Jeffrey Erez, the founder of Erez Law, was recently featured in a CNBC story, “Broken bonds: The role Wall Street played in wiping out Puerto Ricans’ savings.”
Puerto Rico suffers from long-term financial and economic deficiencies that rendered its credit increasingly more speculative. The deterioration of Puerto Rico’s financial condition culminated in its debt being downgraded to junk status or speculative (below investment grade). For the past several years, Puerto Rico has been struggling with compounding debt and economic decline. As a result, the value of Puerto Rico’s municipal tax-free bonds has considerably fallen. Since September 2013, when the steep decline in Puerto Rico bond values began, investors holding these bonds have suffered massive losses. In May 2017, Puerto Rico filed for bankruptcy protection from creditors in what is being described as the largest municipal bankruptcy filing in history.
To make matters worse, after Hurricane Maria devastated the island in September 2017, Puerto Rico debt fell by 4%, the biggest weekly drop since July 2015. This sharp fall came after Governor Alejandro García Padilla announced that Puerto Rico would ask bondholders to take less than what they were owed.
In the CNBC article, Erez was quoted as saying, “To have this type of carnage being born on this small of a population in this small of a geographic territory is something that we’ll likely never see again,” said attorney Jeffrey Erez, whose law firm Sonn and Erez has filed hundreds of securities cases on behalf of Puerto Rican investors. “You have the complete investing class on a very small island having lost 50 percent, 60 percent, 70 percent, 80 percent of their retirement savings within a few years.”
More than 2,000 FINRA arbitration cases have been filed against broker-dealers, including UBS Financial Services, Santander Securities, Popular Securities and Merrill Lynch. “According to data compiled by Securities Litigation & Consulting Group (SLCG), more than $329 million in settlements and awards have been paid to clients in the four years ended Oct. 10. More than 90 percent has come from UBS, due to its proprietary closed-end funds,” according to the CNBC article.
At Erez Law, many of our clients come to us because of our specialization in Puerto Rico bond loss cases. We use considerable legal resources to help investors who trusted reckless and unethical financial advisors. We have filed over 300 FINRA arbitration cases against large brokerage firms, including UBS, Merrill Lynch, Santander Securities, Morgan Stanley, Oriental Financial Services, Popular Securities and others, holding these firms accountable for dishonest investment advisory practices, unsuitable recommendations, misrepresentation, and over-concentration in connection with Puerto Rico bonds and funds.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, firms across the country may be liable for investment or other losses due to investments in Puerto Rico bonds suffered by their customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.