UBS AG, a Swiss global financial services company that is headquartered in Basel and Zürich, Switzerland, is being sued by a number of their older investors claiming they were put into mutual funds that were invested heavily in Puerto Rico bonds. According to a May 6th., 2014 article in Reuters, this risky investment cost these seniors much of their life savings, causing billions of dollars of losses because of Puerto Rico's economic problems.
The complaint was filed in a Manhattan federal court which was made public on Tuesday. This complaint states that UBS treated the 23 closed-end funds as "cash cows," which generated millions of dollars in fees by heavily investing in Puerto Rico government bonds. The complaint also states that UBS AG should have been aware these bonds were very risky due to the Puerto Rican economy's instability.
The complaint also stated that UBS made the problem worse by leveraging the funds, by encouraging these senior clients to take out $500 million loans to boost their investments in the funds. However, these were elderly clients who should have preserved capital for their retirements. By March, these funds lost more than half of their value and the senior investors lost their retirements as well.
The parent company of Banco Popular, Popular Inc., is also a defendant with because of its alleged role in nine of the funds. This class-action lawsuit is covering thousands of people mainly in their 50s and older.
However, Soreide Law Group feels that in a class action your individual rights are not represented and historically bringing your own claim yields a better recovery. FINRA allows individual investors to bring their own claims against UBS and their own broker.
Attorney Lars Soreide of Soreide Law Group, has been actively filing cases against broker/dealers for the substantial losses sustained by Puerto Rican bond investments. Call (888) 760-6552, for a free consultation if you've invested in Puerto Rico Bond Funds.
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