Chicago-based Stoltmann Law Offices represents investors who’ve suffered losses from dealing with financial advisors who recommended investments linked to Russia with inappropriate risk for their clients. Financial advisors sometimes ignore the political risk of the investments they are selling at great peril to their clients. Case in point was the recent massive devaluation of Russian bonds that resulted from Vladimir Putin’s invasion of Ukraine, which triggered a punitive wave of sanctions from the U.S. and European Union.
Certain Russian bond prices were cut to zero after the country’s invasion of Ukraine. That was also bad news for investors in those bonds, who were forced to add more cash to margin brokerage accounts since the securities could no longer be used as collateral. Further, Moody’s the credit rating agency, cut Russia’s credit rating to Ca, which is one step above full default.
The Swiss wealth manager UBS “is calling on some investors to add either cash or securities to their portfolio after cutting the lending value of some Russian bonds to zero, people with knowledge of the matter said,” according to Yahoo Finance. Here’s more bad news for UBS clients and holders of certain Russian bonds: “UBS may liquidate the securities at market value for those clients that can’t meet the additional requirements, the people said, asking not to be identified as the matter is private.”