Microsoft employee awarded damages against investment advisor

January 27, 2005
Puget Sound Business Journal

A law firm representing participants in Microsoft Corp.’s employee stock option plan said it has won an award of $237,338 from investment manager UBS/PaineWebber on behalf of one such client, who received “unsuitable investment advice” from the manager.

Klayman & Toskes PA alleged that several large U.S. investment managers failed to implement hedging strategies for Microsoft (NASDAQ: MSFT) employees, leaving them over-invested in Microsoft shares, and at risk for more losses than necessary.

The unnamed participant in this case was awarded damages by a National Association of Securities Dealers arbitration panel, the law firm said in a press release.

“As a result of failing to recommend and implement risk management strategies, the (client’s) portfolio was exposed to unnecessary, uncompensated risk,” the law firm said in an announcement.

Klayman & Toskes said it continues to represent many Microsoft employees who received unsuitable investment advice from their financial advisers. In addition to UBS/PaineWebber, the firm says it has pending cases against other major Wall Street firms.

UBS representatives in Seattle said they weren’t aware of this case and couldn’t immediately comment.

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