UBS Loses Arbitration, Forced To Pay $200k

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UBS Loses Arbitration, Forced To Pay $200k

UBS lost an arbitration case this week pertaining to the offer and sale of a number of Puerto Rico Fixed Income and Bond funds.

The Claimant in the arbitration asserted causes of action for violation of the Puerto Rico Uniform Securities Act, securities fraud, constructive fraud, breach of contract, negligence, negligent supervision, failure to supervise, breach of fiduciary duty, misrepresentation, omission of facts, manipulation, unsuitability, common law fraud, constructive fraud, and respondeat superior.

The Claimant’s allegations related to the her purchase of shares of Puerto Rico Fixed Income Funds I, II, and III and Puerto Rico Investors Bond Fund.

In her statement of claim, the Claimant requested rescission of the closed end funds sold to her and $357,000 to $625,000 in compensatory damages, as well as interest, costs, attorneys’ fees, and punitive damages. In her pre-hearing brief, the Claimant requested compensatory damages between $339,297 and $702,003. UBS requested dismissal of the claims and expungement of the action.

After considering the pleadings, testimony, and evidence, the arbitration panel found UBS liable in the amount of $200,000 and denied UBS’s request for expungement.

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