Category Archives: Puerto Rico Bond Funds


Another Investor Lawsuit Filed Over Puerto Rico Bonds

By | FINRA Sales Practice Violations, News, Puerto Rico Bond Funds, Regulator Disciplinary Actions, Securities Arbitration | No Comments
Caribbean News

January 16, 2017
SAN JUAN, Puerto Rico — A securities arbitration law firm on Friday filed a claim against UBS Financial Services Inc. of Puerto Rico and UBS Financial Services, Inc. (collectively “UBS”) for $8.5 million.

According to the claim, the claimant entrusted assets to UBS with the investment objective of capital preservation. However, UBS ultimately concentrated the account in Puerto Rico government bonds (PRGBs) and its proprietary Puerto Rico closed-end bond funds (UBS PR CEBFs), which are leveraged and concentrated in PRGBs.

UBS purchased and held for the 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 their low risk tolerance. However, the over concentration in these PRGBs and UBS PR CEBFs was fraught with excessive risk given the claimant’s investment objective and risk tolerance.

UBS failed to disclose to the claimant the risks associated with over concentrating the account in these securities. Had this information and the true nature of the risk of the recommended allocation been known to the claimant or properly disclosed, he would not have invested his assets in these products.

The law firm representing the claimant, Klayman & Toskes, in conjunction with Carlo Law Offices, is currently investigating, on behalf of their clients, the sales practices of UBS in connection with investment recommendations provided to their customers.


Recover Investment Losses

Residentes de Puerto Rico con cuentas de inversiones en Morgan Stanley: El Bufete de Arbitraje de Valores Klayman & Toskes, P.A. Continúa Proceso de Arbitraje de FINRA contra Morgan Stanley por Violación a Prácticas de Venta de la Industria

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San Juan, Puerto Rico (HISPANICIZE WIRE) – 30 de septiembre de 2016 – El bufete de arbitraje de valores Klayman & Toskes, P.A. (“K&T”),, continúa el trámite de una reclamación de arbitraje [Caso de FINRA Núm. 14-01090] contra Morgan Stanley (NYSE: MS) por violaciones a las prácticas de venta de la industria, tras información divulgada en el acuerdo transaccional de $4.7 millones que la casa de corretaje alcanzó con el estado de Mississippi, evidenciando el mal manejo de información crítica en el perfil de los clientes de la firma.

El acuerdo transaccional contiene detalles del convenio entre Morgan Stanley y el estado de Mississippi, el cual sugiere que la firma entró información incorrecta sobre los objetivos de inversión y tolerancia al riesgo de los clientes, durante la transferencia de numerosas cuentas de Smith Barney a Morgan Stanley. Según el acuerdo, al momento de transferir las cuentas de Smith Barney a Morgan Stanley, la información de los clientes nuevos tenía que añadirse al sistema. Esta información incluía los objetivos de inversión de los clientes, su tolerancia al riesgo, así como información personal y financiera, utilizada en parte para ayudar en la determinación de si ciertas inversiones eran adecuadas para los clientes.

Según el abogado de valores Lawrence L. Klayman, la investigación del bufete está enfocada en si Morgan Stanley y sus asesores financieros fueron diligentes con sus clientes de Puerto Rico al determinar sus objetivos de inversión y tolerancia al riesgo. “Las violaciones a las prácticas de venta descubiertas por el estado de Mississippi parecen ser consistentes con las violaciones que nuestro bufete está investigando respecto a clientes de Morgan Stanley en Puerto Rico”, indicó el abogado. “También estamos investigando si Morgan Stanley falló en supervisar a sus asesores financieros en relación con posibles recomendaciones inadecuadas de inversión hechas a clientes de Puerto Rico, independientes de la existencia de información incorrecta o imprecisa en su perfil de inversión”, concluyó.

El único propósito de este comunicado es investigar las prácticas de venta de Morgan Stanley en conexión con las recomendaciones de inversión inadecuadas hechas por sus asesores financieros. Los clientes presentes y pasados de Morgan Stanley de Puerto Rico quienes tengan información relacionada con nuestra investigación pueden contactar a los abogados Lawrence L. Klayman o Raymond Gentile de Klayman & Toskes al (787) 919-7325, o visitar nuestra página en

Puerto Rico Bondholders: Klayman & Toskes P.A. Applauds Senators’ Recommendation to SEC to Investigate Possible Illegal Activity in Puerto Rico Debt Debacle

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New York, NY, June 15, 2016 – The Securities Arbitration Law Firm of Klayman & Toskes applauds the distinguished groups of Senator’s who are calling for a comprehensive investigation into the investment firms who managed Puerto Rico’s debt.

