UBS ordered to pay $204,000 in Puerto Rican bond claim

Finra panel says firm was liable for breach of contract and unsuitability

Mar 20, 2018 @ 4:26 pm

By InvestmentNews

A Finra all-public arbitration panel has found UBS liable for breach of contract and unsuitability in a customer complaint involving Puerto Rican bonds, and ordered UBS to pay compensatory damages of $204,339, plus $66,000 in costs.

The claimant in the case, Antonio Gnocchi Franco of Puerto Rico, who also was acting in his role and trustee of his law firm's pension plan, charged that UBS had engaged in misrepresentation, negligence, breach of contract, breach of fiduciary duty, overconcentration, unsuitability, unauthorized trading and use of loan facilities, unjust enrichment and failure to supervise in connection with recommendations to invest in Commonwealth of Puerto Rico bonds and two UBS bond funds.

At the close of the hearing, Mr. Franco requested damages of $5,161,273 for "trading losses" or $3,429,438 for "net out-of-pocket losses."

In a statement explaining the award, the Financial Industry Regulatory Authority Inc. said the panel granted "in part and denied in part" the claimant's motion. All claims under the Puerto Rico Uniform Securities Act were dismissed.


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