New Research Indicates Investors Already Lost Billions in Puerto Rico Bond Funds

by InvestorLawyers on January 16, 2014

in Arbitration,FINRA,Securities Fraud,Suitability,UBS

New Research Indicates Investors Already Lost Billions in Puerto Rico Bond Funds

Investment fraud lawyers continue to investigate claims on behalf of investors who have suffered significant losses in UBS Puerto Rico closed-end municipal bond funds. Allegedly, UBS Puerto Rico has engaged in questionable sales practices related to certain closed-end bond funds, including leveraged fixed income funds. New research has indicated that investor losses now amount to billions of dollars.

According to InvestmentNews, 19 of these bond funds lost a total of $1.6 billion from January to September of last year alone. Reportedly, the funds that caused the most significant investor losses were the ones underwritten by UBS with large municipal bond holdings. Around $10 billion in closed-end bond funds were sold by the Puerto Rican unit of UBS Financial Services from 2002 to 2012.

The Puerto Rican economic downturn has caused the value of the funds — as well as the value of other funds not underwritten by UBS that purchased Puerto Rican debt — to significantly decline. Municipal market weaknesses and rumors regarding interest rates have led to illiquidity and value declines for these products. In many cases, the risks associated with these investments reportedly were not properly disclosed to clients prior to their sale.  In these circumstances, some UBS Puerto Rico customers may have claims for unsuitable recommendations, over-concentration and/or improper use of leverage.

Some of the funds currently being investigated by investment fraud lawyers are:

  • Puerto Rico Mortgage Backed & US Govt. Fund
  • Puerto Rico Fixed Income Funds I-VI
  • Puerto Rico AAA Portfolio Bond Funds I and II
  • Puerto Rico AAA Portfolio Target Maturity Fund
  • Puerto Rico Investors Bond Fund II
  • Puerto Rico Investor’s Tax-Free Funds I-VI
  • Puerto Rico GNMA &US Gov. Target Maturity Fund
  • Puerto Rico Tax-Free Target Maturity Fund I and II
  • Tax-Free Puerto Rico Target Maturity Fund
  • Tax-Free Puerto Rico Funds I and II

If you suffered significant losses in UBS Puerto Rico closed-end bond funds, you may be able to recover your losses through FINRA securities arbitration. To find out more about your legal rights and options, contact a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

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