As lawsuit moratorium’s end approaches, lawsuits pile up against Puerto Rico
May 1 marks the end of the freeze of lawsuits against Puerto Rico, and it is quickly approaching. Bondholders are fighting to be first in line to be repaid, though some say that “given the chance, Puerto Rico’s government has no intention of ever paying back the people who financed the regime for the past several years.”
Many of the lawsuits being prepared to be levied against different branches of Puerto Rico’s government are stock and bond fraud, claiming that recommendations were made to invest in the government as low risk, when it was actually high risk. While there are many large, institutional investors involved in the situation, there are also many small, retail investors, who are buying bonds for themselves, not any company or group. These individuals have largely been ignored in the debt restructuring, leading to fears that they will not be repaid and will lose everything.
Some of the companies that made these fraudulent recommendations are UBS Investment Bank, Santander Investment Services, and Merrill Lynch Wealth Management. To meet the requirements to invest, many had to liquidate their life’s savings, leaving them with no retirement or funds for their future.
Some companies and law firms have created videos and articles covering the situation and telling the small retail investors how to go about creating a solid lawsuit and to get a settlement, and covering which bonds are under investigation. For example, UBS alone has 35 bonds, including Puerto Rico AAA Portfolio Target Maturity Fund, Puerto Rico GNMA US Government Target Maturity Fund, Puerto Rico Fixed Income Fund (I-V), Tax Free Puerto Rico Fund, Puerto Rico Fixed Income Fund (I-VI), Puerto Rico GNMA & U.S. Government Target Maturity Fund, and many others.
The situation following the end of the moratorium on lawsuits is expected to be hectic, to say the least. The people with the most to lose are individuals, not large banks and investment companies, and those individuals rightly feel that they have been overlooked in the debt restructuring that has occurred. The people of Puerto Rico are expected to face some hardships with the new government spending limits, and some of those same people will be doubly affected, because their money will be all but gone. This is why many are going to lawyers and suing, in hopes of regaining at least a portion of their investments.