Four Members of UBS Muni Team Lured Back After Quitting

UBS Global Asset Management coaxed four members of its municipal bond team back to the company after they resigned last week.

In a statement, UBS said it entered into negotiations with four people in the muni team after they resigned. All four rescinded their resignations and remain with the company, the company said.

UBS did not say who resigned, why they resigned, or where they would have gone.

Western Investment LLC in a statement earlier this week called the resignations a "talent exodus" and said UBS' Investment Grade Municipal Income Fund was at risk of operating "with little to no meaningful experience" in munis.

Western Investment led a group of dissident shareholders last year seeking to unseat the board of the muni fund and boot the company as adviser to the fund.

The fund found itself in a curious predicament after its annual shareholder meeting.

The shareholders' proposal to bounce UBS as adviser to the fund failed. UBS' proposal to continue running it under a new agreement also failed.

UBS continues to run the fund under the old agreement, since the other proposals were struck down.

Arthur Lipson, a principal at Western Investment, said it makes sense that people would want to leave UBS because "it's a troubled shop."

The company faces charges of tax evasion and real-estate value inflation, and paid $150 million in fines in the wake of an auction-rate securities scandal.

"People working there probably could find better places to work," Lipson said. Of the people who left and then returned, he said: "I hope they got a good raise."

Lipson said he intends to wage another proxy battle over control of the fund this year.

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