In February 2014, Bond Buyer magazine featured a story about Silver Law Group’s representation of many Puerto Rico investors in FINRA arbitration claims against UBS of Puerto Rico for losses in leveraged bond funds. The article concluded by highlighting Silver Law Group Managing Partner Scott Silver’s concerns that FINRA was not equipped to handle the large number of claims which could easily be anticipated against UBS for selling this complex alternative investment which lost more than 60 percent of its value last fall.
Last week, FINRA finally took public action to address the issue by recognizing the problem and temporarily halting all claims against UBS Puerto Rico while FINRA creates a protocol to administer the cases. Silver Law Group urges FINRA to quickly address these issues and avoid unnecessary delay.
FINRA and the securities industry force investors to arbitrate all disputes with a broker-dealer through an arbitration clause in the customer agreement. However, FINRA arbitration is promoted as a fast, inexpensive process for deciding disputes. Many investors are now frustrated by a system which cannot administratively manage their claims. Investors have suggested, amongst other solutions:
- giving Claimants the sole option to elect the hearing location;
- recruiting arbitrators for the Puerto Rico hearing location, but also supplement the arbitrator roster there by drawing from the entire pool of FINRA’s Southeastern Region, not just those FINRA “handpicks;”
- waiving for Claimants who agree to a non-Puerto Rico situs all travel expenses for “brokerage firm employees” who might be ordered to testify at a hearing;
- applying any new procedures retroactively, so all cases follow the same rules;
- requiring FINRA to underwrite translation expenses; and
- requiring FINRA to translate the Code and NTM 11-17 into Spanish.
Silver Law Group is helping many Puerto Rican investors try to recover their losses. If you have questions about your legal rights, or have been the victim of investment fraud, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or Toll Free at (855) 755-4799.