The Securities Arbitration Law Firm of Klayman & Toskes Continues to
Investigate Claims On Behalf of Current and Former UPS Employees Who Held
Concentrated Positions in UPS Stock on Margin/Hypo Loans
NEW YORK -- February 20, 2013
The Securities Arbitration Law Firm of Klayman & Toskes (“K&T”),
www.nasd-law.com, announced today that it is continuing to investigate claims
against full service brokerage firms on behalf of current and former United
Parcel Service (“UPS”) (NYSE:UPS) employees for losses sustained as a result
of maintaining a concentrated, leveraged position in UPS stock. Many UPS
employees who obtained company stock as a form of compensation, either through
the employee stock option plan (“ESOP”) or employee stock purchase plan
(“ESPP”), and later transferred it to a full service brokerage firm, were
encouraged to take out a “hypothecation loan,” also known as a “hypo loan.” A
hypo loan is obtained by pledging securities or other assets as collateral to
secure a loan. In this case, the UPS stock served as collateral for the loan.
Unfortunately, many UPS employees were never advised of the risks associated
with maintaining a hypo loan, including the risk of a margin call. When the
price of UPS stock declined from October 2008 through April 2009, many UPS
employees had their stock liquidated thereby decimating their investment
Additionally, in many accounts, the UPS stock represented a concentrated
position. However, many UPS employees were unaware of the risks associated
with owning a concentrated account. Moreover, many brokerage firms failed to
explain how the use of risk management strategies, like a zero-cost collar,
protective put options, stop loss orders and/or an exchange fund, could have
protected the concentrated UPS position.
The effects of margin on a concentrated stock position substantially increase
the risk to the account. Once the account receives a margin call as a result
of the decline in share price of the UPS stock, a forced liquidation of the
stock can occur, which precludes the investor from recovering their losses
through a potential rebound in the price of UPS stock. In many cases, had the
investor not been on margin, the UPS stock would not have been liquidated to
meet a margin call, thereby providing it with an opportunity to recover given
that the price of UPS stock came back in value since 2009.
Current and former UPS employees who have sustained investment losses can
contact K&T to explore their legal rights and options. The attorneys at K&T
are dedicated to pursuing claims on behalf of investors who have suffered
substantial investment losses. K&T, an experienced, qualified and nationally
recognized securities litigation law firm, practices exclusively in the field
of securities arbitration and litigation. It continues its representation of
investors throughout the world in securities arbitration and litigation
matters against major Wall Street brokerage firms.
If you wish to discuss this announcement or have investment losses of $250,000
or more in UPS stock, please 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 http://www.nasd-law.com.
Klayman & Toskes, P.A.
Steven D. Toskes, Esquire, 888-997-9956
Jahan K. Manasseh, Esquire, 888-997-9956
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