Two Firms File Cases Against UBS Over Puerto Rico Closed Ended Funds
Two law firms have filed cases against UBS over losses on closed-end funds holding Puerto Rico municipal bonds.
The Vicente & Cuebas law firm in Puerto Rico has filed arbitration cases with the Financial Industry Regulatory Authority, partner Harold Vicente Jr. said in an interview. The cases filed so far are for about $50 million in losses.
Vicente & Cuebas anticipates 50-70 clients. When all their cases are filed the claims will be for over $100 million in losses, Vicente said.
If his clients could not use margin loans for investing, UBS professionals inappropriately recommended the use of non-purpose loans, Vicente said.
On Tuesday, White Law Group filed an arbitration case with FINRA for a single investor claiming more than $450 million in losses. The firm claims UBS engaged in fraud, breach of fiduciary duty, negligence, and negligent supervision, according to a press release.
The cases concern closed ended funds that invest at least 67% of their money in Puerto Rico municipal bonds. They are used exclusively by Puerto Rico residents.
UBS did not immediately respond to a request for a comment.