Boca Raton, Florida (GLOBE NEWSWIRE) September 18, 2015 — The securities arbitration law firm of KlaymanToskes, www.klaymantoskes.com, announced today that it is investigating Financial Industry Regulatory Authority (FINRA) violations for Merrill Lynch customers with concentrated positions in United Parcel Service (“UPS”) (NYSE: UPS) stock managed in Merrill Lynch’s Rampart Options Management Service (“ROMS”) program. Merrill Lynch offers the ROMS program on a discretionary basis exclusively to high-net-worth clients holding stock positions exceeding $1 million through Rampart Investment Management Company (RIMCO), an independent money manager located in Boston, Massachusetts. According to Merrill Lynch, “The ROMS service can enhance the income potential of a concentrated stock position by leveraging a combination of modeling programs, experience and professional options management. Investors can likely increase cash flow on their stock by 2% to 6% annualized, with the potential for more depending on the stock’s individual characteristics and the client’s risk/return profile.”
According to KlaymanToskes, the investigation encompasses Merrill Lynch sales practices for customers who acquired UPS stock through through UPS’ Managers Incentive Program or as an UPS employee, and were advised by Merrill Lynch to manage their concentrated UPS stock position through Merrill Lynch’s ROMS program. According to securities attorney, Steven D. Toskes, “Merrill Lynch must supervise financial advisor investment recommendations made to customers with concentrated stock positions, especially brokerage accounts managed on a discretionary basis” Mr. Toskes explains, “The ROMS program was unsuitable investment advice for UPS investors with low cost basis stock who did not want to have UPS stock ‘called away’ and trigger large capital gains tax. During the second half of 2013, UPS stock price gains resulted in substantial losses when share prices rose above call option strike prices selected by the ROMS program. A failure to recommend suitable option strategies for concentrated stock positions may be a cause of action available to Merrill Lynch customers in an individual securities arbitration claim filed with FINRA.” Securities concentration in UPS stock may result from investors’ desire to avoid taxes from the sale of low cost basis stock. No matter what the reason for maintaining a concentrated stock position, Merrill Lynch and its financial advisors must recommend suitable options strategies based on customer personal financial needs.
About KlaymanToskes
KlaymanToskes an experienced, qualified and nationally recognized securities litigation law firm is currently investigating FINRA sales practice violations of Merrill Lynch related to customers with concentrated positions in UPS stock managed by Rampart Options Management Services. If you have knowledge or experience related to the sales practices of Merrill Lynch and its financial advisors recommendation of covered call option strategies for managed by Rampart Options Management Services, contact Steven D. Toskes, Esq. at 888-997-9956 or visit us on the web at www.klaymantoskes.com.