Jose Ramirez Charged by the SEC for Conducting Fraudulent Scheme
On September 29, 2015, the Securities and Exchange Commission (SEC) charged Jose Ramirez, a former top broker at UBS Financial Services Incorporated of Puerto Rico (“UBSPR”), who made material misrepresentations and omissions and conducted a fraudulent scheme that involved the use of credit line proceeds from a UBSPR-affiliated bank to buy shares in UBSPR affiliated closed-end mutual funds.
The complaint filed in federal court in Puerto Rico against Jose Ramirez, a previous registered representative in UBSPR’s Guaynabo branch office alleges that Ramirez increased his compensation by at least $2.8 million by having certain customers use proceeds from lines of credit with UBS Bank USA to purchase additional shares in UBSPR closed-end mutual funds. To avoid exposure, Ramirez allegedly told the customers to transfer money from their line of credit to an outside bank account before depositing the funds into their UBSPR brokerage account and buying the closed-end funds. The funds invested substantially in Puerto Rico municipal bonds and lost value as the Puerto Rico bond market receded, requiring the customers to pay down a portion of the loans or risk having their investments liquidated.
According to the SEC’s complaint, Ramirez misled customers about the safety of the closed-end funds and the risks of investing in them with borrowed money. He also is claimed to have lied to his branch manager when questioned about suspicious transactions in the closed-end mutual funds. Ramirez was terminated by UBSPR in January 2014. As a result of this conduct, the SEC’s complaint alleges Ramirez violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected]uritieslawyer101.com or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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