NEW YORK/SAN JUAN, Oct 18 (Reuters) - UBS laid off a number of employees at its Puerto Rico arm last week as it shrinks its business further in the U.S. territory.
UBS said on Sunday fewer than a dozen employees were affected. The Swiss bank has been retrenching in Puerto Rico as the Caribbean island’s government tackles a fiscal crisis stemming from a decade long recession and struggles with its $72 billion debt load.
UBS declined to say how many jobs were cut. Its statement citing “less than a dozen” people was in response to an inquiry from Reuters after several people briefed by UBS workers told Reuters that about 15 people had lost their jobs.
The firm did not respond to requests for the total number of its employees on the island, nor the roles of those laid off.
“While decisions affecting people are always profoundly difficult, when these actions are taken, there is always a focus on solidifying our business in the new environment while continuing to provide the highest level of service to our clients,” a UBS spokesman said in a statement.
Complaints against UBS by U.S., industry, and Puerto Rico regulators about sales practices involving its Puerto Rico bond funds, have become major legal headaches for the firm. Some of the funds, which included debt that UBS underwrote, lost almost two-thirds of their value between March 2011 and October 2013 and have not recovered.
The firm, on Sept. 29, agreed to pay almost $34 million to settle charges from the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority (FINRA), Wall Street’s industry-funded watchdog, that it failed to supervise the sale of Puerto Rican closed-end mutual funds it sponsored to clients in the U.S. territory.
UBS, which neither admitted to nor denied the regulators’ allegations, is also battling nearly a total of nearly $1 billion in arbitration claims by investors who allege they were burned by the firm’s bond funds.
Customer assets controlled by UBS Puerto Rico slid from $15.4 billion in 2010 to $10.1 billion in 2014, according to Puerto Rico’s Office of the Commissioner of Financial Institutions. The firm managed $8.7 billion at the end of the 2015 second quarter.
In June, UBS closed its branch in the Condado section of Puerto Rico’s capital, San Juan, which is located along the island’s northeastern coast. The closing followed others in Guaynabo, a municipality within the greater San Juan area, and Ponce, a major city in the south of the island, according to media reports. The firm has been consolidating its business and clients within its main branch in Hato Rey, also a section of San Juan.
“UBS remains committed to Puerto Rico, our clients and our employees,” the company said, noting its presence on the island for more than 50 years. (Reporting by Suzanne Barlyn and Nick Brown; Editing by Carmel Crimmins and Nick Zieminski)