The outlook for UBS Puerto Rico bond investor’s continues to look bleak. The bond funds, which are ranked a step above “junk bonds” by many of the leading US investment rating agencies, continue to depreciate in value.
According to Investment News, “The NAV for the $375 million Puerto Rico Fixed Income Fund Inc. was $3.63 at the end of October, down 85.4% since the end of June. The NAV for the $449 million Puerto Rico Fixed Income Fund III Inc. was $4.08 at the end of last month, a drop of 68.2% since June.”
Unfortunately, the vast majority of investors purchased these bonds at $10 per share. To make matters worse, many investors’ portfolios were grossly over concentrated in these funds. Some investors have received offers from UBS to repurchase their shares. However, in an email to Investment News, UBS spokeswomen Karina Bryne wrote, “The offers would be at NAV or below.” Since UBS has failed to give specifics about its Puerto Rico Fund share repurchase program, it is unclear whether the firm will actually buy any of the shares. It appears that UBS is simply offering to help investors find a buyer for their shares, which, given the news about these investments, will be extremely difficult.
Many investors who were recommended Puerto Rico muni-bonds by UBS have suffered devastating losses as a result of their portfolios being over-concentrated. The White Law Group recently filed a FINRA arbitration claim on behalf of one investor who lost more than $450,000, and continues to investigate claims on behalf of investors.
Broker dealers have on obligation to make “suitable” investment recommendations. Suitability is determined by such factors as net-worth, risk tolerance, age, and investment objectives. In addition many brokers had a “fiduciary duty” to act in the best interest of their clients. When brokers overlook suitability requirements and/or their fiduciary duty they may be liable for investment losses.
If you invested in a UBS Puerto Rico Fund and would like to speak to a securities attorney about recovering your investment losses through a FINRA dispute resolution claim, please call The White Law Group’s Boca Raton, Florida office at 561-807-6804 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.