November 11, 2003
Dow Jones Business News
NEW YORK -(Dow Jones)- Merrill Lynch & Co. faces a lawsuit filed by a former Microsoft Corp. (NasdaqNM:MSFT – News) employee for alleged mismanagement of stock options and use of portfolio reserve loans.
A Merrill Lynch spokesman declined to comment on the lawsuit, which seeks compensatory damages of $12.6 million.
In a press release Tuesday, Klayman & Toskes P.A. said the complaint alleges Merrill Lynch failed to recommend hedging strategies to protect the claimants’ highly concentrated position in Microsoft. The suit also contends Merrill Lynch owed its customers an ongoing fiduciary duty to manage and provide advice beyond the exercise and initial deposit of stock obtained through Microsoft’s employee stock option plan.
Klayman & Toskes is pursuing arbitration before the New York Stock Exchange (News – Websites) and the National Association of Securities Dealers for this case.
Last week, Klayman & Toskes said it is pursuing an arbitration claim against an unspecified major brokerage firm with the NYSE for an employee stock option participant whose portfolio was over-concentrated in Nortel Networks Corp. (NYSE:NT – News).