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10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document Pg 56 of 133 correspondence sent to Luxalpha, setting up the fund’s annual general meeting, and filing documents with the Luxembourg financial regulator. (See Section III.B.2., supra.; Pergament Decl. Exs. 38 at 2–4; 28 at 22–23.) The “Day-to-Day Managers” of Luxalpha, at least as of 2006, were UBSFSL employees. (Pergament Decl. Exs. 47 at 2; 48 at 2; 49 at 2.) Luxalpha even used UBSFSL’s offices in Luxembourg as its address. (Pergament Decl. Exs. 50 at 2; 49 at 2.) An agency relationship exists where entities are “engaged in a single business enterprise that relies on the joint efforts” of each of the entities, which are “coordinated and controlled” by the parent entity. Dorfman, 2002 WL 14363, at *11. Here, Luxalpha was little more than a fee- generating portal present in the United States, which could not have functioned but for UBS SA and UBSFSL, such that Luxalpha’s jurisdictional contacts should be imputed to UBS SA and UBSFSL. 4. UBSTPM is Subject to Jurisdiction Through Its Role as Luxalpha’s Management Company, and Because UBS SA Acted as Its Agent The third UBS AG subsidiary in this action, UBSTPM, is also subject to jurisdiction because it maintained minimum contacts with the United States related to Luxalpha. UBSTPM outwardly served as Luxalpha’s management company from August 2006 to November 2008, taking over the portfolio management role from UBS SA. (Am. Compl. 19, 21; Hemmen Decl. 9 [Bankr. S.D.N.Y. ECF No. 114.]) Luxalpha’s sales prospectus advised investors that UBSTPM was responsible for managing and administering the fund, as well as monitoring investment policies and restrictions. (Pergament Decl. Ex. 51 at 7, 17.) Pursuant to its contract with Luxalpha, UBSTPM was officially responsible for Luxalpha’s investment management decisions, among other roles. (Pergament Decl. Ex. 52 at LuxAlpha 00410.) Of course, UBSTPM did not disturb the investment decision to invest Luxalpha entirely with BLMIS, 36
10-04285-brl Doc 127 Filed 08/17/12 Entered 08/17/12 14:29:55 Main Document Pg 57 of 133 profiting enormously as a result. 17 UBSTPM was entitled to receive management fees, as well as performance fees tied to the underlying performance of the Luxalpha fund as managed by BLMIS. (Pergament Decl. Exs. 51 at 6; 52 at LuxAlpha 00415.) Upon information and belief, UBSTPM received $27,167,048 in management fees, in addition to $15,482,220 in performance fees, from the period of August 2006 until November 2008. (Am. Compl. 190–91.) UBSTPM is subject to jurisdiction as a result of its direction of investment activity to New York, and its earning of substantial fees in connection with investments funneled to New York. See Maxam, 460 B.R. at 117; Chais, 440 B.R. at 274. In addition, UBSTPM is subject to jurisdiction because of its agency relationship with UBS SA. UBS SA served as Luxalpha’s initial official portfolio manager, as well as its official custodian and distributor. (Pergament Decl. Ex. 10 at 7.) UBS SA appears to have handed off management company responsibility for Luxalpha to UBSTPM in August 2006 as a result of regulatory pressure related to UBS SA impermissibly serving in too many service roles with respect to Luxalpha. (See Pergament Decl. Ex. 53.) The change in authority was entirely cosmetic, however, because UBS SA retained control over UBSTPM with respect to its new portfolio management role. Contemporaneous with the delegation of management responsibility to UBSTPM, UBSTPM and UBS SA contracted to establish an advisory committee for UBSTPM, consisting of UBS SA Managing Directors and Defendants Hondequin, Egger, and Roger Hartmann as well as Access principals and Defendants Littaye and Delandmeter. (Pergament Decl. Ex. 54 at LuxAlpha 00697, 00704.) The purpose of this committee was to advise UBSTPM “with 17 As noted previously, asset management decisions for Luxalpha had been actually delegated to BLMIS in 2004 pursuant to the Trading Authorization Limited to Purchases and Sales of Securities and Options. (Pergament Decl. Ex. 9 at 7 – 9.) 37
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