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Gerard Costello Embroiled in $1.2 Billion Dispute Alleging Misrepresentation 

Apr 12, 2022 Misrepresentation

Gerard Costello (CRD #:1551511), a broker and investment advisor registered with UBS Financial Services, is involved in an investor dispute, according to his BrokerCheck record, accessed on April 5, 2022. 

Investor Allegations

According to the allegations filed on December 10, 2021, Gerard Costello was named in a putative class action seeking to recover losses incurred by UBS customers who participated in the Yield Enhancement Strategy (YES). The investors allege that the firm failed to accurately disclose the risks associated with the Yield Enhancement Strategy, its expected performance, certain alleged conflicts of interest, and that YES team members were involved in arbitration proceedings brought by their former employer.

The investors are seeking $1,200,000,000.

FINRA Rule 2020

FINRA Rule 2020 prohibits brokerage firms and stockbrokers from making material misrepresentations or inducing people into buying investments with false or misleading statements about their potential benefits. 

Losses that can be attributed to a stockbroker's material misrepresentations of facts may result in a viable securities arbitration claim for damages.

Arbitration Award

On August 25, 2020, Gerard Costello was named in a customer complaint alleging breach of contract, violation of the Texas Deceptive Trade Practices - Consumer Protection Act; violation of the Texas Securities Act, fraud, breach of fiduciary duty, negligence, misrepresentation/omission, unjust enrichment, and failure to supervise

FINRA awarded the investor $50,000. 

You can read a copy of the award here

Denied Dispute

On August 21, 2020, Gerard Costello was involved in an investor dispute alleging he misrepresented the volatility of an investment. The investor sought $501,704.47, however, the firm denied the dispute.

Unsuitability and Misrepresentation Allegations

Between 2018 and 2020, Gerard Costello was involved in four unsuitability disputes. According to the allegations Gerard Costello recommended and misrepresented an unsuitable options overlay strategy investment leading to losses. Options can be exceptionally risky and do not fit many investors’ needs. 

Investors in two pending disputes are collectively seeking $1,006,000. 

Two similar disputes have been settled. These cases collectively settled for approximately $1,055,000.

Denied Disputes

One case has been denied, but investors should know that firms can deny disputes without external review. Investors should also know that they can still pursue FINRA arbitration and recover their losses following a denial.

Background Information

Gerard Costello has passed the following exams:

  • Series 66 - Uniform Combined State Law Examination
  • SIE - Securities Industry Essentials Examination
  • Series 7 - General Securities Representative Examination

Gerard Costello is a registered broker in 50 States, the Virgin Islands, Washington DC, and Puerto Rico. He is also a registered investment advisor in four states.

Besides UBS Financial Services, Gerard Costello has also worked with Credit Suisse Securities (USA) (CRD#:816) and Donaldson, Lufkin & Jenrette Securities Corporation (CRD#:7560) .

 Kurta Law Can Help

If you lost money while working with Gerard Costello, don't hesitate to contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For nearly 20 years, Kurta Law has advocated for investors to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.