UBS Financial Services of Puerto Rico

Customer Losses Continue Without Resolution

Investors Should Consider Dispute Resolution Through FINRA Arbitration

UBS Financial Services of Puerto Rico (“UBS Puerto Rico”) as a member firm of the Financial Industry Regulatory Authority (FINRA) is required to resolve all customer disputes through the securities arbitration process. FINRA is charged with the responsibility to resolve disputes between Puerto Rico investors and UBS Puerto Rico concerning the sale of proprietary UBS Puerto Rico Family of Funds and Puerto Rico Municipal Bonds. Klayman & Toskes, PA and the Carlo Law Offices (“law firms”), represent Puerto Rico residents in arbitration claims for damages against UBS Puerto Rico for violations of FINRA sales practice rules and regulations. Our law firms assert on behalf of Puerto Rico investors that UBS Puerto Rico failed to comply with FINRA sales practice rules and regulations concerning investments in proprietary UBS Puerto Rico Family of Funds and Puerto Rico Municipal Bonds.

Puerto Rico investors suffered catastrophic losses when Puerto Rico’s general obligation bonds and other Puerto Rico municipal bonds were downgraded to non-investment grade, junk bond status, by ratings agencies. Puerto Rico investors have experienced ruinous losses in UBS Puerto Rico’s proprietary non-traded, closed-end bond funds either managed or co-managed by UBS Asset Managers. UBS Puerto Rico and its financial advisors recommended UBS Puerto Rico Family of Funds to investors while they characterized the bond funds’ investment objective as current income consistent with the preservation of capital. What transpired after UBS Puerto Rico recommendations was the realization for Puerto Rico investors that their financial life was in peril.

As a result of the law firms’ investigations, we found our clients were advised by UBS Puerto Rico and its financial advisors to invest the majority of their financial assets into UBS Puerto Rico’s proprietary family of closed-end bond funds. UBS Puerto Rico explained to their customers that to enhance the yield to investors, UBS Asset Managers would use leverage in the closed-end bond fund portfolios, up to 50% of the fund assets. Sales materials illustrated the marginal increase in income for Puerto Rican investors without a fair and balanced explanation of the risks of catastrophic losses should the value of the underlying assets, invested in Puerto Rico Municipal Bonds, decline in value. Our law firms represent clients who were recommended by UBS Puerto Rico and its financial advisors to utilize UBS Bank Loans or brokerage account margin credit for investments in the UBS Puerto Rico Family of Funds which resulted in greater losses.

Klayman & Toskes, PA and the Carlo Law Offices represent the rights of Puerto Rico investors who invested in UBS Puerto Rico Family of Funds through participation in the FINRA arbitration process. In representing Puerto Rico investors, the lawsuits filed against UBS Financial Service of Puerto Rico and its financial advisors are based on the recommended investment in UBS Puerto Rico Family of Funds and Puerto Rico Municipal Bonds, as stable and safe investments that were suitable our clients. According to FINRA, unsuitable investment advice, concentration in Puerto Rico bonds, failure to supervise the activities of financial advisors, and misrepresentations and omissions of material facts that was the result of conflicts of interest are among the claims that are available to investors to recover their losses in a FINRA arbitration claim against UBS Puerto Rico.

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 committed by UBS Puerto Rico and its financial advisors may be able recover their losses in a FINRA arbitration claim for damages.