A three-member arbitration panel of the Financial Industry Regulatory Authority has ordered Merrill Lynch to pay a former professional baseball player and his wife more than $2 million in connection with the losses of Puerto Rican bonds.

The panel ruled that Merrill Lynch also must pay Ángel and Windy Pagán $1.7 million in compensatory damages, $88,758.31 in costs and 4.5% interest on the cost from June 20, 2017, through Tuesday, the award date.

Pagán, 39, played in Major League Baseball for the Chicago Cubs, New York Mets and San Francisco Giants. The center fielder left the game in 2017 while a free agent.

According to the Finra complaint, the Pagáns opened an investment account in 2010 at UBS Financial Services Inc. of Puerto Rico through financial advisor Alex Gierbolini. It said Pagán was able to build substantial assets from 2012 through 2016 when he signed lucrative contracts with the San Francisco Giants.

The complaint said the Pagáns were clear in instructing Gierbolini that they wanted only conservative investments because the money entrusted to UBS, and later to Merrill Lynch in 2012 when Gierbolini switched firms, would have to support them and their family for the rest of their lives.

But the complaint said UBS and Merrill Lynch loaded the Pagáns’ investment accounts with Puerto Rican municipal bonds and leveraged closed-end bond funds that had become extremely risky and speculative when the Puerto Rico economy and municipal bond markets began to deteriorate.

It further said Merrill Lynch and Gierbolini consistently recommended that the Pagáns hold and maintain the unsuitable overconcentration of Puerto Rico bonds and closed-end funds in their retirement accounts with actual knowledge that the portfolio was extremely aggressive and risky given Puerto Rico’s exploding debt and depressed economy.

As a result, the Pagáns suffered realized and unrealized losses of more than $2 million between 2012 and 2016, and their losses continued through 2017, the complaint said.

The Pagáns accused Merrill Lynch of, among other things, breach of fiduciary duty, gross negligence and breach of the duty of due care; breach of contract and the covenant of good faith and fair dealing; violations of Puerto Rico and state securities laws; failure to supervise; and violation of Finra and securities industry rules and standards of conduct.

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