Gerard Costello: Options Strategy Complaints Against NYC Broker

Gerard Costello (CRD# 1551511), a broker and investment adviser registered with UBS Financial Services, has received several pending complaints involving recommendations that customers invest in an options overlay strategy offered by UBS. A representative of the firm’s office in New York, New York, the pending complaints allege more than $1 billion in damages.

In December 2021 a “putative class action” was filed against UBS Financial Services by customers who participated in its Yield Enhancement Strategy, alleging that the firm “fail failed to accurately disclose the risks associated with YES, its expected performance, certain alleged conflicts of interest, and that YES team members were involved in arbitration proceedings brought by their former employer.” The class action complaint, which is included on Mr. Costello’s BrokerCheck report, alleges damages of $1.2 billion.

A complaint filed in August 2020 alleged that as a representative of UBS Financial Services, Costello breached contract, violated Texas law, committed fraud, breached his fiduciary duty, acted negligently,  misrepresented and omitted material facts, engaged in unjust enrichment, failed in his supervisory duties. The complaint evolved into a FINRA arbitration proceeding that concluded with an award to the claimant of $50,000.

A complaint filed in July 2020 similarly alleged that an options strategy was misrepresented and unsuitably recommended. The pending complaint alleges damages of $656,000.

An April 2020 complaint alleges that while he was a representative of UBS Financial Services, Costello misrepresented material facts relating to an unsuitable recommendation to invest in and hold an options overlay strategy. The pending complaint seeks damages of $350,000.

A complaint filed in 2019 similarly alleges that Costello, as a representative of UBS Financial Services in New York, unsuitably recommended an options overlay strategy, and made misrepresentations of facts surrounding the investment. The complaint reached a settlement of $165,000.

Gerard Costello has been registered with UBS Financial Services in New York, New York since 2015. His previous registrations include Credit Suisse Securities and Donaldson Lufkin & Jenrette Securities, the former in New York City and the latter in both New York City and Jersey City, New Jersey. He has passed three securities industry qualifying examinations: Uniform Combined State Law Examination, or Series 66; Securities Industry Essentials Examination, or SIE; and General Securities Representative Examination, or Series 7. His self-regulatory organization (SRO) registrations include FINRA, NYSE American, NYSE Arca, Nasdaq ISE, Nasdaq PHLX, the Nasdaq Stock Market, the Chicago Board Options Exchange, and the New York Stock Exchange. His BrokerCheck report lists 57 state securities licenses. (Information current as of May 11, 2022.)

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