San Juan, Puerto Rico. May 5, 2017 — The Securities Arbitration Law Firm of Klayman & Toskes, P.A., www.sueubspuertorico.com, together with Carlo Law Offices, P.S.C. located in Puerto Rico, announced today that they filed a FINRA claim against UBS Financial Services Incorporated of Puerto Rico and UBS Financial Services, Inc. (NYSE: UBS) (collectively “UBS”) for $15 million. The claim has been filed in the wake of Puerto Rico’s recent bankruptcy filing, which is the largest in U.S. Municipal history. According to the Claim, the Claimant entrusted his retirement assets to UBS with an investment objective of current income and capital preservation. Contrary to these objectives, UBS concentrated his account in Puerto Rico Government Bonds (“PRGBs”) and its proprietary Puerto Rico closed-end bond funds (“UBS PR CEBFs”), which are leveraged with UBS Bank USA Loans.
UBS purchased and held for Claimant PRGBs and UBS PR CEBFs, both of which are closely tied to the performance of Puerto Rico’s economy. The Claimant believed the purchases were consistent with his risk tolerance. However, the over concentration in these PRGBs and UBS PR CEBFs resulted in excessive risks, which were exacerbated by the use of UBS’ Bank Loans. UBS failed to disclose to Claimant the risks associated with over concentrating his account in these securities. Ultimately, the Claimant suffered losses which were precipitated by margin calls since his illiquid securities were utilized as collateral.
The sole purpose of this release is to investigate, on behalf of our clients, the sales practices of UBS in connection with unsuitable investment recommendations provided to their customers. Current and former customers of UBS who have information relating to the investment advice provided by UBS related to Puerto PRGBs and UBS PR CEBFs, are encouraged to contact Steven D. Toskes of Klayman & Toskes or Osvaldo Carlo of Carlo Law Offices, at (787)268-6444, or visit our website: www.sueubspuertorico.com.