Press Room
May 03, 2002
Firm Sues Brokerages On Behalf Of Microsoft Employees
Dow Jones News Service
SAN FRANCISCO (Dow Jones)--A lawsuit has
been filed on behalf of Microsoft Corp. (MSFT)
employees against brokerage firms for allegedly
failing to recommend hedging strategies that would
protect concentrated position in Microsoft stock.
Klayman & Toskes filed the lawsuit against Merrill
Lynch, Pierce, Fenner, & Smith, Inc., and Salomon
Smith Barney Inc., and said it is preparing to file
additional claims.
The suit alleges that the brokerage firms mismanaged
the portfolios of the Microsoft employees "given
the fact that there were options strategies available
at the time of exercise that would have protected the
value of the margined, concentrated portfolio, known
as a zero cost collar."
Neither Merrill Lynch nor Salomon Smith Barney was
immediately available for comment Friday evening.
Microsoft shares closed Friday at $49.56, down 3.2%,
following a 2.9% decline on Thursday. The software
giant's shares hit a 52-week high of $76.15 on June
28, and a low of $47.50 on Sept. 21.
