Category Archives: Featured Cases

money

NOTICE TO UPS EMPLOYEES/SHAREHOLDERS: Klayman & Toskes, P.A. Files $1,000,000 FINRA Arbitration Claim on Behalf of Retired UPS Employee for Losses Suffered as a result of Merrill Lynch’s Unsuitable Recommendation to Invest in Rampart Strategy

By | Blog, Featured Cases | No Comments

NEW YORK, March 13, 2017 (GLOBE NEWSWIRE) — The securities arbitration law firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, has filed a $1,000,000 FINRA arbitration claim [FINRA Case No. 17-00599] on behalf of retired United Parcel Service (“UPS”) (NYSE: UPS) employee for losses suffered as a result of Merrill Lynch’s unsuitable recommendation to invest in Rampart Strategy.

According to K&T, the investigation focuses on Merrill Lynch’s sales practices for customers who acquired UPS stock through UPS’ Employee Stock Purchase Plan or Managers Incentive Program and were advised by Merrill Lynch to implement a covered call strategy on their concentrated UPS stock position through Merrill Lynch’s Rampart Strategy.

Securities attorney Steven D. Toskes from K&T explains, “The covered call strategy implemented by Merrill Lynch through Rampart was unsuitable since the strike price of the call option was either too close to the current share price of UPS or below the then current price.  Mr. Toskes continues, “The close proximity of the share price and strike price of UPS virtually ensured that the stock would get called away or it would be very expensive to buy back the option.  Our client accumulated low cost basis stock during the 29 years they worked for UPS and did not want to have their stock ‘called away’ and trigger a large capital gains tax.”

K&T continues to represent UPS employees who invested in the Rampart Strategy against Merrill Lynch for FINRA sales practice violations, including unsuitable recommendations, misrepresentations and omissions of material facts and failure to supervise.  Investors who have information about the sales practices of brokerage firms and their financial advisors are encouraged to contact Lawrence L. Klayman, Esq. or Steven D. Toskes, Esq. of Klayman & Toskes at (888) 997-9956, or visit our website at www.nasd-law.com.

Business people shaking hands in office

NOTICE TO UBS PUERTO RICO CUSTOMERS: Klayman & Toskes Files $8.5 Million Suit Against UBS as it Investigates Claims for Over-Concentration in Puerto Rico Government Bonds and Closed-End Bond Funds

By | Blog, Featured Cases | No Comments

San Juan, Puerto Rico.  January 13, 2017 — The Securities Arbitration Law Firm of Klayman & Toskes, P.A., www.sueubspuertorico.com, together with Carlo Law Offices, P.S.C. located in Puerto Rico, announced today that they filed a claim against UBS Financial Services Incorporated of Puerto Rico and UBS Financial Services, Inc. (NYSE: UBS) (collectively “UBS”) for $8.5 million.  According to the Claim, the Claimant entrusted assets to UBS with the investment objective of capital preservation. However, UBS ultimately concentrated the account in Puerto Rico Government Bonds (“PRGBs”) and its proprietary Puerto Rico closed-end bond funds (“UBS PR CEBFs”), which are leveraged and concentrated in PRGBs.

UBS purchased and held for Claimant PRGBs and UBS PR CEBFs, both of which are closely tied to the performance of Puerto Rico’s economy. The Claimant believed the purchases were consistent with their low risk tolerance. However, the over concentration in these PRGBs and UBS PR CEBFs was fraught with excessive risk given the Claimant’s investment objective and risk tolerance. UBS failed to disclose to Claimant the risks associated with over concentrating the account in these securities.  Had this information and the true nature of the risk of the recommended allocation been known to Claimant or properly disclosed, he would not have invested his hard-earned assets in these products.

The sole purpose of this release is to investigate, on behalf of our clients, the sales practices of UBS in connection with investment recommendations provided to their customers. Current and former customers of UBS who have information relating the investment advice provided by the firm, are encouraged to contact Lawrence L. Klayman of Klayman & Toskes, or Lcdo. Osvaldo Carlo of Carlo Law Offices, at (787) 919-7325, or visit us on the web at www.sueubspuertorico.com.

Law and Justice building.

