Misrepresentation and Omissions Claims Against UBS For Sales of Puerto Rico Bond Funds

Besides suitability claims, one of the major claims we are making against UBS in the FINRA arbitration claims for our clients are misrepresentation and omission claims.  Under the Puerto Rico Uniform Securities Act, brokers have a duty to disclose all material relevant information as well as not misrepresenting risks associated with investments.  We have alleged there were multiple storm clouds on the horizon that should have alerted brokers at UBS that major, significant risks were associated with Puerto Rico municipal related investments.  A recent New York Times article disclosed some of the following risks that were known in recent years with respect to Puerto Rico’s municipal finances.  Consider the following:

-$70 billion in debt;

-$2.2 billion deficit;

– 15.4 percent unemployment rate;

-soaring cost of living,

-pervasive crime rate;

-a 3% drop in population from 2011 through 2013;

-of the islands 3.6 million people, only 1 million work in the formal economy;

-crumbling schools;

-per capita income around $15,200, half that of Mississippi, the poorest U.S. state

-37% of all households receive food stamps (22% in Mississippi);and

-a worrisome exodus of professionals and middle-class Puerto Ricans who have moved to places like Florida and Texas;

Brokers who sell investments without disclosing the risks can be subjected to liability in the FINRA arbitration process.  To learn more, please call our securities fraud lawyers for more information.

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