Securities Fraud and Mismanagement

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Please Call 1-866-817-0201 for a free consultation is you suffered losses in the UBS Willow Fund.

Two UBS subsidiaries agreed Monday, October 19, 2015, to pay $17.5 million to the Securities and Exchange Commission for failing to disclose that the UBS Willow Fund, a closed-end fund they advised, had changed its investment strategy to include risky credit default swaps.

Part of investor losses in the UBS Willow Fund be recoverable from the SEC and there may likely be a significant claim against UBS for the lack of suitability of these investments recommended by UBS.  The Willow Fund had a much greater risk than represented by UBS representatives.

Of the total $17.5 million fine, $13 million will be returned to harmed investors.  Currently, it is unknown what percentage of loss individual investors will recover.

The SEC found that UBS Willow Management violated the antifraud provisions of the federal securities laws and failed to supervise UBS Willow Management, a failure that allowed the transition, and ultimate losses, to occur.

According to the SEC’s order, UBS Willow Management, a joint venture between UBS Fund Advisor and an external portfolio manager, marketed the UBS Willow Fund of simply investing in distressed debt with a strategy simply reliant on the debt increasing in value.

From 2000 through 2008, UBS Willow Management invested and marketed the fund’s assets consistent with the distressed debt strategy.  However, this all changed in 2008 when the fund began to invest in ultra-high-risk credit default swaps.

Marketing material for the fund misrepresented the risk to investors.  Statements specifically misrepresented the exposure of the Fund to credit default swaps in the Fund.

The misrepresentations continued on until the liquidation of the Fund in 2012.

Investors in the fund should speak to an attorney.  While the level of compensation each individual investor may receive from the SEC recovery fund is currently unknown, an attorney can navigate the recovery process through the SEC and help the investor decide if other legal avenues exist for recovery.

We believe that other significant avenues for recovery exist.  Call the number above for more details.