Zamansky LLC Files a FINRA Arbitration against UBS Financial Services Inc. of Puerto Rico for a Customer Who Suffered Alleged Losses in the Puerto Rico Fixed Income Fund

Share Article

Zamansky LLC files a FINRA arbitration against UBS Financial Services Inc. of Puerto Rico on behalf of a customer over alleged losses in the Puerto Rico Fixed Income Fund. The case is FINRA TN 1301194.

Zamansky LLC files a FINRA arbitration against UBS Financial Services Inc. of Puerto Rico on behalf of a customer over alleged losses suffered in the Puerto Rico Fixed Income Fund. The case is FINRA TN 1301194.

The Statement of Claim in the arbitration alleges that for the last five years UBS Puerto Rico has been engaged in a scheme of pushing its "safe" and "secure" proprietary Puerto Rico bond funds on conservative investors and retirees for the purpose of reaping huge underwriting and management fees. The Statement of Claim alleges that the claimant is a 65 year-old retiree who was forced back to work as the result of his alleged losses. He alleges in the Statement of Claim that he needed conservative investments and had no tolerance for risk, but held the Puerto Rico bond fund based upon unsuitable advice received from UBS Puerto Rico.

The Statement of Claim further alleges that, over the last two years, Puerto Rican debt and credit has deteriorated substantially, so that the proprietary closed end Puerto Rican bond funds experienced a massive increase in risk making them unsafe and unsuitable for most investors. The Statement of Claim alleges that Puerto Rico Fixed Income Fund and other Puerto Rico bond funds became too risky and unsuitable for the claimant who was a conservative investor. The Statement of Claim alleges he suffered large losses from a collapse in the value of the fond funds due to deteriorations in Puerto Rico credit. He alleges that he never knew that his Puerto Rico bond fund was so risky or that he could suffer losses of 60% or more, or that they were illiquid and had no real secondary market. The Statement of Claim also alleges that UBS Puerto Rico had serious conflicts of interest which influenced the unsuitable investment advice that it gave claimant, and that it breached its fiduciary duty to investors under Puerto Rico law.

On May 1, 2012 the Securities and Exchange Commission (SEC) issued a Cease-and-Desist Order in Administrative Proceeding Case No. 3-14863, against UBS Puerto Rico. In the Order, UBS Puerto Rico agreed to pay $26 million in disgorgement and fines to settle charges that it sold allegedly mispriced CEFs to investors, and that it knew but failed to disclose that the market was illiquid. The SEC also alleged that UBS Puerto Rico pushed its bond funds on customers through aggressive sales practices.

Stock fraud attorney Jacob Zamansky has described what is happening in Puerto Rico as the "Hurricane Katrina of financial crises." The proprietary closed end funds it sold to its brokerage customers became high risk and speculative investments which was not communicated to investors, he states. As a result, conservative and retiree investors who held these funds at UBS Puerto Rico have experienced huge unexpected losses, Zamansky states. Any UBS Puerto Rico bond fund customer in this situation should consult a professional to discuss his or her legal rights, Zamansky states.

What Investors Can Do

If you were a UBS Puerto Rico bond fund investor who allegedly suffered a loss from a proprietary bond fund, or you would like to have your accounts reviewed, you may, without obligation or cost to you, email jake(at)zamansky(dot)com or call the law firm at (212) 742-1414.

About Zamansky LLC

Zamansky LLC is a leading investment fraud law firm specializing in securities arbitration and securities class actions. Our stock fraud attorneys represent both individual and institutional investors. Our stockbroker fraud practice is nationally recognized for our ability to aggressively prosecute cases and recover losses.

Contacts

Zamansky LLC
50 Broadway - 32nd Floor
New York, NY 10004
Jake Zamansky, 212-742-1414

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Jacob Zamansky
Zamansky & Associates LLC
212 742-1414
Email >
Visit website