UBS Financial Services Inc. and UBS Financial Services of Puerto Rico were recently ordered to pay approximately $19 million for losses Puerto Rico investors incurred in UBS’s closed-end Puerto Rico bond funds and Puerto Rico bonds.
These investors also complained about the use of leverage in connection with these investments, according to a press release.
UBS has been ordered to pay tens of millions of dollars in various arbitration claims to date, including awards of approximately $9 million, $15 million, $18 million, and now $19 million.
The UBS bond funds at issue in many of these cases were not traded on any exchanges, involved high amounts of leverage, and were heavily concentrated into a single geographic area, which exposed the investors to high amounts of risk.
In some instances, investors have alleged their brokers advised them to borrow additional money from UBS to invest in these securities, which would tremendously increase the risks involved. In many instances, the clients have alleged that they were told this was a safe strategy that would not put their money at substantial risk.
“If you are or were a client of UBS, or suffered losses in any other municipal bond investments made at the recommendation of your broker, contact the law firm of Shepherd, Smith, Edwards & Kantas LLP for a free, confidential evaluation of your account,” the law firm stated.