UBS To Pay $34 Million Over Puerto Rico Bond Funds
The SEC has fined UBS’s Puerto Rico brokerage firm $34 million for failing to supervise a UBS Puerto Rico broker Jose Ramirez Jr., who allegedly misled investors into borrowing money to buy UBS’s risky, closed-end Puerto Rico bond funds.
Along with FINRA, the SEC brought charges against Ramirez Jr., accusing him of duping investors into using lines of credit to buy up nearly $50 million in closed-end bond funds that went belly up in 2013.
UBS’s policy and customer agreements prohibited the use of the loan proceeds to buy the UBS bond funds. Ramirez allegedly tried to circumvent the UBS policy by having customers transfer the money to unaffiliated third parties, waiting and then using the money to purchase the UBS bond funds. UBS fired Ramirez in 2014.
UBS has agreed to pay $15 million in disgorgement, along with interest and penalties. FINRA has also fined UBS Puerto Rico an additional $7.5 million over its alleged supervisory failures, and ordered an additional $11 million be paid to the 165 customers who suffered losses on the fund sold to them by Ramirez.
Call a Los Angeles Investment Attorney Today
If you invested in and lost money in UBS Puerto Rico bond funds, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles investment attorney today for a consultation regarding your rights.