Lawsuit seeks documents in Puerto Rico fund settlement with UBS

lunes 3 de noviembre de 2014 15:03 GYT

By Suzanne Barlyn

Nov 3 (Reuters) - An investor who alleges he lost more than $400,000 in Puerto Rico closed-end bond funds sold by a UBS AG unit has sued Puerto Rico's financial regulator, challenging the transparency of its $5.2 million settlement with the firm.

Manuel Martínez-Umpierre, a client of UBS Financial Services Inc of Puerto Rico, asked a local court on Friday to order the release of confidential documents that Puerto Rico's Office of the Commission of Financial Institutions used as the basis of its settlement with the UBS unit on Oct. 9.

The settlement required UBS to pay $1.7 million in restitution to 34 Puerto Rico residents with low net worth who had invested in the funds and an additional $3.5 million to an investor education fund.

Martínez-Umpierre was not eligible for compensation under that settlement, but is a plaintiff in a separate shareholder suit against UBS involving the funds.

The documents he is seeking could potentially help in that case and in more than 500 arbitration complaints about the closed-end bond funds. Thousands of investors in the funds lost money following a sharp decline in the value of Puerto Rico municipal bonds last year.

Martínez-Umpierre wants to know whether his broker was one of six at UBS who are subject to extra supervision under the settlement, but whose identities remain confidential.

He also wants to shed light on how the low net-worth investors were selected, as well as their specific losses, according to the petition filed at the San Juan Superior Court, the city's highest trial court.

Puerto Rico's Commissioner of Financial Institutions, Rafael Blanco-Latorre said in an interview that releasing the documents would reveal personal and financial details about UBS clients, among other issues.   Continuación...