UBS Willow Fund’s use of Credit Default Swaps Causes Investor Loss

Block & Landsman by Block & Landsman

The UBS Willow Fund, ostensibly a distressed debt fund, was a closed-ended fund recommended and sold by UBS to its clients.  This product utilized credit default swaps (“CDS”), which are essentially contracts whereby one party shifts the risk of a default onto the CDS seller in exchange for an agreed upon premium.  These are highly speculative investments.  Unfortunately for the Willow Fund, it invested in CDS involving European sovereign debt.  This gamble by UBS did not pay off, and investors are now paying the price. Last October,...Read More

SEC Uncovers Deficiencies in how Investment Advisers Handle Custody of Clients’ Assets

Block & Landsman by Block & Landsman

The Securities and Exchange Commission (“SEC”) recently published a new Risk Alert and Investor Bulletin regarding investment advisers’ handling custody of their clients’ assets. According to the SEC, there are significant deficiencies in how investments advisers handle the custody of clients’ assets. Recent examinations of investment advisers have uncovered custody related issues in one out of three firms inspected. The SEC highlighted three areas of particular concern: “Failure to recognize that they [investment adviser...Read More

Great Lakes Dredge & Dock Corp May Have Violated Federal Securities Laws

Block & Landsman by Block & Landsman

Potential federal securities law violations at Great Lakes Dredge & Dock Corp (Symbol: GLDD) have caused upset at the Oak Brook, Illinois company. After close of trading on March 14, 2013, GLDD announced it would restate its 2012 2Q and 3Q revenues. The adjustment resulted in 2012 2Q revenues being reduced by $3.9 million and 2012 3Q revenues being reduced by $4.3 million. In addition, GLDD announced $5.6 million of 4Q revenues failed to meet revenue recognition standards. This news came along with the announcement of the company’s Pre...Read More