This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Securities Arbitration Law Firm Of Klayman & Toskes Files $2 Million Claim Against Morgan Stanley Smith Barney On Behalf Of A UPS Employee As It Continues To Investigate Claims On Behalf Of Current And Former UPS Employees

Stocks in this article: UPS

The Securities Arbitration Law Firm of Klayman & Toskes (“K&T”), www.nasd-law.com, announced today that it filed a claim against Morgan Stanley Smith Barney (“Smith Barney”) on behalf of a UPS (NYSE: UPS) employee for losses sustained as a result of maintaining a concentrated, leveraged position in UPS stock. The suit was filed with FINRA’s arbitration department, and seeks damages of $2,000,000.

According to the Claim, the Claimant worked over 23 years with UPS and accumulated shares of the company through UPS’ Employee Stock Purchase Plan and Managers Incentive Program, which represented virtually his entire life savings. The Claimant opened a Hypothecation Loan (“hypo loan”) whereby the UPS stock served as collateral. In opening an account with Smith Barney, Claimant’s hypo loan was converted to a margin loan through Smith Barney. While Smith Barney loaned Claimant money using his UPS stock as collateral, Smith Barney failed to recommend a collar and/or protective put option as a risk management strategy to protect Claimant’s concentrated position in UPS stock. A collar and/or protective put option would have prevented a collateral call on the loan when the UPS stock substantially declined below the loan-to-value-ratio. Having the UPS stock collared would have increased the borrowing power in Claimant’s account allowing him to borrow 90% of the protective put option of the collar. However, Smith Barney, looking to make money on the loan, facilitated the unsuitable investment strategy of borrowing against a concentrated stock position without a collar and/or protective put option in place. By failing to protect the concentrated position and/or recommend risk management strategies, Claimant received margin calls which triggered the sale of his UPS stock. This case is about the failure of Smith Barney to collar and/or protect Claimant’s UPS stock which represented a large portion of his life savings. As a direct result of Smith Barney’s negligence, Claimant lost his life savings and filed for Chapter 7 bankruptcy.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs