CORRECTED-UPDATE 1-UBS must pay $1.45 mln to investor in Puerto Rico bond fund case
(Corrects to explain that investor's loan was secured by UBS funds, but not used to buy more of the funds, in 9th paragraph.)
By Suzanne Barlyn
Feb 19 (Reuters) - Securities arbitrators have ordered UBS AG to pay an investor $1.45 million for losses incurred by its Puerto Rico closed-end bond funds, according to a ruling.
A Financial Industry Regulatory Authority (FINRA) arbitration panel in San Juan, late Thursday, found two UBS units liable in the case, which alleged securities fraud, misrepresentation and other misdeeds, according to the ruling.
Many of the Puerto Rico funds sold by UBS were highly concentrated in the debt of the Caribbean island's government and related entities.
Some of the funds lost half to nearly two-thirds of their value between March 2011 and October 2013, amid fears about the size of Puerto Rico's debt burden and the weakness of its economy. They have failed since to recover.
UBS is defending against hundreds of customer complaints and arbitration claims, collectively seeking $1.5 billion in damages, the firm said in a Feb. 2 disclosure statement on Feb Of those, the firm has resolved $284 million in claims through settlements or the full arbitration process, according to the disclosure.
"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," a UBS spokesman said in a statement.
Over 20 years, the funds provided excellent returns, he said. Continuación...