Erez Law is currently investigating UBS Financial Services Inc. financial advisor David Lugo (CRD# 3109426) regarding losses sustained from unsuitable investments in Puerto Rico bonds. Lugo was registered with UBS Financial Services Inc. in San Juan, Puerto Rico from 2002 to 2015.
Puerto Rico suffers from long-term financial and economic deficiencies that rendered its credit increasingly more speculative. The deterioration of Puerto Rico’s financial condition culminated in its debt being downgraded to junk status or speculative (below investment grade). For the past several years, Puerto Rico has been struggling with compounding debt and economic decline. As a result, the value of Puerto Rico’s municipal tax-free bonds has considerably fallen. Since September 2013, when the steep decline in Puerto Rico bond values began, investors holding these bonds have suffered massive losses. In May 2017, Puerto Rico filed for bankruptcy protection from creditors in what is being described as the largest municipal bankruptcy filing in history.
To make matters worse, after Hurricane Maria devastated the island in September 2017, Puerto Rico debt fell by 4%, the biggest weekly drop since July 2015. This sharp fall came after Governor Alejandro García Padilla announced that Puerto Rico would ask bondholders to take less than what they were owed.
Lugo has been the subject of 149 customer complaints between 2002 and 2017, according to his CRD report. There are 87 settled cases, most having to do with losses in connection with bonds, closed-end funds, and stocks and bonds tied to Puerto Rico municipal bonds ranging from $6,977.54 and up to $11,044,945, with some settlements in the middle including, $180,000, $250,000, $360,000, $450,000, $550,000, $895,000, $1,250,000, $1,400,000, $3,000,000, $3,500,000, $3,850,000 and $8,983,230, among many others. There have been three awards/judgements against Lugo in May 2014, May 2014 and October 2013 in the amounts of $4,029,731.11, $2,000,000, and $702,003.
Five cases were denied and 54 cases are still pending, including:
- December 2017. “Time frame: Unknown — Present Claimants allege their investments in Puerto Rico closed-end funds were unsuitable, over concentrated, and misrepresented as safe investments.” The customer is seeking $700,000 in damages and the case is currently pending.
- November 2017. “Time frame: 2012-2015 Claimant’s Counsel alleges unsuitability, misrepresentation and over concentration in Puerto Rico municipal bonds and also alleges recommendation to hold.” The customer is seeking $20,000,000 in damages and the case is currently pending.
- November 2017. “Time frame: Unspecified Claimants allege misrepresentations, unsuitability, and over concentration concerning their investments in closed-end funds and other Puerto Rico securities.” The customer is seeking $5,700,000 in damages and the case is currently pending.
- November 2017. “Time frame: unspecified Allegations: Claimants allege misrepresentations, unsuitability, and over concentration concerning their investments in closed-end funds and Puerto Rico municipal bonds.” The customer is seeking $6,000,000 in damages and the case is currently pending.
- September 2017. “Time frame: 2013-present Claimants allege their investments in Puerto Rico closed-end funds and municipal bonds were unsuitable, over concentrated, and misrepresented as safe investments.” The customer is seeking $969,626 in damages and the case is currently pending.
- August 2017. “Time frame: 2012-2015 Claimants allege unsuitability, misrepresentations, and over-concentration concerning their investments in Puerto Rican municipal bonds.” The customer is seeking $90,000,000 in damages and the case is currently pending.
- June 2017. “Time frame: unspecified Claimants allege misrepresentations, unsuitability, and over concentration concerning their investments in Puerto Rico municipal bonds.” The customer is seeking $1,500,000 in damages and the case is currently pending.
- June 2017. “Time frame: unspecified Claimants allege misrepresentations, unsuitability, and over concentration concerning their investments in closed-end funds and Puerto Rico municipal bonds.” The customer is seeking $1,700,000 in damages and the case is currently pending.
- May 2017. “Time frame? Not stated Claimant’s Counsel alleges misrepresentations and unsuitable recommendations resulting in the overconcentration of the clients accounts in CEFs.” The customer is seeking $15,000,000 in damages and the case is currently pending.
- January 2017. “Time frame: unspecified Claimant alleges misrepresentations, unsuitability, and over concentration concerning his investments in closed-end funds and Puerto Rico municipal bonds.” The customer is seeking $8,500,000 in damages and the case is currently pending.
- April 2016. “Time frame: unspecified Claimants allege misrepresentations, unsuitability, and over concentration concerning their investments in closed-end funds.” The customer is seeking $1,000,000 in damages and the case is currently pending.
- February 2016. “Claimant alleges misrepresentations, unsuitability, and over concentration concerning his investments in closed-end funds and Puerto Rico municipal bonds. Time frame: unspecified.” The customer is seeking $3,038,418.82 in damages and the case is currently pending.
- September 2015. “Time frame: unspecified Claimants allege misrepresentations, unsuitability, and over concentration concerning their investments in closed-end funds.” The customer is seeking $2,257,543.55 in damages and the case is currently pending.
- September 2015. “Time frame: 2006-2015. Claimants allege misrepresentations, unsuitability, and over concentration concerning their investments in Puerto Rico municipal bonds and closed-end bond funds.” The customer is seeking $3,265,000 in damages and the case is currently pending.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, UBS Financial Services Inc. may be liable for investment or other losses suffered by Lugo’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.
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