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UPS Employee Receives FINRA Award

Sunday, February, 21, 2016

A UPS worker represented by the Securities Arbitration law Firm of Klayman & Toskes, PA received a victory recently when it won a $2.25 million award versus Citigroup Global Markets concerning FINRA securities arbitration. The arbitration panel heard six days’ worth of testimony before granting the award in favor of the retired UPS executive.


The executive claimed causes of action related to his concentrated position in UPS stock, which included breach of fiduciary duty, failure to recommend risk management strategies for a concentrated, leveraged position, unsuitable investment strategy, negligence and gross negligence, and failure to supervise.


After he experienced losses in stock positions, he took action and sought recourse to recover his investment losses. According to the UPS employee’s attorneys, the client worked for more than 37 years with the company and accumulated shares through UPS’s Employee Stock Purchase Plan and Managers Incentive Program. The company was accused of loaning funds using UPS stock as collateral, but did not implement a risk management strategy to protect the concentrated stock. The lawsuit was filed because the company failed to protect its employee’s life savings.


The attorney also pointed out that employees participating in Employee Stock Purchase Plans are especially vulnerable. It is important financial advisers keep a close eye on protected positions and help clients make the best decisions diversifying or hedging their positions. As a matter of fact, full-service firms are obligated to do so and must provide suitable investment advice concerning risk management. By failing to do so, as UPS did, they are putting themselves at risk for legal action.