According to InvestmentNews, the beneficiaries of a trust are suing UBS for $4.5 million. The lawsuit alleges that UBS “acted against Ms. Carmona’s interests to keep the trust invested in closed-end funds, for which it earned management fees, underwriting fees, interest and commissions, according to the suit.” Approximately 90% of the trust was said to be invested in closed-end funds.
Furthermore the claim alleges that Ms. Carmona was deliberately kept in the dark about her status as beneficiary of the trust that was set up by her late husband, Mr. Hargen. According to the report, UBS is accused of preventing Ms.Carmona from receiving some $664,000 in earnings from the trust by reinvesting in closed end funds. The firm allegedly reinvested the funds to increase the fees and commissions they could generate from the trust.
Despite the knowledge that Ms. Carmona’s husband died in 2003, according to the complaint UBS continued to list on federal filings that he was alive and owner of the trust. In addition, the firm is accused of misrepresenting Mr. Hargen’s residence. UBS allegedly listed his residence on tax returns as a UBS office at AIG Plaza in Puerto Rico although he was a resident in Florida since 2001.
According to InvestmentNews, the trust which at one point had about $1.8million is worth less than $1000. The claim seeks “$3.5 million in damages and reimbursement of fees and interest income of around $1 million.”
Unfortunately it appears that many investors suffered devastating losses as a result of UBS closed end funds. 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 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