Two affiliated investment advisors settled charges brought by the Securities and Exchange Commission that they misled investors and filed misleading shareholder reports with the SEC by not disclosing a material change in investment strategy. According to the SEC, from 2000 through 2008, UBS Willow Management LLC promoted the UBS Fund Advisor L.L.C. as primarily investing in distressed debt (i.e., expecting distressed debt to rise in price). However, beginning in 2008 through the Fund’s demise in 2012, UBS Willow Management changed its strategy to capitalize on a decline in value in debt. UBS Willow Management accomplished this by buying large amounts of credit default swaps. However, claimed the SEC, after the Fund changed its investment strategy, UBS Willow Management continued to state its prior strategy in communications with investors, prospective investors, the Fund’s board of directors and the SEC. The SEC claimed that UBS Fund Advisor L.L.C., which had contractual control and supervised UBS Willow Management, was obligated to ensure that UBS Willow Management complied with its stated investment strategy or modified its disclosures. It did not, said the SEC. To resolve this matter, the two advisors agreed to pay total sanctions of US $17.5 million, of which more than US $13 million will be paid to investors for the Fund’s losses attributable to a change in the investment strategy.