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UBS Willow Fund Litigation Options

In October 2012, investors in the UBS Willow Fund were informed that the fund would be liquidated after having sustained substantial losses.  Those investors are now likely investigating their litigation options.

At this point, it appears that investors have two basic options to attempt to recover their losses:

(1) Participate in the already filed class action

In December 2012, a class action lawsuit was filed against the UBS Willow Fund alleging that the fund deviated from an announced strategy of investing in debt securities by trading in high-risk credit default swaps that were based largely on foreign sovereign debt.  The class action, filed in federal court in Manhattan, seeks to recover over $200 million for investors in the fund.

The class action filed appears to attempt to capture all investors in the UBS Willow Fund, so investors certainly could elect to simply participate in the class (by not bringing an individual claim or opting out of the class action) with the hope that they receive compensation for part or all of the losses they have sustained as a result of owning the UBS Willow Fund.

This approach is probably best for those investors that lost a relatively small amount and for whom it would, therefore, not make economic or time sense to pursue an individual claim.

(2) Bring a FINRA Arbitration Claim against the brokerage firm that recommended the UBS Willow Fund investment.

Financial advisors and broker-dealers have a duty to their clients to perform the necessary due diligence on an investment before offering it for sale to their clients and to ensure that any investment recommendation that is made is suitable in light of the client’s age, investment experience, net worth, and investment objectives.

As such, investors in UBS Willow Fund may have individual claims against the brokerage firm or financial advisors that recommended this product to them based on those entities failure to perform the necessary due diligence or to recommend an investment that is suitable.  The White Law Group is currently investigating FINRA arbitration claims on behalf of UBS Willow Fund investors to determine the merits of such claims.  Based on the firm’s investigation thus far, it does appear that the brokerage firms that sold the UBS Willow Fund to their clients did fail to perform adequate due diligence on this offering.

Any claim against the brokerage firm or financial professional that sold the UBS Willow Fund to an investor would be filed using FINRA’s dispute resolution/arbitration forum.  This avenue may make sense for investors who have suffered large losses (greater than $100,000) and who would like to pursue an individual claim to recover their losses.  Unlike class action claims, the strengths and merits of an individual claim hinge on those facts that are specific to that particular investor (i.e. that investors age, income, net worth, investment experience, etc.).  As such, individual claims can often be the best way to maximize one’s recovery if the individual facts are stronger than those of the class more generally.

If you invested in the UBS Willow Fund and are interested in exploring your litigation options, including filing a FINRA arbitration claim to attempt to recover your losses, please call the securities attorneys of The White Law Group at 312-238-9650 for a free consultation.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Boca Raton, Florida and Chicago, Illinois.  The firm represents investors throughout the country in FINRA arbitration claims against brokerage firm and financial advisors.

For more information on The White Law Group, visit https://whitesecuritieslaw.com.


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