UBS Sales Practices in Puerto Rican Bond Funds under review
SALLAH ASTARITA & COX, LLC, an AV rated, nationally recognized law firm, has announced its investigation into investor claims against UBS Financial Services Inc. of Puerto Rico (UBS PR) over its sales of leveraged bond funds to investors. The investigation concerns both sales practices of the advisors and the bond funds themselves which included the Puerto Rico Fixed Income Funds and the Puerto Rico Investors Tax-Free Fund, Inc.
UBS PR has reported huge losses in multiple proprietary closed-end bond funds. These funds were frequently sold to conservative investors or retirees seeking income. Some investors were encouraged to borrow money to purchase these Funds. According to some investors and press reports, other investors were encouraged to purchase the bonds, and then to borrow against the value of the bonds in the accounts.
The United States Securities and Exchange Commission has issued a Cease-and-Desist Order in an Administrative Proceeding, No. 3-14863, against UBS Puerto Rico. In the Order, UBS Puerto Rico agreed to pay $26 million in disgorgement and fines to settle charges that it sold allegedly mispriced -closed end funds to investors. The alleged mis-pricing related to proprietary funds of UBS Puerto Rico which invested in Puerto Rican municipal bonds. The SEC order does not include any recovery for investors who were harmed by this conduct.
Investors who have suffered losses in these securities will need to file arbitration proceedings in order to recover their losses. Sallah Astarita & Cox, LLC is a boutique securities law firm comprised of veteran securities litigators and former SEC Senior Enforcement Attorneys, who have represented parties in over 650 arbitrations, including dozens of investors in Puerto Rico,
Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.
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Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.