UBS AG and a subsidiary of Banco Popular are asking a New York federal judge to dismiss a proposed class action over allegations that the banks steered older investors into risky Puerto Rico bond funds. The banks argue that the putative class action is rooted in allegations of fraud and that such fraud-based claims cannot be maintained as a class action.
According to the plaintiffs, UBS Puerto Rico, UBS AG’s Puerto Rico broker-dealer, and Popular Securities LLC, an affiliate of Banco Popular, breached their fiduciary duties to thousands of Puerto Rican investors by selling them risky closed-end bond funds that held large concentrations of risky Puerto Rico municipal bonds. The funds were portrayed as safe, fixed-income securities intended to preserve investors’ principal while providing tax-free income. Instead, the funds had approximately half of their assets financed through borrowing and invested in billions of dollars of Puerto Rican government debt.
As we have blogged about previously, these funds performed extremely poorly as Puerto Rico’s economy has continued to spiral downward. Investors collectively have billions of dollars. Many Puerto Rico bonds held in the funds have been downgraded to “junk” status.
Many Puerto Rico bond fund investors do not have to rely on the class action to seek recovery of their losses. Investors also can file their own FINRA arbitration claim against the UBS or Banco Popular. FINRA arbitrations are typically resolved much quicker than class action lawsuits.
Have You Invested with UBS?
The attorneys at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions, including from UBS and its subsidiaries. DKR currently is pursuing many FINRA arbitration claims against UBS Puerto Rico on behalf of Puerto Rico residents who lost money in UBS Puerto Rico bond funds.
If you lost money investing with UBS Puerto Rico bond funds, or any volatile security where your broker failed to disclose the risks or misrepresented the risks, you may have certain legal rights that require your immediate attention.
Contact us to schedule an appointment or consultation today.