Puerto Rico Investment Losses
Have you invested in Puerto Rican municipal debt obligations or bond funds? Puerto Rican bonds are popular for their yield and their tax-exempt status. But, Puerto Rico has had financial troubles for years and is nearly insolvent. This makes these fixed income investments very risky. Several of bond funds have reportedly lost more half their value, despite being marketed to clients as “safe” and “low-risk” investments.
Massachusetts has initiated an investigation into the impact of Puerto Rican debt on Massachusetts mutual fund investors. Massachusetts is looking into whether investors were made aware of the risks when firms that marketed and sold the funds became aware of the risks associated with Puerto Rican debt. Massachusetts’ regulators have sent demands for information to Fidelity Investments, Oppenheimer Funds Inc. and UBS Financial Services.
According to a recent New Times articles, UBS has been an active seller of Puerto Rico debt offerings to its clients. UBS’s Puerto Rico clients “had been piled into highly leveraged bond funds run by UBS” and were “encouraged by its brokers to borrow even more money to invest in those funds. In some cases, money was lent improperly, exacerbating current losses.” Some of the UBS Puerto Rico funds in which investors have seen their holdings dramatically fall in value include:
- Puerto Rico Fixed Income Fund I,
- Tax Free Puerto Rico Fund II,
- Puerto Rico AAA Portfolio Based Funds I and II,
- Puerto Rico AAA Portfolio Target Maturity Fund,
- Puerto Rico Investor’s Tax-Free Funds I-VI,
- Puerto Rico GNMA & U.S. Gov. Target Maturity Fund,
- Puerto Rico Investors Bond Fund I,
- Puerto Rico Mortgage Backed & US Govt. Fund,
- Puerto Rico Fixed Income Funds I-VI,
- Tax-Free Puerto Rico Target Maturity Fund, and
- Tax-Free Puerto Rico Funds I and II.
If you have invested in UBS’s proprietary closed-end funds holding Puerto Rican debt and have lost money, call a Florida securities arbitration lawyer Crary Buchanan for a free consultation regarding your legal rights.