Erez Law is currently investigating financial advisors across the country employed by brokerage firms such as UBS Financial Services, Morgan Stanley, Merrill Lynch, Wells Fargo, RBC Capital Markets, Santander, Popular Securities and Oriental Financial Services, regarding investment recommendations in Puerto Rico Puerto Rico Electric Power Authority (PREPA). PREPA is the sole provider of electricity for 1.5 million customers in the commonwealth of Puerto Rico.
Despite the fact that Puerto Rico filed the largest municipal bankruptcy in history in May 2017, PREPA was avoiding default. PREPA owes $423 million in principal and interest that was due in early July 2017.
However in June 2017, Puerto Rico’s federal oversight board Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) voted to allow for PREPA to file for bankruptcy, and rejected a debt-restructuring agreement with creditors. This will allow PREPA to restructure its $9 billion debt through bankruptcy and will ensure that PREPA services are not interrupted for its customers. The panel will continue talks with creditors to attempt to reach a deal.
In the past few months, PREPA’s bonds have taken a hit and some speculate that investors will see a return of just 85 cents on the dollar. In light of the bankruptcy news, the PREPA bonds that matured on July 1, 2017 traded at 60 cents on the dollar, a 17 center per dollar loss from June 30, 2017.
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, financial advisors across the country may be liable for investment or other losses suffered by their customers.
Erez Law represents investors in the United States for claims against financial advisors across the country who suffered losses due to recommendations in PREPA bonds. If you 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.