UBS’s Yield Enhancement Strategy (“YES”) reportedly has over $5 billion under management and over 1,200 investors. Investors in YES must agree to commit capital to the program, a so-called “mandate,” which may take the form of securities or cash. The committed capital provides collateral for options spread trading in each investor’s account. Although marketed to bond investors, the bonds held by each investor have nothing to do with the YES strategy other than serving as collateral for the options trades. Some investors pledge other securities or cash as collateral for the YES program.

The YES strategy entails generating option premium income through the strategic sale and purchase of SPX (S&P 500) index option spreads. This strategy, which is also sometimes referred to as an “Iron Condor” spread, involves writing two vertical options spreads – a bear call spread and a bull put spread. Thus, this strategy entails four different options contracts, each with the same expiration date and differing exercise prices. The “Iron Condor” strategy involves writing both a short put and a short call against the SPX, with these naked, or uncovered, options are designed to generate income for the investor via the receipt of premium. Further, the “Iron Condor” strategy involves writing both a long put and long call against the SPX, with these trades, or options legs, designed to mitigate the risk associated with the uncovered options positions.

While the YES strategy may deliver solid returns in a market that neither rises nor falls substantially over relatively short time frames, the strategy’s inherent substantial risks become apparent in times of heightened stock market volatility. For example, earlier this year in February 2018, when markets turned volatile, a volatility index known as VIX spiked to extreme levels in excess of 20. During that same time frame, YES incurred its first substantial losses of 2018. Unfortunately, the February 2018 losses appear to represent only the beginning. YES investors have reportedly suffered losses in excess of 20% of their committed capital during November and December 2018 as markets once again turned volatile. Many investors found to their chagrin that their options positions incurred steep losses- far beyond what they had thought was possible- over very short periods of time.

Ultimately, options strategies like the iron condor amount to bets in favor of the time decay embedded in options (which have fixed expiration dates) versus volatility. On the one hand, an investor can pocket options premium income in those instances where the option — which has a finite lifespan and fixed expiration and is therefore properly viewed as a decaying asset — goes to zero and expires worthless. However, on the other hand, periods of pronounced market volatility can quickly lead to scenarios where the option premium is dwarfed by losses due to market volatility.

UBS reportedly marketed the “Yield Enhancement” strategy to high net worth investors as presenting limited risk while providing single-digit annual enhancement of returns on bond portfolios. This marketing angle may have appealed to risk-averse investors due to the lower bond yields available during the recent multi-year period of low interest rates.

The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience representing investors who have sustained losses due to the negligence or misconduct of their broker and/or brokerage firm. In particular, the firm has substantial experience in cases involving non-conventional investments and structured products, including commodity futures, options, and leveraged ETFs and ETNs. Investors may contact us via the contact form on this website, by telephone at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation. Attorneys at the firm are admitted in New York and Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

Prior to starting with Merrill Lynch in 2009, Zeng worked for UBS Financial Services and before that for Morgan Stanley.

If you suffered significant losses as a result of doing business with David Zeng or received an unsuitable recommendation in any of the mentioned investment categories from another stockbroker or financial advisor, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

A claim was recently filed on behalf of a former client of Luis Fernandez and Angel Canabal against UBS Financial Services Incorporated of Puerto Rico and UBS Financial Services Inc. According to the claim, the retired client invested the majority of his life savings based on the recommendation of Fernandez in UBS proprietary bond funds, which were primarily invested in Puerto Rican debt. Allegedly, these investments were risky, illiquid and unsuitable for the investor.

The claim also alleges that the risks of the investments were not explained to the client, and that UBS made a recommendation that he borrow more money to be invested in the proprietary funds from a UBS-related company. The account was later taken over by Canabal, who allegedly told the investor that the recommendations were sound, the account wasn’t invested aggressively, and no changes were required.

According to investment fraud lawyers, under FINRA rules, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Reportedly, many UBS clients received unsuitable recommendations regarding investments that consisted largely of Puerto Rican debt.

If you suffered significant losses in UBS Puerto Rico bonds sold by Fernandez, Canabal or another UBS broker, you may be able to recover your losses. 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.

