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A FINRA arbitration panel issued an award of damages to Greco & Greco clients against UBS of Puerto Rico on February 23, 2018. The arbitration involved multiple Puerto Rico customers of UBS who had been invested primarily in UBS Puerto Rico Closed-End Mutual Funds and Puerto Rico Bonds.
The award, totaling $521,075.00 in damages, was significant because most of the damages were incurred in investments that UBS claimed were conservative (the Puerto Rico AAA Portfolio Bond Fund and COFINA bonds), and UBS further unsuccessfully claimed that the customers had not lost any money because of the interest/dividends they had earned over the years in the investments.Read more at InvestmentNews
As set out in more detail at Greco & Greco’s website (http://www.securities-lawyers.net/ubs-puerto-rico) the UBS Puerto Rico Closed-End Funds (CEFs) were high risk investments which used leverage (a speculative investment technique) and which did not have a market (they were traded by UBS’s trading desk but UBS had the ability to stop trading of the funds at any time).
Greco & Greco provides free attorney consultations regarding potential cases involving UBS, Puerto Rico Closed-End Funds, and Puerto Rico bonds. If we can help, please contact us.
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Greco & Greco is pleased to report the first FINRA Arbitration Award against UBS Financial Services of Puerto Rico relating to the crash of UBS closed end bond funds in 2013 which were sold to Puerto Rico residents. W. Scott Greco represented the Claimant customer in the case of Bauza v. UBS Financial Services of Puerto Rico, et al. The arbitration panel awarded $200,000 in damages to the Claimant, despite claims by UBS that Claimant’s net out of pocket losses were less than $10,000.
The case involved a heavy over-concentration of the Claimant’s UBS account in proprietary UBS closed end bond funds pursuant to UBS’s recommendations. The funds invested heavily in Puerto Rico bonds using leverage (a speculative investment technique), and had significant geographic concentration risk.
Read about the arbitration award in this Reuters article.