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.