Investors Win $2 Million Arbitration Award Against UBS

Ahmed Hussein, a former UBS investor, lost more than $20 million after UBS called the Quality System loan against a health-care information systems company on margin. The company began to lose money in 2012, and Mr. Hussein was a Quality System director. UBS then quickly sold its stock. The arbitration panel that decided the case did not give a reason for its decision, but ruled that UBS must pay Mr. Hussein $2 million with no other damages or legal fees. Mr Hussein had been with UBS since 2009. He also claimed that UBS sold some shares of his in July 2012 without his authorization or knowledge of the transactions. He then claimed this caused Quality System’s stock to fall even farther, deepening his losses. He resigned from the board in 2013.

UBS can be held liable for investment losses. If you have suffered losses with them, or other brokerage firms, we may be able to help. We are securities attorneys who concentrate on recovering money for investors. 312-332-4200.

UBS Loses A Second Puerto Rico Fund Case

UBS lost its second case in less than a week for a buried client in the firm’s proprietary funds. A Financial Industry Regulatory Authority (FINRA) arbitration panel in San Juan, Puerto Rico, found two UBS units liable to an investor, Juan Burgos. Burgos brought a case against the firm for the almost $800,000 in investment losses he suffered in his bond fund portfolio, alleging that UBS mishandled his portfolio, and invested his life savings in risky Puerto Rican closed-end bond funds. The funds have been under scrutiny because of their high concentrations in debt of the island’s government and other related entities. The funds lost nearly half to two thirds of their value over the last two years, because of the concern over Puerto Rico’s high debt and continuously unstable economy. The arbitration panel ruled in favor of Burgos, forcing UBS to buy back his investment portfolio to the tune of $1 million. There are currently hundreds of claims filed against UBS for their sale of the Puerto Rican closed-end bond funds. Another FINRA arbitration panel on May 14th ordered UBS AG to pay an investor $200,000 for her losses in the funds.

Stoltmann Law Offices has filed dozens of claims to date on behalf of investors who lost money in the risky Puerto Rican closed-end bond funds. If you invested in these funds, you can sue UBS in the FINRA arbitration forum to recover some of your losses. Please call us for a free, no obligation consultation with one of our securities attorneys at 312-332-4200. We are based in Chicago.

UBS Loses First Case for Mutual Fund Fraud

UBS AG was ordered to pay $200,000 to an investor on Wednesday for losses in its Puerto Rico closed-end bond funds. This is the first case to go to hearing against UBS. The Financial Industry Regulatory Authority (FINRA) arbitration panel found two UBS units liable in the case, alleging securities fraud, misrepresentation, unsuitable investment recommendations and other misdeeds. Hundreds of claims have been filed to date, altogether seeking more than $900 million in damages. Between 2011 and 2013, the funds lost nearly half to two-thirds of their value, because of fears regarding Puerto Rico’s debt size. The result is good news for burned investors as it shows FINRA arbitrators “get” and are receptive to arguments about the fraud engaged in by UBS reps. We are securities attorneys who represent dozens of investors in the Puerto Rico bond fund cases. If you invested money with UBS Puerto Rico bond funds, you may be able to recover some of your money by calling us at 312-332-4200. The call is free with no obligation, and time is of the essence.

I Discuss With the Wall Street Journal The Deluge of FINRA Arbitration Claims…

that will hit UBS for the sales of the closed end Puerto Rican bond funds.  The entire article can be viewed at the link below.  While 400 FINRA arbitration claims and lawsuits already filed, more are on the way. The primary claims made against UBS and Merrill Lynch are suitability claims (the investments weren’t appropriate for the investor given their age, actual investment objectives and financial resources) and  misrepresentation and omissions (the true risks were either misstated or weren’t disclosed).   To learn more about suing UBS or Merrill Lynch for Puerto Rican investment fraud losses, please call us or visit

Legal Choices For Investors In Puerto Rico Electric Power Authority Bonds

The news continues to get worse for investors in the Puerto Rico Electric Power Authority bonds.  It now appears certain investors in the bonds will have their payments postponed or canceled in coming months for an indefinite period of time.  Because of this news, the Puerto Rico Electric Power Authority bond prices continue to plummet, declining from approximately 54 cents on the dollar invested to 40 cents on the dollar.  The government owned utility charges customers more than double the U.S. average because of its poor finances, including nearly $9 billion in debt from issuing bonds to upgrade and replace power generation plants.  Cash on hand has plummeted from $200 million down to $120 million.  Long term debt of the utility has increased from $6.8 billion in 2009 to $8.9 billion in 2013.  Brokers at firms like UBS, Merrill Lynch and Banco Popular aggressively sold these bonds to many conservative, income seeking investors who were looking for the sort of stability that typically comes with utility bonds.  Many investors sold these bonds may have an actionable claim and recover investment losses through the FINRA arbitration claims process or through a lawsuit against the brokerage firm who sold them the notes.  Actionable claims could include suitability, fraud and misrepresentation and omission claims.  In order to receive a free legal analysis on whether damages can be recovered for investments in the Puerto Rico Electric Power Authority bonds, please call our investment fraud law firm to hear all contingency fee options.

