Swiss banking giant UBS is in hot water over its hedge fund hotelery. Recently sued for “dishonest and unethical” practices in dealings with hedge fund advisers by regulators in Massachusetts, UBS is facing intense scrutiny over the perks it provided to hedge fund managers.

UBS is accused of engaging in some righteous quid pro quo in an effort to keep managers' business and catch up to rivals Goldman Sachs and Morgan Stanley in the $8 billion dollar hedge fund brokerage fee sweepstakes. UBS had previously been forced to shut down its own in-house fund, Dillon Read Capital Management, after it suffered catastrophic losses in the sub prime mortgage industry.

In a surprise statement today, the UBS board announced that it is dumping its chief executive, Peter Wuffli. One has to imagine that the aforementioned travails had something to do with the board's lack of confidence in him.

-- MDT

Labels: Dillon Read, hedge fund, sued, UBS