Articles Tagged with Scotia Bank

According to Bloomberg, the retirement system of Puerto Rico has joined a lawsuit against UBS Financial Services, Inc. (UBS) for poor returns that the retirement system received on $3 billion the it borrowed on UBS’s recommendation. Six beneficiaries originally brought this Puerto Rico bond fraud case in 2011 against UBS and two smaller broker-dealers.UBS was the underwriter of bonds sold by the judiciary retirement systems and employees eight years ago.  UBS also served as investment consultant, adviser, and bond fund manager. The bond proceeds were supposed to earn a positive return as compared to the interest paid on the bonds.  According to UBS, this would help Puerto Rico resolve some of its pension shortfall.  However, UBS, according to the complaint, put too much of the bond proceeds toward low-yielding accounts that made “negative income.”

Now, Puerto Rico’s pension funds are in financial trouble and could go broke as early as 2018.  System administrator Pedro R. Ortiz said that the system’s board is looking to obtain a  “significant recovery” for pensioners and participants.