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FINRA Arbitration Verdict: UBS to pay $18 million

By on December 5, 2016

ubs-nightSAN JUAN – UBS Financial Services Inc. and UBS Financial Services Inc. of Puerto Rico were slammed with an $18 million FINRA arbitration verdict (Case No. 14-02464) released Monday, according to the Sonn and Erez PLC.

The award included approximately $12.7 million in compensatory damages, $2.5 million in interest, $3.18 million in attorneys fees, and $163,000 in expert costs. “The arbitration, like over 1,000 other arbitrations, centered on the sale of Puerto Rico Municipal Bonds and Puerto Rico closed end funds that owned Puerto Rico muni bonds on margin,” the law firm’s release reads.

“This verdict supports our theory that UBS oversold Puerto Rico bonds and closed end funds to their customers, in concentrated amounts, like many other brokerage firms in Puerto Rico,” said Jeffrey Sonn of Sonn & Erez, whose law firm wasn’t involved in the verdict, but who represent more than 200 Puerto Rico investors with similar claims.

In 2015, FINRA fined UBS $18.5 million finding that “UBS PR failed to monitor the combination of leverage and concentration levels in customer accounts to ensure that the transactions were suitable given the customers’ risk objectives and profiles,” according to FINRA.

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