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FINRA Rules in Favor of Swiss Group

Wednesday, September, 23, 2015


The Financial Industry Regulatory Authority (FINRA) recently levied a favorable ruling for the Switzerland-based company UBS Group AG. The ruling dismissed an arbitration claim by investor Berta Ganapolsky and losses related to municipal bonds. Documents show the investor was requesting $9.1 million in relief.

 

The attorney for the investor claimed his client had all of her money invested into a single bond by UBS broker David Jose Lugo. That bond was underwritten and sold by the UBS Group. The investment resulted in losses after its value fell in response to concerns over Puerto Rico’s debt crisis and weakening economy.

 

Despite the loss of the investment capital, the FINRA panel dismissed the investor’s claim and found that he had decided to stay invested in the bond based on advice from outside counsel. Once the ruling was levied, the investor’s claim was removed from Lugo’s public record as a broker, so future investors and employers will have no access to information or any idea the events occurred. There is still a record of various other complaints filed against the broker regarding the loss-making fund and the record states Lugo left UBS Group in May 2015.

 

This ruling by FINRA is in stark contrast to other recent rulings that ordered UBS to pay millions of dollars to investors as damage compensation. The self-regulatory agency ordered the company to pay $3 million to two investors on August 31st after the company was accused of pushing closed-end funds and other municipal bonds in Puerto Rico. Earlier that month UBS paid $2.5 million in compensation to two other investors.