UBS Financial Services of Puerto Rico has come under the scrutiny of a leading bond market commentator, The Bond Buyer in yesterday’s article titled, UBS Puerto Rico Faces Surge in Arbitration Claims. Standard & Poor’s, Moody’s and Fitch’s credit ratings agencies downgraded Puerto Rico’s general obligation bonds to junk bond status, which is below the investment grade status given to most U.S. municipal bonds. The downgrade was predicted by UBS Financial Services’ (UBS) recent report Municipal Brief: Puerto Rico Credit & Market Update dated January 29, 2104. This prediction came long after UBS Financial Services of Puerto Rico branch offices mobilized its sales force with a targeted marketing campaign to sell the UBS Puerto Rico Family of Funds to investors. A market revelation that is too late for those Puerto Rico investors’ whose portfolios are now heavily laden with UBS’ proprietary closed-end funds geographically concentrated in Puerto Rico bonds.
As mentioned in our previous blog post, “The removal of Puerto Rico municipal bonds from the universe of ‘investment grade’ municipal bonds could potentially result in increased sell orders from municipal bond portfolio managers driving prices lower.” Further price declines in Puerto Rico municipal bonds has already occurred and the effects for many UBS closed-end funds, including UBS Puerto Rico Fixed Income Funds and UBS Puerto Rico Investors Tax Free Funds, has been an average drop in many of the funds’ net asset values (NAV) of another 5% since the announced credit ratings downgrades.
Scott L. Silver, managing partner of Silver Law Group, has brought clarity to many Puerto Rico investors who have contacted his law firm. These investors have a better understanding of the Financial Industry Regulatory Authority (FINRA) securities arbitration process. The bond buyer reported, “his firm has filed about three dozen claims for FINRA arbitration in the past several weeks.” According to the Bond Buyer interview Mr. Silver pointed out that FINRA “rules require dealers to supervise the activities in customer accounts” and said “his clients’ losses may be attributed to a failure by UBS to supervise their financial advisors.”
Silver Law Group is conducting current investigations of UBS Financial Services of Puerto Rico and the supervision of its representatives located at the San Juan, Ponce, Hato Rey, Guaynabo and Mayaguez branch offices for violations of FINRA rules and regulations. These sales practice regulations require adherence to the securities industry standards of care designed to protect the investing public. UBS is required to provide, and investors should be able to reasonably rely upon UBS financial advisors for competent, suitable investment advice for securities held in their brokerage accounts. UBS is required to supervise the activities in customer accounts and losses may be attributed to the failure to supervise their financial advisors. Investors may be able to recover their losses from UBS in a securities arbitration claim filed with FINRA for negligence and/or unsuitable investment advice.
The Silver Law Group has Martindale Hubbell “AV” Preeminent Peer Review™ rated lawyers committed to the advocacy of investor rights for Puerto Rico investors who suffered UBS Bond Fund Losses. If you are interested in learning more about our investigation or your legal rights, you are encouraged to contact our law firm for a free consultation. Our attorneys have significant experience representing investors in FINRA arbitration claims and are working closely with Puerto Rico counsel. If you have questions about your legal rights, or have been the victim of investment fraud, please contact us Toll Free at (855) 755-4799 for a free consultation.