A customer complaint alleges Morgan Stanley broker Lindsay Yencho implemented an unsuitable options trading strategy over a seven-year period, writing that Yencho misrepresented the strategy in their trust accounts between January 2018 and May 2025.
Lindsay Margaret Yencho (CRD #6571087) is a registered broker and investment adviser in 30 states from California out west to Florida back east.
Claims of suitability often refer to stockbroker recommendations that are made without the broker providing a "reasonable basis for recommendation," or reason for advising a client purchase or sell a particular investment.
Covered call strategies are often sold to clients as a way to generate income, particularly on concentrated positions in a portfolio. According to Investopedia, "A covered call involves holding a long position in a stock while selling call options on the same asset. [It]... generates income from option premiums while providing limited risk reduction. It is particularly effective in flat or moderately bullish markets, where stock prices are expected to remain stable or rise slightly. "
One risk is the owner of the stock can't profit from its higher market value. If the stock price rises above the option's strike price, it is called away. The seller of the call option is forced to sell at the strike price.
Another risk is the underlying concentrated position. If the market goes against the stock, the covered call seller keeps the premium (income) but then suffers the capital loss on the underlying stock. This can cause devastating losses to the investor. Brokers and advisers often try to "sell" these losses as tax write-off benefits. In truth, they are hard money losses that could have been prevented by diversification or sometimes (and only to some extent) by employing more complex options strategies.
If you invested with Morgan Stanley broker Lindsay Yencho or with any investment adviser or firm who misrepresented or made unsuitably recommended securities transactions or options strategies that have proven harmful to your investments or interests, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.