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The Securities Arbitration Law Firm Of Klayman & Toskes Commences Investigation Into Damages Sustained By Investors Who Held Large, Unhedged Concentrated Positions In Enerplus Corp. Stock

Stocks in this article: ERF

The second sentence of the first paragraph should read: Since trading around $31 per share in July 2011, the price of Enerplus stock has dropped about 46% and is currently trading around $17 per share. (instead of "Since trading around $28.55 per share in February 2011, the price of Enerplus stock has dropped about 61% and is currently trading at $11.17 per share.")

The corrected release reads:

THE SECURITIES ARBITRATION LAW FIRM OF KLAYMAN & TOSKES COMMENCES INVESTIGATION INTO DAMAGES SUSTAINED BY INVESTORS WHO HELD LARGE, UNHEDGED CONCENTRATED POSITIONS IN ENERPLUS CORP. STOCK

The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, announced today that it is investigating the damages sustained by investors who held large, unhedged concentrated positions in Enerplus Corp. stock (NYSE: ERF) (“Enerplus”). Since trading around $31 per share in July 2011, the price of Enerplus stock has dropped about 46% and is currently trading around $17 per share. As a result of this decline, Enerplus shareholders who held large concentrated stock positions in Enerplus have sustained substantial losses.

Investment portfolios holding large concentrated stock positions carry significant downside risks. In some cases, investors holding these positions are unable or unwilling to sell due to adverse tax consequences, company or regulatory restrictions or corporate culture. Full service brokerage firms whose customers hold large concentrated stock positions have a duty to ensure that their customers understand the risks associated with concentration, and to disclose and recommend the availability of risk management strategies which can be used to protect 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, creates a range of value that the portfolio maintains irrespective of the fluctuation and direction of the underlying 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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