Previous articles have described the numerous problems that many investors currently face as a result of investments their broker at UBS or another brokerage firm made to invest in Puerto Rican municipal bonds. Other posts have discussed why UBS knew or should have known that those problems were imminent, and yet kept selling those bonds to virtually all of its clients. Those problems have even gotten worse, as Moody’s has followed suit from Standard & Poor’s and downgraded approximately $55 billion worth of Puerto Rico’s outstanding bonds, pushing many of those into junk bond status. The question becomes, now what? What options do investors have?
Broker-dealers, like UBS and UBS Puerto Rico, are regulated by the Financial Industry Regulatory Authority (“FINRA”). FINRA rules give customers of broker-dealers the option of filing complaints against their broker and his employing company in arbitration. Arbitration is a court alternative. It can be quicker and less expensive than a claim filed in a state or federal court; FINRA arbitration cases typically take between 12 to 18 months from when they are filed to when a decision is rendered by the arbitrators.
The proceedings are also much less invasive for the customer bringing the claim. Typically, customers are not required to respond to written questions under oath, submit to depositions, or in person questioning on the record, or other similar discovery procedures which occur in court litigation. Instead, the customers are generally only required to produce certain paper documents in their possession; things like statements from their broker, letters and/or emails between themselves and their broker, certain tax records, etc. The only other requirement is to attend a final, in person hearing, similar to a trial in court, where the customer will have the opportunity to explain their story before the arbitrators.
The attorneys at Shepherd, Smith, Edwards & Kantas LLP have represented customers nationwide in cases like these, and currently represent many investors who have lost money in Puerto Rico bonds. Ultimately, like any litigation, there are never any guarantees in arbitration. However, the firm never accepts a case unless it believes, based upon its experience trying these types of cases, that it is likely that the customer will recover money as a result of filing a claim. If you have lost money in Puerto Rico bonds or a fund which invests heavily in Puerto Rican bonds that you purchased at the recommendation of your broker, contact us for a free, no obligation consultation to see if we believe you might be able to recover some or all of the money you lost.
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