Finra fined UBS AG's Puerto Rican unit $7.5 million and ordered it to pay $11 million in restitution to clients on Tuesday for allowing customers to borrow against risky Puerto Rican securities. UBS allowed customers to borrow against accounts largely consisting of Puerto Rican closed-end funds. In August 2013, a market shock caused the value of these assets to plummet, forcing UBS's customers to incur significant losses to meet the bank's margin calls. Also on Tuesday, the Securities and Exchange Commission charged UBS Puerto Rico for failing to supervise a former broker. A UBS spokeswoman could not be reached for comment. The fines come as Puerto Rican officials press U.S. senators to allow the U.S. commonwealth to access Chapter 9 of the bankruptcy code. The island's governor said in June that the island wouldn't be able to manage its heavy debt burden.
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