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View the article online at http://citywire.co.uk/wealth-manager/article/a735425

UBS staff shocked as Madoff Sipp exposure revealed

by Danielle Levy on Feb 21, 2014 at 10:27

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.

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3 comments so far. Why not have your say?

Keith Cobby

Feb 21, 2014 at 11:57

Isn't a SIPP managed on a discretionary basis a contradiction?

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Barry Bennett

Feb 21, 2014 at 16:55

Yeah - should be called a DIPP!

But isn't Discretionary - in the RDR client centric world - also a contradiction.

Discretion ~ choice etc etc.

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Ian Lees

Feb 22, 2014 at 08:38

No wonder the Swiss National sponsorship of their highly skilled Ski Instructors were switched form UBS to Aberdeen Asset Management. You could hardly expect to see a swiss ski instructors logo on the slopes with Bernie Madeoff with UBS Sipp .. .that might be referred to as a " SLIP " of judgement, rather than a Sipp of judgement . . . . " slip " get it ?

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