UBS Loses Again on Puerto Rican Bonds
UBS was dealt another blow from its sale of Puerto Rican bonds and closed-end funds by FINRA, who ordered the firm to pay over $700,000 to two elderly clients.
As we’ve told you, UBS has been under fire in a number of FINRA arbitration cases from clients claiming damages related to the firm’s sale of Puerto Rican bonds. Total claimed damages sought by clients are approximately $1.9 billion, of which $740 million has been resolved through settlements, arbitration or withdrawal of the claim, according to the firm’s latest earnings report.
Luis Vega and his defunct car rental business, Condado Motors was awarded $549,000 in compensatory damages. His ex-wife, Teresa Rosas was awarded $165,288. FINRA found UBS liable of negligence in its management of the clients’ investments, and UBS was also ordered to pay $62,241 in costs and $39,200 in hearing session fees, but will not be responsible for attorney’s fees as requested by the clients.
Vega and Rosas had asked for over $5 million for securities fraud, deceit and recklessness in addition to negligence, according to a record of the award.
UBS denied all claims made by the couple, and further requested that FINRA fees and costs be paid by them. It also asked for the removal of all arbitration records from the FINRA-operated CRD system related to its employee, and the clients’ adviser, Jose Chaves, which FINRA rejected.
According to FINRA Broker Check Jose E. Chaves (CRD# 5827677) has been registered with UBS Financial Services in San Juan, PR since August 2012. He has seven customer disputes listed on his Broker Check.
Vega, 87, invested close to $8 million through Condado Motors with Chaves, between 2006 and 2011, according to according to an article On Wall Street. Chaves allegedly did not diversify the assets, and instead put about 95% in three of UBS’ Puerto Rican closed-end funds.
Unfortunately it appears that many more investors suffered devastating losses as a result of UBS Puerto Rico closed-end funds. Brokers that sold UBS closed-end funds had a responsibility to make sure the investment recommendation was suitable for their client. The White Law Group continues to investigate claims against the brokerage firms that pushed Puerto Rican municipal bonds and bond funds.
For more information on the investigation see UBS Puerto Rico $34 Million Settlement with SEC & FINRA and Troubling News for UBS Puerto Rico Fund Investors.
If you are concerned about your investment in Puerto Rico bonds and would like to speak to a securities attorney, please call The White Law Group at 888-637-5510 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.
To learn more about the firm, please visit www.WhiteSecuritiesLaw.com.