SAN JUAN, Puerto Rico, Feb. 2, 2015 (GLOBE NEWSWIRE) -- The Securities Arbitration Law Firm of Klayman & Toskes ("K&T"), www.nasd-law.com, and Carlo Law Offices, commented today on the recent announcement by the Federal Deposit Insurance Corporation (FDIC) concerning Doral Bank, a wholly-owned subsidiary of Doral Financial Corporation (NYSE:DRL). The FDIC announcement relates to the further deterioration of Doral Bank's financial condition, the primary enterprise of Doral Financial Corporation. For investors, there are implications for Doral Financial Corporation issued preferred trust securities that were ultimately offered to investors with secured notes in the Puerto Rico Conservation Trust Fund. As the ultimate guarantor for the Puerto Rico Trust Fund Secured Notes, Doral Financial Corporation's financial condition directly impacts the default risk to note holders.
On January 26, 2015, Doral Bank received notification of a Prompt Corrective Action Directive from the FDIC, effective immediately. The directive requires Doral Financial Corporation's subsidiary bank, "to promptly (i) increase the amount of its Tier 1 capital to a level sufficient to restore the Bank to the capital category of "adequately capitalized" under Section 38(b)(1)(B) of the Federal Deposit Insurance Act; and/or (ii) accept an offer to combine with another insured depositary institution." The significance of this development, according to securities attorney Steven D. Toskes, is that "Puerto Rico investors should understand that the credit rating on the Puerto Rico Conservation Trust Fund Notes is derived from the credit rating of the guarantor, Doral Financial Corporation, not from the Puerto Rico government or any agency. This is the source of the default risk."
Klayman & Toskes, PA and the Carlo Law Offices are dedicated to the rights of Puerto Rico investors. Puerto Rico investors who suffered losses as a result of FINRA sales practice violations may be able recover their losses in a FINRA arbitration claim.
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Klayman & Toskes, a leading securities and litigation law firm, practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors. The firm represents investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms.