A Financial Industry Regulatory Authority (FINRA) arbitration panel has reportedly ordered Swiss banking giant UBS to pay $200,000 to an investor for losses incurred by its Puerto Rico closed-end bond funds.
Securities arbitrators held two UBS units liable of alleged securities fraud, misrepresentation and other misdeeds, according to Reuters.
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The investor, Yolanda Bauza, had claimed between $357,000 and $625,000 for her losses in a filing seeking compensation, in 2013, the report said.
Several of the Puerto Rico funds sold by UBS were found to be highly concentrated in the debt of Caribbean island’s government and related entities.
Few funds lost half to nearly two-thirds of their value between March 2011 and October 2013.
An UBS spokesperson told Reuters: "UBS is disappointed with the decision to award any damages, with which we respectfully disagree."
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By GlobalDataThe arbitrators did not provided reasons for their decision and denied UBS’ request to remove details about the case from the public records of two UBS Puerto Rico brokers, who were involved in advising Bauza, Reuters report added.
Jeffrey Sonn, a lawyer who was not involved in the arbitration, but represents other investors in cases against UBS, said: "The case is significant because it will make UBS reevaluate how they value these cases for settlement. It puts UBS on notice they are at risk for significant awards in favor or Puerto Rico investors."
