May 03, 2002
Dow Jones News Service
SAN FRANCISCO (Dow Jones)–A lawsuit has been filed on behalf of Microsoft Corp. (MSFT) employees against brokerage firms for allegedly failing to recommend hedging strategies that would protect concentrated position in Microsoft stock.
Klayman & Toskes filed the lawsuit against Merrill Lynch, Pierce, Fenner, & Smith, Inc., and Salomon Smith Barney Inc., and said it is preparing to file additional claims.
The suit alleges that the brokerage firms mismanaged the portfolios of the Microsoft employees “given the fact that there were options strategies available at the time of exercise that would have protected the value of the margined, concentrated portfolio, known as a zero cost collar.”
Neither Merrill Lynch nor Salomon Smith Barney was immediately available for comment Friday evening.
Microsoft shares closed Friday at $49.56, down 3.2%, following a 2.9% decline on Thursday. The software giant’s shares hit a 52-week high of $76.15 on June 28, and a low of $47.50 on Sept. 21.