November 27, 2017 Comments (0) Blog, Current Investigations

UBS Puerto Rico Closed-end Funds Securities Investigation

UBS Puerto Rico Closed-end funds
(Last Updated On: November 27, 2017)

Investigating Potential Claims involving UBS Puerto Rico Closed-end Funds

The White Law Group continues to investigate the liability that UBS Financial has for recommending UBS Puerto Rico closed-end funds (“CEFs”) to investors.

UBS Puerto Rico closed-end funds dropped more than 20% in October, according to reports.

For the past few years, Puerto Rico has been struggling with rising debt and economic decline. The value of Puerto Rico’s municipal tax-free bonds has largely fallen as a result. In May 2017, Puerto Rico filed for bankruptcy protection in the largest municipal bankruptcy filing in history.

According to reports, UBS was the leading broker-dealer in Puerto Rico. UBS often concentrated its clients’ portfolios in its proprietary closed-end funds invested in Puerto Rico bonds as well as Puerto Rico bonds. The UBS CEFs were the single largest source of revenue for UBS.

According to the Financial Industry Regulatory Authority (FINRA), UBS allegedly failed to implement a reasonably designed system to identify and prevent unsuitable transactions in light of the unique economy of the territory.

FINRA censured and fined UBS-PR $7.5 million for failures related to suitability of transactions in Puerto Rico closed-end fund (CEF) shares. FINRA also reportedly ordered UBS-PR to pay approximately $11 million in restitution to 165 customers who suffered losses on their CEFs.

UBS-PR allegedly failed to monitor the combination of leverage and concentration levels in customer accounts to ensure that the transactions were suitable given the customers’ risk objectives and profiles.

In October 2017, many UBS CEFs suffered a significant decline of approximately 20%, decreasing from around $10 to the $1-$3 range as of mid-November.

The White Law Group has handled a number of claims involving UBS Puerto Rico closed-end funds. The firm is specifically investigating the following UBS Puerto Rico Closed-end funds:

UBS Tax-Free Puerto Rico Fund, Inc.
UBS Tax-Free Puerto Rico Fund II, Inc.
UBS Tax Free Puerto Rico Target Maturity Fund, Inc.
UBS Puerto Rico Fixed Income Fund, Inc.
UBS Puerto Rico Fixed Income Fund II, Inc.
UBS Puerto Rico Fixed Income Fund III, Inc.
UBS Puerto Rico Fixed Income Fund IV, Inc.
UBS Puerto Rico Fixed Income Fund V, Inc.
UBS Puerto Rico Fixed Income Fund VI, Inc.
UBS Puerto Rico AAA Portfolio Target Maturity Fund, Inc.
UBS Puerto Rico AAA Portfolio Bond Fund, Inc.
UBS Puerto Rico AAA Portfolio Bond Fund II, Inc.
UBS Puerto Rico GNMA & US Govmt. Target Maturity Fund, Inc.
UBS P.R. Mortgage-Backed & US Govmt. Securities Fund, Inc.
UBS Puerto Rico Fixed Income Fund, Inc.
UBS Puerto Rico Fixed Income Fund II, Inc.
UBS Puerto Rico Fixed Income Fund III, Inc.
UBS Puerto Rico Fixed Income Fund IV, Inc.
UBS Puerto Rico Fixed Income Fund V, Inc.
UBS Puerto Rico Fixed Income Fund VI, Inc.

Brokerage firms, like UBS, have a responsibility to adequately supervise their employees and implement the necessary procedures and systems to detect misconduct. As such, The White Law Group continues to investigate claims against UBS Puerto Rico on behalf of investors in closed-end funds.

If you are concerned about your investment made with UBS Puerto Rico closed-end funds 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.

For more information on The White Law Group, please visit our website at www.WhiteSecuritiesLaw.com.