Our UBS Fund Fraud Victim Profiled In Investment News…

This week, Investment News profiled a client of our with a FINRA arbitration claims pending against UBS AG.  The claim involves allegations of unsuitable investment recommendations, fraud and misrepresentation and omissions. The client, Manuel Gonzalez Martinez, lost his job in 2009 as a mechanical engineer for Hewlett-Packard in Puerto Rico.  He proceeded to roll over $150,000 from a 401(k) and a lump-sum pension payment to an IRA with UBS AG.  As noted in the article, his broker, Luis Roberto Fernandez Diaz, recommended Puerto Rico municipal bond funds with a 3% upfront sales fee and 1% annual expenses.  The broker has 17 customer disputes between 2009 through 2014.  As we alleged in the FINRA lawsuit, investing an IRA in municipal bonds is grossly inappropriate because their main advantage is tax avoidance, something that is already a feature of an IRA.   Even more devastating, the bonds plunged in value and are now worth only $90,000.  The entire article can be viewed at the link below. We continue to sue UBS, Merrill Lynch and Banco Popular for investment losses in mutual funds concatenated in Puerto Rican debt.

How Much Does It Cost To File A FINRA Arbitration Claim Against UBS?

Securities fraud lawyers who are currently suing UBS for investment losses in the closed end Puerto Rico bond funds generally work on a  contingency fee basis.  FINRA Dispute Resolution, the arm through which people who wish to sue for investment losses must go through, does charge a claim filing fee for the privilege of filing a claim.   This is a fee for the initial filing and must be paid at the time the claim is filed.  The amount of the FINRA filing fee depends on the amount of the claim at issue.  The breakdown of the FINRA filing fee is listed below… $10,000.01-$25,000—$425 $25,000.00-$50,000—$600 $50,000.01-$100,000—$975 $100,000.01-$500,000—$1,425 $500,000.01-$1 million—$1,575 Over $1 million—$1,800 If Damages Aren’t Specified-$1,250 Under FINRA Rule 12900 C(1), clients can receive a partial refund of the filing fee if the claim is settled more than 10 days before the date of the arbitration hearing. In addition, FINRA has a “hardship” waiver for investors of “meager” means who wish to file a FINRA arbitration claim.  If the client’s Adjusted Gross Income income is less than $30,000 for the immediate preceeding two years, FINRA is likely to waive or defer the filing fee.

“Should I Sell or Hold my UBS Puerto Rico Closed End Mutual Fund”?

A big concern for UBS and Merrill Lynch clients who own bonds or bond funds with Puerto Rico debt  remains whether to continue to hold the funds or sell.  Unfortunately, it is impossible to determine what will happen with the value of these funds.  This week it was announced that Puerto Rico is contemplating more than a hundred different proposals intended to jumpstart its sagging economy – including legal prostitution and marijuana use. Considering unemployment is at 15 percent, while 45 percent of the population is living in poverty – drastic steps must be taken to improve the economy.  The question is what impact will this have on the UBS closed end funds at issue in over 200 current FINRA arbitration claims and whether clients should sell now or continue to hold the funds.  Unfortunately, it is simply too difficult to determine what the future value of these funds will be regardless of what steps are taken by the Commonwealth to improve its economy.  Many FINRA arbitrators, however, do like to see realized losses that are set or fixed prior to the hearing.  But we have recommended to our clients to speak with their new, current adviser for advice on whether to hold or sell the funds.  To learn more about securities fraud claims against UBS, please visit

“How Long Will My UBS Bond Fund Case Take To Resolve”?

Many current clients as well as potential clients have contacted our law firm to inquire into how long a securities arbitration FINRA fraud claim against UBS will take in terms of time. Fortunately, FINRA lifted the suspension on the cases against UBS and Merrill Lynch related to Puerto Rico bond fund losses two weeks ago.  This means FINRA arbitrators are now being appointed and the cases are moving once again.  While FINRA usually attempts to resolve cases within a 12 month period, this delay, and the surge of cases being filed (likely over 1000 claims in the next 12 months against UBS), likely means the period of time it will take for cases to resolve will be pushed back two months.  Therefore, it should take approximately 14 months from beginning to end.  To learn more, please visit or call us in Chicago for a no cost evaluation of your case by a lawyer.