Salomon Smith Barney Sued by WorldCom Employee Stock Options Holders
January 15, 2002
AFP-Extel News Ltd
NEW YORK (AFX) – Law firm Klayman & Toskes PA said it has filed suit before the National Association of Securities Inc against Salomon Smith Barney Inc, charging the brokerage with failing to inform WorldCom Inc employees of the need to protect their stock options with hedging strategies.
Salomon representatives “failed to recommend to WorldCom employee stock option participants hedging strategies to protect their concentrated position in WorldCom as a result of the exercise of their stock options through the use of margin,” the firm said in a statement.
Employees could have protected the value of the margin concentrated portfolio with options known as a “zero cost collar” which were available to them, it said.
The claimants are now seeking compensation and punitive damages from Salomon Smith Barney’s PeachTree Road branch office in Atlanta, Georgia.