Erez Law and Aldarondo & Lopez Bras have been retained by more than a 130 families who suffered losses stemming from investments in UBS Puerto Rico’s tax free bond funds. Aldarondo & Lopez Bras is a separate law firm only licensed to practice law in Puerto Rico. Hundreds more investors have consulted with Erez Law and Aldarondo & Lopez Bras regarding their losses, and desire to retain the law firms to pursue claims against the brokerage firms who sold the investments to them. UBS dominates the island’s market through its UBS Family of Funds, which have sold $10 billion and include closed-end funds managed solely by UBS and another 9 closed-end funds co-managed with Popular Securities. Banco Santander (Santander Securities), Merrill Lynch, Raymond James, Oriental Bank and others also sold investments linked to Puerto Rico’s municipal debt. Claims for investment losses against UBS and other brokerage firms must be arbitrated through the Financial Industry Regulatory Authority (“FINRA”), the largest dispute resolution forum in the securities industry.
Many of the investors who lost money are retired, elderly people, whose brokers recommended that they invest most, if not all, of their retirement savings in the UBS Family of Funds, including: Tax-Free Puerto Rico Fund, Inc.; Tax-Free Puerto Rico Fund II, Inc.; Tax-Free Puerto Rico Target Maturity Fund, Inc.; Puerto Rico AAA Portfolio Target Maturity Fund, Inc.; Puerto Rico AAA Portfolio Bond Fund, Inc.; Puerto Rico AAA Portfolio Bond Fund II, Inc.; Puerto Rico GNMA & U.S. Government Target Maturity Fund, Inc.; Puerto Rico Mortgage-Backed & U.S. Government Securities Fund, Inc.; Puerto Rico Fixed Income Fund, Inc.; Puerto Rico Fixed Income Fund II, Inc.; Puerto Rico Fixed Income Fund III, Inc.; Puerto Rico Fixed Income Fund IV, Inc.; Puerto Rico Fixed Income Fund V, Inc.; and Puerto Rico Fixed Income Fund VI, Inc.
In addition, investors were encouraged to use margin or other loans to invest in Puerto Rico bonds and Puerto Rico-focused closed-end funds. In so doing, investors used borrowed money to invest in closed-end funds which, in turn, were using borrowed money – or leverage – to make investments. When the value of the investments dropped, investors then received margin calls, which forced them to liquidate their Puerto Rico bond or closed-end bond funds in a vicious cycle of compounded risk and loss. Thus, investors who have been forced to sell their UBS Puerto Rico tax free bonds to meet margin calls have realized losses in their investments.
If you invested in Puerto Rico debt and have experienced investment losses, please call us at 888-840-1571 or complete our “contact form.” Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies.