New York (HedgeCo.Net) – Service providers for hedge funds scored a victory yesterday when a New York judge threw out a suit filed against UBS by defrauded investors.

Judge Charles Ramos dismissed the complaint in a Manhattan court at the request of UBS, who served as prime broker and custodian to the now collapsed hedge fund Wood River Partners, LP.

The investors had accused UBS of improperly profiting from the trades of the fund, and claimed that UBS had made $100 million by selling borrowed shares of Endwave Corp., the fund’s main holding.

The plaintiffs also accused UBS of creating a short market for Endwave stock while borrowing from the hedge fund’s account to buy shares. This in turn decreased the fund’s portfolio by almost $20 million, according to their allegations.

"The facts alleged do not support the causes of action,” Ramos stated.  "These plaintiffs lack standing."

Investors were duped into thinking their assets were being diversified when in reality they weren’t. The hedge fund exceeded the 10% cap on ownership of any one company, though it wasn’t clear whether or not UBS had knowledge of that situation.

Nevertheless, it was a victory for service providers seeing as how recent trends show more and more of disdained investors going after affiliated or hired help by defunct hedge funds.

Investors in Wood River lost approximately $100 million. The plaintiffs of the lawsuit were made up of a group that had funneled in $79 million. John Whittier, who headed the hedge fund, is now serving three years behind bars.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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New York – June 17, 2008 – MadisonGrey Global Fund Services and HedgeOp Compliance today announced a co-marketing agreement that will combine MadisonGrey’s total fund administration, accounting, cash management, and investor relations services with the leading web-based compliance platform for hedge funds and funds of hedge funds.  The alliance enables MadisonGrey to use the ComplianceTrak fund-level engine for clients, providing them with custom compliance reporting and monitoring as well as offering preferred pricing for the ComplianceTrak advisor-level portal. 

“At MadisonGrey, our aim is to deliver seamless yet comprehensive fund administration services. The addition of ComplianceTrak will help our clients accelerate workflow and build and maintain a solid compliance infrastructure,” stated James C. Lanshe, Chairman & Chief Executive Officer for MadisonGrey.

“We are proud to partner with MadisonGrey to offer their hedge fund and fund of fund client’s access to ComplianceTrak, stated Bill Mulligan, CEO of HedgeOp Compliance.  “Our complementary business lines employ cutting-edge technology and both firms share a common vision of service excellence.”

About MadisonGrey

MadisonGrey is an SAS70 compliant alternative fund administrator with an unwavering dedication to providing a superior client experience.  Focused on the distinct needs of domestic and offshore hedge funds and funds of hedge funds, the firm offers complete fund accounting, risk analysis, record keeping, and workflow processes with compliance and operational oversight services.  For additional information please visit madisongrey.com.

About HedgeOp Compliance   

HedgeOp Compliance, LLC focuses exclusively on helping hedge fund and fund of hedge fund managers meet their compliance and operational challenges. HedgeOp has developed a successful business based on its proactive approach to servicing clients and proven reputation.  Clients range from start-up hedge funds to large firms with well-established track records. HedgeOp’s business lines include specialized compliance consulting services, our proprietary ComplianceTrak software, and due diligence research and reporting for fund of funds.  For additional information please visit hedgeop.com.

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