This is bad news for a lot of investors, as about 70 percent of U.S. municipal bond funds currently hold some portion of Puerto Rico bonds and those funds that are required to hold investment-grade bonds will be forced to sell the Puerto Rico bonds at significant discounts. According to stock fraud lawyers, this selling pressure may result in bond holders seeing significant price drops. In addition, the downgrade could throw a wrench in Puerto Rico’s plan to borrow $1-2 billion in the near future. Puerto Rico would likely have to agree to a much higher interest rate for investors to accept the risks associated with the bonds.

Puerto Rico bond investors suffered losses of more than 20 percent in 2013, with even higher losses for investors who were exposed to the internal leverage (or borrowing of money to buy additional municipal bonds) in UBS Puerto Rico bond funds. Investors who were 50 percent leveraged reportedly experienced losses of around 40 percent. In addition, securities fraud attorneys say that many investors were convinced to use a margin account, a second mortgage or a bank loan to borrow more money for larger investments. Both of these recommendations carried significant risk and were unsuitable for many investors.

Under FINRA rules, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.

If you received an unsuitable recommendation of Puerto Rico bond funds (either by UBS Puerto Rico or another brokerage firm) and suffered significant losses as a result, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

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.

In one claim already filed by stock fraud lawyers, the claimant, one of Lugo’s clients, seeks to recover approximately $15 million. According to the allegations in this claim and others, Lugo reportedly recommended that his clients invest significant portions of their accounts in UBS proprietary Puerto Rico municipal bond funds and Puerto Rico municipal bonds. In addition, the amount invested frequently represented large concentrations of the total net worth of the client. Reportedly, these investments were marketed and sold as low-risk and clients were told they would be paid high, tax-advantaged dividends.

Lugo’s clients also allege that they were not warned that the UBS bond funds were highly leveraged. Lugo also allegedly recommended a UBS margin account in order to borrow funds to increase his clients’ Puerto Rico municipal bond investments. While this investment strategy was highly speculative and posed a high risk of principal loss, Lugo allegedly did not warn his clients of the risks and made unsuitable recommendations.

Reportedly, UBS Financial Services offered to buy back some shares of the Puerto Rico closed-end bond funds last month, following the funds’ significant decline in value. However, the shares will be repurchased at net asset value or below and a cap has been placed on the fund to prevent any more than 25 percent of the outstanding shares to be repurchased. According to securities fraud attorneys, the buyback program may be an attempt to discourage individual arbitration claims and actual investor recovery could be much lower than the shares’ net value.

If you suffered significant losses in UBS Puerto Rico bond funds because of the unsuitable recommendations of David Lugo or another UBS representative, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.netfor a no-cost, confidential consultation.

Created as a private hedge fund in 2000, the UBS Willow Fund was sold by UBS Financial Services. Reportedly, an announcement in October 2012 stated that the UBS Willow Fund would be liquidated. On September 6, 2013, the fund’s shareholder report stated, “The fund does not hold investments as of June 30, 2013.”

It’s possible that UBS did not adequately disclose the risks of the fund when making recommendations. Furthermore, many of the investors who received recommendations to invest in the fund reportedly had low risk tolerances and were seeking stable income. According to stock fraud lawyers, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.

In addition, securities arbitration lawyers say that the portfolios of some investors may have been over-concentrated in the UBS Willow Fund. Finally, the fund may have strayed from its disclosed strategy, which was to invest in distressed debt, making speculations about foreign sovereign debt credit default swaps instead.

If you suffered significant losses in the UBS Willow Fund because of an unsuitable recommendation, you may be able to recover your losses through Financial Industry Regulatory Authority arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Both Standard & Poor and Moody had already put Puerto Rico’s general obligation municipal bonds on negative watch when Fitch Ratings joined them on November 14. The Puerto Rico bonds are already rated by all three agencies at just one step above “junk,” or non-investment grade. Currently, Puerto Rico has outstanding debt amounting to around $11 billion in this category, and securities arbitration lawyers say that the negative watch given to the bonds by all three rating agencies is an indication that the debt will likely be downgraded in the coming months to junk-bond status.

