A Financial Industry Regulatory Authority panel has awarded five people $521,000 in compensatory damages in their Puerto Rico bond fraud case against UBS Financial Services (UBS) and UBS Financial Services Inc. of Puerto Rico (UBS-PR). The claimants had accused the financial firm of securities fraud, constructive fraud, common law fraud, negligent supervision, breach of fiduciary duty, and violating the Puerto Rico Uniform Securities Act.
UBS has been the subject of hundreds of FINRA arbitration claims brought by thousands of investors who sustained losses from Puerto Rico bonds and closed-end bonds, with many UBS-PR customers contending that they sustained massive losses because these investments were inappropriately recommended to them. To date, the financial firm has been ordered to pay or agreed to pay in settlements hundreds of millions of dollars to investors, with more claims still pending.
For over four years, our Puerto Rico bond fraud law firm has worked with investors on the island and the U.S. to help those investors recover their losses from losses in Puerto Rico securities. Contact Shepherd Smith Edwards and Kantas today to request your free, no obligation consultation.
Puerto Rico Still Struggling to Pay Back Debt
The U.S. territory, which last year filed for bankruptcy-like protection, continues to struggle to repay over $70 billion of debt that it owes creditors. U.S. District Court Judge Laura Taylor Swain recently approved a $300 million loan to the Puerto Rico Electric Power Authority (PREPA) to help the island’s electric utility company cover its expenses. PREPA had sought $1.3 billion but creditors, including bondholders, fought that amount.
Not only is PREPA mired in $9 billion of debt, but lack of power on the island has been an issue since Hurricane Maria struck last year. The electrical authority argued that it needed the loan or would be forced to leave many customers without power. Already, hundreds of thousands of the island’s residents have yet to see their electricity restored since the storm.
In a written statement, Gerardo Portela, the Executive Director of the Fiscal Agency and Financial Advisory Authority of Puerto Rico (AAFAF) announced that the last week of February is when final notices will be issued to potential creditors of the island, PREPA, the Government Employees Retirement System, the Puerto Rico Sales Tax Financing Corp. (COFINA), and the Highways & Transportation Authority. Those investors will have through May 29 to turn in their proof of claims so that the debts owed to them can be factored into the plan to help restructure the island’s debt.
Unfortunately, many investors saw their retirement and savings devastated because there were brokers who knew they were inappropriately recommending Puerto Rico bonds to investors even though they were not a good fit for these customers, their investments goals, or the degree of risk that their portfolios could handle. Many investors, including retail investors, small business owners, and retirees, lost everything.
Our UBS Puerto Rico bond fraud attorneys are here to help you explore your legal options.
Finra panel awards five UBS clients $521,000 in damages over Puerto Rican bonds, InvestmentNews, February 26, 2018
Federal Judge Approves $300 Million Loan for Puerto Rico Utility, Wall Street Journal, February 19, 2018
Final notice issued for creditors to file proofs of claim against Puerto Rico, Caribbean News, February 26, 2018
More Blog Posts from SSEK Law Firm:
UBS Did Not Fully Disclose the Risks Involved in Puerto Rico Bond Funds to Investors and Brokers, Reports CNBC, Stockbroker Fraud Blog, December 22, 2017
Hedge Funds Get Rid of Puerto Rico General Obligation Bonds After Hurricane Maria, Stockbroker Fraud Blog, November 22, 2017
Fund Manager Accused of Losing $178M in Residential Mortgage-Backed Securities is Barred from the Industry, Institutional Investor Securities Blog, February 16, 2018