A putative class action pending against UBS relating to recommendations and sales of UBS Puerto Rico bond funds has been delayed again after being moved from Puerto Rico to New York court. The class action alleges, among other things, that UBS Puerto Rico recommended that elderly investors buy UBS’s risky Puerto Rico bond funds. In the meantime, individual FINRA arbitration claims that many Puerto Rico investors have filed continue to proceed, some of which already have settled for a recovery of investment losses.
The class action and the FINRA arbitration claims all allege that UBS represented that its 23 closed-end Puerto Rico bonds were safe, when the funds actually invested in risky Puerto Rico municipal bonds and increased the risk by using leverage (borrowed money) to buy even more of the risky Puerto Rico bonds. In reality, the funds were “ticking time bombs,” the values of which largely were subject to Puerto Rico’s shaky and declining economy.
Dimond Kaplan & Rothstein encourages UBS Puerto Rico bond fund investors to consider all of their options to recover their investment losses, including pursuing a FINRA arbitration claim. Typical securities class actions take a number of years and settlements typically are only pennies on the dollar, but FINRA arbitration claims typically last no more than 15 to 18 months and investment loss recoveries often are far greater than that achieved in a class action.
In addition to the traditional higher recovery rate in FINRA arbitration, an analysis is conducted in arbitration that takes the specific aspects of each investor’s case into account. Unlike a class action, FINRA arbitrators would consider an investor’s age, sophistication, net worth, risk tolerance, and other individualized factors that could affect the strength of an investor’s case.
DKR represents more than 100 Puerto Rico investors who lost money in UBS Puerto Rico bond funds. If you lost money in these risky UBS Puerto Rico bond funds, contact Dimond Kaplan & Rothstein, P.A. to discuss your options to recover your investment losses.