In 2000, UBS Financial Services, Inc. (NYSE:UBS) and Bond Street Capital (NYSE:BSC) formed a closed-end mutual fund to purchase debt and other securities of distressed (near bankrupt) companies restructuring their debt financing. Since 2007, the net asset value of the Fund declined by over 300 million dollars. Some investors have lost over 85% of their initial investment capital as a result of gross misrepresentations and mismanagement of the fund.
It appears that many UBS advisors are misinformed by the company about the nature, mechanics and risks of the Willow Fund and in turn, misinformed their clients. Some of UBS's best clients invested in what they were led to believe to be a "safe" and "secure" investment with a "guaranteed income stream." They were unaware of the extensive leverage through the use of derivatives and credit swap contracts. This was a highly speculative investment and unsuitable for many of those clients with income as their primary investment objective.
The Willow Fund managers ratcheted up the risk by failing to perform the rigorous credit analysis on the company's restructuring of their debt financing. In addition, the managers failed to limit the risk positions and diversify the portfolio as represented. It appears that a gross breach of fiduciary duty and negligence occurred in the management of the fund.
Have you suffered losses resulting from an investment in the Willow Fund? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is actively investigating and accepting clients with valid claims against UBS and other stockbrokers who fraudulently offered and sold the fund to investors.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.