UBS Brokers Were Driven to Sell High Risk Puerto Rico Bonds According to Recording

In a recent Reuters' article, Miguel A. Ferrer, the former chairman of UBS Financial Services Inc of Puerto Rico, a unit of UBS AG, told a meeting of their brokers on June 2, 2011, in San Juan, that they needed to change their mindset or leave. This was according to an audio recording in Spanish made by someone in attendance and reviewed by Reuters. The following is a partial translation appearing exclusively in Reuters:

“You need to focus again on the attractive benefits of our funds and stop this nonsense that there are no products available – because if there are no products, go home, get a new job!”
Ferrer stressed that the brokers had nearly $1 billion in cash in their clients’ accounts that was not generating commissions at the time. He said the team’s production had dropped “40-something-percent” (a figure which is now disputed by UBS that says it was closer to 10 percent), that “overall we are doing quite badly” and it was “bullshit” for brokers to claim there weren’t products to sell.

This recording could help the many arbitration claims filed with the Financial Industry Regulatory Authority (FINRA) in the United States. Hundreds of investors are seeking claims totaling more than $900 million from UBS. The claims are based on allegations that UBS Puerto Rico sold the funds’ high yields and tax benefits to clients, but did not tell them about the riskiness of the investments. Many feel that UBS put its financial interests ahead of their clients by trying to sell clients funds containing bonds underwritten by UBS.

Between March 2011 and October 2013, some of the funds lost 1/2 to nearly 2/3 of their value and have failed to recover. At the time of the meeting, Ferrer and UBS Puerto Rico were the subject of an earlier SEC probe into its sales tactics for the same group of funds in 2008-2009. UBS paid a $26.6 million penalty in 2012 to settle allegations that it had offloaded shares in the funds from its own balance sheet before filling its customers' sell orders. UBS neither admitted nor denied the allegations. Ferrer left UBS July, 2014 after a restructuring at UBS.

Lars Soreide is quoted in several national publications regarding the lawsuits he has filed against UBS on behalf of his clients. Please see some the blog articles regarding Soreide Law Group and the lawsuits filed against UBS at:

https://www.securitieslawyer.com/securitieslawyerblog/?p=4905

https://www.securitieslawyer.com/securitieslawyerblog/?p=3907

https://www.securitieslawyer.com/ubspuertoricofundloss.html

If you experienced investment losses through UBS of Puerto Rico or UBS in the United States, please call Soreide Law Group (888) 760-6552 for a free consultation on how you may be able to recover your losses.
Soreide Law Group (https://www.securitieslawyer.com) is currently representing investors nationally and internationally against UBS.