Friday, 29 August 2014
Last updated 11 hours ago
Sep 10 2009 | 10:50am ET
A judge has ordered UBS to set aside $35.5 million to cover a potential verdict against it in a lawsuit brought by hedge fund Pursuit Partners.
According to Pursuit, UBS sold it a collateralized debt obligation despite its internal belief that the securities were “crap.” Indeed, Judge John Blawie cited a e-mail from a banker at UBS boasting that he had “sold more crap to Pursuit” in his ruling.
The Stamford, Conn.-based hedge fund “presented sufficient evidence to satisfy the probable cause standard with respect to their claim that UBS was in possession of superior knowledge that was not readily available” to Pursuit.
Pursuit bought the CDOs between July and October of 2007. UBS sold them despite their belief that ratings agencies were about to downgrade the investment-grade securities, and never warned the hedge fund about it, Pursuit said. Indeed, in October, Moody’s Investor Services—which Pursuit is also suing, along with Standard & Poor’s parent McGraw-Hill Cos.—slashed its rating on the CDOs, which eventually defaulted. Pursuit lost its entire investment.
UBS called the judge’s ruling was a “preliminary procedure to require defendants to post security while a case is pending, nothing more.”
“UBS is confident that it will prevail on the merits of the case,” UBS said in a statement.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...