If these bonds are downgraded to junk status, the resulting flood of sales could cause another drastic drop in the bonds’ price, and could also result in losses in closed-end mutual funds invested in the bonds. Unfortunately, most buyers are unwilling to accept the risk of purchasing these bonds unless significantly discounted, leaving many investors forced to keep the investment or sell it at a significant loss.

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

• Puerto Rico Mortgage Backed & U.S. Government 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 & U.S. Government 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 funds invested in Puerto Rico bonds through UBS Financial Services or another financial advisor, 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.

Investment fraud lawyers at the Law Office of Christopher J. Gray P.C. recently filed a securities arbitration claim with the Financial Industry Regulatory Authority regarding UBS Puerto Rico investments. This case, which was filed on behalf of a retiree, focuses on one of a group of closed-end funds structured by UBS Puerto Rico, known as the Puerto Rico Fixed Income Fund I.

According to the allegations stated in the claim, Fund I was marketed and sold as a safe fixed-income investment, and was primarily invested in bonds issued by the Puerto Rican government. However, according to securities arbitration lawyers, because these funds suffered heavy exposure to the Puerto Rico government-issued bonds, there were substantial risks associated with the fund’s concentration these bonds in the event that they lost value. Due to their leveraged exposure to Puerto Rico government bonds, the value of the close-end funds has significantly declined as the underlying municipal bonds have dropped in price.

Fund I had a stated value of $8.55 per share as of July 2013. However, the value per share dropped to $6.06 in September and, as of October 1, shares of Fund I were only valued at $3.73. There are 23 closed-end funds currently in question, some of which have lost more than half their value, according to recent reports. 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 as a result of the improper recommendation of, or an over-concentrated investment in, one of the Puerto Rico closed-end funds, you may be able to recover your losses through 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 for a no-cost, confidential consultation.

According to securities arbitration lawyers, many state-specific municipal bond funds contained Puerto Rico debt and, as a result, other investigations may ensue. According to Massachusetts Secretary of the Commonwealth, William Galvin, the investigation includes three large fund managers: OppenheimerFunds (a unit of MassMutual Life Insurance Co.), UBS Financial Services and Fidelity Investments. The investigation is regarding how these managers sold and disclosed the risk of mutual funds containing heavy concentrations of the Puerto Rico bonds.

“Puerto Rico is currently on the verge of insolvency and many of its obligations are at or near junk rating, thus the risks associated with its municipal debt obligation are disproportionately high,” Galvin notes.

Investment fraud lawyers say the bonds are attractive to managers of mutual funds because they are state-, federal- and local income tax-exempt in all U.S. states. Some of the funds currently being investigated by securities fraud attorneys 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 through OppenheimerFunds, UBS Financial Services, Fidelity Investments or another fund manager, 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 at (866) 966-9598, or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

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Securities and Exchange Commission (“SEC”) Administrative Law Judge Brenda P. Murray recently issued an Initial Decision in In re Ferrer and Ortiz, Initial Decision Release No. 513, Administrative Proceeding File No. 3-14862. In the decision Judge Murray declined to order remedial action against former UBS Puerto Rico employees Miguel A. Ferrer and Carlos Juan Ortiz-Leon and also found that certain conduct by Messrs. Ferrer and Ortiz did not violate the federal securities laws. The charges of wrongdoing, which Judge Murray rejected, involved allegedly misleading statements that Ferrer and Ortiz made about the value of UBS PR closed-end funds, as well as certain UBS PR practices with respect to the pricing of UBS PR closed-end funds.

While no action was taken against Messrs. Ferrer and Ortiz, the SEC judge’s decision does not necessarily mean that investors in UBS Puerto Rico closed end funds do not have valid claims. The conduct charged in the SEC proceeding occurred during 2008 and 2009, and the decision was largely limited to addressing charges that Mr. Ferrer and Mr. Ortiz violated federal securities laws by making misleading statements concerning the value of UBS PR closed-end funds during the 2008-09 time frame. The full text of the SEC judge’s decision is accessible on this page.
UBS ADMIN DECISION

Investors may have valid claims that are different from those rejected in the SEC judge’s decision. Some investors reportedly received unsuitable recommendations to purchase the UBS PR closed-end funds based on representations by individual brokers. Some investors reportedly chose to buy the funds based on the representation that the funds paid a steady yield of dividends, but were safe, and that investors’ principal was not at risk because of the secure municipal bonds backed by the Puerto Rico government in which the funds invested. Such investors would be asserting claims under a completely different legal standard set forth in Financial Industry Regulatory Authority (“FINRA”) rules, and also may be complaining of conduct that occurred after 2009- even as late as August and September, 2013. Therefore, the decision in the SEC case against Ferrer and Ortiz does not mean that individual investors cannot pursue claims against brokers who sold them UBS Puerto Rico closed-end fund shares.

