Vernon Healy Files Multimillion Dollar Investor Claim Against Citi Smith Barney Relating...

Vernon Healy Files Multimillion Dollar Investor Claim Against Citi Smith Barney
Relating to Municipal Bonds and Preferred Stocks -- C, MS

NAPLES, Fla., July 13, 2009 (GLOBE NEWSWIRE) -- The Vernon Healy law firm filed
a claim against Citi Smith Barney today on behalf of a Naples couple who
suffered millions in losses following their stockbroker's trades in the couple's
account without their permission and inappropriate investing activity in
municipal bonds and preferred stocks.

The portfolio, which contained more than $10 million in municipal bonds when it
was transferred to Citi Smith Barney, now known as Morgan Stanley Smith Barney
(NYSE:C) (NYSE:MS), was initially designed to generate a fixed income for living
expenses for the young couple who retired early to Florida following a
successful sale of their businesses.

After dramatic losses in the couple's municipal bond account, managers at Citi
Smith Barney arrogantly rejected the couple's complaints about unauthorized
trades and other broker improprieties and failed to conduct an objective
investigation, according to the claim. This failure to adequately investigate
was especially inappropriate in light of the 9 other customers who have lodged
complaints against the same broker. The previous customer complaints include
ones involving unauthorized trading as well.

The broker's previous employer, Merrill Lynch, has paid more than $550,000 to
settle past customer abuse complaints, according the claim.

The Vernon Healy law firm is seeking phone records of the brokerage firm and
broker in addition to other documents as further evidence of the allegations of
unauthorized trading.

Of note, the broker purchased preferred stock in his own employer, Citigroup, in
early 2008 for the couple's account, a practice barred by Citigroup internal
rules, the claim states. Citi Smith Barney's managers and compliance department
failed to discover and stop the broker's Citigroup trades on which the couple
lost more than $400,000 in principal, according to the claim.

The Smith Barney broker moved greater portions of the couple's fixed income bond
portfolio to financial industry preferred stocks in early 2008 as the troubled
financial industry sector rapidly deteriorated. For example, the broker added
preferred stock in HSBC, Lehman Brothers, PNC, Royal Bank of Scotland, AIG,
Merrill Lynch, Wachovia, and Bank of America in early 2008, the claim states.

After the monumental collapse of Bear Sterns in March 2008, the Smith Barney
broker executed unauthorized trades in the couple's account and purchased Morgan
Chase, Citigroup, Deutsche Bank, Credit Suisse, Barclays, and Wells Fargo,
Allianz, ING, Fannie Mae, and Freddie Mac preferred stocks and convertible
products, according to the claim.

The couple's account lost $650,000 in principal as a result of the broker's
purchases of AIG, ING, Freddie Mac, and Fannie Mae between May 2008 and July
2008, the claim states.

In addition, the claim asserts that the stockbroker purchased Main Street
Natural Gas bonds backed by Lehman Brothers at a premium in April 2008 in the
couple's account, despite significant industry concerns about the financial
sector and especially Lehman Brothers. The couple lost more than $100,000 in
principal on this bond alone, which has come under regulatory scrutiny since it
lost 75 percent of its value within a year of its issuance and sale to the
public.

According to Chris Vernon, the lead attorney for the investors, increasingly his
law firm is seeing a pattern involving inappropriate activity by brokers and
brokerage firms in connection with the sale of both preferred stocks and
municipal bonds.

Financial industry regulator FINRA recently expressed concerns over municipal
bond sales to retail investors that included a specific focus on the municipal
gas bonds backed by Lehman discussed above that were sold to retail investors.

"I'm hopeful regulators will enact reforms to protect future municipal bond
investors, but unfortunately there are a great many investors who have already
been overcharged for bonds and who have already been exposed to far greater bond
investing risks than they were led to believe by brokers," Vernon said.

Vernon Healy is a Naples, Florida based law firm that assists investors
nationwide in recovering significant losses caused by all manner of financial
fraud and negligence in both court and arbitration.

URL:
http://www.protectinginvestors.com/2009/07/vernon-healy-files-multimillion-dolla
-investor-claim-against-citi-smith-barney-relating-to-municipa.html

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CONTACT: Vernon Healy Attorneys at Law
Christopher T. Vernon
Susan R. Healy
(239) 649-5390
(877) 649-5394

acostanzo@vernonhealy.com

http://www.protectinginvestors.com
http://www.vernonhealy.com