While much of the Puerto Rican debt crisis has been thought to be affecting Puerto Rican investors, Morningstar reports that nearly 77% of United States municipal bond mutual funds hold Puerto Rican bonds. According to Barrons, in light of the Puerto Rican debt crisis, numerous financial firms have begun restricting the sale of the bonds. UBS, one of the firms being blamed for the far-reaching effects of the crisis, has begun forcing clients who want to purchase Puerto Rico debt to sign a document acknowledging that they understand the associated risks, Wells Fargo has sent a warning to it’s 15,000 financial advisors making sure they understand the hazards of Puerto Rico debt, and Raymond James Financial has simply restricted the sale of Puerto Rico’s bonds.
Kicking off what is likely to be an onslaught of many similar investigations, the Massachusetts regulatory authority has begun looking into the Oppenheimer Rochester Virginia Municipal Bond Fund (ORVAX) which is reported to have put more than 33% of its holdings in Puerto Rican debt as of August 31. Their findings are likely to have far reaching implications for the future of this crisis. As of this moment, Massachusetts regulators have sent letters of inquiry to this fund, Fidelity FMR Co. Inc and UBS.
For those with exposure to the Puerto Rican bond markets, it is a good time to consult with a law firm to get an understanding of the options available. As one of the top-rated firms by Best Lawyers and USNews and World Reports, Vernon Litigation Group has accumulated years of experience representing investors in their claims against large financial institutions. To consult with one of our lawyers, please call 1-877-649-5394.