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The Swiss Can Duck

The escape and evasion tactics are beginning already for marketers and fund of funds that exposed the general public to the toxic sludge that was Bernie Made-off. Fortunately for some hawkers, particularly those in Europe, a hodge-podge of regulatory authorities are likely to create enough confusion to make recovery through entities like UBS very difficult. This from the Financial Times:

UBS sought to absolve itself from any duty to safeguard investor assets in a $1.4bn fund that channelled money into Bernard Madoff's alleged $50bn Ponzi scheme.
The Swiss bank used an agreement that denied it was responsible for the assets - even though its marketing documents claimed it would be.

The Swiss bank is highly likely to evade responsibility, frankly. Unlike the sympathetic juries likely to adjudicate any conflict in the United States, the European process is far more likely to ignore the "fluff" of the marketing documents in favor of the legalese. UBS, likely, knows this. Knew this.

Subscription documents for the Luxalpha Sicav explicitly remove UBS's liability if the fund's assets are lost. Under European rules, custodians such as UBS must take responsibility for "safekeeping" of a regulated mutual fund's assets. But the Luxalpha subscription form states that UBS "is not the safekeeping agent of the assets of the fund as the assets are safekept by the US registered broker-dealer".

UBS seeks to deny duty over Madoff funds [The Financial Times]


Carl Levin is Seriously Pissed at the Swiss

Senator Carl “Shitty Deal” Levin has blasted the Swiss government withholding the names of withholding the names of certain UBS clients suspected of opening Swiss bank accounts to evade U.S. taxes. The Swiss lower house voted today to reject a U.S.-Swiss treaty that would have turned over about 4.450 out of the 52,000 UBS clients the Uncle Sam suspects of tax evasion.