FINRA Sales Practice Violations

Concentration in Puerto Rico Municipal Bonds

UBS Financial Services of Puerto Rico (“UBS Puerto Rico”) and its financial advisors who recommended that Puerto Rico investors should invest a substantial portion of their assets into UBS Puerto Rico Family of Funds and Puerto Rico Municipal Bonds may have violated FINRA sales practice rules and regulations. UBS Puerto Rico and its financial advisors knew or should have known that investors are not compensated for the risks of exposure to catastrophic loss for investments concentrated in a single, type of security and geographic location. Simply stated, the tax free income from UBS Puerto Rico Family of Funds paid to Puerto Rico investors could never justify the exposure to the level of risk from investments concentrated in Puerto Rico Municipal Bonds.

UBS Puerto Rico and its financial advisors knew or should have known that all financial research supports the need to avoid securities concentration. The concept of not investing all your assets in a single type of security or geographic region is a cornerstone for any suitable asset allocation recommendation. UBS Puerto Rico failed to disclose the risks associated with the proprietary closed-end funds that were non-traded and illiquid. UBS Puerto Rico financial advisors recommended a proprietary product that was non-traded and illiquid, relying entirely on a poorly explained, restrictive Repurchase Agreement. Securities industry standards consider securities concentration to exist when a portfolio’s holdings exceed more than 10% of an investor’s total wealth. The risks of securities concentration are well known and are at complete odds with what is considered suitable investment advice.

UBS Puerto Rico investment recommendation should consider the composition of securities held in an investment portfolio. Recommended investments concentrated in UBS Puerto Rico Bond Funds may represent a violation of the Financial Industry Regulatory Authority (FINRA) sales practice rules and regulations. In many instances, UBS Puerto Rico customer accounts were concentrated in UBS Puerto Rico Bond Funds that were the result of misrepresentations and omissions of material facts, conflicts of interest and the failure to supervise its financial advisors.

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 concentrated investments in UBS Puerto Rico Bond Funds recommended by UBS Puerto Rico may be able recover their losses in a FINRA arbitration claim.

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Visit our Website for the Recovery of Puerto Rico Bond Fund Losses

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For more information on how to start a claim, or to find out if you have a claim, please contact our law firm, toll free, at (787) 268-6444, for a free consultation.

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