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. The FINRA award includes $600,000 in compensatory damages, along with an order that UBS pay approximately $400,000 to buy back the investor’s portfolio.
In every broker/investor relationship, the broker has a duty to assess what the investors’ goals are as well as their risk tolerance. This assessment is based on a number of key factors, including the investors’ stated objectives, risk tolerance, financial condition and tax status. It is the broker’s responsibility to only pursue and recommend investments that are suitable for that investor based on these factors.
Have you suffered losses in an unsuitable or over-concentrated UBS investment? Did your UBS broker recommend an investment that was not in line with your conservative investment goals? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Attorney Pearce is currently representing numerous clients with claims against UBS Puerto Rico for misrepresentations, overconcentration and/or unsuitable recommendations of UBS Puerto Rico closed end bond funds to conservative investors.
For dedicated representation by a law firm with over 35 years of experience in all kinds of securities, commodities and investment disputes, contact us by telephone at 561-338-0037 or toll free at 800-732-2889, via e-mail or visit our website at www.secatty.com We may also be able to arrange a meeting with you at offices located in San Juan, Puerto Rico or in Boca Raton, Fort Lauderdale, Miami and West Palm Beach, Florida and elsewhere.