FINRA Panel says UBS was liable for breach of contract and unsuitability
According to the Financial Industry Regulatory Authority (FINRA), a FINRA arbitration panel has found UBS liable for breach of contract and unsuitability in a customer complaint involving Puerto Rico bonds.
FINRA has reportedly ordered UBS to pay compensatory damages of $204,339, plus $66,000 in costs.
Antonio Gnocchi Franco, the claimant in this case, is a citizen of Puerto Rico. Franco reportedly charged that UBS had engaged in misrepresentation, negligence, breach of contract, breach of fiduciary duty, overconcentration, unsuitability, unauthorized trading and use of loan facilities, unjust enrichment and failure to supervise in connection with recommendations to invest in Commonwealth of Puerto Rico bonds and two UBS bond funds.
Franco, who was acting in his role and trustee of his law firm’s pension plan, at the end of the hearing, requested damages of $5,161,273 for “trading losses” or $3,429,438 for “net out-of-pocket losses.”
According to FINRA, the panel granted some, but not all of the claimant’s motion. All claims under the Puerto Rico Uniform Securities Act were dismissed.
UBS and its affiliated firm, UBS Financial Services Inc. of Puerto Rico, have already paid millions of dollars due to client losses in Puerto Rico proprietary closed-end bond funds filled with Puerto Rico municipal securities issued by various authorities and agencies. Last year, they lost the largest claim to date for $18.6 million.
The market for Puerto Rico’s $70 billion in municipal debt hit the bottom over the summer of 2013 after Detroit filed for bankruptcy that July.
Free Consultation with a Securities Attorney
Unfortunately it appears that many more investors suffered devastating losses as a result of UBS Puerto Rico bond funds. Brokers that sold UBS Puerto Rico bond 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.
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.