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UBS Ordered to Pay FINRA Claimants $3.1 Million in Connection with Puerto Rico Closed-End Funds
On August 31, 2015 a FINRA arbitration panel awarded $3.1 million to three claimants in connection with losses stemming from investments in UBS Puerto Rico closed-end funds and other municipal bonds. The claimants, Ana Teresa Lopez-Gonzalez, Andres Ricardo Gomez and Wave Management LLC as Trustee for AG, were part of a larger group of investors that filed an arbitration claim with FINRA in December 2013 asserting a number of causes of action against UBS, including fraud, breach of fiduciary duty, negligence, breach of contract, negligent misrepresentation and omission, unsuitability and overconcentration.
The panel of three FINRA arbitrators held UBS Financial Services Incorporated of Puerto Rico and UBS Financial Services, Inc. jointly and severally liable, ordering the companies to pay the claimants damages, attorneys’ fees and interest in the amount of $3.1 million – the largest arbitration award to date for losses linked to UBS Puerto Rico closed-end funds.
“I believe the arbitration panel did justice in this matter,” the attorney for the claimants, Jacob H. Zamansky of Zamansky LLC, stated. “It was very gratifying to see my clients have their life savings and dignity restored.”
Puerto Rico is currently in a fiscal crisis. The island has accumulated over $70 billion in debt and $37 billion in unfunded pension liabilities. Thousands of people in Puerto Rico trusted UBS, placing millions of dollars in UBS Puerto Rico closed-end funds. UBS marketed these funds as a conservative and safe product when in reality they were a very risky investment given Puerto Rico’s dire financial conditions.
When the market for these funds collapsed in 2013, investors in Puerto Rico, including Ana Teresa Lopez-Gonzalez and Andres Ricardo Gomez, suffered catastrophic financial losses. Not only did the financial advisors at UBS Puerto provide these investors with unsuitable investment recommendations and misrepresentations, they failed to follow a key rule of investment – proper diversification. These investments were 100% concentrated in a single, high-risk type of security and when you place all of your eggs in one basket and the basket breaks, you lose all of your eggs.
If you are an investor who has suffered a financial loss in connection with UBS Puerto Rico closed-end funds, contact Jake Zamansky at jake@zamansky.com or by calling (212) 742-1414. Zamansky LLC is a leading investment fraud law firm that is currently representing hundreds of investors in Puerto Rico who have lost money in these types of investments.