Puerto Rico Residents with Morgan Stanley Brokerage Accounts: The Securities Arbitration Law Firm of Klayman & Toskes, P.A. Continues to Pursue FINRA Arbitration Claim Against Morgan Stanley for Sales Practices Violations

By | Blog, Featured Cases, News | No Comments

San Juan, Puerto Rico (HISPANICIZE WIRE) – September 30, 2016 – The Securities Arbitration Law Firm of Klayman & Toskes¸ P.A. (“K&T”), www.nasd-law.com, continues to pursue FINRA arbitration claim [FINRA Case No. 14-01090] against Morgan Stanley (NYSE: MS) for sales practices violations in light of information disclosed in $4.7M settlement the firm reached with the state of Mississippi evidencing the firm’s mishandling of critical client profile information.

The consent order contains details of the settlement between Morgan Stanley and the state of Mississippi which suggests that client investment objective and risk tolerance information were entered incorrectly while transferring numerous client accounts from Smith Barney to Morgan Stanley. According to the consent order, “in order to transfer the accounts from Smith Barney to Morgan Stanley, new customer information was required to be entered into Morgan Stanley’s system. This information included customer investment objectives, risk tolerances, financial and other personal information used, in part, to aid in the determination of whether certain investments ….were suitable for the customer.”

According to securities attorney Lawrence L. Klayman, “Our investigation is focused on whether Morgan Stanley and its brokers conducted reasonable diligence for its Puerto Rican customers to ascertain their appropriate investment objective and risk tolerance.  The sales practice violations uncovered by the state of Mississippi appear to be consistent with the violations our firm is investigating for Morgan Stanley clients from Puerto Rico.”  Mr. Klayman continues, “We are also investigating whether Morgan Stanley failed to supervise its brokers in conjunction with potentially unsuitable investment advice being made to clients from Puerto Rico, despite incorrect or inaccurate information contained in their investment profile.”

The sole purpose of this release is to investigate, on behalf of our clients, the sales practices of Morgan Stanley in connection with unsuitable recommendations being made by its brokers.  Current and former customers of Morgan Stanley from Puerto Rico who have information related to our investigation are encouraged to contact Lawrence L. Klayman, Esq. or Raymond Gentile, Esq. of Klayman & Toskes at (888) 997-9956, or visit our website at www.nasd-law.com.

Notice to Merrill Lynch Clients with Rampart Options Management Services Program: Klayman & Toskes, P.A. Continues to Pursue $1,000,000 FINRA Arbitration Claim on Behalf of UPS Employee for Mismanagement of Concentrated Stock Position

By | Featured Cases | No Comments

New York, June 28, 2016 (GLOBE NEWSWIRE) – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, announced today that it is continuing to pursue a $1,000,000 FINRA arbitration claim against Merrill Lynch [FINRA Case No. 16-01593] on behalf of UPS (NYSE:UPS) employee for losses sustained from an unsuitable recommendation to invest in the Rampart Options Management Services Program (“Rampart”).

The Claimant worked for over 23 years with UPS and accumulated shares of the company through UPS’ Employee Stock Purchase Plan and Managers Incentive Program, according to the Claim.  Merrill Lynch and its financial advisor recommended Rampart to facilitate the unsuitable investment strategy of selling covered call options on the UPS stock to produce income.  Securities attorney Steven D. Toskes explains, “Merrill Lynch’s recommendation to utilize Rampart’s strategy was unsuitable investment advice.  Our client is a UPS investor with low cost basis stock who did not want to have their UPS position ‘called away’ and trigger a large capital gains tax.”

Merrill Lynch advised the sale of call options at strike prices that were far too low given market conditions and failed to buy back the options to ensure the stock was not called away.  Claimant lost over 3,800 shares of his UPS stock as a result of Merrill Lynch’s failure to recommend suitable options strategies for concentrated stock positions.

If you are a current or former UPS employee with a Merrill Lynch account that used Rampart’s services, and wish to discuss this announcement or have relevant information relating to the manner in which the firm handled concentrated portfolios, please contact Lawrence Klayman, Esq. or Steven D. Toskes, Esq. of Klayman & Toskes, P.A., in furtherance of our investigation at 888-997-9956, or visit our firm’s website at www.nasd-law.com.

