Puerto Rico’s Uncertain Future Leaves Investors in Limbo

Posted on August 14th, 2015 at 12:55 PM
Puerto Rico’s Uncertain Future Leaves Investors in Limbo

From the Desk of Jim Eccleston at Eccleston Law LLC: 

After Puerto Rico slipped into default status on their $72 billion debt, U.S. municipal bond fund investors were left exposed to a crumbling financial situation. While almost half of all U.S. muni bond mutual funds are exposed to the Puerto Rican debt, market analysts have been watching this financial system unravel for several years.

As stated by Scott Colyer, chief executive of Advisors Asset Management, “Whether or not they’re in default today, they’ve telegraphed and publicly stated that they intend to default.” Puerto Rico failed to pay its August 1st payment of $58 million to holders of Public Finance Corp. bonds.  However, because Puerto Rico is only a U.S. commonwealth, it cannot legally file for bankruptcy.

Most mutual funds are holding their Puerto Rican bonds. Morningstar Inc. has 52% of all muni bond funds, with some exposure to Puerto Rican debt. Another major company, OppenheimerFunds, holds 18 of the top 25 spots. 

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

Tags: James Eccleston, Eccleston Law Offices, Morningstar Inc, OppenheimerFunds

Return to Archive



I want to thank you for your excellent professional representation. It was greatly appreciated.

Michael M.


August 12, 2022
SEC Charges J.P. Morgan, UBS, and TradeStation for Deficiencies Pertaining to the Prevention of Customer Identify Theft

The Securities and Exchange Commission (SEC) has charged J.P. Morgan Securities, UBS Financial Services, and TradeStation Securities over deficiencies in their programs designed to prevent client identify theft, which violates the SEC’s Identity Theft Red Flags Rule, or Regulation S-ID.

August 11, 2022
FINRA Suspends Former Schwab Advisor for Failing to Disclose Felony Charges

The Financial Industry Regulatory Authority (FINRA) has suspended a former Charles Schwab advisor who allegedly failed to disclose multiple felony charges.

August 10, 2022
UBS Wealth Group’s Legal Costs Skyrocket in Q2

UBS Wealth’s litigation expenses have substantially spiked in the second quarter as the firm has faced a host of investor complaints and regulatory probes into UBS’ volatile Yield Enhancement Strategy (YES).