On Tuesday, UBS was ordered to pay $2.5 million to a San Juan couple who invested in Puerto Rico bond funds that plummeted in value when the island commonwealth’s financial crisis hit. The couple had requested up to $6 million in damages. The Financial Industry Regulatory Authority (FINRA) has so far ordered the bank to pay almost $1.5 million out of the $5.8 million requested by investors in the funds. 900 cases have been filed against UBS for the sale of the bond funds, and Puerto Rico faced its first-ever municipal-bond default just this month. Already, the bank faces up to $1.1 billion in damages.
UBS brokers told clients that the funds were safe, when, in fact, they were not, and sold to investors under false pretenses. When the funds went down in mid-2013, the Puerto Rico bond issuers used leverage, a risky strategy, to improve returns on the defaulting funds. By later 2013, almost $3 billion of the funds’ market value was gone. Jose Ramirez, a former UBS broker who sold the funds, was fired from the bank and is currently under a criminal investigation by the Justice Department. Another broker, Ramiro Colon, is under scrutiny by the Securities and Exchange Commission (SEC) for failure to supervise.
Stoltmann Law Offices has represented dozens of investors who lost money in Puerto Rican bond funds sold by UBS and by brokers such as Jose Ramirez. If you lost money in Puerto Rican bond funds, you may be entitled to recover some of your financial losses. Please call our securities law firm based in Chicago, Illinois at 312-332-4200 to speak with an attorney. The call is free with no obligation. We sue firms such as UBS in the FINRA arbitration forum to help investors recover their financial losses. Please call soon as time is of the essence.