A brokerage unit of Grupo Santander must pay a total of nearly $1.9 million to a group of Puerto Rico-based investors who blamed the firm for losses in fixed-income notes that went sour, according to a securities arbitration ruling late Tuesday.

Their case stems from investments in Puerto Rico Conservation Trust Fund Notes, a fixed-income security whose yield depended on underlying payments to the trust from a bank that failed in 2010, according to lawyers for the investors.

The six investors filed their case against Guaynabo, Puerto Rico-based Santander Securities LLC last year seeking $5 million, according to a Financial Industry Regulatory Authority arbitration panel. They alleged that Santander was negligent, placed too much of their money in too few securities and failed to supervise its broker, among other things, according to the ruling.

A spokeswoman for Santander Puerto Rico declined to comment.

The case is unusual because Santander did not sell the securities to the investors, who bought the notes from another firm in 2004, said Melanie Cherdack, a Miami-based lawyer representing the investors. But the investors transferred their accounts to Santander in 2006, where they received poor advice, Cherdack said.

While many securities arbitration cases by investors focus on a firm's recommendation to buy securities, the Santander case hinged on whether the firm's advice to hold, and not sell, the notes was appropriate, Cherdack said.

"We are pleased with the result, especially since the clients did not purchase the investment at Santander," Cherdack said.

There could be similar outcomes in the future, said Scott Ilgenfritz, a securities arbitration lawyer in Tampa, Florida, who was not involved in the case.

Changes to FINRA rules which became effective last year clarify that a broker's recommendation to hold securities is a type of "strategy" that must be suitable for investors, based on their age, ability to take on risk, and other factors.

It is unclear whether the revised rule played a role in the Santander case since reasons for a decision typically aren't made public in FINRA arbitration. Nonetheless, the hearing in the case was held nearly a year after the rule change became effective.

The Conservation Trust of Puerto Rico is a non-profit entity, established by the U.S. Congress to oversee parks in the U.S. territory. Many investors believed the Puerto Rico Conservation Trust Fund Notes, which paid as much as 6.3 percent in tax-free annual interest, were a direct investment in that entity and the same as a municipal bond, said Cherdack.

Instead, the notes were far riskier and depended on the fund receiving periodic payments from the banking unit of R&G Financial Corp., a former San Juan-based financial holding company. The banking unit failed in 2010, ultimately leading to the investors losing their principal.

A spokesperson from the Conservation Trust of Puerto Rico did not immediately return a phone call requesting comment.

The Santander case involves a $100 million offering underwritten in 2004 by R&G and other firms. It was one of several offerings, according to Cherdack.