UBS Puerto Rican Bonds Drive a Surge in Arbitration Claims

Posted on February 25th, 2014 at 9:15 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

UBS Financial Services and UBS Financial Services of Puerto Rico face a surge in arbitration claims filed by investors and related to Puerto Rican bonds, which now have been downgraded to speculative.

UBS recommended investments into UBS proprietary closed-end bond funds, managed or co-managed by UBS, holding Puerto Rican bonds. Moreover, UBS frequently recommended the use of the UBS Puerto Rico bond funds as collateral for UBS bank loans.

The market for Puerto Rico debt became increasingly volatile last year with the deterioration on the island's economy. Even though the government enacted pension reforms and other measures, it still was futile to prevent the commonwealth's investment ratings from downgrading.

It is alleged that UBS knew about a significant supply and demand imbalance and discussed the weak secondary market internally. Further, the investors claim that UBS made misleading statements to investors and increased its own holdings to keep prices up and maintain the appearance of a stable market.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston

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