The Securities Arbitration Law Firm of Klayman & Toskes Files $500,000 Claim Against Merrill Lynch on Behalf of a UPS Employee As It Continues To Investigate Claims on Behalf of Current and Former UPS Employees

Mon Apr 28, 2014 9:53am EDT

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The Securities Arbitration Law Firm of Klayman & Toskes Files $500,000 Claim Against Merrill Lynch on Behalf of a UPS Employee As It Continues To Investigate Claims on Behalf of Current and Former UPS Employees

The Securities Arbitration Law Firm of Klayman & Toskes (“K&T”), www.nasd-law.com, announced today that it filed a claim against Merrill Lynch 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 for about 34 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. The UPS stock and loan were eventually transferred to Merrill Lynch. Merrill Lynch 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 Merrill Lynch loaned the Claimant money using UPS stock as collateral, Merrill Lynch 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 margin call on the loan when the UPS stock substantially declined below the LTVR. Merrill Lynch, 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 Merrill Lynch 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 Merrill Lynch in connection with the handling of concentrated, leveraged stock portfolios for UPS employees. Current and former UPS employees who held accounts with Merrill Lynch 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