{"id":5503,"date":"2013-10-03T00:00:00","date_gmt":"2013-10-03T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2013\/10\/ubs_faces_legal_battle_over"},"modified":"2022-05-05T08:37:31","modified_gmt":"2022-05-05T13:37:31","slug":"ubs-faces-legal-battle-over","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/ubs-faces-legal-battle-over\/","title":{"rendered":"UBS Faces Legal Battle Over Failing Puerto Rico Bond Funds with Local Investors"},"content":{"rendered":"\n

As the value of proprietary closed-end bond funds invested created by a UBS AG unit (UBS)<\/a> in Puerto Rico continue to drop, the financial firm and its 132 financial advisers find themselves facing what is expected to be a protracted legal battle with local investors who want their money back. The value of the Puerto Rico bond funds sank after over $10 billion were sold to investors. UBS is also contending with allegations that a number of its brokers persuaded clients to purchase the bond funds and bonds on a credit line and margin.<\/p>\n

The UBS Puerto Rico funds are comprised of 14 close-end funds that were sold through UBS Financial Services Inc. of Puerto Rico\u2019s registered representatives and brokers. As tension over the broader municipal bond market hit the US commonwealth, the net asset value of the funds became eroded, falling from an initial price of $10 to roughly $3 for some of the funds.<\/p>\n

Unlike closed-end municipal bond funds domiciled in the US\u2014these are only allowed to have leverage as high as 30% of the assets in the fund\u2014the Puerto Rico bond funds\u2019 leverage can reach as high as 50% of total assets (55%, under certain conditions). Such leverages can only make any losses greater.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

As the value of proprietary closed-end bond funds invested created by a UBS AG unit (UBS) in Puerto Rico continue to drop, the financial firm and its 132 financial advisers find themselves facing what is expected to be a protracted legal battle with local investors who want their money back. The value of the Puerto […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3752,3922,4039,3755],"tags":[2624,2625],"class_list":["post-5503","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-municipal-bonds","category-puerto-rico-bond-funds","category-ubs","tag-banco-popular","tag-banco-santander"],"yoast_head":"\nUBS Faces Legal Battle Over Failing Puerto Rico Bond Funds with Local Investors — Investor Lawyers Blog — October 3, 2013<\/title>\n<meta name=\"description\" content=\"As the value of proprietary closed-end bond funds invested created by a UBS AG unit (UBS) in Puerto Rico continue to drop, the financial firm and its 132 — October 3, 2013\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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