Today is not only the day that UBS saw its original rate-gate immunity deal torn up and replaced with a guilty plea and $545 million fine. That followed the day that FINRA took time out of its busy schedule to rip the bank a new one while ordering it to buy back some worthless Puerto Rican bond funds. That may not seem like a big deal, since it will cost UBS exactly 1/545th what the Justice Dept. settlement will. But if it is a harbinger of things to come, well, Puerto-Rican-bond-fund-gate may prove almost twice as bad as rategate.
UBS AG must buy back an investor's Puerto Rico bond fund portfolio for $1 million, securities arbitrators ruled on Tuesday in a rare, lengthy rebuke of the firm's sales practices on the Caribbean island….
Many of the Puerto Rico funds sold by UBS were highly concentrated in the debt of the Caribbean island's government and related entities. UBS is defending against hundreds of arbitration claims filed with FINRA, collectively seeking more than $900 million in damages.