Painewebber Antes Up
Investors in PaineWebber's Short-Term U.S. Government Income Fund spent much of this year watching their fund sink almost 6%. But as of June 7, the fund's shell-shocked, conservative investors can rest a bit easier: PaineWebber says it expects to inject $33 million into the $1 billion bond fund to offset big losses from volatile mortgage-derivative securities. It will also pay about $50 million to buy the remaining mortgage-derivative securities from the fund, which is managed by a subsidiary. The brokerage's remarkable actions come as part of an agreement in principle to settle class-action litigation brought on behalf of fund investors. PaineWebber also removed the fund's manager pending a review.