Securities Arbitration Lawyers BlogFINRA Orders UBS Group AB to Pay Puerto Rico Investors $2.5 Million
Good news for other investors who have suffered losses in Puerto Rico investments
For the tens of thousands of ordinary investors who have suffered losses due to the financial crisis in Puerto Rico, there is hope. According to an online article on The Wall Street Journal, Financial Industry Regulatory Authority (FINRA) arbitrators ordered UBS Group AG to pay nearly $2.5 million to a couple from San Juan who bought Puerto Rico bond funds through the bank. This legal win is a sign of hope for investors in Puerto Rico municipal-bond funds seeking to recover financial losses through securities arbitration.
UBS brokers allegedly told many investors that Puerto Rico bond funds were a safe investment, when in fact the funds were actually a risky investment due to their structure and investment strategy. In addition, it is alleged that UBS profited by collecting fees on sales and trades of the funds while at the same time the bank ultimately controlled a large part of the market for the funds.
The article states that “the Swiss bank said it faces more than $1.1 billion in damages tied to its Puerto Rico activities.” Puerto Rico recently defaulted on its municipal-bond payment—the first default in its almost 117-year history as a United States protectorate. As a result, it is anticipated that additional cases will be filed.
As previously reported by The Wall Street Journal, UBS broker Jose Ramirez is the focus of a criminal investigation by the Justice Department. According to this recent article, there has been no confirmation as to whether Ramirez is the UBS broker being investigated by federal regulators for improperly encouraging investors to take out loans so they could buy more shares in the Puerto Rico funds.
According to FINRA’s BrokerCheck website, the Securities and Exchange Commission (SEC) has recommended bringing an action against current UBS broker Ramiro Colon for failure to supervise. According to Mr. Colon, he intends to “vigorously defend” against any allegations.
In another case presented to FINRA arbitrators at a hearing, the arbitrators awarded Juan Burgos Rosado $1 million dollars in relief and wrote an opinion that said Mr. Rosado was “at age 66 essentially a first-time senior investor with no experience” and “that a proper effort to know her customer would have revealed that to his broker.”
This isn’t the first case involving UBS and FINRA; arbitrators ordered UBS to pay damages to investors in three other cases earlier this year. So if you have found yourself suffering financial loss at the hands of UBS, Ramirez, Colon or any financial adviser, it is essential that you know your legal rights. You may be eligible for loss recovery through securities arbitration.
Silver Law Group has attorneys practicing nationwide with the appropriate skills and expertise to help you explore your legal options further. When you contact us, you can always expect a free consultation with an experienced securities arbitration attorney. If you have a case, we’ll handle it on a contingent fee basis, which means you won’t pay legal fees unless we win.