UBS Financial Services Inc. And UBS Financial Services Of Puerto Rico Ordered To Pay An Investor $200,000 For Losses In UBS's Puerto Rico Proprietary Bond Funds

May 19, 2015, 16:46 ET from Shepherd Smith Edwards & Kantas LLP

SAN JUAN, Puerto Rico, May 19, 2015 /PRNewswire/ -- UBS Financial Services Inc. and UBS Financial Services of Puerto Rico (collectively "UBS") have been ordered to pay an investor $200,000 by a FINRA arbitration panel for losses the investor incurred by investing in UBS's Puerto Rico bond funds.  This is the first known decision from an arbitration panel concerning the collapse of UBS's Puerto Rico bond funds from 2013. This result is important for the hundreds of other lawsuits filed by investors in the last few years over investments in the same or similar funds.

Yolanda Bauza invested money she received from a settlement for a car accident.  She alleged that her broker was guilty of misrepresentation, securities fraud, and other wrongdoing which caused her to suffer losses to funds she entrusted to him.  In addition to awarding $200,000 to Ms. Bauza, the arbitrators denied UBS's request to remove information about the dispute from the public records of the brokers who had advised Bauza, David Lugo and Carlos Gonzalez.

According to Sam Edwards, a partner with Shepherd, Smith, Edwards & Kantas, who is representing a number of Puerto Rico bond fund investors, "We are very pleased FINRA's arbitrators recognized what those of us representing the many thousands of investors in Puerto Rico and abroad have known for almost two years: UBS's Puerto Rico bond funds were highly conflicted, very risky and completely misrepresented to investors.  They were suitable for almost no investors.  As a result, those who invested in these bond funds, like Ms. Bauza, should be fairly compensated."

The onslaught of Puerto Rico bond cases have come after many of these UBS funds lost up to two-thirds of their value, mostly in 2013.  Investors, including many who should never have been invested in municipal bonds, or should have had far less of their portfolios invested in this area, sustained huge losses as the funds plummeted and the markets dried up, leaving many investors with no way to get their money back out easily.  To make matters worse, many investors have claimed that UBS brokers recommended they borrow against their UBS accounts and use the money to buy even more of these municipal bond funds.  Those that did saw their losses increase substantially.

If you are or were a client of UBS, or suffered losses in any other municipal bond investments made at the recommendation of your broker, contact the law firm of Shepherd, Smith, Edwards & Kantas LLP for a free, confidential evaluation of your account.  We have a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. More information can also be found on our blog at

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SOURCE Shepherd Smith Edwards & Kantas LLP