ubs willow fund

UBS has agreed to pay $17.5 million to settle charges from the U.S. Securities and Exchange Commission that the UBS Willow Fund changed its investment strategy focused on distressed debt without informing investors and subsequently lost over 80% of its value. However, investors have lost millions of dollars which has not been recovered. UBS Willow Management LLC and UBS Fund Advisor LLC agreed to be censured and some of the funds will be returned to investors for restitution. However, most investors will only receive a de minimis amount of their entire loss. Some investors have already pursued securities arbitration claims against UBS for allegedly misrepresenting the fund.

According to the SEC, UBS Willow Management, made investments in the UBS Willow Fund from 2000 through 2008 that were consistent with a strategy described in its offering and marketing materials, which was based on the debt increasing in value.

Problems with the fund began in 2008 when UBS Willow Management shifted the fund’s investments to include large quantities of credit default swaps, a bet that the value of the related debt would decline, without adequately disclosing the shift in investment strategy, the SEC claimed.

UBS Financial Services of Puerto Rico has received the attention of many market watchers in the media since their UBS Puerto Rico Family of Funds suffered a “meltdown” in value. What did not receive adequate media attention are UBS’ sales practices which through the zeal of its financial advisors has left Puerto Rico residents holding excessive amounts of a failed financial product, and in many instances laden with UBS Bank loans. We have learned firsthand the extent of the destruction experienced by Puerto Rican residents who have been targeted by UBS.

The UBS Puerto Rico Family of Funds, UBS Puerto Rico Fixed Income Funds and UBS Puerto Rico Investors Tax Free Funds, were designed to be sold exclusively to residents of Puerto Rico according to their Offering documents. The investment objective was tax free income consistent with preservation of capital. A closer look at the fine print deep in the Offering document tells investors a more cautious tale.

The Prospectus and Offering documents for the proprietary closed-end funds artfully disclose some of the potential risks deemed required by regulatory laws. The risks include:

Articles Tagged with ubs willow fund

SEC Settles with UBS Over Losses in the Willow Fund, a UBS Proprietary Alternative Investment

UBS Bank Loans Created Unacceptable Risks for Puerto Rico Investors