Did Merrill Lynch, Pierce, Fenner & Smith Incorporated Financial Advisor Alex Gierbolini Recommend Unsuitable Puerto Rico Bonds?

Erez Law is currently investigating Merrill Lynch, Pierce, Fenner & Smith Incorporated financial advisor Alex Gierbolini (CRD# 2894231) regarding unsuitable recommendations in Puerto Rico bonds and closed-end funds. Gierbolini has been registered with Merrill Lynch, Pierce, Fenner & Smith Incorporated in Guaynabo, Puerto Rico since 2012. Gierbolini was previously registered with UBS Financial Services Inc. and Guaynabo, Puerto Rico in Guaynabo, Puerto Rico from 2000 to 2012.

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.

Gierbolini has been the subject of 18 customer complaints between 2000 and 2017, one of which was denied and one was closed without action, according to his CRD report:

• October 2017. “Time frame: 2012-2013 Claimant alleges unsuitable recommendations and misrepresentations regarding municipal bonds.” The customer is seeking $600,000 in damages and the case is currently pending.
• June 2017. “The Customer alleges unsuitable investment recommendations and misrepresentation and omission of material facts from September 2012 to December 2016.” The customer is seeking $2,000,000 in damages and the case is currently pending.
• February 2017. “The Customer alleges unsuitable investment recommendations and misrepresentation and omission of material fact from April 2005 through December 2013.” The customer sought $151,000 in damages and the case was settled for $40,000.
• October 2016. “Time frame:2008-2013 Claimants allege failure to supervise.” The customer is seeking $688,000 in damages and the case is currently pending.
• September 2016. “The Customer alleges unsuitable investment recommendations and misrepresentation and omission of material facts from September 2012 to August 2015.” The customer is seeking $214,000 in damages and the case is currently pending.
• September 2016. “The Customer alleges unsuitable investment recommendations and misrepresentation and omission of material facts.” The customer is seeking $400,000 in damages and the case is currently pending.
• August 2016. “The Customer alleges unsuitable investment recommendations and misrepresentation and omission of material facts.” The customer sought $2,000,000 in damages and the case was settled for $715,000.
• May 2016. “The Customers allege unsuitable investment recommendations and misrepresentation and omission of material facts from 2012 to 2016.” The customer is seeking $500,000 in damages and the case is currently pending.
• November 2015. “Time frame: 2009-2013 Claimants allege unsuitable recommendations and misrepresentations regarding municipal bonds and closed-end funds.” The customer is seeking $1,113,000 in damages and the case is currently pending.
• October 2015. “The Customer alleges unsuitable investment recommendations and misrepresentation and omission of material facts from 2009 to September 2015.” The customer is seeking $2,425,000 in damages.
• April 2015. “Time Frame: 2010-present Claimants Allege Unsuitable Recommendation And Misrepresentation Involving Closed End Funds.” The customer sought $3,809,047 in damages and the case was settled for $1,088,000.
• August 2014. “Time Frame: March 16, 2011-present Claimant Alleges Unsuitable Recommendations And Misrepresentations In Connection With Its Purchases Of Closed-end Puerto Rico Municipal Bond Funds.” The customer sought $50,000 in damages and the case was settled for $22,000.
• August 2014. “The customer alleges unsuitable investment recommendations and misrepresentation and omission of material facts from 2007 to March 2014.” The customer is seeking $615,071 in damages and the case is currently pending.
• July 2014. “The customers allege unsuitable investment recommendations and misrepresentation and omission of material facts from October 2012 to June 2014.” The customer sought $200,000 in damages and the case was settled for $30,000.
• June 2014. “The customer alleges unsuitable investment recommendations and misrepresentation and omission of material facts from September 2012 to August 2013.” The case was settled for $120,000.
• June 2014. “Time frame: 2001-present claimants allege unsuitability with respect to third-party managed accounts. Claimants also allege unsuitability and failure to disclose risks in connection with the purchase of bonds and closed-end funds.” The customer sought $1,500,000 in damages and the case was settled for $300,000.
• May 2014. “Time frame: mid 2000-2012 claimant alleges unsuitable recommendations to invest in Puerto Rico bonds and utilize leverage.” The customer sought $4,000,000 in damages and the case was settled for $187,500.
• December 2008. “Client verbally alleged that he did not authorize the purchase of google inc cl a in his account.” The customer sought $155,510 in damages and the case was settled for $67,145.73.

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, Merrill Lynch, Pierce, Fenner & Smith Incorporated may be liable for investment or other losses suffered by Gierbolini’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.