UBS Category Archives — Page 5 of 20 — Investor Lawyers Blog Published By Investment Fraud Attorneys

Investors Continue to Bring Puerto Rico Bond Fraud Claims Against UBS For, Among Other Things, Encouraging Them to Use Non-Purpose Lines of Credit to Purchase Securities

Published on: August 18, 2017 | by Shepherd Smith Edwards & Kantas, LLP

Two years after the Financial Industry Regulatory Authority (FINRA) barred former UBS Financial Services of Puerto Rico (UBS-PR) broker Jose Ramirez, nicknamed the Whopper, our UBS Puerto Rico fraud attorneys are continuing to provide representation to investors who sustained losses because they took his and other UBS-PR brokers’ advice to borrow from credit lines in order to invest in even more securities. If you are one of these investors and you would like to explore your legal options, please contact Shepherd Smith Edwards and Kantas, LTD LLP today.

It was in 2015 that the US Securities and Exchange Commission (SEC) brought charges against Ramirez accusing him of fraud in the offer and sale of $50 million of UBS-PR affiliated, non-exchange traded closed-end mutual funds. The former UBS broker allegedly enriched himself by advising certain customers to use non-purpose credit lines that a firm affiliate, UBS Bank USA, was offering so that they could buy even more shares.

These customers were not, in fact, allowed to use credit lines to buy the securities and Ramirez allegedly knew this. He is accused of getting around restrictions by telling customers to move money to a bank that had no affiliation with UBS and then re-depositing the funds to their UBS Puerto Rico brokerage account in order to buy additional closed-end mutual funds or Puerto Rico bonds. Such a scheme was a violation of numerous rules and regulations and, if misrepresented to the investors as the SEC has alleged, would have been a major legal violation.

UBS Financial Services of Puerto Rico Ordered to Pay Investors $793,000 Over Muni Bond Sales

Published on: June 28, 2017 | by Shepherd Smith Edwards & Kantas, LLP

A Financial Industry Regulatory Authority (“FINRA”) arbitration panel has awarded two investors $793,000 in their Puerto Rico municipal bond fraud case against UBS Financial Services (UBS) and UBS Financial Services of Puerto Rico (UBS-PR). The claimants, Madeleine Carrero (as an in individual and as the trustee of Ulises Barros Carrero and Fideicomiso Ulises Barros), accused UBS of negligence, misrepresentation, breach of fiduciary duty, unauthorized trading, unsuitability, and breach of contract.

This is the latest ruling in which UBS and its Puerto Rico-based brokerage firm have been ordered to pay investors for the losses they suffered from investing in Puerto Rico bonds and closed-end bonds.

On the island and the U.S. mainland, our UBS Puerto Rico bond attorneys are continuing to work with investors seeking to recover their losses from investing in Puerto Rico securities. Many investors lost everything, with some even borrowing funds at the inappropriate recommendation of their advisor so that they could invest even more in the island’s bonds.

If you think that you may have grounds for a Puerto Rico bond fraud claim against UBS Puerto Rico, Santander Securities (SAN), Banco Popular or another brokerage firm, it’s not too late to file your claim. Contact Shepherd Smith Edwards and Kantas, LTD LLP today.

UBS and Credit Suisse Settle Mortgage-Backed Securities Cases With for $445M and $400M, Respectively

Published on: May 4, 2017 | by Shepherd Smith Edwards & Kantas, LLP

UBS Group AG (UBS) has paid the National Credit Union Administration $445M to settle claims brought on behalf of Western Corporate Federal Credit Union and U.S. Central Federal Credit Union, which both failed after they sustained losses from residential mortgage-backed securities they purchased through the broker-dealer.The two credit unions went into conservatorship several years ago and have since shut down.

UBS settled this latest case without denying or admitting to wrongdoing. The lender had previously paid NCUA $79.3M to resolve similar allegations involving two other credit unions that also failed. With that settlement, the bank also did not deny or admit wrongdoing.

To date, NCUA has recovered nearly $5B in settlements from big banks related to the faulty securities that they sold to corporate credit unions.

Bondholders and Hedge Funds Sue Puerto Rico After Litigation Stay Expires

Published on: May 2, 2017 | by Shepherd Smith Edwards & Kantas, LLP

Hours after a May 1 deadline passed, unfreezing any creditor litigation against Puerto Rico, a number of creditors sued the U.S. territory over its outstanding bonds. Plaintiffs of these Puerto Rico bond lawsuits include general obligation bondholders, COFINA bondholders, and bond insurer Ambac.

The May 1 deadline was supposed to have given the island and its federal financial oversight board time to come up with a debt-reduction agreement with creditors as Puerto Rico owes more than $70 Billion of debt. No deals were made by the deadline.

Following the failure of the island to reach any debt reduction deals, Fitch Ratings downgraded $3.5 Billion of PRASA-issued debt from a “CC” rating to a “C.” PRASA is Puerto Rico’s water authority.

Securities Fraud: FINRA Bars Ex-UBS Broker, Imprisoned Former LPL Financial Broker Faces SEC Charges, and SEC Refiles Unregistered Securities Fraud Case

Published on: April 27, 2017 | by Shepherd Smith Edwards & Kantas, LLP

Former UBS Broker is Barred form the Securities Industry

Ronald Broadstone, an ex-UBS (UBS) broker, has agreed to be barred from the securities industry. The Financial Industry Regulatory Authority is the one that brought the ban, accusing him of misusing and misappropriating customer monies, settling a customer case without telling his firm, and taking part in unauthorized trading.

According to the self-regulatory organization, Broadstone’s attorney testified that the former broker would not respond to more questions. His refusal to speak violated FINRA rule 8210.

