The White Law Group is investigating the liability that UBS Financial has for recommending UBS Puerto Rico Mortgage-Backed & US Government Securities Fund to investors.
For the past few years, Puerto Rico has been struggling with rising debt and economic decline. The value of Puerto Rico’s municipal tax-free bonds has largely fallen as a result. In May 2017, Puerto Rico filed for bankruptcy protection in the largest municipal bankruptcy filing in history.
According to reports, UBS was the leading broker-dealer in Puerto Rico. UBS often concentrated its clients’ portfolios in its proprietary closed-end funds such as UBS Puerto Rico Mortgage-Backed & US Government Securities Fund. The UBS CEFs were the single largest source of revenue for UBS.
In October 2017, many UBS Closed-end funds suffered a significant loss of approximately 20%, decreasing from around $10 to the $1-$3 range as of mid-November.
UBS – Censured and Fined
FINRA censured and fined UBS-PR $7.5 million for failures related to suitability of transactions in Puerto Rico closed-end fund (CEF) shares. FINRA also reportedly ordered UBS-PR to pay approximately $11 million in restitution to 165 customers who suffered losses on their CEFs.
The brokerage firm allegedly failed to monitor the combination of leverage and concentration levels in customer accounts to ensure that the transactions were suitable given the customers’ risk objectives and profiles.
According to the Financial Industry Regulatory Authority (FINRA), UBS allegedly failed to implement a reasonably designed system to identify and prevent unsuitable transactions in light of the unique economy of the territory.
The White Law Group has handled a number of claims involving UBS Puerto Rico municipal bonds. The firm is specifically investigating UBS Puerto Rico Mortgage-Backed & US Government Securities Fund and UBS Puerto Rico Mortgage-Backed & US Government Securities Fund II.
UBS Financial and all brokerage firms have a responsibility to adequately supervise their employees. They must ensure the necessary procedures and systems to detect misconduct. The White Law Group continues to investigate claims against UBS Puerto Rico on behalf of investors in closed-end funds such as UBS Puerto Rico Mortgage-Backed & US Government Securities Fund.
Did you lose money investing in UBS Puerto Rico Mortgage-Backed & US Government Securities Fund? If so, you may be able to recover your losses. To speak to a securities attorney, please call The White Law Group at 888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, please visit our website at www.WhiteSecuritiesLaw.com.