Clients who invested in the following funds may wish to consider attempting to recover their losses through the FINRA arbitration process: 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.

Attorneys are available to review possible cases involving UBS Puerto Rico closed-end funds. Investors who were not told the truth about these funds may have a claim against UBS and/or the broker or other brokerage firm that sold them the funds. In addition, investors who could not afford to take the risk of losing money in these funds, but received reommendations to buy the funds, may also have claims. Investors may contact the Gray Firm in New York at (866) 966-9598 or newcases@investorlawyers.net (or via the contact form on this page) for a confidential, no-obligation consultation.

Puerto Rico requires that attorneys be licensed in order to appear as counsel of record in FINRA arbitration proceedings. The Gray Firm is not licensed to practice in Puerto Rico and is offering legal advice only to investors in the states. The Gray Firm is working with Puerto Rico attorneys who can advise and represent those investors who live in Puerto Rico.

In May 2012, a statement of claim was filed with the Financial Industry Regulatory Authority by Saddlebag LLC. The claim alleges that the firm wrongfully invested the client’s assets in illiquid auction-rate securities (ARS). According to securities lawyers, many financial firms sold auction-rate securities as short-term instruments with a highly-liquid nature, much like money market funds.

However, in 2008, the credit crunch resulted in a failure of the ARS market and investors with a piece of the $330 billion market were stuck holding securities that they were unable to sell. Other firms, including Morgan Keegan, have been accused of misleading investors regarding the liquidity risk of auction-rate securities.

Auction-rate securities are tax-exempt, long-term and taxable bonds and their interest rates are connected to the short-term market. Through ARS, issuers can acquire lower short-term rates on long-term financing. Auction-rate securities were marketed as liquid cash alternatives and considered safe before the global credit crunch.

Firms and their registered representatives have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation. According to Thompson Reuters, leading auction-rate securities underwriters included Bank of America, Citigroup, Goldman Sachs, UBS, Lehman Brothers, Morgan Stanley, JPMorgan, Merrill, RBC and Wachovia.

If illiquid investments were unsuitable for you given your age, investment objectives and risk tolerance and you suffered significant losses in the auction-rate securities market, you may have a valid securities arbitration claim. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or by e-mail at newcases@investorlawyers.net for a no-cost, confidential consultation.

Investors have reported that financial advisors in Puerto Rico sold them closed-end funds based on the representation that the funds paid a steady yield of dividends, but were safe and that investors’ principal was not at risk because of the secure municipal bonds backed by the Puerto Rico government in which the funds invested.

However, Puerto Rico municipal bonds have been anything but secure of late. Since 2000, the Commonwealth has experienced an imbalance between recurring government revenues and total expenditures. In 2009, the deficit reached a record $3.306 billion. Further, as of June 2010, the unfunded public employees’ retirement accounts reportedly had an actuarial shortfall totaling approximately $25 billion. As a result of these poor fundamentals, investors are concerned about the creditworthiness of the Puerto Rico government and as a result the prices of some Puerto Rico government bonds have dropped. Reportedly, certain ten-year Puerto Rico general obligation bonds had a yield of 4.89% as of September 30, 2013 (bond yields rise as bond prices fall).

UBS closed-end funds have lost significant value due to their leveraged exposure to the underlying municipal bonds as well as selling pressure in the market for the funds. Shares that steadily paid dividends and appeared to maintain their value for several years have suddenly collapsed in value by 50% or more. 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.

Clients who invested in the following funds may wish to consider attempting to recover their losses through the FINRA arbitration process: 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.

Attorneys are available to review possible cases involving UBS Puerto Rico closed-end funds. Investors who were not told the truth about these funds may have a claim against UBS or the firm that sold them the funds. In addition, investors who could not afford to take the risk of losing money in these funds may also have claims. Investors may fill out the form on this page to arrange to discuss their possible case. Investors may also contact the Christopher Gray firm in New York at (866) 966-9598 or newcases@investorlawyers.net for a confidential, no-obligation consultation. Se habla espanol.

Puerto Rico requires that attorneys be licensed in order to appear as counsel of record in FINRA arbitration proceedings. The Gray Firm is not licensed to practice in Puerto Rico and is offering legal advice only to investors in the states. The Gray Firm is working with Puerto Rico attorneys to advise and represent those investors who live in Puerto Rico.

The arbitration claim alleges that Fund I was sold by Merrill Lynch as one of a group of safe mutual funds that were largely invested in municipal bonds issued by the Puerto Rico government. The closed-end funds such as Fund I are solely for sale to residents of Puerto Rico and have reportedly been heavily marketed there by UBS and other brokerage firms (including Merrill Lynch) for at least the past 5 years. Several of the 23 closed-end funds in question have reportedly lost over half their value, despite being marketed as safe investments.

The New York Times Dealbook blog reports that some UBS customers were encouraged by its brokers to borrow money to invest in these funds and that in some cases, money was lent improperly, exacerbating current losses. A number of UBS clients have reportedly been forced to liquidate hundreds of millions of dollars in holdings in these funds to meet margin calls. Robert Mulholland, the head of wealth management advisers in the Americas for UBS, reportedly characterized the closed-end fund issue as ”the perfect storm” in a meeting in San Juan last month.

Fund I and the other UBS closed-end funds at issue were heavily exposed to Puerto Rico government-issued bonds that carried substantial risks. Now that the underlying municipal bonds have lost value, the closed-end funds have lost significant value due to their leveraged exposure to the underlying municipal bonds as well as selling pressure in the market for the funds. Shares that steadily paid dividends and appeared to maintain their value for several years have suddenly collapsed in value. In the case of Fund I, shares were shown on customer statements as worth $8.55 a share as late as July 2013. By early September 2013, the value of the Fund I shares had dropped from $8.55 a share to $6.06. As of October 1, 2013, the price of Fund I shares had dropped further to $3.738.

Other UBS closed-end funds are believed to have suffered similar drops in value.

Other UBS Puerto Rico funds concerning which investors may wish to consider filing arbitration claims include the following:

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

Attorneys are available to review possible cases involving UBS Puerto Rico closed-end funds. Investors who were not told the truth about these funds may have a claim against UBS or the firm that sold them the funds. In addition, investors who could not afford to take the risk of losing money in these funds may also have claims. Investors may fill out the form on this page to arrange to discuss their possible case. Investors may also contact the Christopher Gray firm in New York at (866) 966-9598 or newcases@investorlawyers.net for a confidential, no-obligation consultation.

Puerto Rico requires that attorneys be licensed in order to appear as counsel of record in FINRA arbitration proceedings. The Gray Firm is not licensed to practice in Puerto Rico and is offering legal advice only to investors in the states. The Gray Firm is working with Puerto Rico attorneys to advise and represent those investors who live in Puerto Rico.

The collateral for the CDO was managed by ACA Management and reportedly was primarily consisted of CDS on subprime RMBS, or residential mortgage-backed securities. According to securities arbitration lawyers, the CDO — as the “insurer” — received premiums from the CDS collateral on a monthly basis. Then the premiums were used for CDO bondholder payments. According to the SEC, ACA and UBS agreed that the collateral manager would seek bids for yield that contained both a fixed running spread and upfront cash in the form of “points.”

According to the SEC’s findings, UBS collected upfront payments totaling $23.6 million while acquiring collateral and, instead of transferring the upfront fees at the same time as the collateral, UBS kept the upfront payments and chose not to disclose this information. In addition to retaining the undisclosed $23.6 million, it also retained a disclosed fee of $10.8 million. Investment fraud lawyers say the decision not to disclose the retention of the upfront points was inconsistent with prior UBS deals and the industry standard. Allegedly, UBS’ head of the U.S. CDO group stated, “Let’s see how much money we can draw out of the deal.”

