In October 2017, many UBS Closed-end funds suffered a significant loss of approximately 20%, decreasing from around $10 to the $1-$3 range as of mid-November.
Puerto Rico has been struggling with rising debt and economic decline for several years now. The value of Puerto Rico’s municipal tax-free bonds has largely fallen as a result. In May 2017, Puerto Rico filed for bankruptcy protection in the largest municipal bankruptcy filing in history.
According to reports, UBS was the leading broker-dealer in Puerto Rico. UBS often concentrated its clients’ portfolios in its proprietary closed-end funds such as UBS Puerto Rico AAA Portfolio Target Maturity Fund. Reportedly, the UBS Closed-end funds were the single largest source of revenue for UBS Financial.
According to FINRA, UBS allegedly failed to implement a reasonably designed system to identify and prevent unsuitable transactions in light of the unique economy of the territory.
FINRA censured and fined UBS-PR $7.5 million for failures related to suitability of transactions in Puerto Rico closed-end fund (CEF) shares. FINRA also reportedly ordered UBS-PR to pay approximately $11 million in restitution to 165 customers who suffered losses on their CEFs.
UBS allegedly failed to monitor the combination of leverage and concentration levels in customer accounts to ensure that the transactions were suitable given the customers’ risk objectives and profiles.
The White Law Group continues to investigate claims involving UBS Puerto Rico AAA Portfolio Target Maturity Fund and other UBS Puerto Rico Closed-end funds.
UBS Financial has a responsibility to adequately supervise their employees. They must ensure the necessary procedures and systems to detect misconduct. The White Law Group continues to investigate claims against UBS Puerto Rico on behalf of investors in closed-end funds such as UBS Puerto Rico AAA Portfolio Target Maturity Fund.
Did you suffer losses investing in UBS Puerto Rico AAA Portfolio Target Maturity Fund? If so, you may be able to recover your losses. Please call The White Law Group at 888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, please visit our website at www.WhiteSecuritiesLaw.com.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.