Zamansky LLC investigates losses stemming from Puerto Rico bonds and bond funds that were sold to retail investors as safe, steady and low-risk.
Recent months have seen a precipitous decline in the value of bonds issued by the Commonwealth of Puerto Rico. Lingering economic malaise, including an unemployment level nearly double the national average, has driven down the credit ratings of these bonds to near-junk levels. These plummeting values, in turn, have led many holders of these bonds to sell their holdings in desperation, creating an even worse market for these securities.
Unfortunately, according to Reuters, local institutions and individuals located in Puerto Rico own an estimated 30 percent of the $70 billion of outstanding bonds.
Additionally, an astonishingly large number of bond funds contain at least some exposure to Puerto Rico’s bonds. These bond funds include funds managed by companies such as UBS, Merrill Lynch, Oppenheimer Funds, and Wells Fargo, among others. Indeed, some funds offered by these companies are almost exclusively exposed to Puerto Rican bonds.
Because Puerto Rico is an unincorporated commonwealth, and not a typical American state or municipality, the income from its bonds is tax-exempt. The yield on these bonds has traditionally been as high as seven-to-ten percent annually. These have been very appealing returns for many financial advisors and asset managers—because they lead to greater fees—even when they are really too risky for most customers.
And now that these bonds are being downgraded, investors could be left holding the bag. With bond indexes that track Puerto Rican bonds down more than 18% this year, investors have already taken a big hit.
What Investors Can Do
If you were an investor in Puerto Rico bonds who allegedly suffered a loss from a proprietary bond fund, or you would like to have your accounts reviewed, you may, without obligation or cost to you, email email@example.com or call the law firm at (212) 742-1414.
About Zamansky LLC
Zamansky LLC is a leading investment fraud law firm specializing in securities arbitration and securities class actions. Our stock fraud attorneys represent both individual and institutional investors. Our stockbroker fraud practice is nationally recognized for our ability to aggressively prosecute cases and recover losses.
50 Broadway – 32nd Floor
New York, NY 10004
Jake Zamansky, 212-742-1414