UBS Broker Rico Bond Sales

UBS Broker Sentenced in Fraudulent Puerto Rico Bond Sales

A one-time leading agent in Puerto Rico received a sentence of a year and one day behind bars, following his confession months earlier to participating in misconduct related to a Swiss banking behemoth, UBS, through which he improperly gained roughly $1 million in fees, resulting in numerous investors losing their entire life savings.

Jose Ramirez is the first person to spend time in jail due to sales of UBS proprietary closed-end bond funds. has been investigating many broker fraud cases regarding Puerto Rico Bonds.

In a near-empty DC federal court, Ramirez pleaded Justice Thomas F. Hogan for mercy. He said that he ruined his life and the lives of people who looked to him for help. Judge Hogan ordered 33 months jail, two years of supervised discharge, a fine of $500 and allowed Ramirez’s petition to report to prison voluntarily.

Judge Hogan said that he was confronted with a person who had confessed his offenses and he believed is apologetic for his activities. Ramirez, popularly known as “The Whopper” in Puerto Rico, confessed his crimes in November 2018 for his part in a plan to unfairly acquire and misuse credit lines to buy securities.

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As per the authorities, from January 2011 to September 2013, Ramirez suggested his customers to borrow money and put that money into UBS Puerto Rico bonds. The sales produced about $1.2 million for him in the form of his fees.

UBS Puerto Rico did not permit using credit lines to buy securities. But, Ramirez claimed that he was not the only dealer whose customers used the credit lines to buy securities. He said in his conviction memo that UBS was completely aware of the dealings and issued letters to seven brokers for understanding, permitting, or suggesting the plan.

Ramirez was the only broker who was indicted for his participation in the plan so far. The earnings produced commissions when the bank lines were drawn in UBS’s Utah subsidiary and then again when the customers used their capital for investing in the closed-end bonds supervised by Ramirez.

By the end of June 2013, two distinct bonds accounted for more than 90% of all assets in 10 of UBS bonds.

A CNBC assessment In December 2017 discovered that UBS was not honest with its customers and agents about the risks connected with its proprietary bail funds even as the worth of the capital plunged.

From 2012, UBS financiers around the island had roughly invested $10 billion in the funds or about 10% of their island’s GDP.

In 2013, Puerto Rico bond market plunged which caused a sharp drop in the bond funds value. Several clients were forced to sell their funds, as they had no other assets to fulfill account maintenance requirements. That caused major losses.

As per the government, the industry breakdown eventually uncovered Ramirez’s ploy.


As per the court records, Ramirez did not answer the regulator’s worries as he had raised his Fifth Amendment right under the U.S. Constitution. In addition, he maintained his constitutional right to stay quiet in the legal event for the SEC’s civil case.

Ramirez eventually broke his silence last Saturday when he called out the names of seven brokers whom he alleged either had knowledge of, involved in or had suggested the dealings of the scheme.

In his conviction memo, Ramirez called out four former or current UBS Puerto Rico agents: Luis Sanchez, Leslie Highley, Fernando Castillo and David Lugo along with a UBS executive, Doel Garcia, a UBS Puerto Rico division manager and his former supervisor, Ramiro Colon and Carlos Ubinas who was the president as well as the chairman of UBS Puerto Rico.

In reaction to this, a spokesperson from UBS stated that in its conviction document, the DOJ explained Mr. Ramirez’s crime as brazen, revealed that he evaded UBS controls and discovered that Mr. Ramirez took benefit of all concerned parties. In light of this discovery, Mr. Ramirez’s last efforts of blaming his victims for his crimes were proved futile.

Jacobs told Judge Hogan that UBS has failed in an internal investigation that recognized the Ramirez as the hub of this fraud.

Jacobs told the Justice that Ramirez had cooperated with the authorities during its investigation but the proof and data he gave was not sufficient for the government to prove that other brokers were also involved in the deceptive behavior.

An Attorney for Lugo stated that Mr. Lugo had not participated in the deeds for which Mr. Ramirez was charged, and eventually had to confess his crimes. Mr. Lugo’s employment negotiation against UBS-PR was established to the liking of Mr. Lugo as well as UBS-PR.

UBS has earlier made a settlement with SEC and FINRA for roughly $34 million for fees including the sales procedures of their bonds and incapability of supervising.

UBS has also given approximately $480 million to its customers. Apart from that, the Swiss bank has conducted an investigation regarding the Puerto Rico funding. UBS states that they are fully assisting the authorities.

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