“UBS kept $23.6 million that under the terms of the deal should have gone to the CDO for the benefit of its investors,” says George S. Canellos, co-director of the SEC’s Division of Enforcement. “In doing so, UBS misrepresented the nature of the CDO’s collateral and rendered false the disclosures about how the collateral was acquired.”

The $50 million settlement includes disgorgement of the upfront payments amounting to $23.6 million and the $10.8 million disclosed fee, $9.7 million in interest and a $5.7 million penalty. If you invested in the CDO ACA ABS 2007-2, find out more about your legal rights and options by contacting a securities arbitration lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 for a no-cost, confidential consultation.

The following firms have reportedly been subpoenaed: Merrill Lynch, Morgan Stanley, UBS Securities LLC, Charles Schwab & Co. Inc., Fidelity Brokerage Services LLC, Wells Fargo Advisors, ING Financial Partners Inc., TD Ameritrade Inc., LPL Financial LLC, MML Investor Services LLC, Commonwealth Financial Network, Investors Capital Corp., WFG Investments Inc. and Signator Investors Inc.

According to securities arbitration lawyers, the state sent subpoenas to the firms on July 10, 2013, requesting information regarding the sale of certain products to Massachusetts residents 65 or older over the last year. Nontraditional investments include private placements, hedge funds, oil and gas partnerships, tenant-in-common offerings, and structured products.

The subpoenas reportedly requested the following information related to these investments: The method of review of the sale, commissions generated, training materials, marketing materials and any relevant compliance. The firms have been instructed to respond no later than July 24.

In some cases, the recommendation of alternative investments to seniors with low risk tolerances may be unsuitable. According to investment fraud lawyers, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.

This investigation follows the recent Massachusetts crackdown on improper sales of non-traded REITs, which resulted in over $8 million in restitution to Massachusetts investors paid by six different brokerage firms. According to William F. Galvin, the Massachusetts Secretary of the Commonwealth, the recent investigations into non-traded REIT sales “heightened my concern that the senior marketplace is being targeted for the sales of these high-risk esoteric products.” The fifteen firms that were recently subpoenaed were not parties to the previous restitution payments, and the firms have not been found guilty of any wrongdoing.

About the alternative investments, Galvin stated, “While these products are not unsuitable in and of themselves, they are accidents waiting to happen when they are sold to inexperienced investors by untrained agents who push the products to score… large commissions.”

If you received an unsuitable recommendation to invest in alternative investments, you may be able to recover your losses through 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 for a no-cost, confidential consultation.

Recently, a Financial Industry Regulatory Authority arbitration claim was filed on behalf of a Texas investor against UBS Financial Services. According to the Statement of Claim, UBS Financial Services allegedly sold the investor, who was a brokerage customer of the firm at the time, $300,000 of the 100 Percent Principal Protected Notes.

According to the claim’s allegations, UBS was aware of the deteriorating financial condition of Lehman Brothers, but concealed its views from brokerage customers who owned the notes. Furthermore, UBS customers were allegedly kept unaware that the Lehman Brothers notes could quite possibly default and become worthless. In addition, the claim alleges that the sales of Lehman notes were halted twice by UBS Financial Services because of concerns regarding credit risk, but UBS did not disclose these halts to thousands of its customers who were already invested in Lehman notes.

In addition to the alleged failure to disclose relevant information to its customers, securities arbitration lawyers say that many investors may have received unsuitable recommendations of the Lehman Brothers 100 Percent Principal Protected Notes and other Lehman Brothers structured products. Financial Industry Regulatory Authority rules have established that firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance. Furthermore, investment fraud lawyers say brokerage firms must, before approving an investment’s sale to a customer, conduct a reasonable investigation of the securities and issuer.

Investors should be aware that the Financial Industry Regulatory Authority imposes a six-year time limitation for filing arbitration claims. Therefore, investors who purchased Lehman Brothers structured products in late 2007 or early 2008 should consider consulting an attorney as soon as possible if they wish to explore filing a claim.

If you are a UBS Financial Services customer who suffered significant losses in Lehman Brothers products, you may have a valid securities arbitration claim. 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 for a no-cost, confidential consultation.

