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Today, the Securities Law Firm of KlaymanToskes filed a securities arbitration claim against Citigroup Global Markets, Inc. (NYSE: C) on behalf of a single mother, for losses sustained as a result of being over-concentrated in Citigroup stock. The claim seeks damages of $6 million. The suit was filed with the Financial Industry Regulatory Authority’s (FINRA) Office of Dispute Resolution. According to the Claim, the Claimant acquired a concentrated stock position in Citigroup stock through her divorce. With no experience in the stock markets, she relied on her Citigroup advisor to provide her with suitable investment advice and protect her accounts which represented virtually her entire net worth. However, Citigroup failed to advise her of the risk her portfolio entailed and risk management strategies that the firm had available to protect the Citigroup stock. When the price of Citigroup stock collapsed in 2008, the Claimant sustained significant losses in her portfolio which was supposed to help support the financial future of both she and her young child.
KlaymanToskes has pioneered the representation of both retail and institutional clients who sustained losses as a result of holding concentrated positions in a single security or sector. Specifically, KlaymanToskes’ claims focus on the mismanagement of concentrated portfolios given the fact that there were risk management strategies available that would have protected the value of the concentrated portfolios to the downside. Such risk management strategies include stop loss and limit orders, protective puts and collars. Whether the broker recommended that the client purchase a concentrated position, or the concentrated position was transferred into the account, the brokerage firm had a duty to make suitable recommendations to diversify away the risk.