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UBS Puerto Rico Bond Fund Cases & Investigation

The Law Offices of Robert Wayne Pearce, P.A. is currently investigating the UBS Puerto Rico bond funds and seeking to recover losses of many investors residing in Puerto Rico. Many investors purchased the island's debt through closed-end mutual funds, which in many cases held more than 70 percent of assets in Puerto Rican bonds and employed leverage. The steep decline in Puerto Rican bond prices is believed to be linked to worries about Puerto Rico's shrinking economy, double-digit unemployment rate, and individual debt. Such fears ignited a wave of selling that briefly pushed some Puerto Rican bond yields to over 10 percent, which in turn caused bond prices to spiral downward.

UBS Puerto Rico is the island's market leader in closed-end funds, operating more than a dozen bond funds such as:

  • Tax-Free Puerto Rico Fund, Inc.
  • Tax-Free Puerto Rico Fund II, Inc.
  • Tax-Free Puerto Rico Target Maturity Fund, Inc.
  • Puerto Rico AAA Portfolio Target Maturity Fund, Inc.
  • Puerto Rico AAA Portfolio Bond Fund, Inc.
  • Puerto Rico AAA Portfolio Bond Fund II, Inc.
  • Puerto Rico GNMA & US Govmt. Target Maturity Fund, Inc.
  • P.R. Mortgage-Backed & US Govmt. Securities Fund, Inc.
  • Puerto Rico Fixed Income Fund, Inc.
  • Puerto Rico Fixed Income Fund II, Inc.
  • Puerto Rico Fixed Income Fund III, Inc.
  • Puerto Rico Fixed Income Fund IV, Inc.
  • Puerto Rico Fixed Income Fund V, Inc.
  • Puerto Rico Fixed Income Fund VI, Inc.

UBS Puerto Rico also served as a co-underwriter and co-manager of the following closed-end funds:

  • Puerto Rico Investors Tax-Free Fund
  • Puerto Rico InvestorsTax-Free Fund II
  • Puerto Rico InvestorsTax-Free Fund III
  • Puerto Rico InvestorsTax-Free Fund IV
  • Puerto Rico InvestorsTax-Free Fund V
  • Puerto Rico InvestorsTax-Free Fund VI
  • Puerto Rico Tax-Free Target Maturity Fund
  • Puerto Rico Tax-Free Target Maturity Fund II
  • Puerto Rico Investors Bond Fund

Many of these closed-end funds have declined between 50 and 60 percent. Santander Securities and Popular Securities also manage closed-end funds with Puerto Rican bond holdings that suffered losses.

In May of 2012, UBS Puerto Rico settled with the Securities and Exchange Commission (SEC) for $26.6 million over claims alleging that UBS Puerto Rico misrepresented and omitted material facts related to the above-listed bond funds. Many of the funds were leveraged (purchased with borrowed funds), which magnified investors' losses. However, investors may be able to recover their investment losses by filing Financial Industry Regulatory Authority (FINRA) arbitration claims against UBS Puerto Rico that would be heard in San Juan, Puerto Rico.

Our Current Cases Against UBS Puerto Rico

Our firm has filed claims on behalf of UBS Puerto Rico investors. We have summarized the allegations our clients have made against UBS Puerto Rico to help our readers decide whether they should investigate and possibly bring claims against that brokerage firm themselves. Please read these summaries and if you believe the facts and circumstances are similar, contact us for a free consultation.

Client Reviews
Robert Pearce is part of that unusual breed of lawyers that are able to create empathy with clients and thoroughly adopt their cause. No half efforts here. He and his group of professionals are outstanding strategists that can execute with precise fervor and unyielding determination. Theirs is a huge wave of facts, research, precedents and preparation, that has impressed me in its thoroughness and creativity, and most importantly with the results. No stone goes unturned and no effort is ever spared. In my book, he and they are those of a very rare kind that one wants to keep for a very long time. Ramon F.