Puerto Rican Conservation Trust Fund Secured Note Investors

Should Consider Their Investment Recovery Options


R&G Financial Corporation issued preferred trust securities that were ultimately offered to investors with secured notes in the Puerto Rico Conservation Trust Fund. Puerto Rican residents including investors from San Juan, Hato Rey, Bayamón, Guaynabo, Ponce, Rincón and Mayaguez were solicited to invest in Puerto Rico Conservation Trust Fund Secured Notes because they were a safe source of tax free interest income.

wall street According to the R&G Financial Corporation registration statement, SEC Form S-3, the R&G Capital Trust V Offering for $100 million on March 31, 2004 was underwritten by:

 • R-G Investments Corporation

 • UBS Financial Services, Inc. of Puerto Rico

 • Santander Securities Corporation

 • Popular Securities, Inc.


The preferred trust securities issued were used by the Puerto Rico Conservation Trust Fund to back a concurrent offering to the investing public for secured notes. According to the registration statement R&G Financial Corporation established the R&G Capital Trust V, a wholly owned Delaware statutory trust, and issued $100 million of trust preferred securities to the Puerto Rico Conservation Trust Fund, a non-affiliated charitable trust. The Puerto Rico Conservation Trust Fund used the issued trust preferred securities to secure a concurrent offering to the investing public undertaken by the Puerto Rico Conservation Trust Fund, represented as secured notes. The Puerto Rican Conservation Trust serves its charter through the acquisition, active management and development of lands possessing significant ecological, aesthetic or historical value in Puerto Rico.

On May 17, 2010, R&G Financial Corporation disclosed in a SEC Form 8-K filing that the company filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. As a result of the bankruptcy filing, R&G Capital Trusts III, R&G Capital Trust V and R&G Capital Trust VI (collectively, the R&G Capital Trusts) were in default. The R&G Capital Trusts that issued trust preferred securities to the Puerto Rico Conservation Trust Fund for an equivalent investment in F&G Financial Corporation junior subordinated debentures defaulted on interest payments with no assets to back the guarantees made to investors.

Many financial advisors recommended investments in Puerto Rico Conservation Trust Secured Notes because they represented that it was a safe source of tax free investment income. Puerto Rico investors should consider what options are available to recover their investment losses in Puerto Rico Conservation Trust Secured Notes.

Underwriter Brokerage Firms May Have Violated Securities Laws


The Underwriters of the R&G Capital Trust preferred trust securities solicited their clients to invest in Puerto Rico Conservation Trust Secured Notes backed by R&G Financial Corporation. Brokerage firms are obligated to give, and investors are entitled to rely upon brokerage firms for competent, suitable investment advice. Brokerage firms are required to supervise the activities in brokerage accounts, including solicited recommendations in securities for which the brokerage firm is a statutory underwriter as defined in the Securities Act of 1933 with respect to the sales of R&G Capital Trust preferred trust securities. Underwriters are required to conduct adequate due diligence to assure the complete disclosure of all material information related to the registration statement concerning R&G Capital Trust preferred trust securities. The failure to supervise brokerage account activity, unsuitable investment advice or fraudulent misrepresentations and omission of material facts are all causes of action that may be available to investors against their brokerage firm in an individual securities arbitration claim for damages filed with the Financial Industry Regulatory Authority (FINRA).

Frequently Asked Questions:


Q: What duties and obligations do stockbrokers have when they recommend an investment in Puerto Rico Conservation Trust Fund Secured Notes to their clients?

 

Q: As a Puerto Rico resident, Puerto Rico Conservation Trust Fund Secured Notes were recommended as a safe investment that paid tax free income for my retirement. Why is a FINRA arbitration claim the best option for me to recover my losses?

 

Q: Is there an attorney that I can discuss this matter with in Spanish?

 

Q: How do I determine whether I have a viable Securities Arbitration Claim?


What duties and obligations do stockbrokers have when they recommend an investment in Puerto Rico Conservation Trust Fund Secured Notes to their clients?
Stockbrokers have many duties owed to their client, one of which is to only make suitable investment recommendations, based on relevant facts concerning the client's age, net worth, income, tax status and investment experience. Brokerage firms are required to monitor the activities in brokerage accounts and losses can sometimes be attributed to the failure to adequately supervise the handling of client brokerage accounts. Brokerage firms are obligated and investors are entitled to rely upon the disclosure of all material information concerning securities recommendations, especially securities underwritten by the brokerage firm.


Q: As a Puerto Rico resident, Puerto Rico Conservation Trust Fund Secured Notes were recommended as a safe investment that paid tax free income for my retirement. Why is a FINRA arbitration claim the best option for me to recover my losses?
The Puerto Rico Conservation Trust Fund Secured Notes were solicited by member firms of FINRA, known as the Financial Regulatory Industry Authority. R&G Financial Corporation provided principal guarantees which are now worthless after their bankruptcy filing. Investors can seek to recover investment losses from FINRA member firms who were Underwriters of the preferred trust securities for failure to conduct adequate due diligence and misrepresentations of material facts concerning the recommended investment.


Q: Is there an attorney that I can discuss this matter with in Spanish?
The lawyers at Tramont Guerra Nunez, PA are Spanish-speaking and ready to answer your questions.


Q: How do I determine whether I have a viable Securities Arbitration Claim?
Take the Following Steps to Begin the Recovery of Your Investment Losses:

  • Contact Our Legal Team to complete a Case Facts Summary
  • Schedule a time For an Interview with an Industry Expert
  • Gather Critical Case Documents
  • Complete Risk Tolerance Assessment
  • Assess Account Damages and Financial Advisor Misconduct
  • File Statement of Claim for Securities Arbitration