Puerto Rico investors who were advised by various brokerage firms, including UBS Financial Services of Puerto Rico, Santander Securities, Popular Securities, Oriental Financial and Merrill Lynch (“brokerage firms”) to invest in UBS Puerto Rico Family of Funds Suffer More Losses. According to UBS Puerto Rico reports, the Net Asset Values (NAVs) for the non-traded closed-end Puerto Rico Bond Funds dropped precipitously for the week ending March 4, 2015. Puerto Rican residents including investors from San Juan, Arecibo, Caguas, Guaynabo, Carolina, Dorado, Ensenada and Vega Baja were solicited to invest in UBS Puerto Rico Family of Funds because they were a safe source of tax free interest income.
UBS Financial Services of Puerto Rico reported the NAV and percentage declines for the week ending March 4, 2015 for the following closed-end funds managed solely by UBS Asset Managers:
- Puerto Rico Fixed Income Fund, Inc. ($2.877); -5.7% decline
- Puerto Rico Fixed Income Fund II, Inc. ($3.275); -4.80% decline
- Puerto Rico Fixed Income Fund III, Inc. ($3.396); -4.79% decline
- Puerto Rico Fixed Income Fund IV, Inc. ($4.253); -3.52% decline
- Puerto Rico Fixed Income Fund V, Inc. ($3.735); –5.63% decline
- Puerto Rico Fixed Income Fund VI, Inc. ($4.147); -4.71% decline
- Tax Free Puerto Rico Fund, Inc. ($4.514); -1.98% decline
- Tax Free Puerto Rico Fund II, Inc. ($3.346); -3.10% decline
UBS Financial Services of Puerto Rico reported the NAV and percentage declines for the week ending March 4, 2015 for the following closed-end funds co-managed by UBS Asset Managers and Popular Asset Management:
- Puerto Rico Investors Tax-Free Fund, Inc. ($3.38); -2.87% decline
- Puerto Rico Investors Tax-Free Fund II, Inc. ($3.35); -3.46% decline
- Puerto Rico Investors Tax-Free Fund III, Inc. ($3.75); -3.35% decline
- Puerto Rico Investors Tax-Free Fund IV, Inc. ($2.99); -2.29% decline
- Puerto Rico Investors Tax-Free Fund V, Inc. ($3.80); -1.55% decline
- Puerto Rico Investors Tax-Free Fund VI, Inc. ($4.31); -2.05% decline
- Puerto Rico Investors Bond Fund I, Inc. ($4.20); -2.55% decline
Brokerage firm investment recommendations made by its financial advisors are required to avoid any misrepresentations or omissions of materials facts concerning investment recommendations. As the lead underwriter of the UBS Puerto Rico Family of Funds, UBS Puerto Rico is required to give balanced, accurate information to avoid providing unsuitable investment advice. Brokerage firms are required to supervise its financial advisors. UBS Puerto Rico Family of Funds losses that are the result of concentrated investments in Puerto Rico Bonds may be attributed to brokerage firms’ failure to supervise its financial advisors.
UBS Puerto Rico, as lead underwriter, is required to conduct adequate due diligence to determine the accuracy of information provided by the Prospectus and Offering documents, including the risks associated with leverage and the ability of UBS Asset Managers to manage and hedge the closed-end fund portfolio risks. Brokerage firms failed to disclose excessive markups and markdowns charged for the management of the proprietary closed-end funds which was the result of conflicts of interest between UBS Puerto Rico, third-parties and UBS Puerto Rico customers.
Klayman & Toskes, PA and the Carlo Law Offices are dedicated to the rights of Puerto Rico investors. Our legal team can help you determine what steps can be taken to protect your investor rights. Puerto Rico investors who suffered losses as a result of FINRA sales practice violations concerning the UBS Puerto Rico Family of Funds may be able recover their losses in a FINRA arbitration claim for damages.