Stalled in the Courts a Claim Over Retirement Bonds
More than five years after being introduced, the investment firms that handled the controversial bond issue in the Retirement System Administration (RSA) have not even responded to the lawsuit claiming responsibility for one of the main episodes of the drama of vulnerability for Puerto Rican pensioners.
The lawsuit was filed on September 29, 2011 and, just in the last two weeks, motions for dismissal by defendants were filed. It is the same controversy by which the women of the country protested lastWednesday at the UBS offices in Hato Rey.
The plaintiffs have askedjudge Rebecca de León Ríos to accelerate the consideration of the case because the passage of time damages the case as well as the result of the controversy may cause RSA to receive millions of dollars from the defendants, which may alleviate the pension cuts that are being discussed by the Government and the Fiscal Control Board as one of the alternatives in the Fiscal Plan that could be implemented from today.
The plaintiffs are pensioners and the RSA itself, while the defendants are UBS Financial Services Incorporated of Puerto Rico, Samuel Ramirez <><><><><><><><><>& Company and Santander Securities. An indemnity of $ 800 million is claimed for the RSA and about $ 50,000 for each individual claimant as a result of alleged irregularities and violations of law in the handling of a $ 2,947 million RSA bond issue that was lost to Retirement./p
With the transaction, RSAwas supposed to receive a capital injection of $ 2,947 million and to invest in higher yielding products at an interest rate of 6.5%. The yield in excess of 6.5% would help to capitalize on the System and help with its long-terms sustainability, but this never happened./p
According to the defendant, there was 'bad financial advice and management by UBS to the System of Retirement of the Employees of the Government and the Judicature'. UBS, they add, did not act in good faith and incurred conflicting roles since, on the one hand, it recommended RSA to make the transaction, on the other they structured it, and on the other they sold the bonds. In total, it has been estimated that UBS earned about $ 100 million in commissions as a part of the transaction. This multiplicity of roles would not be allowed under the federal rules of the financial market./p
The plaintiffs emphasized that this transaction would be the fourth large-scale law violation case involving UBS soil./p
The Retirement System for Government Employees and the Judicaturewas created by Law 447 of May 1951 with the purpose of securing and protecting the economic future of public employees and securing their pension./p