UBS Sued Again for Mutual Fund Sales Practices

Another lawsuit involving proprietary closed-end Puerto Rico bond funds has been brought against UBS Financial Services, Inc., claiming it breached fiduciary duty in managing money tied to the funds. The complaint, filed by plaintiffs, beneficiaries of the estate of Nellie Sanchez Carmona, is asking for $3.5 million in damages and reimbursements of fees and interest around $1 million from the firm. The beneficiaries claim that Ms. Carmona was kept in the dark about her status as beneficiary of the trust her husband set up. UBS reinvested $664,000 that the trust earned, into closed-end funds and continued earning income on the principal instead of paying out the earnings for Ms. Carmona’s medical expenses, as were the terms of the trust. UBS then claimed her husband, Robert Hargen was the owner of the trust, but he had knowingly passed away in 2003. UBS faces $1 billion in complaints related to the proprietary closed-end bond funds, which started to lose their value quickly in August 2013, when investors were wary of Puerto Rico’s ability to pay back its debts. Ms. Carmona’s trust is now supposedly worth less than $1,000. If you invested in UBS proprietary closed-end bond funds and would like to sue UBS for investment losses related to them, please call our Chicago-based securities fraud attorneys at 312-332-4200 for a no-cost, no obligation phone call.

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