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UBS Puerto Rico Closed-End Fund Securities Lawsuit

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A Financial Industry Regulatory Authority (FINRA) arbitration claim has been filed on behalf of investors who purchased certain UBS Puerto Rico closed-end funds. The funds were sold by financial advisors in Puerto Rico, especially those at UBS Puerto Rico, who allegedly represented the closed-end funds as safe investments that would pay a steady yield of income. Investors were also told that the Puerto Rico closed-end funds were not at risk because they were invested in secure municipal bonds backed by the Puerto Rico government. Some of these UBS Puerto Rico closed-end funds, however, have lost over half their value in a period of only 2 months, resulting in claims of UBS Puerto Rico closed-end fund securities fraud.

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UBS Puerto Rico Closed-End Fund Securities Fraud

mutualfundsfundlosseserisaInvestors who purchased UBS Puerto Rico closed-end funds report that UBS and other Puerto Rico brokerage firms sold the closed-end funds as safe investments. They based their risk assessment on the fact that the closed-end funds were invested in bonds that were backed by the Puerto Rico government.

Since 2000, however, the Puerto Rico government has run at a deficit whereby government expenditures have continued to outpace revenues. As a result, the deficit reportedly reached a record $3.306 billion. Additionally, as of June 2010, the unfunded public employees' retirement accounts were reported to have a shortfall of approximately $25 billion.

These events have called into question the creditworthiness of the Puerto Rico government, and as a result, the prices of some of the Puerto Rico bonds have dropped. Unfortunately, for purchasers of Puerto Rico closed-end funds that were invested in these bonds, the value of their investment has declined dramatically and many investors may have lost most of their retirement savings.

Additionally, as investors in PR closed-end funds have needed to withdraw money from their accounts for personal reasons, they have allegedly been advised to borrow money from UBS and other brokerage firms rather than selling shares of their UBS Puerto Rico funds. Such advice was risky because if the funds lost value, the investors would have lost even more than if they had just sold some of their PR fund shares. Given that the funds have lost value, some investors who did borrow from a brokerage firm have lost almost all of their investments. Some investors who borrowed money from credit lines offered by brokerage firms have reportedly received margin calls and even had their UBS Puerto Rico fund shares liquidated. Some have even ended up owing money to the brokerage firms.

The following Puerto Rico closed-end funds are included in the UBS securities lawsuit:
    Tax-Free Puerto Rico Fund
    Tax-Free Puerto Rico Fund II
    Tax-Free Puerto Rico Target Maturity Fund
    Puerto Rico AAA Portfolio Target Maturity Fund, Inc.
    Puerto Rico AAA Portfolio Bond Fund
    Puerto Rico AAA Portfolio Bond Fund II
    Puerto Rico GNMA & U.S. Government Target Maturity Fund
    Puerto Rico Mortgage-Backed & U.S. Government Securities Fund
    Puerto Rico Fixed Income Fund
    Puerto Rico Fixed Income Fund II
    Puerto Rico Fixed Income Fund III
    Puerto Rico Fixed Income Fund IV
    Puerto Rico Fixed Income Fund V
    Puerto Rico Fixed Income Fund VI
    Puerto Rico Short Term Investment Fund
    Multi-Select Securities Puerto Rico Fund
    UBS IRA Select Growth & Income Puerto Rico Fund
    Puerto Rico Investors Family of Funds
    Puerto Rico Investors Tax-Free Fund
    Puerto Rico Investors Tax-Free Fund II
    Puerto Rico Investors Tax-Free Fund III
    Puerto Rico Investors Tax-Free Fund IV
    Puerto Rico Investors Tax-Free Fund V
    Puerto Rico Investors Tax-Free Fund VI
    Puerto Rico Tax-Free Target Maturity Fund
    Puerto Rico Tax-Free Target Maturity Fund II, Inc.
    Puerto Rico Investors Bond Fund I


UBS Puerto Rico Securities Lawsuit Settlement

securitiessettlementsgavelmoney This is not the first time UBS PR securities have been accused of fraud. In 2012, the US Securities and Exchange Commission (SEC) accused UBS PR and two executives of fraud for actions related to closed-end funds. The SEC alleged the defendants made "misrepresentations and omissions of material facts to numerous retail customers in Puerto Rico" regarding the liquidity and pricing of CEFs. UBS settled the lawsuit for $26.6 million, but did not admit to any wrongdoing. The two executives denied the SEC's allegations, according to Bloomberg (4/4/12).

In October 2013, a judge dismissed an SEC complaint against UBS Puerto Rico and two executives, finding that the SEC did not prove its complaint against the defendants. The SEC alleged the defendants misled investors about the liquidity of the closed-end funds.

UBS Puerto Rico Closed-End Fund Securities Legal Help

If you have suffered from financial losses, you may qualify for damages or remedies that may be awarded in a possible UBS Financial Services, Inc. securities lawsuit. Please click the link below to submit your complaint for a free evaluation.
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UBS CLOSED END FUNDS LEGAL ARTICLES AND INTERVIEWS

Puerto Rico Lawsuit Filed
Puerto Rico Lawsuit Filed
February 3, 2014
Puerto Rico As investors watch and wonder what else can happen with the Puerto Rico closed-end funds, at least one lawsuit has been filed against the government of Puerto Rico. Meanwhile, experts warn that 2014 could be a bad year for investors, who have already reportedly lost a lot of money in the collapse of the Puerto Rico funds [READ MORE]

UBS Puerto Rico Closed-End Funds Lose $1.66 Billion Last Year
UBS Puerto Rico Closed-End Funds Lose $1.66 Billion Last Year
January 24, 2014
New York, NY The numbers are in and it gives pause to consider the motivation of those considering a UBS Puerto-Rico Closed-End Funds lawsuit: the funds lost a total of $1.66 billion in the first nine months of 2013 [READ MORE]

UBS Puerto Rico Investors Look to 2014
UBS Puerto Rico Investors Look to 2014
January 17, 2014
San Juan, Puerto Rico Investors who lost money in UBS Puerto Rico closed-end funds likely hope that 2014 will be a better year than 2013. Thanks to the closed-end funds losing 16 percent or more in 2013, many investors are reportedly out a lot of money, with some investigating possible litigation or arbitration claims. Although UBS has offered to buy back shares of the UBS Puerto Rico funds, allegations have still been raised that the funds were marketed as being safer and less risky than they were [READ MORE]



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