Notice to Merrill Lynch Clients with Rampart Options Management Services Program: Klayman & Toskes, P.A. Files $500,000 Claim on Behalf of UPS Employee for Mismanagement of Concentrated Stock Position

By | Featured Cases | No Comments

 

New York, June 10, 2016 (GLOBE NEWSWIRE) – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, announced today that it has filed a claim against Merrill Lynch on behalf of a UPS (NYSE:UPS) employee for losses sustained from an unsuitable recommendation to invest in the Rampart Options Management Services Program (“Rampart”).  The suit was filed with FINRA’s Arbitration Department and is seeking damages of $500,000.

According to the Claim, the Claimant worked over 23 years with UPS and accumulated shares of the company through UPS’ Employee Stock Purchase Plan and Managers Incentive Program.  Merrill Lynch and its financial advisor recommended Rampart to facilitate the unsuitable investment strategy of selling covered call options on the UPS stock to produce income.  Securities attorney Steven D. Toskes explains, “Rampart’s covered call strategy was unsuitable investment advice for a UPS investor with low cost basis stock who did not want to have UPS stock ‘called away’ and trigger a large capital gains tax.

Merrill Lynch advised the sale of call options at strike prices that were far too low given market conditions and failed to buy back the options to ensure the stock was not called away.  Claimant lost over 3,800 shares of his UPS stock as a result of Merrill Lynch’s failure to recommend suitable options strategies for concentrated stock positions.

If you are a current or former UPS employee with a Merrill Lynch account that used Rampart’s services, and wish to discuss this announcement or have relevant information relating to the manner in which the firm handled concentrated portfolios, please contact Lawrence Klayman, Esq. or Steven D. Toskes, Esq. of Klayman & Toskes, P.A., in furtherance of our investigation at 888-997-9956, or visit our firm’s website at www.nasd-law.com.

The Securities Arbitration Law Firm of Klayman & Toskes, P.A. Comments on Trading Halt in United Development Funding IV Shares Reported in SEC Filings

By | Blog, Featured Cases | No Comments

Boca Raton, Florida (Globe Newswire) February 25, 2016 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, comments on the recent SEC Form 8-K filing reported by United Development Funding IV (NASDAQ:UDF) to shareholders. The United Development Funding IV SEC filing, dated February 22nd, reported “law enforcement authorities executed a search warrant at the corporate office of United Development Funding IV.” According to the SEC filing, following law enforcement actions United Development Funding IV received a notice from The NASDAQ Global Select Market (“NASDAQ”) of a trading halt in the company’s stock which is still in effect. United Development Funding IV share prices declined over 80% over the last 12 months, prior to the trading halt. According to securities attorney, Steven D. Toskes, Esq, “Investors who invested in United Development Funding IV as a non-traded REIT have significantly different case facts than investors who invested after the Initial Public Offering (“IPO”).”

Investor losses in United Development Funding IV may be attributed to Financial Industry Regulatory Authority (FINRA) sales practice violations. Mr. Toskes explains, “Brokerage firms who sold and marketed United Development Funding IV to investors are obligated to give, and investors are entitled to rely upon, brokerage firms for adequate due diligence when recommending investments.” FINRA sales practice violations may have led to their investment losses. Brokerage firm violations of FINRA sales practice rules related to investments in United Development Funding IV may include misrepresentations and omissions of material facts, conflicts of interest, unsuitable investment advice, securities concentration or the failure to supervise its financial advisors.

About Klayman & Toskes, P.A.

K&T is a leading securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors such as non-profit organizations, public and multi-employer pension funds in large and complex securities matters. K&T has office locations in California, Florida, New York and Puerto Rico. Investors with questions related to sales practices of brokerage firms and its financial advisors’ recommendations concerning United Development Funding IV, may contact Steven D. Toskes, Esq. at 888-997-9956.

