SEATTLE, Aug. 29 -LAWFUEL – The Law News Network — The Law Firm of Klayman & Toskes, P.A. (“K&T”)( http://www.nasd-law.com ), representing numerous Microsoft
Corporation (Nasdaq: MSFT) Employee Stock Option Plan (“ESOP”) participants,
continues to aggressively pursue securities arbitration claims on their
According to one such claim, Case No.: 2002-011084, following the
“exercise and hold” of employee stock options, the Claimants’ maintained a
margined concentrated portfolio in Microsoft. However, the Claimants’
financial advisor failed to recommend suitable hedging and/or risk management
strategies to protect the value of their leveraged Microsoft shares, thereby
causing severe losses in the amount of $2,768,425.
In May of this year, the final hearing of this arbitration commenced in
Seattle, Washington. However, the hearing came to an abrupt halt when K&T
sought the immediate recusal of two arbitrators on grounds of alleged bias.
Nevertheless, K&T continues its pursuit of recovery on behalf of its clients,
as the final hearing of this matter has been re-set for mid-November of this
Presently, K&T represents numerous Microsoft ESOP participants and
investors who have claims against Wall Street brokerage firms before the New
York Stock Exchange and the National Association of Securities Dealers worth
over $500 million. The claims focus on the mismanagement of the clients’
portfolios given the fact that there were risk management strategies available
that would have protected the value of the concentrated portfolio. Such risk
management strategies include stop loss and limit orders, protective puts and
collars. Stop loss orders, limit orders and protective puts provide an account
with downside protection and an exit strategy should the stock decline in
value. A hedge strategy, known as a “zero cost” collar, would have created a
range of value that the portfolio would have maintained irrespective of the
fluctuation and direction of the underlining stock price. The failure to use
risk management strategies, as well as the failure to “hedge” the value of the
concentrated portfolio, directly exposed many investors’ concentrated
portfolios to the fluctuations in the volatile securities market.
In the past, K&T has been able to make successful recoveries for investors
with claims similar to those mentioned above. For instance, K&T obtained a
favorable award against UBS/PaineWebber for a Microsoft employee. The amount
awarded represented 46% of the claimant’s out-of-pocket losses. However, the
amount awarded against UBS/PaineWebber represented 100% of the employee’s
damages had UBS/PaineWebber implemented the “zero cost” collar strategy.
Similarly, K&T received another favorable award against Smith Barney for a
WorldCom employee. In both cases, K&T was able to successfully demonstrate
that these employees received unsuitable investment advice from their
full-service brokerage firms. Due to these recent successes, K&T firmly
believes that it can and will continue to aid similarly situated ESOP
participants and investors.
The sole purpose of this release is to investigate, on behalf of our
clients, sales practice violations of licensed brokers at major brokerage
firms. Presently, K&T continues to represent Microsoft ESOP participants and
investors, as well as numerous others, who have claims against major Wall
Street brokerage firms for securities violations including the misuse of
margin, the misuse of stock option plans, failure to supervise, unsuitability
claims, misrepresentation and material omissions of fact and excessive
trading/churning of customers’ accounts.
K&T, a nationally known securities arbitration law firm, presently
represents numerous investors throughout the country who have claims against
major Wall Street brokerage firms for securities fraud violations and
negligence. If you wish to discuss this announcement or have information
relevant to our securities arbitration claims, please contact Lawrence L.
Klayman at 1-888-997-9956 or visit us on the web at http://www.nasd-law.com .