The law firm is investigating sales of Puerto Rico municipal bonds by large U.S. based brokerage firms such as Wells Fargo and Morgan Stanley to their brokerage customers. Since 2006, even before Hurricane Maria devastated the Island, Puerto Rico has suffered from a protracted economic recession. The government has incurred massive debt that has bankrupted Puerto Rico.
As a result, Puerto Rican municipal bonds (“PRMBs”) have been risky and speculative investments for years. Notwithstanding, financial advisors at Morgan Stanley and Wells Fargo recommended and advised many of their retail brokerage customers to purchase these PRMBs. They were touted as safe, high yield income investments that were good for seniors, retirees and other conservative investors.
Unfortunately, this was not true. PRMBs were not suitable for conservative, retiree or senior investors. Investors who purchased PRMBs before September 2013 have suffered 60-70% losses of principal. The risk of these losses should have been known to financial advisors as the credit ratings deteriorated and worsened. Any investor who has suffered a loss in PRMBs may have a claim to recover their loss in FINRA arbitration.
Morgan Stanley had one financial advisor, Angel Aquino-Velez, who is no longer with the firm. Mr. Aquino-Velez reportedly has customer arbitration claims against him for close to $7 million in damages. Customers allege that they were sold unsuitable investments and that misrepresentations were made about PRMBs and closed-end bond funds that held PRMBs.
If you had a brokerage account at Wells Fargo or Morgan Stanley and purchased a PRMB on your financial advisor’s recommendation or advice, and you wish to have your situation reviewed, please contact our firm for an evaluation. You can contact Jake Zamansky by telephone at (212) 742-1414 or by email at firstname.lastname@example.org.