Klayman & Toskes, P.A. Wins $2.25 Million FINRA Arbitration Award in Favor of Retired UPS Executive With Concentrated Stock Position Against Citigroup Global Markets

By | Blog, Featured Cases, FINRA Sales Practice Violations, Securities Arbitration, Securities Concentration | No Comments

Boca Raton, Florida (GLOBE NEWSWIRE) February 10, 2016 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com announced a major victory today in winning a significant $2.25 million award against Citigroup Global Markets (NYSE: C) for FINRA securities arbitration Case No. 14-00199. The securities arbitration panel heard testimony for six days in Atlanta, Georgia before an award in the amount of $2.25 million was made in favor of a retired UPS executive, represented by attorneys, Steven D. Toskes, Esq. and Raymond Gentile, Esq. Citigroup has since paid the award. The Claimant alleged causes of action related to Claimant’s concentrated position in UPS stock (NYSE: UPS) including: breach of fiduciary duty; unsuitable investment strategy; failure to recommend risk management strategies  for a concentrated; leveraged position; negligence and gross negligence; and failure to supervise. Investors who suffered losses in concentrated stock positions should consider what recourse is available to recover their investment losses in stock held in full-service brokerage accounts. The Financial Industry Regulatory Authority, (FINRA) is a self-regulating organization with sales practice rules and regulations that governs the securities industry’s conduct to protect the investing public.

According to founding partner, Steven D. Toskes, “Our client worked over 37 years with UPS and accumulated shares through UPS’ Employee Stock Purchase Plan and Managers Incentive Program. Citigroup loaned funds using UPS stock and other securities as collateral but failed to implement a risk management strategy to protect the concentrated stock.” Mr. Toskes continues, “Any time a client has a concentrated, leveraged stock position, the prudent practice is to protect the downside to prevent a margin call through a risk management strategy such as a prepaid forward contract, collar or protective put option. This case was about the failure of Citigroup to protect our client’s UPS stock which represented the vast majority of his life savings”.

Concentrated stock positions represent a long term holding acquired through investment, inheritance or as an employee of the company. “Employees who participate in Employee Stock Purchase Plans (“ESPP”) can be particularly susceptible to concentrated stock positions and their respective financial advisors should ensure that these positions are protected from unforeseen market events by diversifying or hedging these positions accordingly” said Raymond Gentile, Esq. Full-service brokerage firms are obligated to give, and investors are entitled to rely upon, brokerage firms for competent, suitable investment advice concerning risk management strategies for concentrated stock positions. Brokerage firms are required to supervise the activities in brokerage accounts, and losses may be attributed to the failure to adequately supervise the financial advisor. Recommendations of unsuitable investments and/or maintaining unprotected concentrated stock positions are both causes of action that may be available to investors against their full-service brokerage firm in an individual securities arbitration claim filed with FINRA.

 

About Klayman & Toskes, P.A.

K&T is a leading securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors such as non-profit organizations, public and multi-employer pension funds in large and complex securities matters. The Firm has offices in California, Florida, New York and Puerto Rico. Investors who have suffered investment losses from concentrated stock positions and the failure to implement risk management strategies should contact Steven D. Toskes, Esq. at 888-997-9956.

The Securities Arbitration Law Firm of Klayman & Toskes, P.A. Continues to Investigate Sales Practices Violations Related to Credit Suisse X-Links and Velocity Shares ETNs

By | Alternative Investments, Blog, Featured Cases, Featured Investigations, FINRA Sales Practice Violations, MArket-Linked Notes, Oil & Gas Investments, Securities Arbitration, Structured Securities Products | No Comments

Boca Raton, Florida (BUSINESSWIRE) – January 21, 2016 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A., www.nasd-law.com, continues to investigate Financial Industry Regulatory (FINRA) sales practice violations related to Credit Suisse Securities USA (“Credit Suisse”) X-Links and Velocity Shares Exchanged Traded Notes (ETNs). Credit Suisse X-Links and Velocity Shares ETNs are issued by affiliated banks, Credit Suisse A.G and Credit Suisse Group A.G., ADR (NYSE:CS). In some instances, Credit Suisse X-Links and Velocity Shares performance is linked to oil prices, energy-related master limited partnerships and commodity indexes. Credit Suisse manages its proprietary X-Links and Velocity Shares ETNs, commonly known as structured securities products, to generate greater returns through the use of embedded derivatives designed to track the performance of a volatile security, index, commodity or currency, many times without any principal protections.

FINRA sales practice rules require a fair and balanced representation to investors that Credit Suisse X-Links and Velocity Shares ETNs are more complex and risky than a simple “interest rate” credit when based on a volatile index or commodity. Credit Suisse underwrites, manages and markets billions of dollars in Credit Suisse X-Links and Velocity Shares ETNs including the following:

  • Credit Suisse S&P MLP ETN (NYSE Arca: MLPO)
  • Credit Suisse X-Links Commodity Benchmark ETN (NYSE Arca: CSCB)
  • Credit Suisse X-Links Commodity Rotation ETN (NYSE Arca: CSCR)
  • Credit Suisse X-Links Cushing MLP Infrastructure ETN (NYSE Arca: MLPN)
  • Credit Suisse Velocity Shares 3X Long Crude ETN (NYSE Arca: UWTI)
  • Credit Suisse Velocity Shares 3X Natural Gas ETN (NYSE Arca: VGAZ)

In 2015, a Securities Exchange Commission (SEC) audit of major Wall Street brokerage firms led to a National Exam Program – Risk Alert Report after the review of sales practices violations related to Structured Securities Products, similar to Credit Suisse X-Links and Velocity Shares ETNs. According to the SEC examination, deficiencies were found in some brokerage firms’ supervisory and sales practices related to the determination of “suitability” and “levels of concentration” in customer accounts.

Our investigation of major Wall Street brokerage firms, including Credit Suisse relates to sales practices related to Credit Suisse X-Links and Velocity Shares ETNs. Brokerage firm violations of FINRA sales practice rules may include misrepresentations and omissions of material facts, conflicts of interest, unsuitable investment advice, securities concentration or the failure to supervise its financial advisors. Our investigation relates to investments in Credit Suisse X-Links and Velocity Shares ETNs designed to track the Price of Oil, MLP Pipeline Indexes, Commodities Baskets, and in some instances are leveraged up to 300%.

About Klayman & Toskes, P.A.

Klayman & Toskes, P.A., an experienced, qualified and nationally recognized securities litigation law firm, is currently investigating FINRA sales practice violations of major Wall Street brokerage firms related to the sale of Credit Suisse X-Links and Velocity Shares ETNs. Investors who have knowledge or experience related to the sales practices of brokerage firms and its financial advisors’ recommendations related to Credit Suisse X-Links and Velocity Shares ETNs, contact Steven D. Toskes, Esq. at 888-997-9956.

AEELA throws UBS under the Bus for the Management of Puerto Rico Government Bond

By | Featured Cases, News, Puerto Rico Bond Funds, Securities Arbitration | No Comments

Noticel.com
August 4, 2014

From 2010 to 2012 there was an increase of $ 50 million to over $ 300 million in the amount of assets of the Association of Employees of the Commonwealth (AEELA) managed by UBS, among these, bonds of the Corporation for Public Financing (PFC, for its acronym in English).

PFC bonds, maturing in early August, will be the first default in the history of the Government of Puerto Rico.

During that period, UBS AEELA acquired for about $ 179 million in bonds of Puerto Rico, which increased to $ 212 million the amount of related financial instruments of Puerto Rico in AEELA portfolio investments. This increase resulted in an increase in the concentration of assets in bonds AEELA Puerto Rico from 14% in 2010 to 30% in 2012.

The executive director of the organization, Claudio Paul Crespo said in a press release that “part of this additional investment in bonds, UBS was made AEELA acquiring for Puerto Rico bonds that were in your own portfolio. These bonds, which were transferred from the portfolio of UBS AEELA portfolio, remained lower than that of other instruments available in the credit rating market. In addition, UBS recommended AEELA purchase long-term bonds, which increased based on the fluctuation of interest and value of risk assets “.

He added that the investment portfolio by UBS AEELA proposal was substantially more risky than the “Barclays Aggregate Bond Index,” which was the model used for UBS investment AEELA. “UBS recommended to AEELA riskier than those in the investment model that these represented AEELA investments that were to follow,” he said.

