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A group of investors in Puerto Rico allege that a major financial services firm took advantage of investment loopholes, engaged in shady activity, and failed in its fiduciary duty, according to a UBS mutual fund class action lawsuit.
Legal requirements in the territory differ in numerous ways from regulations and statutes used in 50 states. One example cited in the UBS mutual fund class action lawsuit is that residents are exempt from taxes on profits from mutual funds when at least two-thirds of the assets were held in Puerto Rico. UBS Financial touted these benefits to investors along with co-defendant Banco Popular, which offered 23 different mutual funds to investors.
One of the problems alleged by the plaintiffs’ UBS class action lawsuit is that the companies issued loans to people who wanted to invest and bought securities using loaned money. A Puerto Rico exemption allows UBS mutual funds to borrow one dollar for every dollar in assets. However, if a security takes a loss, that means that it doubles. A 10 percent loss becomes 20 percent, for example, and it all comes from the fund principal and, as a result, investors.
Compounding that was which government-issued financial instruments the investment firm used to build its portfolios. The UBS class action lawsuit claims the financial institution underwrote the very same government bonds that they sought to invest in, again thanks to the exemption in securities law in Puerto Rico. As a result, the UBS mutual fund class action argues that the advisers and fund managers should have been aware of the risky propositions since their coworkers were assessing the ratings of those bonds.
Finally, the company allegedly pushed practices that would result in it making commissions off internal transactions without being of any real benefit to people looking for a return on their investment. Those factors together have cost potentially thousands of plaintiffs to lose their retirement savings, according to the UBS mutual fund class action lawsuit.
The plaintiffs are represented by class action lawsuit lawyers from Grant & Eisenhofer PA, Bernstein Litowitz Berger & Grossman LLP, the Law Offices of Andres W. Lopez PSC, and Kessler Topaz Meltzer & CHeck LLP.
The UBS Mutual Fund Class Action Lawsuit is Nora Fernandez, et al. v. UBS AG, et al., Case No. 14-cv-03252, in the U.S. District Court for the Southern District of New York.
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One thought on UBS Mutual Fund Class Action Alleges Financial Mishandling
(A) UBS broker(s), continued to trade on a hedge fund of a dead relative while the estate was in probate, running up $1000s in commissions and fees, and losing several thousand dollars in the process. Her broker’s name I know, and I have the statements. Someone needs to smack him around with a tire iron, and then sue him for treble damages. It was like a free for all with her account after she was dead. Trading went up something like 100000000000000000000000000000000000000% after she died, and UBS just made trades to make trades and collect the commissions and fees.