Puerto Rico investor awarded record $18.5 million against Swiss bank
SAN JUAN, Puerto Rico -- The Financial Industry Regulatory Association (FINRA) Office of Dispute Resolution has published a record $18.5 million securities arbitration award on behalf of Puerto Rico investor Rafael Vizcarrondo against UBS Financial Services, Inc. (UBS) and its Puerto Rico affiliate, UBS Financial Services, Inc. of Puerto Rico (UBS-PR).
Vizcarrondo, an attorney and a businessman, filed his claim in August 2014 following the collapse of the Puerto Rico municipal bond market, which began in August 2013. This case was prosecuted by securities and investor rights attorney Timothy Dennin.
Vizcarrondo alleged in his statement of claim and during his 24-day arbitration hearing that UBS, through its financial advisors, recommended purchases of proprietary non-diversified closed-end Puerto Rico municipal bond funds (UBS Funds) that during 2012 and 2013 resulted in 97% of his UBS liquid assets being allocated into these over-concentrated products.
The stated investment objectives and risk parameters for the UBS Funds recommended to Vizcarrondo and other Puerto Rico investors were to provide "current income" or "high income" exempt from US federal and Puerto Rico income taxes "consistent with the preservation of capital."
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