Investors who lost tens of millions of dollars with the collapse of Greensill Capital have written to the Luxembourg financial regulator challenging an offer of redress from UBS that the Swiss bank hoped would draw a line under the scandal.
The investors claim they have been denied access to crucial documents relating to funds they invested in, which were domiciled in Luxembourg. They argue that without seeing the funds’ internal rules they are unable to accept the terms of the UBS offer, which expires at the end of July.
The intervention complicates a move by UBS to clear up long-standing legal issues tied to Credit Suisse, the rival bank it rescued last year.
Credit Suisse advised about 1,000 of its wealthiest clients to invest in a group of funds tied to specialist finance firm Greensill. When Greensill imploded three years ago, the funds were closed, trapping $10bn of assets in one of the final blows that led to the collapse of Credit Suisse.
UBS last month offered to pay the investors 90 per cent of the funds they had tied up in the Greensill funds, which promised low risks and high returns.
Under the terms of the offer, which expires on July 31 and has been seen by the Financial Times, investors must give up other legal claims.
People with knowledge of the UBS offer said it had been well received by clients and most investors were expected to take it up.
But a group of former Credit Suisse clients who invested $80mn in the funds have enlisted lawyers to try to gain access to fund documents from the Luxembourg financial regulator, the CSSF.
They argue that under Luxembourg fund laws, if there is a miscalculation of the fund’s net asset value or there is non-compliance with the investment rules, the fund manager is obliged to make good any losses suffered by investors.
They claim that despite making several requests — in person and in writing — they have been denied access to documents that set out the funds’ internal rules by the fund management company, which is now part of UBS.
“The latest offer to investors from UBS should only be considered with the benefit of all documentation concerning the fund managers’ adherence to their regulatory responsibilities at the time,” said Denis Philippe, a lawyer representing the investors.
“Yet, despite repeated requests for full disclosure, the fund managers appear reluctant to submit the evidence for scrutiny. This continued lack of transparency is wholly unacceptable and does a disservice to all affected shareholders.”
The investor group is being co-ordinated by Alcimos, which specialises in arranging and sourcing litigation funding.
UBS declined to comment. CSSF did not respond by the time of publication.
