Puerto Rico: USB brokers lose arbitration case


Puerto Rican brokers have been in the news for failing to ethically invest on their clients’ behalf. Most recently, Investment News reported that two claimants were awarded $793,077.61 by UBS. They charged UBS Financial Services and UBS Financial Services of Puerto Rico with a number of investment violations after the clients purchased municipal bonds with them. These violations include: misrepresentation, negligence, failure to uphold their fiduciary duty and a several other ethical problems. What can you do if you suspect that your broker is not acting in your best interests?

• Research your broker and their firm. Ideally you researched your broker and their firm before you invested with them. If not, spend some time looking into them now. Start with a basic search engine scan of their name and any mentions in the news. Then dive into their data on the SEC website. Larger investment groups should be found on the SEC site. Smaller groups will take a lot more research to guarantee their legitimacy. During the research process, look for red flags of past litigation or disgruntled investors. Your broker or adviser’s disciplinary history should also be available on the SEC’s online database.
• Research the current economic climate. You hired a broker or adviser to handle your finances, but that does not mean that you should not be involved. Read up on your investments, and see if your investment returns match the economic climate and expected returns. Additionally, check this information against the information your broker gives you. Keep copies of any written communication between you and your broker to crosscheck at a later date. If they speak to you over the phone, ask them to send you a written record of their recommendations.
• File a report with the SEC. If you are concerned about your broker’s actions after conducting research, it may be time to get others involved. Report your suspicions on the SEC website, file a complaint or ask questions.
• Contact an attorney. You have legal rights as an investor. Your broker must honestly represent all investments before the investment is made. If your broker fails to do so, and you lose money as a result, you may be legally entitled to reimbursement for your loss. Contact an attorney who understands the recuperation process and can advocate on your behalf.