The group of Senator’s is urging the SEC “to investigate any possible misconduct by financial advisors to municipal entities in Puerto Rico in the years leading to the crisis,” which include “possible market manipulation, conflicts of interest, trading practices and fraud” in the management of Puerto Rico securities.

According to Lawrence L. Klayman of Klayman & Toskes, “the people of Puerto Rico deserve to know if investment firms perpetuated or contributed to the debt crisis, especially if illegal activity motivated these firms to put their own financial interests ahead of the individuals who ultimately purchased bonds and bond funds which contained this debt.  In the last 25 years there has been scandal after scandal on Wall Street.  Unfortunately, it’s always the people on Main Street who pay the price for the misconduct that fuels these scandals.  History seems to be repeating itself in light of the Senators’ recommendation to investigate the roles that investment firms played in Puerto Rico’s debt debacle.”

The Securities Arbitration Law Firms of Klayman & Toskes, P.A. and Carlo Law Offices Announce Investigation of Santander Securities, LLC on Behalf of Puerto Rico Investors for FINRA Sales Practice Violations

By | Featured Investigations, FINRA Disciplinary Actions, FINRA Sales Practice Violations, Puerto Rico Bond Funds, Securities Concentration | No Comments

The Securities Arbitration Law Firms of Klayman & Toskes, P.A. and Carlo Law Offices Continue to  Investigate Santander Securities, LLC on Behalf of Puerto Rico Investors for FINRA Sales Practice Violations

San Juan, Puerto Rico (BUSINESSWIRE) – October 13, 2015 – The Securities Arbitration Law Firms of Klayman & Toskes, P.A., www.perdidasenbonospr/.com/en/, and Carlo Law Offices continue to investigate Santander Securities, LLC, a subsidiary of Santander BanCorp, both wholly owned by Banco Santander, S.A. (NYSE:SAN) for securities sales practice violations. Financial Industry Regulatory Authority (FINRA), announced a $6.4 million settlement with Santander Securities, LLC for sales practice violations related to UBS Puerto Rico Bond Funds and UBS affiliated bank loans.

According to the FINRA Acceptance Waiver and Consent Order (AWC), Santander Securities, LLC agreed to settle with FINRA for $6.4 million which included, “A fine of $2.0 million” and “Restitution of approximately $4.3 million” for certain solicited transactions in Puerto Rico Bonds and close-end funds. FINRA cited that, Santander Securities, LLC had “deficient supervisory system and procedure regarding concentrated securities purchases and margin use” related to solicited investments in individual Puerto Rico bonds and Puerto Rico close-end funds.

According to Steven D, Toskes, Esq., of Klayman & Toskes, P.A., “the findings in the FINRA action against Santander Securities released today is significant for investor claims of broker misconduct related to solicited investments in individual Puerto Rico Bonds, Puerto Rico closed-end funds and the use of margin loans which led to catastrophic losses.” Mr. Toskes continued, “Our investigations resulted in similar findings to those detailed in the FINRA AWC against Santander Securities that resulted in $6.4 million in fines and restitution for misrepresentations about risk, concentration in Puerto Rico Bonds and the use of margin and bank loans.”

The securities arbitration law firms of Klayman & Toskes, P.A. and Carlo Law Offices are dedicated to the rights of Puerto Rico investors. We are experienced, qualified and nationally recognized securities litigation attorneys. We are currently investigating Santander Securities, LLC for FINRA sales practice violations related to concentrated investments in individual Puerto Rico Bonds, Puerto Rico closed-end funds and the use of margin loans. Puerto Rico investors who have experience with or knowledge of Santander Securities sales practices, contact Steven D. Toskes, Esq. at 888-997-9956.

AEELA throws UBS under the Bus for the Management of Puerto Rico Government Bond

By | Featured Cases, News, Puerto Rico Bond Funds, Securities Arbitration | No Comments
August 4, 2014

From 2010 to 2012 there was an increase of $ 50 million to over $ 300 million in the amount of assets of the Association of Employees of the Commonwealth (AEELA) managed by UBS, among these, bonds of the Corporation for Public Financing (PFC, for its acronym in English).

PFC bonds, maturing in early August, will be the first default in the history of the Government of Puerto Rico.

During that period, UBS AEELA acquired for about $ 179 million in bonds of Puerto Rico, which increased to $ 212 million the amount of related financial instruments of Puerto Rico in AEELA portfolio investments. This increase resulted in an increase in the concentration of assets in bonds AEELA Puerto Rico from 14% in 2010 to 30% in 2012.

