Were you the victim of investment losses due to unsuitable municipal bond portfolio recommendations by your UBS Financial Services Inc. investment broker?
According to public records, a former client of UBS Financial Services Inc. filed a $10 million customer complaint about alleged unsuitable municipal bond portfolio recommendations resulting in investment losses. The complaint alleges that the firm recommended the client secure a $6 million line of credit with their securities as collateral to secure their payment to invest their tax funds.
Regrettably for the investor, it is alleged that UBS Financial Services Inc. led the client to believe that the bond yield would exceed the interest changes on the line of credit, leaving the investor with a net gain. This was, however, not the case, as the bonds had longer maturities that exposed investors to a significant interest-rate risk with the increases across the market in 2022.
Additionally, according to the claim filed with FINRA, the client opened fee-based Strategic Advisor accounts, which charged quarterly management fees when the accounts were invested in mutual funds.
It is alleged that UBS Financial Services Inc. charged the client $290,000 in advisory services fees despite there being just one purchase in two years in the investment account; this practice is commonly known as reverse churning.
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, UBS Financial Services Inc. may be liable for investment or other losses suffered by its customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. 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.
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