UBS-AG is a global investment banking and securities firm which provides a range of financial services, including advisory services, underwriting, financing, market making, asset management, brokerage and retail banking on a global level.
According to a press release dated August 1, 2005, the Complaint alleges that during the Class Period, Defendants served as financial advisors who purportedly provided unbiased and honest investment advice to their clients. Unbeknownst to investors, Defendants, in clear contravention of their disclosure obligations and fiduciary responsibilities, failed to properly disclose that they had engaged in a scheme to aggressively push UBS sales personnel to steer clients into purchasing certain UBS Funds and UBS Tier I Funds (collectively, "Shelf Space Funds") that provided financial incentives and rewards to UBS and its personnel based on sales. The Complaint alleges that Defendants' undisclosed sales practices created an insurmountable conflict of interest by providing substantial monetary incentives to sell Shelf-Space Funds to their clients, even though such investments were not in the clients' best interest. UBS' failure to disclose the incentives constituted violations of federal securities laws.
The action also includes a subclass of persons who held any shares of UBS Mutual Funds. The Complaint additionally alleges that the investment advisor subsidiary of UBS, UBS Global Asset Management, created further undisclosed material conflicts of interest by entering into revenue sharing agreements with UBS financial advisors to push investors into UBS proprietary funds, regardless of whether such investments were in the investors' best interests. The investment advisors financed these arrangements by illegally charging excessive and improper fees to the fund that should have been invested in the underlying portfolio. In doing so they breached their fiduciary duties to investors under the Investment Company Act and state law and decreased shareholders' investment returns.
The action includes a second subclass of persons who purchased a UBS Financial Plan that held Tier I mutual funds. The UBS Financial Plans include, but are not limited to UBS Personalized Asset Consulting and Evaluation Plan, InsightOne accounts, and/or a resource management accounts.
The "UBS Tier I Funds" includes mutual funds in the following mutual fund families: AIM, Alliance, American Funds, Columbia, Davis Funds, Dreyfus, Eaton Vance, Federated, Fidelity, Franklin Templeton, John Hancock, Hartford, Lord Abbett, MFS, Oppenheimer, PIMCO, Pioneer, Putnam, Scudder, UBS Global Asset Management, and Van Kampen.
On December 14, 2005 the judge appointed lead Plaintiffs in the case and approved selection of lead Counsel. On May 3, 2006 the Consolidated Amended Complaint was filed and Defendants moved for dismissal on August 1, 2006.
A stipulation and Order dismissing UBS Global Asset Management International Ltd. was entered on August 22, 2008.
On October 22, 2008, an order was entered by the Court granting the Defendant’s motion to dismiss the case without prejudice.
On December 01, 2008, a Notice of Appeal was filed by the Plaintiffs in the United States Court of Appeals for the Second Circuit. Plaintiffs voluntarily withdrew their appeal on March 12, 2009.
