The Galbraith Law Firm Is Investigating UBS Financial Services of Puerto Rico on Behalf of Investors in Bond Funds

Our office is investigating UBS Financial Services Inc. of Puerto Rico over its sales of leveraged bond funds. Our investigation targets not only the sales practices of financial advisors but also the firm’s widespread sale of these proprietary funds, including the Tax Free Puerto Rico Fund II.

In May 2012, the SEC issued a Cease-and-Desist Order against UBS Puerto Rico, and UBS agreed to pay $26 million in disgorgement and fines to resolve charges that it sold mispriced closed-end funds to its customers. The mispricing related to UBS proprietary bond funds that invested in Puerto Rican municipal bonds.

The New York Times has reported that UBS opened an internal investigation into the sales of the proprietary leveraged bond funds to its customers. The article reported that some of the funds were highly leveraged, and that UBS brokers compounded that risk by encouraging their customers to borrow on margin to make their investments.

Leveraged bond funds are high-risk products that are unsuitable for ordinary investors, and The Galbraith Law Firm reminds investors that simply because one component of an investment sounds safe—for example, municipal bonds—does not mean that it is safe. In fact, many such investments are high-risk. Here, UBS customers are suffering huge losses due to the apparent misconduct of the firm and its financial advisors.

If you purchased a proprietary Puerto Rican bond fund from UBS Financial Services Puerto Rico, please contact The Galbraith Law Firm at 212.203.1249 or kevin@galbraithlawfirm.com for a free confidential consultation concerning your legal rights.