According to the Statement of Claim, the couple was nearing retirement and, therefore, wanted to preserve and protect their savings. Allegedly, they were presented with a written financial plan by UBS Financial Services that recommended an allocation of 52 percent equities and 46 percent fixed income for their “moderate” objectives and risk tolerance.

However, securities arbitration lawyers say the claim alleges that UBS disregarded the recommended allocation and concentrated the couple’s accounts in structured products and notes and equities for the “fixed income” portion. These investments allegedly included Lehman structured products, which UBS was aware carried significant default risk.

The claim also alleges that, unlike traditional fixed income investments, the structured products failed to provide principal protection or diversification, making their sale to these investors unsuitable. Allegedly, UBS sold these structured notes in order to generate fees.

According to investment fraud lawyers, Financial Industry Regulatory Authority rules have established that firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.

If you are a UBS Financial Services customer who suffered significant losses because of an unsuitable recommendation of an investment product that was too risky for your investment objectives and risk tolerances, you may have a valid securities arbitration claim. Under FINRA rules investors must make claims within six years of the event or occurrence underlying the claim. Therefore, investors who purchased Lehman structured products in late 2007 and 2008 should consider consulting an attorney as soon as possible if they wish to possibly pursue a claim. To find out more about your legal rights and options, contact a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

The feeder funds used by full-service brokerage firms to invest in Paulson’s Advantage and Advantage Plus Funds went by a variety of names, such as LionHedge Paulson, UBS Paulson Advantage Fund, Morgan Stanley HedgePremier Paulson, Paulson Advantage Access Fund and CAIS Paulson. Stock fraud lawyers say that all of the aforementioned funds invest in Paulson’s funds and that in some cases they may not have provided oversight or due diligence in the funds, despite representations made to investors.

Following the Advantage Fund’s decline, in May 2012 the fund was put on Morgan Stanley Wealth Management’s “watch list” and investors are now being advised to redeem. Three months later, Citigroup reportedly made a similar decision, pulling $410 million from Paulson’s funds. In light of the fact that the Paulson funds were sued by an investor in February 2012, many investors are contacting securities fraud attorneys about their losses. In the 2012 lawsuit, both Paulson & Co. and its funds were charged with deeply investing into SinoForest without conducting adequate due diligence and accused of breach of fiduciary duty.

If you invested in one of the Citigroup, Morgan Stanley, Merrill Lynch or UBS Financial Services feeder funds listed above, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

Currently a broker at Newport Coast Securities, Holzer has also worked with a number of other firms, including UBS, Brookstreet Securities Corporation, AG Edwards, Wedbush Morgan Securities Inc. and Sequoia Equities Securities. Holzer and UBS have already been compelled to pay to settle securities claims amounting to $11.4 million. These claims alleged that Holzer misrepresented variable annuities through misrepresentation of guaranteed returns. Holzer was fired from AG Edwards in 2003 for allegedly engaging in business practices that did not coincide with the firm’s policies. Further allegations against Holzer include misrepresentations while at Brookstreet. These misrepresentations allegedly occurred in 2005 at a Beverly Hills presentation at which Holzer allegedly stated that a fictional couple was able to make $9 million by deferring $732,000 in taxes through the use of trusts. In another claim, a customer of Wedbush Morgan Securities alleged breach of fiduciary duty, account mishandling, and breach of contract that allegedly resulted in damages of $824,000.

According to securities fraud attorneys, allegations against Holzer include fraud, churning, unsuitable investments, misrepresentations of fees, Securities Act violations, private placement-related fraud, negligent representations related to variable annuities, inadequate supervision, variable annuity-related fraud, negligent recommendation and sale of Provident Royalties LLC, negligent sale and recommendation of Behringer Harvard Security trust and other unsafe products as well as elder abuse.

Stock fraud lawyers say that in many cases, investment firms can still be held liable for a broker’s actions if their supervision of that broker was negligent. As a result, it may possible for investors to recover their losses from Holzer or the brokerage firm she was employed with when the fraud occurred.

If you have a claim arising from the conduct of Bambi Holzer or another financial advisor, you may be able to recover losses through securities arbitration. To find out more about your legal rights and options, contact a securities fraud attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.