UBS Hedge Fund Admin. Settles Fraud Charges

Feb 1 2008 | 12:07pm ET

UBS’ hedge fund administration business has settled civil charges that it overlooked fraud at a hedge fund client.

UBS Fund Services will pay $19 million to settle a case brought by the court-appointed receiver for defunct hedge fund Philadelphia Alternative Asset Management, which collapsed in 2005.

The King of Prussia, Pa.-based firm’s president, Canadian Paul Eustace, was indicted in November on commodities fraud charges, relating to a scheme in which he allegedly defrauded investors of $200 million in a shell game designed to hide investment losses.

In settling, UBS Fund Services did not admit or deny the charges. The case had been scheduled to go to trial on Jan. 22.

In December, PAAM’s receiver struck a deal with the hedge fund’s former futures broker, MF Global, the former Man Financial, which spun off from Man Group last year. MF Global agreed to pay $75 million.

The two settlements, plus $75 million in recovered assets, have led to an “extraordinary” level of recovery for PAAM investors, the receiver said.

RELATED STORIES

Former Man Group Futures Broker Settles Hedge Fund Lawsuit
Philly Hedge Fund Manager Indicted


In Depth

Bob Doll's Ten Market Predictions For 2016

Jan 7 2016 | 9:37pm ET

Well-known market strategist Robert Doll has published his annual list of ten predictions...

Lifestyle

Citadel's Ken Griffin Donates $40M To New York's Museum of Modern Art

Dec 22 2015 | 9:23pm ET

Citadel founder Ken Griffin has donated $40 million to New York’s Museum of Modern...

Guest Contributor

Hedge Fund Marketing - Making the Most of Your Salesperson

Jan 20 2016 | 8:11pm ET

In this contributed article, Bruce Frumerman of Frumerman & Nemeth takes a close...