A Major Investment Firm is Losing Its Battle Against Fraud Claims

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When a major investment firm offers a low-risk way for its wealthy investors to consistently enhance their returns, those investors listen.

Who wouldn’t?

After all, it’s a major investment firm – so the offering must be above-board – and anyone with a basic understanding of the securities market knows that low-risk opportunities don’t come along very often.

Enter the yield-enhancement strategy (YES). In the early 2000s, a major investment firm introduced the YES strategy to several of its wealthy clients. Brokers at the firm touted the YES strategy as a low-risk structured product that could generate consistent returns by betting on overall stability in the securities market. It utilized an “iron condor,” an investment strategy that involves simultaneously purchasing multiple options with strike prices above and below the price at which the underlying securities are expected to land, allowing the investor to collect option premiums – and do this over and over again.

For a long time, it worked. Wealthy investors did, in fact, enhance their yield through the firm’s YES strategy – and they were hooked. But then the market crashed, and the honeymoon was over.