A Financial Industry Regulatory Authority arbitrator on Monday ordered Santander Securities to pay $50,000 in compensatory damages to a 90-year-old widow of “relatively modest means” after the firm made unsuitable and highly risky investments in Puerto Rico bonds and bond funds on her behalf, according to FINRA.
Santander declined to comment Tuesday, one day after the FINRA Office of Dispute Resolution posted the award on the regulator’s website.
Arbitrator Eric Ross Cromartie found there were “significant issues with suitability and risk, given the concentration of” claimant Amparo Mendez Class’ “entire investment portfolio” in the Puerto Rico bonds, he said in the decision.
What’s more, Cromartie saw “no evidence that Claimant was ever advised to diversify her portfolio or sell any of her Puerto Rico bond-related holdings,” he said.
Although “tax advantaged investing can be quite beneficial to many investors, those advantages are significantly less for older investors of modest means,” he pointed out.
Causes of action asserted by the claimant against Santander included violations of duties owed to the client, negligence and breach of fiduciary duty, breach of contract, failure to review and update, unsuitability of investments, and violation of industry rules and standards of professional care.