The debt crisis in Puerto Rico continues to loom over the commonwealth. Although the island is a U.S. territory, it’s public corporations are not covered by U.S Bankruptcy code. With a $422 million debt payment due May 1 and another $2 billion due in July, the threat of default is nearing a very real possibility.
According to InvestmentNews, the commonwealth has proposed that holders of general obligations bond that do not live in Puerto Rico accept 74 cent on the dollar and 54 cents on the dollar for bonds backed by sales tax.
Unfortunately for investors, many financial advisors pushed Puerto Rican debt as a safe way to generate income and focused on how the bonds can be used as a “tax free” method of generating income.
Just last month FINRA awarded three investors more than $470,000 in connection with the sale of UBS Puerto Rico open-ended bond funds.
Oppenheimer also had several funds that invested heavily in puerto rico debt. Investment News reports that Oppenheimer Rochester Maryland Municipal has 48% of its assets in puerto rico and their Virginia municipal bond fund has 40.8% of its assets in Puerto Rico.
The White Law Group continues to investigate the liability that brokerage firms may have for recommending these risky high yield bond funds. When a broker makes unsuitable investment recommendations and/or fails to perform adequate due diligence on investment recommendations, the brokerage firm may be liable for negligent supervision and responsible for investment losses.
If you suffered losses in Puerto Rico municipal bond funds and would like to discuss your litigation options, please call the securities attorneys of The White Law Group at 1-888-637-5510 for a free consultation.
The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. The firm represents investors in FINRA arbitration claims throughout the country. For more information on the firm, visit www.whitesecuritieslaw.com.