SAN FRANCISCO, Dec. 6, 2002 (PRIMEZONE) -- The law firm of Klayman & Toskes, P.A. ("K&T") (http://www.nasd-law.com), representing large groups of Employee Stock Option Plan ("ESOP") participants, has filed suit before the New York Stock Exchange ("NYSE") on behalf of a Microsoft (Nasdaq:MSFT) employee who had accumulated the vast majority of his retirement nest egg through Microsoft's ESOP Plan. The suit seeks compensatory damages of $3,037,937 against Merrill Lynch, Pierce, Fenner & Smith, Inc. ("Merrill Lynch") for alleged unlawful conduct at its Bellevue, Washington branch office.
The suit alleges that Merrill Lynch, through its registered representative, Daver Tiryakioglu, failed to recommend to Unlimited Advantage account holders, hedging strategies to protect their concentrated position in Microsoft as a result of their exercise of Microsoft Employee Stock Options through the use of margin. The suit contends that Merrill Lynch owed these fee based account holders a continuous and ongoing fiduciary duty to manage and provide advice beyond the exercise and initial deposit of Microsoft stock obtained through Microsoft's ESOP. Merrill Lynch represents, through its advertisements and solicitations, that investors with large holdings in a single company need strategies to reduce risk and volatility, as well as strategies for diversification and liquidity. Merrill Lynch promotes that it helps customers develop a customized plan that uses hedging strategies, diversification and manages downside risk and taxes. However, Merrill Lynch failed to implement these services. As such, the suit focuses on the firm's mismanagement of their clients' portfolios given the fact that at the time of exercise, there existed option strategies that would have protected the value of the margined, concentrated portfolios, known as a "zero cost" collar.
The sole purpose of this release is to investigate, on behalf of our clients, sales practice violations of licensed brokers at Merrill Lynch. The firm 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, the 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. We would greatly appreciate any information from Microsoft ESOP participants concerning the method or process used by Merrill Lynch with regard to clients' stock options and the handling of their accounts.
K&T has offices in California, Florida and New York and represents investors throughout the nation. If you wish to discuss this announcement, have done business with Merrill Lynch with regard to the execution of stock options, or have information relevant to our lawsuits, please contact Lawrence L. Klayman, Esquire of Klayman & Toskes, P.A., 888-997-9956 or visit us on the web at http://www.nasd-law.com