UBS facing action over CDOs
The sub-prime crisis is turning increasingly litigious, with big European institutional HSH Nordbank announcing today that it has implemented legal proceedings against UBS to recover what it describes as significant losses incurred on a US$500 million portfolio of collateralised debt obligations linked to the US mortgage market.
The investments were sold by UBS in 2002 to Landesbank Schleswig-Holstein, which subsequently merged with Hambrgische Landesbank to become HSH Nordbank AG.
HSH Nordbank said it expected to file its claim against UBS in the State of New York by the end of this month.
The impending litigation relates specifically to CDOs known as North Street 2002-4 and the bank will claim that UBS’ management of the portfolio had been in breach of its contractual obligations and fiduciary duties and that substitutions were made solely for the benefit of UBS.
Commenting on the move, HSH Nordbank spokesman Bernhard Blohm said the bank’s investment in the North Street program was to be conservatively managed by UBS according to prudent investment objectives.
“Our claims against UBS will show that the manner in which the investments were sold to HSH Nordbank and UBS’ subsequent management of the assets were clearly contrary to our interests,” he said.
AUTHOR
Mike Taylor
Recommended for you
Adviser losses this week are quadruple the same period a year ago, with the industry falling into negative territory for the last 12 months.
Colonial First State has announced the latest manager to join its Edge managed accounts menu, focusing on providing investors with a strategic income.
Rising advice fees has prompted Radar Results to increase its price guide to a minimum of $3,000 per client to reflect the changing shape of the adviser landscape.
Investment consultancy Ascalon Capital has appointed a new partner, who joins from 20 years at Zenith Investment Partners, as well as a new chief executive amid a “bold new chapter” for the firm.
