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Federal Judge Imposes Civil Penalties Against Ex-UBS Puerto Rico Broker

July 16, 2018 Blog

As Puerto Rico’s bond crisis continues, the evidence is continuing to mount that brokers and investment advisors at large investment firms such as UBS Puerto Rico, Santander and Popular Securities are largely responsible for retirees’ and other individuals’ investment losses. In addition to numerous arbitration awards against these firms and their brokers and advisors, a federal district court judge recently ruled against an ex-UBS Puerto Rico broker in a civil case filed by the Securities and Exchange Commission (SEC).

Ex-UBS Puerto Rico Broker Liable for Misleading Investors while Earning $2.8 Million in Commissions

According to the SEC’s Complaint, the broker, Jose G. Ramirez, earned approximately $2.8 million in commissions as a result of misleading individual investors into risky Puerto Rico bond investments. Specifically, the SEC alleged that Ramirez first provided investors with misleading information about UBS’s proprietary Puerto Rico municipal bond funds, and then recommended that they use UBS lines of credit to by shares of these funds. As a result of buying shares of the propriety bond funds “on margin,” when the value of Puerto Rico’s bonds plummeted, many investors were forced to liquidate their accounts in order to repay what they owed to UBS:

“To evade detection, Ramirez allegedly instructed the customers to transfer money from their line of credit to an outside bank account before depositing the funds into their UBSPR brokerage account and purchasing the closed-end funds. The funds invested heavily in Puerto Rico municipal bonds and lost value as the Puerto Rico bond market declined, requiring the customers to pay down a portion of the loans or risk having their investments liquidated.”

Other allegations against Ramirez in the SEC litigation included:

  • Misleading investors about the risks associated with UBS’s closed-end Puerto Rico municipal bond funds;
  • Misleading investors about the risks of investing with funds from a line of credit; and,
  • Misleading his branch manager when questioned about the inappropriate transactions.

Based on the evidence presented, federal district court judge Pedro Delgado-Hernández granted summary judgement against Ramirez. This means that the evidence was sufficient to warrant a judgment without the need for a trial.

How Individual Investors Can Recovery Puerto Rico Bond Losses

While cases like this one expose the wrongdoing that led to many investors losing millions of dollars in Puerto Rico municipal bond investments, they do not provide a remedy to aggrieved investors. In order to recover their losses, investors must file arbitration claims with the Financial Industry Regulatory Authority (FINRA). If you suffered fraudulent losses in Puerto Rico municipal bonds, you still have time to file for FINRA arbitration, and you should discuss your case with an attorney as soon as possible.

Find Out if You are Eligible for FINRA Arbitration

To find out if you are eligible to recover your Puerto Rico bond losses through FINRA arbitration, you can call (212) 742-1414 or contact us online to schedule a free, no-obligation consultation with an experienced investment fraud attorney. With offices in the heart of Wall Street, we represent individuals in Puerto Rico and nationwide.