Alerts

Court Dismisses Wood River Investors’ Claims Against Prime Broker

July 25, 2008

On July 23, 2008, the New York Supreme Court, Commercial Division, New York County, issued a decision that is important for all prime brokers. Written by Justice Charles E. Ramos, the decision dismissed the claims that investors in hedge fund Wood River Partners, L.P. (“Wood River”) had asserted against the fund’s prime broker, UBS Securities, LLC (“UBS”), for allegedly causing the hedge fund’s collapse. Eurycleia Partners, LP v. UBS Securities, LLC, No. 600874/07 (N.Y. Sup. Ct. July 23, 2008). This decision is important to the prime brokerage community because it reaffirms the principle that investors in entities that hold accounts with a prime broker generally lack standing to sue, and are owed no fiduciary duties by, the prime broker.