UBS Financial Services Ordered to Pay Many Millions to Another Investor For Puerto Rico Bond And Closed-End Fund Losses

Published on: March 31, 2017 | by Shepherd Smith Edwards & Kantas, LLP

Once again, a Financial Industry Regulatory Authority (FINRA) panel has ordered UBS Financial Services (UBS) to pay a large arbitration award to an investor. Dr. Luis E. Cummings claimed losses related to his investing in Puerto Rico bonds and Puerto Rico closed-end funds. Cummings also said sustained losses from loans made against these securities.

In his Puerto Rico bond fraud case, Cummings accused UBS of negligence, recklessness, deceit, fraud, and fault. Meantime, the brokerage firm is once again claiming that this is yet another investor who was experienced enough to make a “fully informed decision” about whether to leverage investments and invest a healthy portion of his portfolio in Puerto Rico closed-end funds and bonds.

But as Shepherd Smith Edwards & Kantas Partner Sam Edwards said when commenting on a previous case in which UBS also was ordered to pay an investor over their similar losses, “even customers who are business savvy can be abused.” The FINRA Panel ultimately awarded Dr. Cummings more than $5 million in compensation as well as forgiveness of a similar amount of debt.

As General Obligation Bondholders Get Go Ahead on Their Bond Fraud Case Against Puerto Rico, COFINA Creditors Seek to Intervene

Published on: February 25, 2017 | by Shepherd Smith Edwards & Kantas, LLP

A federal judge has ruled that general obligation bondholders in Puerto Rico may go ahead with a securities fraud lawsuit arguing that the U.S. territory’s government has to pay them what they are owed even as it pays off other bondholders and workers and restructures its nearly $70 billion of debt. U.S. District Court Judge Francisco Besosa said the bondholders’ case could proceed despite a new law that has placed a stay on the majority of creditors’ legal actions brought against Puerto Rico.

Owners of general obligation bonds which includes individuals and hedge funds such as Monarch and Aurelius, are arguing that Puerto Rico general obligation bonds are supposed to be constitutionally guaranteed, therefore other Puerto Rico obligations cannot be paid before general obligation bondholders. Judge Besosa said that because the general obligation bondholders’ debt lawsuit does not seek to get any kind of payment from the territory or confiscate commonwealth property, the case should be exempted from the stay.

Following Judge Besosa’s ruling, creditors of COFINA bonds, Puerto Rico’s sales tax authority, are now asking a federal court to keep the island’s government from being told to redirect bond payments to the general bond holders. The COFINA plaintiff group, which includes funds holding more than $2 billion in debt and also hedge funds such as Canyon Capital and Goldentree, contend that the general obligation bondholders’ claims are “self-serving” and without merit.

Puerto Rico Defaults on More Debt Payments

Published on: January 31, 2017 | by Shepherd Smith Edwards & Kantas, LLP

The Puerto Rico government has defaulted on more debt payments that were due to bondholders. The U.S. Territory did not meet the February 1, 2017 due date on $312 million in principal plus interest. The default includes Puerto Rico General Obligation bonds that are supposed to be constitutionally protected.

The Puerto Rican Government Development Bank owes $279 million of the defaulted debt. A spokesperson for Puerto Rico’s Aqueduct and Sewer Authority, however, said that the Commonwealth paid $295 million of interest, which was due on some of the debt.

Puerto Rico owes $70 billion of debt and the island has been embroiled in financial troubles for over three years. The territory has struggled to pay back the debt it owes, defaulting more than once on payments that were due. Last weekend, Puerto Rico’s federal oversight board voted to extend the stay placed on litigation against the island for debt payments that have been missed. The stay was supposed to lift on February 15, 2017. Now that date is May 1, 2017.

The island’s new governor, Ricardo Rosselló, was also granted an extension for when he has to turn in a fiscal blueprint, mapping out how Puerto Rico plans to restore its fiscal health. He now has until February 28, 2017.

UBS Ordered to Pay Another $18M in Puerto Rico Bond Fraud Case

Published on: January 14, 2017 | by Shepherd Smith Edwards & Kantas, LLP

A few weeks after a FINRA arbitration panel ordered UBS (UBS) to pay $18 million in a Puerto Rico bond fraud case, the firm has been ordered to pay another customer a large amount in a similar municipal bond claim. In this latest ruling, the Gomez family claimed they lost $22.87 million from investing in Puerto Rico securities. UBS Puerto Rico (UBS-PR) brokers had purportedly suggested the Gomez family invest in Puerto Rico bonds despite the fact that they wanted investments that were safe. The family relied on the funds from their investments to cover their living expenses.

UBS argued that Mr. Gomez was an experienced investor. The firm claimed that when Gomez opted to concentrate his portfolio in Puerto Rico bonds, he knew what he was doing.

The FINRA panel disagreed with UBS’s assessment, awarding the Gomez family almost $20 million in cash and refusing to enforce almost $6 million is loans the Gomez family owed to UBS. The securities arbitration award to the Gomezes includes $4 million in punitive damages.

UBS Broker is Fired Over Outside Business Activities

Published on: December 28, 2016 | by Shepherd Smith Edwards & Kantas, LLP

UBS Financial Services (UBS) has terminated the employment of Connecticut broker Phil Fiore Jr. The broker-dealer says that even while Fiore was under heightened supervision he did not tell the firm about his outside business activities.

UBS contends that he violated firm policies, such as not disclosing that he was serving as an unpaid director for a not-for-profit entity affiliate, along with a client, as well as not obtaining internal approval to create blog posts, failing to obtain approval to run a charity golf tournament, and not disclosing that a new client had invested in his outside business.

Fiore, who was let go in November, had been a top UBS broker and was rated as a leading adviser in Connecticut. He’d worked at UBS since 2009 and was a senior VP. Previously, he’d been employed with Merrill Lynch.