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SEC Charges UBS Puerto Rico & 2 Execs With Mutual Fund Fraud

On May 1, 2012, the Securities & Exchange Commission (SEC) charged UBS Financial Services of Puerto Rico and two executives, Miguel A. Ferrer and Carlos J. Ortiz, with making misleading statements to investors, concealing a liquidity crisis, and masking its control of the secondary market for 23 proprietary closed-end mutual funds.

UBS has agreed to settle the SEC charges by paying $26.6 million that will be placed in a fund for investors.

In the spring of 2009, UBS realized their closed-end fund inventory represented a financial risk. To reduce its inventory, the sold about 75% of their holdings to investors while misrepresenting the manner in which secondary market prices were set as well as the liquidity of the market.

If you have questions about your brokerage account or if you have stock market losses you wish to discuss, please do no hesitate to contact us. We have been helping investors recover investment losses for over 20 years.

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.