BOCA RATON, FL, January 9, 2018 – The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, continues to investigate and pursue claims for current and former UPS (NYSE: UPS) employees for losses sustained from unsuitable covered call writing strategies for concentrated UPS stock positions. The investigation focuses on firms’ sales practices for customers who acquired UPS stock through UPS’s Employee Stock Purchase Plan or Managers Incentive Program and were advised to implement a covered call strategy on their concentrated UPS stock position.
K&T continues to bring claims on behalf of clients who are current or former UPS employees, who held concentrated positions in UPS stock. UPS employees received their shares at a low cost-basis as a form of compensation, and firms solicited them to employ a covered-call strategy that promised present income. UPS employees often have no desire to lose their shares that they worked so hard to acquire. UPS employees also wanted to keep their shares, because the shares produced consistent dividends, and the shares have a history of appreciation. In many instances the covered call strategy failed. Wall Street brokerage firms, in their implementation of the covered call strategy sold options with strike prices that were too close to the market value of the shares, sometimes while the shares were “in the money.” The strategy placed investors in a precarious position of either losing their shares or having to pay a significant sum to buy-back their stock. Further, the sale of such large positions typically ended in significant tax liability to investors.
The sole purpose of this release is to investigate whether the covered call strategies deployed by investment firms were suitable for UPS investors with concentrated stock positions which were acquired through the Employee Stock Purchase Plan and/or Managers Incentive Programs. Current and former UPS employees who held accounts at full-service brokerage firms, and have information relating to the manner in with the firm handled their concentrated, leveraged portfolios, are encouraged to contact the attorneys of Klayman & Toskes, P.A., at (888) 997-9956, or visit our firm’s website at www.nasd-law.com.