UBS Ordered To Pay Largest FINRA Award To Date for Losses Associated with Puerto Rico Municipal Bonds and Bond Funds

Representing Investors Nationwide

This week, a Financial Industry Regulatory Authority (FINRA) panel ordered UBS Financial Services Inc. (UBS) to pay restitution of nearly $20 million dollars for losses associated with the recommendation and sale of Puerto Rico bonds and closed-end funds sold to a UBS customer and his associates. This is the largest amount that UBS has paid to date in a Puerto Rico bond fraud case.

The arbitration ruling involved not only the sale of the Puerto Rico bonds but also how credit lines were used as part of the investment strategy employed for the customers' accounts.  Of the $19.8 million awarded,  there was $14.9 million in compensatory damages, $745K in interest, $3.9 million to cover legal fees and $215K for other litigation and hearing expenses.

Over the past few years, UBS has been ordered to pay tens of millions of dollars to investors that have filed arbitration claims alleging similar conduct resulting in significant damages to the investors.  The underlying investments are typically high-risk, geographically concentrated and do not trade on any exchange making UBS and other banks that sold them, the only source of liquidity.  When the investments started to lose value, in late 2012 and early 2013, along with the Puerto Rico governments inability to meet its debt obligations, the banks and brokerage firms refused to purchase the investments bank, often offering to margin (loan money) against them instead further compounding the problem and losses. 

If you have suffered damages following any type of investment fraud, including UBS, Santander, Oriental and Banco Popular bond funds, please contact Colling Gilbert Wright & Carter online or call 407-712-7300 today to schedule a free consultation with one of our dedicated attorneys