new yORK (Bloomberg) — UBS AG and Ernst & Young LLP said Luxembourg lawsuits filed by investors who lost millions of dollars in mutual funds linked to Bernard Madoff's Ponzi scheme are invalid and should be thrown out.

Private and institutional investors who lost money through Access International Advisors LLC's LuxAlpha Sicav-American Selection have no right to bring direct claims against the fund's custodian bank, its auditor and other institutions linked to the fund, lawyers for UBS and Ernst & Young told a Luxembourg court yesterday. They said arguments by the investors are "vague" and "simply wrong."

"Yesterday we were not told a great deal in terms of arguments," Marc Elvinger, a lawyer representing UBS, told a three-judge panel today. "And the few things that we were told, were wrong."

French investors who lost money through LuxAlpha are suing UBS and the fund's auditor Ernst & Young for "seriously neglecting" their supervisory duties. The court is reviewing in at least four days of hearings whether the investors can be regarded as shareholders of the fund and whether they have the right to bring such direct claims.

The Luxembourg commercial court in April decided to use a small group of LuxAlpha claims out of about a hundred to review the issue. LuxAlpha, which invested 95 percent of its assets with Madoff, had $1.4 billion in net assets a month before his arrest. The fund was dissolved and is being liquidated.

A ruling in favor of the investors "could set the course for some 100 pending cases and many more to come," Pierre Reuter, who represents clients in six of the lawsuits being reviewed, said by telephone before the hearings.

'Incorrect' Claims

Investors' arguments yesterday that they weren't allowed to put their names on the company register, which would help them to be recognized as the fund's shareholders "are incorrect," Elvinger said.

"Investors do have the right and they had the choice also here to subscribe directly to the fund and to give instructions to the bank to do so not only for the investor's account but to also subscribe in the investor's name," Elvinger said.

Madoff, 71, pleaded guilty in March in federal court in Manhattan and was sentenced on June 29 to 150 years in prison for using money from new clients to pay earlier investors. He directed a multibillion-dollar Ponzi scheme from his now-defunct New York money-management firm.

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