UBS Group AG's wealth management business must pay a combined $750,000 to three investors who claimed damages tied to their investments in Puerto Rico's debt, according to the
Financial Industry Regulatory Authority Inc.
The arbitration award will go to Jose A. Rivera Riera, Desarrollos Jarra SE and Jenny Robles Adomo, who claimed fraud, recklessness and negligence relating to their investments in Puerto Rico bonds and closed-end funds, according to a
Sept. 9 Finra document. The investors sought to recoup commissions they paid the brokerage firm on top of damages to their portfolios.
The Finra arbitration awards that UBS must pay investors for alleged negligence relating to Puerto Rico's debt crisis have continued to climb this year. In March, a Finra arbitration panel decided the brokerage firm
must pay $470,000 to three investors who claimed damages because their accounts were over-concentrated in Puerto Rico bonds that plunged in value.
In the latest case, Mr. Rivera, Mr. Jarra and Mr. Robles initially claimed about $2.5 million of compensatory damages, $18 million in punitive damages, plus the reimbursement of unlawful commissions, according to the Sept. 9 document.
At the hearing in San Juan, Puerto Rico, the Finra arbitration panel decided that Mr. Rivera will receive $562,500 in compensatory damages from UBS, while Mr. Jarra will be awarded $157,500 and Mr. Robles $30,000.
Gregg Rosenberg, a spokesman for UBS, said that the firm was "disappointed" with the decision.
“Although the arbitrators awarded less than the full damages the claimant requested, UBS is disappointed with the decision to award any damages, with which we respectfully disagree,” Mr. Rosenberg said in an emailed statement. “UBS notes that the decision in this case was based on the facts and circumstances particular to this particular claimant, and is not indicative of how other panels may rule with regard to other customers who invested in similar products.”
