The Securities Arbitration Law Firm of Klayman & Toskes Files $500,000 Claim Against Citigroup Global Markets, Inc. on Behalf...
June 16 2014 - 11:07AM
Business Wire
The Securities Arbitration Law Firm of Klayman & Toskes
(“K&T”), www.nasd-law.com, announced today that it filed a
claim against Citigroup Global Markets, Inc. (“Citigroup”) on
behalf of a UPS (NYSE: UPS) employee for losses sustained as a
result of maintaining a concentrated, leveraged position in UPS
stock. The suit was filed with FINRA’s arbitration department, and
seeks damages of $500,000.
According to the Claim, the Claimant worked about 35 years with
UPS and accumulated shares of the company through UPS’ Employee
Stock Purchase Plan and Managers Incentive Program. The Claimant
opened a Hypothecation Loan (“hypo loan”) whereby the UPS stock
served as collateral. The UPS stock and loan eventually were
transferred to Citigroup. Citigroup had the right to call the loan
if the collateral fell below 30% or the loan exceeded 70% of the
loan-to-value ratio (“LTVR”). While Citigroup loaned Claimant money
using the UPS stock as collateral, Citigroup failed to recommend a
collar and/or protective put option as a risk management strategy
to protect Claimant’s concentrated position in UPS stock. A collar
and/or protective put option would have prevented a collateral call
on the loan when the UPS stock substantially declined below the
LTVR. Citigroup, looking to make money on the loan, facilitated the
unsuitable investment strategy of borrowing against a concentrated
stock position without a collar and/or protective put option in
place. By failing to protect the concentrated position and/or
recommend risk management strategies, Claimant received margin
calls which triggered the sale of UPS stock as well as other
non-UPS assets. This case is about the failure of Citigroup to
collar and/or protect Claimant’s UPS stock which represented a
substantial portion of his life savings.
The sole purpose of this release is to investigate, on behalf of
our clients, the sales practices of Citigroup in connection with
the handling of concentrated, leveraged stock portfolios for UPS
employees. Current and former UPS employees who held accounts with
Citigroup and have information relating to the manner in which the
firm handled their concentrated, leveraged portfolios, are
encouraged to contact Steven D. Toskes, Esquire or Jahan K.
Manasseh, Esquire of Klayman & Toskes, P.A., at 888-997-9956,
or visit us on the web at www.nasd-law.com.
Klayman & Toskes, P.A.Steven D. Toskes, EsquireorJahan K.
Manasseh, Esquire, 888-997-9956
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