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Puerto Rico has been in an economic decline since 2006, when corporate tax loopholes closed, causing a substantial outflow of manufacturing business back to the mainland. The global financial crisis that followed exacerbated the problems further. One consequence of this economic decline has been a rapid increase in the U.S. territory’s debt obligations. The debt obligations now stand at approximately $70 billion, which is close to $20,000 per capita for each resident of the island.

Puerto Rico’s bonds began a sharp price decline in 2013 as fears about the economy came into focus. Over the course of 2016, Puerto Rico has defaulted on its bond obligations on several occasions, including this summer, when it failed to make payments due under its general obligation bonds. These developments have left thousands of investors fretting about their retirement savings.

Some investors have been proactive by taking action against the brokerage firms that steered them towards Puerto Rico bonds. Indeed, earlier this year, the Financial Industry Regulatory Authority reported that over a thousand arbitration claims had been filed relating to Puerto Rico bonds and bond funds. A large number of these case have resulted in substantial arbitration awards or settlements for investors.

A significant portion of the arbitration cases that have been filed to date have been filed against UBS Financial Services, which sold huge amounts of Puerto Rico debt through its proprietary closed-end bond funds, and in its role as underwriter. Many of these funds have declined more than 50% in value. Investors have alleged that UBS engaged in fraudulent sales practices with respect to these funds, and that the funds were unsuitable for their investment objectives and risk tolerance. The following is a list of proprietary UBS bond funds and bond funds that UBS helped to distribute to investors:

  • 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 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.
  • Puerto Rico GNMA & US Govmt. Target Maturity Fund, Inc.
  • P.R. Mortgage-Backed & US Govmt. Securities Fund, Inc.
  • 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

Some of the other brokerage firms and brokers that were involved in the sale of Puerto Rico debt are listed below:


  • Popular Securities
  • Santander Securities
  • Charles Schwab & Co.
  • Hapoalim Securities USA
  • Interactive Brokers LLC
  • Investment Professionals Inc.
  • J.P. Morgan Securities
  • Lebenthal & Co.
  • National Securities Corporation
  • Oppenheimer & Co.
  • Riedl First Securities Co. of Kansas
  • Stifel Nicolaus & Co.
  • TD Ameritrade
  • Wedbush Securities Inc.
  • JP Turner & Company
  • RBC Capital Markets


  • Vicente Castillo
  • Miguel Andres Pascual
  • Felix Alberto Bartolomei
  • Nelson T. Rodriguez
  • David L. Rojas
  • Nelson T. Rodriguez
  • Luis Enrique Sanchez
  • Enrique Fernandez
  • Eric Louis Snyder
  • James Malcom Ugobono
  • Alberto Rosario

According to FINRA, most of the claims that have been filed to date relating to Puerto Rico bonds and bond funds have been filed by residents of Puerto Rico. However, the Puerto Rico Government Development Bank reports that most of the outstanding debt is owed to “U.S. mainland investors, including individuals, bonds funds, insurance companies, commercial banks, and others.” The smart money is on these mainland investors following the lead of their compatriots in Puerto Rico. If and when the other shoe drops, the claims could number in the thousands.

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If you have suffered investment losses as a result of malpractice or misconduct our experienced team of investment fraud attorneys may be able to assist you in recovering some or all of your losses. Call us toll-free at 888-607-4819 for a free consultation or email us through our “Contact” page to schedule a free consultation.