The Financial Industry Regulatory Authority (FINRA) recently settled charges against Santander Securities LLC for supervisory failures involving certain Puerto Rican bonds and closed end funds. Beginning in December 2012, FINRA alleged that for a 10 month period Santander’s risk classification tool did not accurately reflect the risks associated with Puerto Rican Bonds.
In addition, FINRA found that Santander did not supervise its customers’ use of margin and concentrated positions in their accounts.
Furthermore, the Wall Street Journal reports that the day after the municipal bonds were downgraded to near junk status in December 2012, “Santander allegedly stopped buying Puerto Rican municipal bonds being sold by customers and accelerated efforts to dump its inventory.”
Santander Securities agreed to pay $4.3 million in restitution to certain customers who purchased Puerto Rican bonds and $121,000 in restitution to certain customers impacted by the failures to supervise, in addition to an offer to buy back those securities. In addition, Santander will pay a $2million fine to FINRA.
The foregoing information, which is publicly available, is being provided by The White Law Group.
If you suffered losses investing in Puerto Rico municipal bonds or closed-end funds and would like to speak to a securities attorney, please call the securities attorneys of The White Law Group at (312)238-9650 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 Vero Beach, Florida.
For more information on The White Law Group, please visit our website at www.WhiteSecuritiesLaw.com.