UBS Will Pay $34 Million Over Puerto Rico Bond Funds
The SEC has fined UBS’s Puerto Rico brokerage firm $34 million for failing to supervise a UBS Puerto Rico broker who allegedly misled investors into borrowing money to buy UBS’s risky, closed-end Puerto Rico bond funds.
Along with FINRA, the SEC brought charges against UBS broker Jose Ramirez Jr., accusing him of duping Puerto Rican investors into using lines of credit to buy up nearly $50 million in closed-end bond funds that went belly up in 2013.
UBS’s policy and customer agreements prohibited the use of the loan proceeds to buy the UBS bond funds. According to the SEC, Ramirez tried to circumvent the UBS policy by having customers transfer the money to unaffiliated third parties and use the money to buy the UBS bond funds. UBS fired Ramirez last year.
UBS has agreed to pay $15 million in disgorgement, along with interest and penalties. FINRA has separately fined UBS Puerto Rico an additional $7.5 million over its alleged supervisory failures, and further ordered another $11 million to be paid to the 165 customers who suffered losses on the fund sold to them by Ramirez.
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Dimond Kaplan & Rothstein, P.A. attorneys continue to aggressively pursue claims on behalf of investors who have lost money in the UBS Puerto Rico bond funds. If you lost money in UBS Puerto Rico bond funds, you may have certain legal rights that require your immediate attention. Contact us to schedule an appointment or consultation today.