The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”) ( http://www.nasd-law.com), representing numerous aggrieved investors throughout the nation, advises all Citigroup (NYSE: C) shareholders who are class members of the settled class action against Citigroup, In Re Citigroup, Inc. Securities Litigation, Case No. 07 Civ. 9901, that they should explore all of their legal options, including filing a securities arbitration claim against their full service brokerage firm. Class members who sustained substantial losses as a result of holding a large concentrated position in Citigroup stock with a full service brokerage firm, with the exception of Citigroup and its related parties, should consider whether they should file an individual securities arbitration claim in addition to participating in the class action. Investors who held concentrated positions in Citigroup stock may be able to recover investment losses through the arbitration forum established by the Financial Industry Regulatory Authority (“FINRA”). FINRA’s Arbitration Department is where investors, both retail and institutional, go to seek redress as a result of sales practice violations committed by their brokerage firm, including claims of over-concentration, misrepresentation and omission, unsuitable recommendations and failure to supervise.
Since 2000, K&T has pioneered the representation of High Net Worth (“HNW”) and Ultra-HNW clients who sustained investment losses as a result of holding concentrated positions in a single security or sector, in a full-service brokerage account. The clients we represented and continue to represent include founders of public companies and key employees from virtually every industry who received large grants of stock, Rule 144 restricted stock and stock options. The claims focus on the mismanagement of the clients’ portfolios given the fact that there were risk management strategies 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 a concentrated portfolio directly exposes an investor’s concentrated position to the fluctuations in the volatile securities markets.