The Klayman & Yoskes firm said the participant had hired the firm to sue Morgan Stanley Dean Witter & Company for not recommending the workers protect their company stock holdings with hedging strategies.
Working on behalf of its existing WorldCom clients, the firm has also lodged arbitration claims making similar allegations against Salmon Smith Barney and Merrill Lunch. Claims from existing clients are more than $50 million, the law firm said.
The WorldCom claims focus on Salomon’s, Merrill’s, and Morgan Stanley’s management of their clients’ portfolios – given the fact that there were available options that would have protected the value of the margined, concentrated portfolios, known as a “zero cost” collar.
The firm said in a media announcement that it is pursuing arbitration suits before the New York Stock Exchange and the National Association of Securities Dealers for:
- securities violations including the misuse of margin
- misuse of stock option plans,
- failure to supervise,
- unsuitability claims,
- misrepresentation and material omissions of fact
- unauthorized transactions, and
- excessive trading/churning of customers’ accounts
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