SAN JUAN, Puerto Rico, March 14, 2014 (GLOBE NEWSWIRE) -- The Securities Arbitration Law Firm of Klayman & Toskes, P.A., http://www.perdidasenbonospr.com, together with Carlo Law Offices, P.S.C. located in Puerto Rico, announced today that they filed a claim against Santander Securities ("Santander"), a part of Banco Santander, S.A. (NYSE:SAN), on behalf of a retired Puerto Rico resident. The claim, filed with FINRA's arbitration department, seeks to recover damages sustained in Puerto Rico bonds, as well Santander's proprietary "First Puerto Rico" funds.
The Complaint alleges that the Claimant, age 81, is retired and relies on his investment portfolio for income. The Claimant opened an account with Santander in January of 2008, following the sale of his business in 2007, and was looking for investments to support his income needs during his retirement years. The Claimant's Santander broker solicited and then recommended Santander's proprietary bond funds called "First Puerto Rico" that are concentrated in Puerto Rico municipal bonds and used leverage as a means to increase returns. While these bond funds are high risk, Santander sold these bond funds as suitable for Claimant as the funds' investment objectives were current income and preservation of capital. Not knowing or understanding the risk, Claimant invested $1.3 million in Santander's First Puerto Rico bond funds. In addition to the bond funds, Santander purchased regular Puerto Rico municipal bonds in Claimant's account, further increasing the concentration in Puerto Rico government bonds. Additionally, the bonds were lower credit rated bonds with long maturity dates which exposed Claimant to interest rate risk and credit quality risk. The portfolio that was created for Claimant at Santander was not suitable, and when Puerto Rico started to experience problems due to its rising debt, Claimant's account dramatically declined in value.
The sole purpose of this release is to investigate, on behalf of our clients, the sales practices of Santander in connection with the sale of Puerto Rico bonds and First Puerto Rico funds to their customers. Current and former customers of Santander, or other full-service brokerage firms in Puerto Rico, who purchased Puerto Rico Bonds and Bond Funds, and have information relating to the manner in which the firm represented these products, are encouraged to contact Steven D. Toskes or Lcdo. Raúl A. Reichard, LL.M. of Klayman & Toskes, or Lcdo. Osvaldo Carlo of Carlo Law Offices, at (787) 919-7325, or visit us on the web at http://www.perdidasenbonospr.com.