Created as a private hedge fund in 2000, the UBS Willow Fund was sold by UBS Financial Services. Reportedly, an announcement in October 2012 stated that the UBS Willow Fund would be liquidated. On September 6, 2013, the fund’s shareholder report stated, “The fund does not hold investments as of June 30, 2013.”

It’s possible that UBS did not adequately disclose the risks of the fund when making recommendations. Furthermore, many of the investors who received recommendations to invest in the fund reportedly had low risk tolerances and were seeking stable income. According to stock fraud lawyers, firms have an obligation to fully disclose all the risks of a given investment when making recommendations, and those recommendations must be suitable for the individual investor receiving the recommendation given their age, investment objectives and risk tolerance.

In addition, securities arbitration lawyers say that the portfolios of some investors may have been over-concentrated in the UBS Willow Fund. Finally, the fund may have strayed from its disclosed strategy, which was to invest in distressed debt, making speculations about foreign sovereign debt credit default swaps instead.

If you suffered significant losses in the UBS Willow Fund because of an unsuitable recommendation, you may be able to recover your losses through Financial Industry Regulatory Authority arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.

Allegedly, UBS may have offered and sold the UBS Willow fund to investors — particularly customers with low risk tolerance seeking stable income, such as retirees — while marketing it as a safe, reliable investment. However, the fund has suffered a decline of around 80 percent. Investigations are also underway to determine if UBS Financial Services adequately disclosed or misrepresented the material risks of this investment to clients.

In some cases, securities fraud attorneys say that investors’ portfolios may have been over-concentrated in the UBS Willow Fund. If so, these portfolios may have been mismanaged, given that risk management strategies were available that would have offered investors protection for the value of their portfolio.

Prior to recommending an investment to a client, brokers and firms are required to perform the necessary due diligence to establish whether the investment is suitable for the client, given their age, investment objectives, and risk tolerance. If you suffered significant losses as a result of your investment in the UBS Willow Fund and it was an unsuitable investment for you and/or you were not made aware of the risks associated with the investment, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact a stock fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.