A Financial Industry Regulatory Authority (FINRA) panel said that Stifel, Nicolaus & Co. (“Stifel”) must pay June and Perry Burns over $100K for losses they sustained from Puerto Rico bonds and oil and gas investments. The Burns are in their eighties and they invested a “substantial” amount of their life savings with Stifel.
In their Puerto Rico bond fraud arbitration claim, the couple accused Stifel of negligence, unauthorized trading, and unsuitable investments, among other violations. For that portion of their case, the FINRA panel awarded the Burns $79,709, which was everything they lost, and also fees and interest. Despite the ruling, Stifel, in its own filings, continues to deny the couple’s allegations. The broker-dealer tried to have the case thrown out and removed from its FINRA records.
Senior Investors Sustained Losses From Investing in Puerto Rico Bonds
Unfortunately, the Burns are not the only senior investors whose retirement savings were seriously harmed because brokerage firms and their brokers recommended that retirees invest in Puerto Rico bonds and Puerto Rico bond funds even though these securities were too risky for their portfolios and/or not aligned with their investment objectives. For the past few years, our senior financial fraud lawyers at Shepherd Smith Edwards and Kantas have been working with older investors in the US mainland and the island of Puerto Rico to help them get their lost investments back. Aside from Stifel, other brokerage firms are accused of inappropriately recommending Puerto Rico bonds and close-end bond funds to investors, including UBS Puerto Rico (UBS-PR), Santander Securities (SAN), Banco Popular, Merrill Lynch, Morgan Stanley (MS) and others.
Meantime, Puerto Rico continues to struggle to repay its over $70 billion of debt as creditors wait impatiently. This week, the federal oversight board approved a fiscal plan. The island’s governor should be able to begin negotiations with these creditors.
Unfortunately, as part of the plan, Puerto Rico Governor Ricardo Rosselló had to approve what could potentially be tough spending cuts that may leave the island with less money for paying back bondholders. Also under the approved plan, about $800 million in primarily surplus funds is projected to be available yearly to service debt over the next decade.
Oppenheimer Funds Inc. and Franklin Advisers, the two biggest holders of Puerto Rico bonds, had asked that certification of the plan be delayed for further scrutiny but the board went ahead and approved the plan ahead of the March 15 deadline. The Puerto Rico government has until May 1, 2017 to arrive at a settlement with bondholders. Negotiations between the island and bondholders were frozen until Rosselló presented the board approved-plan.
At Shepherd Smith Edwards and Kantas, LTD LLP, our securities lawyers are also representing small business owners, other retail investors, as well as investors who invested indirectly in Puerto Rico bonds through hedge funds and mutual funds in the US. Ask us for your free case consultation today. Hablames Espanol and our securities fraud law firm has a presence in both Puerto Rico and the mainland.
Stifel to repay $100K to elderly couple who bet life savings on risky investments, OnWallStreet, February 16, 2017
Puerto Rico oversight board approves revised government turnaround plan, Reuters, March 13, 2017
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