MarketWatch reports that with the power out for what could be months in Puerto Rico in the wake of Hurricane Maria, this could mean that investors holding $9 billion of Puerto Rico Electrical Authority (PREPA) bonds may end up never seeing the money they invested in the US territory’s electrical authority. Meantime, Puerto Rico’s residents must now also grapple with recovering from the physical devastation caused by the heavy rains, winds and flooding from Hurricane Maria.
The power outage comes just three months after PREPA filed for bankruptcy protection and the financial oversight board appointed to deal with the territory’s $74 billion of debt turned down a restructuring deal between the electrical authority and a group of insurers and bondholders. For many Puerto Rico investors, Hurricane Maria comes just four years after they sustained major losses from investing in Puerto Rico bonds and closed-end bond funds—securities that brokerage firms such as Santander Securities (SAN), Banco Popular, UBS Puerto Rico (UBS-PR), Oriental Financial Services and others touted as low risk, safe investments, even to customers who did not have the portfolio to handle the actual, higher risks involved.
Currently, there are thousands of Puerto Rico bond fraud and closed-end bond fraud cases awaiting arbitration hearings before the Financial Industry Regulatory Authority (FINRA). Our Puerto Rico bond fraud attorneys at Shepherd Smith Edwards and Kantas have been representing investors on the island and the US mainland in helping them try to recover these investment losses.
Pursuing a Puerto Rico bond fraud or closed-end bond fraud case is not the type of securities claim that an investor should file without legal help. For example, InvestmentNews recently reported on one Puerto Rico securities claim against Oriental Financial Services, which sold Puerto Rico tax-free bonds to investors. In a letter to the client, the broker-dealer’s president, Sean Miles, stated that the firm, along with its “its agents, employees, parent, and affiliates,” was disclaiming any investment advice regarding this person’s accounts and it would be up to this investor to “mitigate losses” regarding the Puerto Rico securities at issue. Meantime, other brokerage firms, including UBS, which has already been forced to pay hundreds-of-millions of dollars to resolve numerous UBS Puerto Rico bond fraud claims, continue to combat investors’ securities cases against them.
Puerto Rico Oversight Board Investigates Debt Crisis
In other Puerto Rico debt news, the island’s oversight board is conducting an independent probe into the territory’s debt crisis to comprehensively examine the borrowing that eventually forced the island to seek bankruptcy protection in May. All this as, reports Bloomberg, a group of unsecured creditors are asking the bankruptcy court to allow the investors to conduct their own probe into the involvement of Banco Santander Puerto Rico, Banco Popular de Puerto Rico, and the Government Development Bank for Puerto Rico in the territory’s debt crisis.
If you would like to schedule a free, no obligation case consultation so we can help you determine whether you have grounds for a Puerto Rico bond fraud case, contact Shepherd Smith Edwards and Kantas, LTD LLP today.
Puerto Rico’s bondholders worried after Hurricane Maria turns out lights, MarketWatch, September 21, 2017
Puerto Rico’s Debt Investigation Will Be Broad, Official Says, Bloomberg, September 18, 2017
More Blog Posts:
UBS Fights Insurers’ $20 Million Lawsuit Over Puerto Rico Bond Claims, Stockbroker Fraud Blog, August 21, 2017
Investors Continue to Bring Puerto Rico Bond Fraud Claims Against UBS For, Among Other Things, Encouraging Them to Use Non-Purpose Lines of Credit to Purchase Securities, Stockbroker Fraud Blog, August 18, 2017
SEC Hacking Raises Concerns That Rogue Traders Might Access Filings in EDGAR Before They Are Public, Institutional Investor Securities Blog, September 22, 2017