Investors Allege Rey Medina Velez Overconcentrated Them in Unsuitable Investments 

Rey Medina Velez (CRD #: 3118991), a broker registered with UBS Financial Services, allegedly recommended unsuitable investments, according to his BrokerCheck record, accessed on March 29, 2023. Read on to learn more about his alleged conduct as a broker.

Pending Investor Dispute

On January 12, 2023, multiple investors filed a dispute alleging that Rey Medina Velez recommended unsuitable Puerto Rico municipal bonds and closed-end funds, overconcentrated them in these investments, and misrepresented these products as safe investments. The clients seek $103,924.59 in damages in this pending dispute.

FINRA Rule 2111

FINRA Rule 2111 requires that brokers tailor their investment recommendations to an investor’s profile, which describe investor characteristics, such as their tax status, risk tolerance, and financial goals.

Investors who rely on brokers for recommendations may be able to recover their losses through FINRA arbitration.

FINRA Rule 2020

FINRA Rule 2020 prohibits the use of manipulation, deception, and other fraudulent methods to influence investors’ decisions. Misrepresenting an investment’s limitations, requirements, or other relevant information violates this rule.

Settled Disputes

Eighteen disputes, filed from 2015-2020, alleged that Rey Medina Velez made unsuitable recommendations of Puerto Rican investments, mostly closed-end funds and municipal bonds, and overconcentrated clients in these unsuitable products.

Investors alleged that he made misrepresentations and/or omissions with regard to these investments, particularly the degree of risk involved in concentration. These disputes were settled for approximately $2,369,351.70.

An additional seven disputes, filed from 2015-2020, collectively alleged that Rey Medina Velez recommended unsuitable closed-end funds, misrepresented these funds, and over-concentrated clients’ accounts. These clients received settlements totaling $903,500.

On August 11, 2017, several investors named Rey Medina Velez in a dispute alleging that UBS Financial Services Incorporated of Puerto Rico engaged in the following:

• Fraudulent conduct
• Gross negligence
• Mismanagement of client accounts
• Unsuitable concentration of clients in shares of the firm’s proprietary closed-end funds
• Unsuitable and negligent recommendations to hold their investments in these funds

These clients sought $146,239.44 in damages and the dispute was settled for $100,000.

What is broker negligence?

Brokers may act in many negligent ways, ranging from misrepresenting the facts about an investment to executing unauthorized trades. Investors who feel their losses are the result of broker negligence may be able to recover their funds through FINRA arbitration.

Background Information

Rey Medina Velez has passed the following exams:

• Series 66 – Uniform Combined State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 7 – General Securities Representative Examination

Rey Medina Velez is a registered broker in Puerto Rico.

He has also worked for UBS Financial Services Incorporated of Puerto Rico (CRD#:13042).

Kurta Law Can Help

If you worked with Rey Medina Velez and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.