Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

UBS staff shocked as Madoff Sipp exposure revealed

2 comments
UBS staff shocked as Madoff Sipp exposure revealed

A number of UBS employees have been shocked to find out their self-invested pension plans (Sipps) had exposure to the Madoff Ponzi scheme.

Letters seen by Wealth Manager, have been sent to a number of employees and former UBS staff who have Sipps managed by the firm on a discretionary basis. They have been offered the option to submit claims to the Madoff Victim fund (MVF) by 28 February through Sipp administrator Standard Life Trustee Company.

A further letter from UBS identifies clients as having ‘whole or partial exposure, directly or indirectly, to now-bankrupt brokerage firm Bernard L. Madoff Investment Securities LLC (BLMIS) as at 11 December 2008’.

It explains the MVF is separate from the liquidation proceedings involving BLMIS, as the MVF was set up to compensate end-investors who have lost their own monies as a result of a direct or indirect investment in BLMIS.

UBS is not authorised to submit claims on behalf of clients.

In the letter, Standard Life said it was in discussions with UBS to ‘clarify the nature of the discretionary investment made by them and how to manage any claim’ – for example, whether the individual client should make the claim individually or do it through Standard Life Trustee Company Limited.

Wealth Manager understands that the exposure to Madoff was through a fund that invested in a fund of hedge funds.

It is understood that the fund was managed by a third-party and UBS itself did not select the Madoff scheme.

One disgruntled ex-UBS employee said he was shocked to receive the letter and is planning to make a claim. ‘I was not even aware that I was in it [Madoff],’ he added.

UBS declined to comment or offer any clarity on the number of clients that are affected or whether the bank will offer separate compensation for those affected.

A spokesperson for Standard Life Trustee Company said: ‘We currently have a very small number of Sipp customers impacted. We have been in communication with all of our discretionary investment managers and while some have confirmed there is no exposure, others are continuing to investigate.

‘For our customers that are impacted, and who would like Standard Life to claim for compensation on their behalf, we will do so ahead of the deadline of 28 February.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Navigating geopolitical risk with ETFs

Navigating geopolitical risk with ETFs

ETFGI’s Deborah Fuhr on how investors can use exchange-traded funds to position their portfolio.

Play Sarasin’s Boucher: why I like salmon with chocolate

Sarasin’s Boucher: why I like salmon with chocolate

Henry Boucher, manager of the £129 million Sarasin Food & Agriculture Opportunities fund, explains why he is gobbling up salmon and chocolate stocks.

Play Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Alibaba hype, the UK slowdown and opportunities in European sovereign bonds

Libby Ashby and leading wealth managers analyse what the Alibaba IPO hype means for Chinese equities, slowing growth of the UK economy and whether there’s anything left to play for in the European sovereign bond market.

Your Business: Cover Star Club

Profile: Barclays' former advisory boss on his move into property

Profile: Barclays' former advisory boss on his move into property

On paper, Rick Denton might have been expected to finish his career in banking

Wealth Manager on Twitter