The Securities Arbitration Law Firm of Klayman & Toskes, P.A. Investigates Claims of Customer Losses from Concentrated UPS St...
September 22 2015 - 2:57PM
Business Wire
The securities arbitration law firm of Klayman & Toskes,
P.A. ("K&T"), www.nasd-law.com, announced today that it is
investigating Financial Industry Regulatory Authority (FINRA)
violations for Merrill Lynch customers with concentrated positions
in United Parcel Service (“UPS”) (NYSE: UPS) stock managed in
Merrill Lynch’s Rampart Options Management Service (“ROMS”)
program. Merrill Lynch offers the ROMS program on a discretionary
basis exclusively to high-net-worth clients holding stock positions
exceeding $1 million through Rampart Investment Management Company
(RIMCO), an independent money manager located in Boston,
Massachusetts. According to Merrill Lynch, “The ROMS service can
enhance the income potential of a concentrated stock position by
leveraging a combination of modeling programs, experience and
professional options management. Investors can likely increase cash
flow on their stock by 2% to 6% annualized, with the potential for
more depending on the stock's individual characteristics and the
client's risk/return profile.”
According to K&T, the investigation encompasses Merrill
Lynch sales practices for customers who acquired UPS stock through
UPS’ Managers Incentive Program or as an UPS employee, and were
advised by Merrill Lynch to manage their concentrated UPS stock
position through Merrill Lynch’s ROMS program. According to
securities attorney, Steven D. Toskes, “Merrill Lynch must
supervise financial advisor investment recommendations made to
customers with concentrated stock positions, especially brokerage
accounts managed on a discretionary basis,” Mr. Toskes explains,
“The ROMS covered call strategy was unsuitable investment advice
for UPS investors with low cost basis stock who did not want to
have UPS stock ‘called away’ and trigger large capital gains tax.
During the second half of 2013, UPS stock price gains resulted in
substantial losses when share prices rose above call option strike
prices selected by the ROMS program. A failure to recommend
suitable option strategies for concentrated stock positions may be
a cause of action available to Merrill Lynch customers in an
individual securities arbitration claim filed with FINRA.”
Securities concentration in UPS stock may result from investors’
desire to avoid taxes from the sale of low cost basis stock. No
matter what the reason for maintaining a concentrated stock
position, Merrill Lynch and its financial advisors must recommend
suitable options strategies based on customer personal financial
needs.
About Klayman & Toskes, P.A.
K&T an experienced, qualified and nationally recognized
securities litigation law firm is currently investigating FINRA
sales practice violations of Merrill Lynch related to customers
with concentrated positions in UPS stock managed by Rampart Options
Management Services. If you have knowledge or experience related to
the sales practices of Merrill Lynch and its financial advisors
recommendation of covered call option strategies for managed by
Rampart Options Management Services, contact Steven D. Toskes, Esq.
at 888-997-9956 or visit us on the web at www.nasd-law.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20150922006366/en/
Klayman & Toskes, P.A.Steven D. Toskes, Esq.,
888-997-9956stoskes@nasd-law.comwww.nasd-law.com
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