The executive director of the organization, Claudio Paul Crespo said in a press release that “part of this additional investment in bonds, UBS was made AEELA acquiring for Puerto Rico bonds that were in your own portfolio. These bonds, which were transferred from the portfolio of UBS AEELA portfolio, remained lower than that of other instruments available in the credit rating market. In addition, UBS recommended AEELA purchase long-term bonds, which increased based on the fluctuation of interest and value of risk assets “.

He added that the investment portfolio by UBS AEELA proposal was substantially more risky than the “Barclays Aggregate Bond Index,” which was the model used for UBS investment AEELA. “UBS recommended to AEELA riskier than those in the investment model that these represented AEELA investments that were to follow,” he said.

The April 18, 2014, the Association lodged a complaint against UBS in the amount of $ 65.7 million. That complaint is based on actions that resulted in UBS alleged false representations, omissions, breach of contract, violation of fiduciary duty, unsuitable investment recommendations, neglect of portfolio diversification, negligent supervision of its employees, fraud, violations of the Financial Industry Regulatory Authority (FINRA), violations of the laws and regulations on investment and violations of the laws of Puerto Rico.

This claim was filed with FINRA in the US through the law Carlo Law Offices, PSC, represented by Mr. Osvaldo Carlo Linares, and Klayman & Toskes, PA, represented by Mr. Steven D. Toskes. “The law considers that the claim of AEELA is solid, it is based on a thorough study of investments and the applicable law,” said the Executive Director.

Association also referred three cases to the Justice Department on events in AEELA during the same period 2010-2012, among these purchases without auctions, possible violations of law and other irregularities linked to the Vacation Center Playa Santa, the program savings and loan origination system.

“As part of our commitment, we have assumed the duty to work for an impeccable administration, consistent with an institutional vision of sound administration. Employees and pensioners of the government of Puerto Rico can be confident that we have taken the steps to provide stability to the association and strengthen its financial position for the benefit of the heritage of all owners partners so that their savings will continue to grow and can receive no problems the services and benefits they so desperately need, “said Claudio Crespo.

AEELA has it taken steps to prevent the fiscal situation of the government affect the financial stability of the institution and its thousands of owners partners cleared.

The Securities Law Firms Klayman & Toskes, P.A. and Carlo Law Offices Comment on Recent Standard & Poor’s Credit Downgrade Decision To Cut Puerto Rico Public Finance Corp. Bond Credit Ratings

By | Blog, Featured Cases, FINRA Sales Practice Violations, Puerto Rico Bond Funds, Securities Arbitration | No Comments

SAN JUAN, Puerto Rico (Globe Newswire) – July 21, 2015 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”),, and Carlo Law Offices comment on Standard & Poor’s (“S&P”) decision to downgrade the credit rating on debt issued by Puerto Rico Public Finance Corp’s (“PRPFC”) in 2011 and 2012 from “CCC-” to “CC”. The S&P rating agency downgrade came after the PRPFC failed to transfer money to the bond trustee for the $58 million bond payment due Aug 1st. As a matter of practice, funds are transferred 15 days in advance of payment date. With this development, S&P warned that a default on the payment due by the PRPFC on August 1st has now become “a virtual certainty.” S&P stated, “We believe a default on the PFC bonds would be further demonstration of increasing unwillingness to pay debt in full and also raises the potential for future unequal treatment between various types of bondholders.”

In a recent report Bond Buyer asserted that, “Holders of that debt may have no recourse.” In support of this opinion PRPFC Series 2004B Bond Offering documents declare that, “The 2004 Series B bonds will not constitute an obligation of the Commonwealth of Puerto Rico or any of its political subdivisions or public instrumentalities (other than the corporation), and neither the Commonwealth of Puerto Rico nor any of its political subdivisions or public instrumentalities (other than the corporation) will be liable thereon. The Corporation has no taxing authority.”

Securities arbitration attorney, Steven D. Toskes comments on the recent events, “The 2016 Puerto Rico budgetary process has begun to buckle under the strain of excessive debt levels. Investors in PRPFC issued 2004 Series B bonds are most likely the first to be faced with an actual default in interest payments.” Mr. Toskes continues, “This pending default should lead investors to consider loss recovery options, including a Financial Industry Regulatory Authority (FINRA) arbitration claim for the failure to disclose the risks associated with concentrated investments in Puerto Rico Bonds that is the result of a brokerage firm’s failure to supervise its financial advisors.”


Klayman & Toskes, P.A. and Carlo Law Offices are dedicated to the rights of Puerto Rico investors. Puerto Rico investors who suffered losses as a result of FINRA sales practice violations may be able recover their losses in a FINRA arbitration claim. Klayman & Toskes, P.A., a leading securities and litigation law firm, practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors against major Wall Street brokerage firms.

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