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Puerto Rico Securities Arbitration Report: 2,177 Arbitration Filings, $329 million in Settlements and Awards so far (Updated October 10, 2017)


In 2013, a shrinking economy and the government's loss of continued access to capital markets necessary to make interest payments, refinance principal coming due and to fund an unsustainable government deficit caused Puerto Rico tax exempt bond prices to fall substantially.

Puerto Rico brokerage firms' customers held poorly diversified securities accounts, concentrated in Puerto Rico municipal bonds or closed end funds that held leveraged portfolios of Puerto Rico municipal bonds. Often these accounts were further leveraged using margin debt, lines of credit or proceeds from non-purpose loans recycled through third-party banks.

By Craig McCann, Chuan Qin and Mike Yan

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Craig J. McCann

Chuan Qin
Senior Financial Economist703-539-6778
Mike Yan