July 14, 2021 – Aventura, Florida – Jeffrey Sonn, Esq., a nationally recognized attorney in securities fraud, says that banks should pay the nearly $1 billion in fees charged by attorneys and professionals who worked on the restructuring of Puerto Rico’s $85 billion in debt.
“Puerto Rico had nearly $35 billion in public debt and $50 billion in pension liabilities that needed to be restructured and reduced, but the amount of legal fees being charged, nearly $1 billion, is an astounding amount,” said Jeff Sonn, an attorney that represented many Puerto Rican investors in cases against brokerage firms that sold the bonds.
“That $1 billion does not magically appear; it will be paid by the citizens of Puerto Rico, and that seems unfair given the massive amount of bond debt that several banks advised the Puerto Rico government should be issued to support its operations,” added Sonn.
“The banks that advised the Puerto Rico government to issue those bonds are to blame. The banks, in my opinion, knew or should have known that Puerto Rico’s tax base could not support all the bonds that the bank’s helped to create and sell. Puerto Rico simply could never afford the debt without issuing more and more debt. The banks, I think, encouraged the use of bonds because of the massive amount of fees that they earned creating and selling the bonds,” said Sonn. “The banks should pay the legal fees, not the citizens of Puerto Rico,” Sonn added. “The banks made a lot of money because of Puerto Rico bond sales but Puerto Rico is now suffering from unsustainable debt and almost a billion in legal fees,” added Sonn.
“Someone should have gone to jail; why do executives who make millions selling investments by fraud get away with just SEC fines while a guy who robs a convenience store for $40 get ten years in jail? Corporate fraud pays, and our penal system protects white-collar criminals,” added Sonn.