The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, announced today that it is investigating claims on behalf of Apple, Inc. (NasdaqGS: AAPL) shareholders who sustained investment losses due to an over-concentration of shares in Apple stock. Since trading above $700 per share in September 2012, the price of Apple stock has dropped about 35% and is currently trading around $450 per share. As a result of this decline, Apple shareholders who held large concentrated stock positions in Apple have sustained substantial losses.
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 large 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 or stock options. The claims, filed in the Financial Industry Regulatory Authority (“FINRA”) Arbitration Department f/k/a NASD and NYSE, focused 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.
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