Access International Advisors LLC’s LuxAlpha Sicav-American Selection Fund could mean hundreds of damages claims for UBS AG and Ernst & Young LLP if investors who lost millions of dollars in the Bernard Madoff-linked fund emerge victorious in their case. The story was first reported Nov. 25 by Bloomberg.
According to the article, individual and institutional investors who lost money through the LuxAlpha Sicav-American Selection Fund are suing UBS and Ernst & Young for “seriously neglecting” their supervisory duties of the fund. It’s now up to a Luxembourg court to decide whether investors have the right to bring direct claims against the fund’s custodian and auditor – UBS and Ernst & Young.
Hearings on the matter started today.
At one time, the LuxAlpha SicavAmerican Selection Fund had $1.4 billion in assets. Following Madoff’s arrest, the fund was dissolved.
UBS’s Luxembourg unit served as the custodian bank to the LuxAlpha Sicav-American Selection Fund. Custodians are responsible for oversight, as well as managing deposits and making payments to investors.
As for Ernst & Young, its role in LuxAlpha included auditing the fund’s annual accounts. In one complaint, a French investor claimed Ernst & Young is “co-responsible” for losses because it “didn’t follow the necessary obligatory controls and checks,” according to the Bloomberg article.
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