Tuesday, May 17, 2022

SEC announces $26 million settlement fund for certain UBS Puerto Rico investors

By on March 22, 2019

(CB file)

Investors ‘harmed’ in relation to 23 non-exchange-traded, closed-end funds may file claims

SAN JUAN – The Securities and Exchange Commission (SEC) issued a release Friday saying that investors in any of the following 23 non-exchange-traded, closed-end funds affiliated with UBS Financial Services of Puerto Rico who were “harmed” by the firm may be entitled to a recovery from an established $26 million fund.

The agency said those affected by “omissions or misrepresentations concerning the pricing of their investments from May 15, 2008, through September 30, 2009, and/or by their failure to execute marketable sell orders placed by the investors from March 1, 2009, through Sept. 30, 2009,” related to the following funds may be eligible to file a claim. 

On May 1, 2012, the SEC issued an order finding that from May 15, 2008, through Sept. 30, 2009, UBS PR made misrepresentations and omissions of material facts to investors in Puerto Rico “regarding the secondary market liquidity and pricing” of the funds.

In addition, the SEC said it found that from March 1, 2009, through Sept. 30, 2009, UBS PR “effectively prevented investors from selling their Fund shares by failing to execute marketable sell orders placed by the investors.”

In accordance with the order, UBS PR paid $26,609,739.94 to the SEC that consisted of $11.5 million “in disgorgement,” $1,109,739.94 in “prejudgment interest,” and a $14 million civil money penalty. The order created the “Fair Fund,” pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended.

A distribution plan has been made for investors who bought or sold shares of one or more of the securities from May 15, 2008, through Sept. 30, 2009, “and whose investments were affected by the misrepresentations and omissions by UBS PR regarding pricing of their investment,” and to those “who submitted marketable orders to sell between March 1, 2009 and September 30, 2009, and whose transactions were not executed by UBS PR, either in part or in full.”

For the “Delayed Sale Transactions, investors are eligible to submit a claim as long as investors subsequently placed another order to sell shares and the shares were sold by the close of the markets on January 16, 2018 (the last date on which closing prices are available) and incurred harm as defined by the Plan of Allocation.”

The Notice and Certification Form is being mailed to “identifiable and potentially-eligible claimants,” but the SEC said that copies may be downloaded from the UBS PR Fair Fund’s Website at www.UBSPRFairFund.com.

In order to file a claim, a Certification Form postmarked no later than June 10, 2019, must be submitted.

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