Puerto Rico COFINA Bonds Investigation
Did you lose money investing in Puerto Rico COFINA Bonds at the recommendation of your broker? If so, the attorneys at The White Law Group may be able to help you recover your losses through FINRA Arbitration.
Puerto Rico COFINA bonds or Puerto Rico Urgent Interest Fund Corporation Bonds, are attached to Puerto Rico’s sales tax. COFINA is a corporation that is owned and controlled by the Puerto Rican government. When it issues debt, the funds that will be used for repayment comes directly from sales tax revenue.
COFINAs have been falling in price since U.S. District Judge Laura Taylor Swain was appointed to preside over the bankruptcy-like proceedings initiated in early May.
On May 30, the worst case scenario seemed to come true as the judge ordered a trustee not to make a $16 million interest payment to Puerto Rico COFINA bondholders. Even though Puerto Rico had defaulted on millions worth of bonds, the COFINA bonds have somehow managed to stay current.
The stay on interest payments allows the competing claims of owners of the general obligation bonds (GO Bonds) to be litigated, according to reports.
GO bondholders believe they have first claim on all of the Commonwealth’s sources of revenue. COFINA bond holders maintain that the Puerto Rico Constitution states that COFINA bonds have first claim on sales tax revenues, something which was of little dispute in the bond market, until Puerto Rico defaulted on GO debt.
Litigation will be the decision maker of the value of the COFINA bonds. Many of the bonds have already suffered substantial losses.
Recovery of Investment Losses in COFINA bonds
The White Law Group is investigating the liability that brokerage firms may have for improperly selling Puerto Rico COFINA Bonds.
Broker dealers are required to perform adequate due diligence on all investment recommendations to ensure that each investment recommendation that is made is suitable for the investor in light of the investor’s age, risk tolerance, net worth, financial needs, and investment experience.
Fortunately, FINRA does provide for an arbitration forum for investors to resolve such disputes and if a broker or brokerage firm makes an unsuitable investment recommendation or fails to adequately disclose the risks associated with an investment they may be found liable for investment losses in a FINRA arbitration claim.
If you suffered losses investing in Puerto Rico COFINA Bonds, the attorneys at The White Law Group may be able to help you recover your losses by filing a FINRA Arbitration claim against the brokerage firm that recommended the investment to you.
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 throughout the country in claims against their brokerage firm.
For a free consultation with one of the firm’s securities attorneys, please call (888) 637-5510. For more information on The White Law Group, visit www.WhiteSecuritiesLaw.com.