The Securities Arbitration Law Firm of Klayman & Toskes ("K&T"), www.nasd-law.com,
announced today that it is investigating claims of United Parcel Service
("UPS") (NYSE: UPS) employees who sustained losses as a result of
maintaining a concentrated, leveraged position in UPS stock. Many UPS
employees who obtained company stock as a form of compensation through
the Managers Incentive Program, and later transferred it to a
full-service brokerage firm, used the stock as collateral for 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 collateral 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 portfolio.
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. In some cases, 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 leverage on a concentrated stock position substantially
increase the risk to the account. Once the account receives a collateral
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's account not been leveraged,
the UPS stock would not have been liquidated to meet a collateral 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 held accounts at full-service
brokerage firm and sustained investment losses in UPS stock 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
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 or Jahan K.
Manasseh, Esquire, 888-997-9956