UBS Wealth Management and UBS Puerto Rico have been ordered by the Financial Industry Regulatory Authority (FINRA) to pay $1 million in damages to a 66 year old investor. According to the arbitration panel, UBS brokers encouraged the investor to keep and hold 100% of his investment portfolio in risky Puerto Rico closed end bond funds despite the fact that the investment was extremely over-concentrated and completely unsuitable for him.
According to the arbitration award, this conservative, frugal investor lost $737,000 of his nearly $1 million portfolio. When the investor approached UBS with his concerns about the decline in the value of his investment portfolio the UBS branch manager allegedly stated that “even a skinny cow could give milk.” The FINRA arbitration award went on to note that UBS provided the investor with brochures and monthly statements in English, despite the fact that he spoke very little English and had requested the documents be sent in Spanish. Unfortunately, this investor did not know that UBS brokers were allegedly under pressure to sell these risky closed-end bond funds and to encourage investors to hold the bonds even when their value collapsed in the fall of 2013. Continue Reading