UBS is hit with a $3.6 million fine and must pay back $1.7 million in restitution for sale of Puerto Rico closed-end mutual funds.
UBS Financial Services Incorporated of Puerto Rico (UBS) has cut a deal with Puerto Rico’s Office of the Commissioner of Financial Institutions (OCFI) in connection with UBS’s sales of closed-end mutual funds in Puerto Rico. Under the terms of the settlement, UBS will pay a $3.5 fine, $1.7 million in restitution to 34 clients and neither admits nor denies any wrongdoing.
After review of UBS’s operations for the time period of January 1, 2006 through September 30, 2013, OCFI alleged that UBS had invested customers with conservative risk tolerances in high concentrations of Puerto Rico Closed-End Funds. OCFI also alleged that UBS either recommended or permitted these clients to utilize “non-purpose” loans to purchase even more closed-end funds. OCFI also reported irregularities in the management of some clients’ accounts and claimed that UBS did not adequately supervise.
Those clients entitled to restitution under the settlement are primarily elderly investors with minimal net worths and conservative financial profiles. The $3.5 million penalty is to be paid to the Securities Trading, Investor Education and Training Fund.
UBS is also mandated to improve its supervision of six of its registered representatives, who may have engaged in problematic practices, for a period of six months, and has agreed to reassess certain of its policies and procedures. Further under the agreement, UBS will determine if additional customer accounts are potentially entitled to restitution.
If you were a customer of UBS and suffered losses in Puerto Rico Closed-End Funds, call attorney David Chase at the Law Firm of David R. Chase, P.A., for a free and confidential consultation.
Mr. Chase, formerly a prosecutor for the SEC with over 20 years of investment fraud experience, aggressively represents investors nationwide, including Puerto Rico, against securities brokerage firms in claims to recover investment losses.
For more detailed information about Mr. Chase’s securities law background and the firm’s representation of defrauded securities investors, you may visit: davidchaselaw.com. Or, you
can contact Mr. Chase toll-free directly at 800-760-0912, or by e-mail at: firstname.lastname@example.org.