• Puerto Rico UBS Class Action
  • Puerto Rico UBS Class Action

    This is a class action filed on behalf of a putative class of similarly situated Puerto Rico residents (the “Class”) who invested in one or more of 23 closed-end mutual funds (the “Funds” or “CEFs”) sponsored or co-sponsored by UBS Financial Services Incorporated of Puerto Rico (“UBS Puerto Rico”) between May 5, 2008 and May 5, 2014 (the “Class Period”).

    The Defendants in this class action include UBS AG; UBS Financial Services, Inc.; UBS Puerto Rico; UBS Trust Company of Puerto Rico; and UBS Bank USA (“Defendants”).

    The case centers on Plaintiffs’ allegation that Defendants improperly pushed Class members to invest in the Funds, which Defendants portrayed as safe, secure, “fixed income” securities that would preserve Class members’ principal investments. Defendants did so without any regard for or analysis of the suitability of these investments – and thereby breached their contractual duties to class members. Contrary to the Defendants’ representations, the Funds were high-risk, highly-leveraged, volatile, investments that eventually plummeted in value beginning in mid-2013, causing billions of dollars in losses to investors.

UBS Puerto Rico Class Action

Case Status

The operative Complaint in this case was filed on May 8, 2015, in the United States District Court for the Southern District of New York (the “Court”). After the Plaintiffs filed the Complaint, the Defendants asked the Court to dismiss the case, asserting that the Complaint did not contain the allegations needed to support the Plaintiffs’ claims.

On December 7, 2016, the United States District Court for the Southern District of New York (Honorable Sidney H. Stein, Senior District Judge) issued a written opinion granting part of Defendants’ request, and denying other parts. Specifically, the Court sustained Plaintiffs’ claims that Defendants breached the contractual provision requiring Defendants to have a reasonable basis for believing that the investments they recommended were suitable for their customers. With its ruling, the Court allowed the Plaintiffs to proceed into the discovery phase of the case.

On January 13, 2017, following the Court’s decision on the Defendants’ motion to dismiss the case, the Defendants filed Answers to the Complaint.

The parties are currently engaged in the process of discovery. During the discovery process, each side is permitted to ask the other side for documents, testimony and other information related to the case. Pursuant to the Scheduling Order issued by the Court, the parties are scheduled to complete fact discovery by November 20, 2017. Class certification—the stage in the case at which the court decides whether the case can proceed as a class action—will be fully briefed by February 9, 2018.