Atlanta Salomon Smith Barney office under scrutiny

November 10, 2003
Atlanta Business Chronicle

A Florida law firm is pursuing securities arbitration claims on behalf of WorldCom Inc. Employee Stock Option Plan participants against Salomon Smith Barney Inc. for alleged unlawful conduct at its Atlanta office.

Smith Barney recently consented to a finding by the New York Stock Exchange that it failed to adequately supervise its brokers at Atlanta’s Peachtree Road branch office who advised WorldCom employees to exercise their stock options and to hold the resulting company shares on margin. This advice given to employees created highly concentrated and leveraged positions in company stock, the Boca Raton, Fla.-based law firm of Klayman & Toskes said. The outcome of this advice was the virtual loss of the employees’ retirement “nest egg.”

The NYSE findings included that Smith Barney’s brokers uniformly made these recommendations despite the customers’ varying risk profiles, investment experience or investment objectives. These findings confirm the contentions that have been alleged against Salomon Smith Barney by Klayman & Toskes on behalf of their WorldCom employee clients since 2001.

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