SAN JUAN, Puerto Rico (GLOBE NEWSWIRE) – June 30, 2015 – The Securities Arbitration Law Firm of Klayman & Toskes (“K&T”), www.perdidasenbonospr.com/en/, and Carlo Law Offices comment on Standard & Poor’s (“S&P”) decision to cut Puerto Rico’s credit rating to CCC- in the face of continued deterioration in the Commonwealth’s economic situation. According to S&P, its decision was based on “a diminished liquidity position, constraints on external market access for needed cash flow financing, and delay in enacting a budget for the new fiscal year that begins July 1.”
The S&P credit ratings downgrade includes the Commonwealth’s General Obligation bonds, the Municipal Finance Agency bonds and the Employees Retirement System bonds. In a televised speech yesterday, Puerto Rico Governor Alejandro Garcia Padilla said the Puerto Rico “cannot pay its debts” and argued the need for negotiations with bondholders to delay payments on the burdensome debt for “a number of years” to facilitate the restoration of the tiny island economy. According to securities attorney, Steven D. Toskes, Esq., “A default on Puerto Rico debt obligations will ultimately result in a reduction the amount of debt owed and the interest paid to Puerto Rico investors.”
Mr. Toskes explains, “brokerage firms that sold Puerto Rico’s bonds to investors will have to concede to their clients what they have denied for years, that investors face permanent realized losses.” He continues, “FINRA arbitration claims for damages will include a failure to disclose risks of the recommended strategy to concentrate investors assets in Puerto Rico Bonds that can be attributed to brokerage firm’s failure to supervise its financial advisors.”
Klayman & Toskes, PA and 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. 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 against major Wall Street brokerage firms.