UBS Financial Services Inc. has been ordered to pay an arbitration award of close to $1 million to an investor who sued the firm over losses stemming from investments in UBS Puerto Rico closed-end bond funds.
The three-person arbitration panel at the Financial Industry Regulatory Authority Inc.'s Office of Dispute Resolution awarded the investor, Ana Elisa Ciordia-Robles, $751,000 in compensatory damages, plus interest, and $206,000 in attorneys' fees and costs,
according to the arbitration award announced on Friday.
Ms. Ciordia-Robles claimed breach of fiduciary duty, negligent supervision and other allegations in the matter, according to the award.
Ms. Ciordia-Robles had requested compensatory damages up to $1 million, plus costs and punitive damages, according to the award.
“The award represents almost 100% of capital lost, and I think that’s very significant,” said Jeffrey Erez, an attorney for the plaintiff. “The fact that the panel awarded fees and cost is meaningful. It was a really solid award.”
“Although the arbitrators awarded less than the full damages claimants requested, UBS is disappointed with the decision to award any damages, with which we respectfully disagree,” wrote spokesman Peter Stack in an email to
InvestmentNews.
UBS Wealth Management Americas is facing a raft of customer complaints tied to its sales of Puerto Rico municipal bond funds. Last year, it agreed to pay a combined $34 million to settle allegations from U.S. regulators tied to its supervision of sales of the funds and a former broker's alleged fraud.
The payment was tied to charges from the Securities and Exchange Commission and the Finra. In both cases, the firm
did not admit or deny charges. In 2014, UBS said claims tied to UBS Wealth Management Americas' Puerto Rico closed-end municipal bond funds have risen to nearly $1 billion.
