UBS accused of selling 'rotten' sausage meat

Sausages

UBS failed to properly disclose risks it took with Swatch Group’s funds and should be held responsible for the losses that followed, the watchmaker argued in a Swiss court.

Bloomberg reports that the watchmaker is suing UBS to recover about $34m, including interest, in losses on 'absolute-return' investments made in 2009 that UBS said were low-risk in any market environment.

Swatch needed advice from UBS because it hadn’t invested in an absolute-return product before, Alexander Schwartz, a lawyer representing the company, said at a hearing in Zurich. UBS never told Swatch to sell its stake in the fund in question and should therefore be held liable, he said.

'Only the defendant had an obligation to know what they contained and to warn the buyer of the danger of rotten meat', Schwartz said, comparing the investment products to sausage with meat that’s gone bad.

To access the complete Bloomberg article hit the link below

Swatch Compares UBS Funds to 'Rotten' Sausages in Swiss Court

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