The April 18, 2014, the Association lodged a complaint against UBS in the amount of $ 65.7 million. That complaint is based on actions that resulted in UBS alleged false representations, omissions, breach of contract, violation of fiduciary duty, unsuitable investment recommendations, neglect of portfolio diversification, negligent supervision of its employees, fraud, violations of the Financial Industry Regulatory Authority (FINRA), violations of the laws and regulations on investment and violations of the laws of Puerto Rico.

This claim was filed with FINRA in the US through the law Carlo Law Offices, PSC, represented by Mr. Osvaldo Carlo Linares, and Klayman & Toskes, PA, represented by Mr. Steven D. Toskes. “The law considers that the claim of AEELA is solid, it is based on a thorough study of investments and the applicable law,” said the Executive Director.

Association also referred three cases to the Justice Department on events in AEELA during the same period 2010-2012, among these purchases without auctions, possible violations of law and other irregularities linked to the Vacation Center Playa Santa, the program savings and loan origination system.

“As part of our commitment, we have assumed the duty to work for an impeccable administration, consistent with an institutional vision of sound administration. Employees and pensioners of the government of Puerto Rico can be confident that we have taken the steps to provide stability to the association and strengthen its financial position for the benefit of the heritage of all owners partners so that their savings will continue to grow and can receive no problems the services and benefits they so desperately need, “said Claudio Crespo.

AEELA has it taken steps to prevent the fiscal situation of the government affect the financial stability of the institution and its thousands of owners partners cleared.

The Securities Law Firms Klayman & Toskes, P.A. and Carlo Law Offices Comment on Recent Standard & Poor’s Credit Downgrade Decision To Cut Puerto Rico Public Finance Corp. Bond Credit Ratings

By | Blog, Featured Cases, FINRA Sales Practice Violations, Puerto Rico Bond Funds, Securities Arbitration | No Comments

SAN JUAN, Puerto Rico (Globe Newswire) – July 21, 2015 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.sueubspuertorico.com, and Carlo Law Offices comment on Standard & Poor’s (“S&P”) decision to downgrade the credit rating on debt issued by Puerto Rico Public Finance Corp’s (“PRPFC”) in 2011 and 2012 from “CCC-” to “CC”. The S&P rating agency downgrade came after the PRPFC failed to transfer money to the bond trustee for the $58 million bond payment due Aug 1st. As a matter of practice, funds are transferred 15 days in advance of payment date. With this development, S&P warned that a default on the payment due by the PRPFC on August 1st has now become “a virtual certainty.” S&P stated, “We believe a default on the PFC bonds would be further demonstration of increasing unwillingness to pay debt in full and also raises the potential for future unequal treatment between various types of bondholders.”

In a recent report Bond Buyer asserted that, “Holders of that debt may have no recourse.” In support of this opinion PRPFC Series 2004B Bond Offering documents declare that, “The 2004 Series B bonds will not constitute an obligation of the Commonwealth of Puerto Rico or any of its political subdivisions or public instrumentalities (other than the corporation), and neither the Commonwealth of Puerto Rico nor any of its political subdivisions or public instrumentalities (other than the corporation) will be liable thereon. The Corporation has no taxing authority.”

Securities arbitration attorney, Steven D. Toskes comments on the recent events, “The 2016 Puerto Rico budgetary process has begun to buckle under the strain of excessive debt levels. Investors in PRPFC issued 2004 Series B bonds are most likely the first to be faced with an actual default in interest payments.” Mr. Toskes continues, “This pending default should lead investors to consider loss recovery options, including a Financial Industry Regulatory Authority (FINRA) arbitration claim for the failure to disclose the risks associated with concentrated investments in Puerto Rico Bonds that is the result of a brokerage firm’s failure to supervise its financial advisors.”

 

Klayman & Toskes, P.A. and Carlo Law Offices are dedicated to the rights of Puerto Rico investors. Puerto Rico investors who suffered losses as a result of FINRA sales practice violations may be able recover their losses in a FINRA arbitration claim. Klayman & Toskes, P.A., a leading securities and litigation law firm, practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors against major Wall Street brokerage firms.

Do you have a question or need more information? Get in touch with us