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FINRA Arbitration Panel: Florida Investor Awarded Compensation for Puerto Rico Bond Losses

On February 11th, 2019, the Financial Industry Regulatory Authority (FINRA) Office of Dispute Resolution announced that a Florida investor, representing his retirement plan, was entitled to $135,629.61 in compensatory damages and associated legal costs. The dispute (Case Number: 16-00737) was centered around investments in Puerto Rican government bonds. In this article, our experienced Miami FINRA arbitration lawyers provide an overview of the decision by the FINRA arbitration panel and we explain what investors should do if they lost a large amount of money in Puerto Rican government debt.

FINRA Arbitration Award: Breach of Fiduciary Duty and Failure to Supervise  

Robert Aguayo Rosario, on behalf of his retirement plan, brought this FINRA arbitration claim against Santander Securities, LLC (CRD#: 41791) — a brokerage firm headquartered in Massachusetts and licensed to do business in 53 U.S. states and territories, including in Florida and in Puerto Rico. In his legal complaint, Mr. Rosario raised several causes of action against the broker-dealer, including:

  • Breach of fiduciary duty;
  • Failure to supervise;
  • Broker negligence; and
  • Violation of federal securities law.

The underlying investments at issue in this case were several types of Puerto Rican government bonds. Over the last several years, many investors sustained huge losses in these financial products — losses that were far larger than they ever thought was possible. Upon reviewing the claim, the FINRA Arbitration Panel awarded Mr. Rosario $90,000 in compensatory damages and $40,629.61 for legal costs and attorneys’ fees. 

Many Brokers Pushed Investors Into Unsuitable Puerto Rican Bonds 

As a general rule, investors believe that bonds are less risky than stocks. While that does tend to be true, it certainly does not mean that every bond investment is ‘safe’. Quite the contrary, many bond investments are extremely risky. Puerto Rican government debt is perhaps the best example. While these bonds were pushed on many investors in South Florida who were looking to build a safe and conservative portfolio, these financial products sustained immense losses. Since 2015, Puerto Rico has defaulted on a number of its debts.

Under FINRA Rule 2111, registered brokers have a professional duty to ensure that they are offering investment advice that is appropriate for each individual customer. In far too many cases, brokers have over concentrated the portfolios of Florida investors into risky, unsafe Puerto Rican government debt and related investment products. Many of these bond holders have suffered significant losses. Investors who were sold unsuitable Puerto Rican government bonds may be entitled to financial compensation from their broker or brokerage firm. If you believe that you or your loved one has such a claim, it is imperative that you speak to a qualified legal professional as soon as possible.

Speak to Our Miami FINRA Arbitration Attorneys Today

At Carlson & Associates, P.A., our Florida securities fraud lawyers investors in FINRA arbitration and FINRA mediation. If you sustained major investment losses in Puerto Rico bonds, please contact us for a confidential consultation. We serve investors in Miami and throughout South Florida.


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