorneys have helped to recover more than $250 million in assets lost to investment fraud, securities fraud, Ponzi schemes, and stockbroker misconduct.

• Gordon Harper, Broker for Merrill Lynch, Sued for CYES Losses (1/2/2020)
• Information for Investors: Harvest Volatility Management Collateral Yield Enhancement Strategy (CYES) (9/11/2019)
• Collateral Yield Enhancement Strategy Investment Losses (8/1/2019)