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UBS’ Defunct Dillon Read Capital Management Hedge Fund – Recent Allegations of Mispricing

Zamansky investigates recent allegations of fraudulent mispricing made by a former employee of the Dillon Read Capital Management (“DRCM”) hedge fund.   DRCM was a hedge fund founded in 2005 by UBS and its former Head of Investment Banking John Costas, to offer an “outside” private equity fund.  At its peak, DRCM managed approximately $3 billion to $3.5 billion of investor funds.

In May 2007, UBS announced that it was transferring DRCM fund over to its Global Asset Management division, after large losses were incurred.  The losses were the result of DRCM’s ill-conceived investments in U.S. subprime mortgages made at or near the peak of the subprime lending boom.  UBS quickly closed the DRCM fund which resulted in losses to its investors.

Zamansky is investigating recent allegations by a former DRCM employee that the fund engaged in mispricing of its securities. The mispricing may have resulted in the DRCM fund appearing to be a sounder, less risky investment for a longer period of time before it collapsed.  As a result, investors who subscribed to the DRCM fund or held it as concerns about subprime mortgages surfaced may have been misled.

If you are an investor in the DRCM who suffered a loss, or have information to assist the investigation, please contact Jake Zamansky at 212 742-1414, or