UBS AG is sticking with its recommendations that some clients buy risky Puerto Rico closed-end bond funds, despite hundreds of arbitration claims by investors who blame the securities for huge losses, according to an internal document.
UBS told brokers that they may continue to recommend the funds to clients following a $5.2 million settlement last week with Puerto Rico's financial institutions regulator about sales practices involving the funds, according to an Oct. 9 internal memo reviewed by Reuters.
However, brokers "should continue to evaluate investment recommendations in a manner consistent with UBS policies and FINRA rules," the firm said in the four-page memo, written in a question and answer format. FINRA, the Financial Industry Regulatory Authority (FINRA), is Wall Street's industry-funded watchdog.
By Suzanne Barlyn
Exclusive: UBS tells brokers to keep selling risky Puerto Rico funds
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