Zamansky LLC Files Its First Arbitration Against UBS Financial Services Inc. Of Puerto Rico For A Customer over Alleged Losses In Its Closed End Fixed Income Funds
Zamansky LLC files its first arbitration against UBS Financial Services Inc. of Puerto Rico on behalf of a customer over alleged losses in its closed end funds, including the Puerto Rico Fixed Income Fund, the Puerto Rican Tax Free Fund, the Puerto Rico Bond Investors Fund and other funds. The case is FINRA TN 1301183.
Zamansky LLC files its first arbitration against UBS Financial Services Inc. of Puerto Rico on behalf of a customer over alleged losses in its closed end Puerto Rico bond funds, including the Puerto Rico Fixed Income Fund, the Puerto Rican Tax Free Fund, the Puerto Rico Bond Investors Fund and other funds. The case is FINRA TN 1301183.
The Statement of Claim in the arbitration alleges that for the last five years UBS Puerto Rico has been engaged in a scheme of pushing its supposedly “safe” and “secure” proprietary Puerto Rico bond funds on unsuspecting conservative investors and retirees for the purpose of reaping huge underwriting and management fees. The Statement of Claim alleges that the claimant, who is a 53 year-old disabled man and Puerto Rican resident who was forced to sell his shares of a family business and retire, suffered huge losses from risky proprietary closed end Puerto Rico bond funds when he needed conservative investments and had no tolerance for risk. The Statement of Claim also alleges that the claimant was solicited and encouraged to borrow against the closed end funds, which was totally unsuitable for him due to the high risks associated with investing on margin or leverage.
The Statement of Claim further alleges that, over the last two years, Puerto Rican debt and credit has deteriorated substantially, so that the proprietary closed end Puerto Rican bond funds experienced a massive increase in risk making them unsafe and unsuitable for most investors. The Statement of Claim alleges that Puerto Rico Fixed Income Fund and other Puerto Rico bond funds became too risky and unsuitable for the claimant who was a conservative investor. The Statement of Claim alleges he suffered large losses from a collapse in the value of the fond funds due to deteriorations in Puerto Rico credit. He alleges that he never knew that his Puerto Rico bond funds were so risky or that he could suffer losses of 60% or more, or that they were illiquid and had no real secondary market. The Statement of Claim also alleges that UBS Puerto Rico had serious conflicts of interest which influenced the unsuitable investment advice that it gave claimant, and that it breached its fiduciary duty to investors under Puerto Rico law.
On May 1, 2012 the Securities and Exchange Commission (SEC) issued a Cease-and-Desist Order in Administrative Proceeding Case No. 3-14863, against UBS Puerto Rico. In the Order, UBS Puerto Rico agreed to pay $26 million in disgorgement and fines to settle charges that it sold allegedly mispriced CEFs to investors, and that it knew but failed to disclose that the market was illiquid. The SEC also alleged that UBS Puerto Rico pushed its bond funds on customers through aggressive sales practices.
Stock fraud attorney Jacob Zamansky, as reported in an October 12, 2013 article entitled “Pierden Los ‘Ahorros De Una Vida'” in El Neuvo Dio, has described what is happening in Puerto Rico as the “Hurricane Katrina of financial crises.” The proprietary closed end funds it sold to its brokerage customers became high risk and speculative investments which was not communicated to investors, he states. As a result, conservative and retiree investors who held these funds at UBS Puerto Rico have experienced huge unexpected losses, Zamansky states. Any UBS Puerto Rico bond fund customer in this situation should consult a professional to discuss his or her legal rights, Zamansky states.
What Investors Can Do
If you were a UBS Puerto Rico bond fund investor 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 firstname.lastname@example.org 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.