Former UBS Puerto Rico Executives File a $10M FINRA Arbitration Claim Against the Firm

Siblings Teresa and George Bravo, who formerly worked as financial advisors at UBS Financial Services Inc. of Puerto Rico (UBS-PR), have filed a $10 million Financial Industry Regulatory Authority (FINRA) arbitration claim against the firm. The Bravos, both were senior vice presidents at the broker-dealer, claim that management deceived not just customers but also employees about proprietary closed mutual funds.

The Bravos said that they thought working with UBS would help them be of better service to their clients, which is why they left their old firm. However, the allegedly fraudulent conduct taking place at UBS created material conflicts of interest for them and other employees. The Bravos are contending that during the three years they worked at UBS, they were repeatedly deceived, mistreated, threatened, and coerced before being forced out.

They collectively managed over $120 million in client assets while working for UBS. According to their complaint, the Bravos said that UBS created a high-pressure atmosphere to get brokers to find and sell more of UBS’s proprietary closed-end mutual funds or risk termination otherwise. Teresa Bravo says that she was even duped into buying $100,000 in mutual funds herself. She and her brother are accusing UBS of deceiving customers for its own protection and trying to artificially preserve the Puerto Rican closed-end funds market.

It was in 2012 that the U.S. Securities and Exchange Commission submitted charges against UBS for allegedly making misleading statements to investors and downplaying that there was a liquidity crisis. UBS Puerto Rico settled the claims for $26 million. UBS executives Carlos J. Ortiz and Miguel A. Ferrer were cleared of the charges during a later hearing with an SEC administrative judge. Since that decision from the SEC, Ferrer made headlines concerning UBS’s closed-end funds when a recording of his voice was released. On it he can be heard pressuring UBS brokers to sell the Puerto Rican closed-end funds despite their list of concerns about the investments.

The Bravos say UBS’s behavior has hurt their business and earning potential. They believe that the firm should be liable for their loss of business and reputation, as well as for UBS’s actions stemming from fraudulent misrepresentation, fraud, negligence, breach of duty to inform an agent, negligent misrepresentation and other claims. Specifically, the Bravos have asked for $10 million in compensatory damages. They would like UBS to pay them punitive damages, too.

Puerto Municipal Bond Fraud Cases

For the past two years, our Puerto Rico bond fraud lawyers have been working with clients to file claims against UBS Puerto Rico, Banco Santander (SAN), Banco Popular, and other brokerage firms because of losses in these same closed-end funds or in similar investments. Many investors should not have been involved with these investments, which were not suitable for their portfolios, risk tolerance levels, or investment goals in the first place.

Please contact our Puerto Rico bond fraud law firm today. We represent investors from the U.S. mainland and the Commonwealth.



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