The Securities Arbitration Law Firm of Klayman & Toskes Files $500,000 Claim Against Citigroup on Behalf of Retired UPS Emplo...
August 01 2014 - 5:09PM
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. on behalf of a retired
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 over 33 years with
UPS and accumulated shares of the company through UPS’ Employee
Stock Purchase Plan and Managers Incentive Program. Claimant opened
a Hypothecation Loan (“hypo loan”) whereby the UPS stock served as
collateral. In opening an account with Citigroup, Claimant’s hypo
loan was converted to an Express Credit Loan with the UPS stock as
collateral. While Citigroup loaned Claimant money using his 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.
Having the UPS stock collared would have increased the borrowing
power in Claimant’s account allowing him to borrow 90% of the
protective put option of the collar. However, 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 collateral calls which triggered the
sale of his UPS stock. This case is about the failure of Citigroup
to collar and/or protect Claimant’s UPS stock which represented a
large portion of his life savings. As a direct result of
Citigroup’s negligence, Claimant lost approximately $500,000.
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, or other full-service brokerage firms, 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, Esquire or Jahan K.
Manasseh, Esquire, 888-997-9956
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