UBS Financial Services Incorporated of Puerto Rico (UBS PR)—Failure to Establish and Maintain a Supervisory System and Procedures
UBS Financial Services Incorporated of Puerto Rico Allegedly Failed to Establish and Maintain a Supervisory System and Procedures
UBS Financial Services Incorporated of Puerto Rico allegedly failed to establish and maintain a supervisory system and procedures reasonably designed to ensure the suitability of transactions in CEFs in certain circumstances, according to a recent FINRA Letter of Acceptance, Waiver and Consent (AWC).
In addition, UBS PR allegedly failed to monitor the combination of leverage and concentration levels in customer accounts to ensure that certain customers’ transactions were suitable, the AWC notes.
Beginning in 1994, UBS PR acted as underwriter in the initial public offerings of 23 affiliated, non-exchange-traded closed-end funds (CEFs) with an initial offering price of over $5 billion, the AWC reports.
UBS PR Censured, Fined $7,500,000 and Ordered Restitution to 165 Customers in the Amount of $10,978,402
By mid-August 2013, the Puerto Rico bond market had suffered a massive decline in market value, the AWC notes, and that by the end of 2013, most CEF shares and Puerto Rican Municipal Bonds lost between 20-50% of their value.
165 customers with conservative or moderate investment objectives and $2 million or less in assets had accounts that were allegedly more than 75% concentrated in highly-leveraged CEF shares, according to the AWC.
As a result, UBS PR has been censured by FINRA, fined $7,500,000, and ordered restitution to 165 customers in the amount of $10,978,402, the AWC reports.
UBS PR neither admitted nor denied the allegations.
The Peiffer Wolf Investor Rights Lawyers Are Helping Investors
The Peiffer Wolf investor rights lawyers are assisting investors who lose money as a result of failure to allegedly establish and maintain a supervisory system and procedures. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of failure to allegedly establish and maintain a supervisory system and procedures encouraged to contact the investor rights lawyers at Peiffer Wolf, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 585-310-5140.