UBS Client Wins $13.6 Million from UBS Financial Services for Losses in Puerto Rico Funds
Posted on Monday, February 20th, 2017 at 12:13 pm
In January 2017, former UBS Financial Services, Inc. and UBS Financial Services, Inc. of Puerto Rico clients won an award in a FINRA arbitration for compensatory damages in the amount of $9,630,000 plus interest and $4,000,350 in punitive damages for losses sustained from investments in Puerto Rico closed-end mutual funds concentrated in Puerto Rico bonds and the use of loan proceeds to purchase securities. The investors were clients of financial advisors:
- Jose Gabriel Ramirez (CRD# 1519748) – Employed by UBS from 1997 to 2014
- Carlos Freire-Borges (CRD# 5321405) – Employed by UBS from 2007 to present
- Carlos Verner Ubinas Taylor (CRD# 1985568) – Employed by UBS from 1998 to present
- Doel Rafael Garciaromero (CRD# 1301785) – Employed by UBS from 1984 to present
- Ramiro Luis Colon III (CRD# 1868710) – Employed by UBS from 2006 to present
FINRA has permanently barred Ramirez from acting as a broker or otherwise associating with firms that sell securities to the public.
The clients claimed losses for unsuitable investments and strategy for investments in Puerto Rico bonds. The investors sustained major losses when Puerto Rico bonds tumbled. 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).
The legal claims that were brought against Ramirez, Freire-Borges, Taylor, Garciaromero, Colon and UBS were for violations of Section 10(b) of the Securities Exchange Act of 1934, SEC Rule 10b-5, NYSE and FINRA rules, and the securities laws and other laws and regulations of Puerto Rico; securities fraud; violation of Article 1802 of the Civil Code of Puerto Rico 31 Laws of Puerto Rico Annotated [L.P.R.A.] Section 5141; breach of contract; and breach of policies, law(s), rules, regulations and norms for the financial protection of elderly or handicapped persons. The FINRA panel also awarded attorney’s fees under the Puerto Rico Uniform Securities Act in the amount of $4,498,015. The FINRA arbitration panel also awarded costs and fees in the amount of $150,600. The FINRA arbitration hearing was conducted in San Juan, Puerto Rico.
Ramirez currently has 75 disclosures on his CRD report, most having to do with unsuitable recommendations to concentrate client in Puerto Rico closed-end funds and bonds. He also has a pending civil case filed by the Securities and Exchange Commission, where the SEC allege that he “made material misrepresentations and omissions and orchestrated a fraudulent scheme involving the use of credit line proceeds from a UBSPR-affiliated bank to purchase shares in UBSPR affiliated closed-end mutual funds. The complaint alleges that Ramirez increased his compensation by at least $2.8 million by having certain customers use proceeds from lines of credit with UBS Bank USA to purchase additional shares in UBSPR closed-end mutual funds,” according to the disclosure on his CRD report.
Freire-Borges currently has 43 disclosures on his CRD report, most having to do with unsuitable recommendations to concentrate client in Puerto Rico closed-end funds and bonds.
Taylor currently has 41 disclosures on his CRD report, most having to do with failure to supervise in connection with their purchase of closed-end funds and Puerto Rico bonds.
Garciaromero currently has 43 disclosures on his CRD report, most having to do failure to supervise in connection with their purchase of closed-end funds and Puerto Rico bonds.
Colon currently has 26 disclosures on his CRD report, most having to do with failure to supervise in connection with their purchase of closed-end funds and Puerto Rico bonds.
Erez Law represent investors in the United States and Puerto Rico for claims against many former Ramirez, Freire-Borges, Taylor, Garciaromero, Colon and UBS Financial Services Inc. clients in FINRA arbitrations to recover losses due to recommendations for high risk and unsuitable investments and strategies in Puerto Rico bonds. Recently, Erez Law won two awards against UBS.
In one case against UBS, the client’s claims involved investments in Puerto Rico closed-end funds concentrated in Puerto Rico bonds. The Erez Law clients were awarded $2.5 million.
In Ciordia vs. UBS, Erez Law represented a beneficiary of a trust that sustained significant losses in UBS proprietary closed-end funds that invested predominantly in Puerto Rico bonds. Ciordia alleged that the broker, Carlos Rodriguez and UBS recommended an overconcentrated and unsuitable position in the UBS Puerto Rico funds. The FINRA panel awarded the Claimant $957,796. The FINRA Panel awarded attorney’s fees under the Puerto Rico Uniform Securities Act as well as costs.
If you were a client of financial advisors Jose Gabriel Ramirez, Carlos Freire-Borges, Carlos Verner Ubinas Taylor, Doel Rafael Garciaromero or Ramiro Luis Colon III of UBS Financial Services, Inc., UBS Financial Services, Inc. Puerto Rico or another firm, and have experienced investment losses or financial irregularities, 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.