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due to mismanagement and not even know it.

Puerto Rico's debt crisis could lead to securities fraud suits

While many financial headlines have been focused on the financial crisis in Greece regarding the debate over the country’s repayment of debt, and the recent stock market troubles in China, the debt troubles in Puerto Rico have not garnered as much attention.

Puerto Rico is $72 billion in debt, and appears to be in no position to repay the debt. In fact, the Commonwealth owes investors $5.4 billion in bond payments over the next calendar year, but it remains to be seen whether these payments will be made. The important part of this is that much of the debt is for sales tax debt and securities that were sold to investors. If these payments are not made, scores of investors stand to lose money. 

Puerto Rico’s debt crisis did not accumulate in a vacuum. Because of this, it may not have been wise for some investors to purchase securities tied to municipal bonds associated with the Commonwealth. This is not an instance of hindsight being the better of two evils. There are many investors who had no idea of the risks involved in investing in municipal bonds, and did so anyway only on the advice of their representatives.

As such, brokerage firms and financial advisors who improperly advised clients to purchase these securities should be held liable. This is where an experienced securities fraud attorney can help in vindicating investors who were duped into buying securities that do not fit their risk profiles.

If you have questions about securities fraud, and your chances of recovering your investment, a lawyer can help. 

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