BOCA RATON, Fla., Nov. 19, 2008 (GLOBE NEWSWIRE) -- Many investors may be suffering significant stock market losses in their portfolios as a result of "over-concentration" (for more information, please see www.overconcentration.com). Even prior to the precipitous decline of the Dow Jones, S&P 500, and NASDAQ, brokers should have been advising their clients against "holding all of their eggs in one basket," says Craig Stein, Managing Partner of Stein, Stein & Pinsky, P.A. (www.steinpinsky.com) in Boca Raton, Florida, and former attorney for the Florida Comptroller's Office. "We have seen that scenario before, most recently when the tech bubble burst," Mr. Stein commented.
Today's situation appears similar to that of the early 2000's when tech companies and dot-coms failed after years of unprecedented success and growth. Just as they did then, many stockbrokers and financial advisors placed their clients far too heavily in one stock or in one sector of the market. Back then it was the tech sector or specific tech companies. Today, many investors are too heavily invested in one financial institution, bank, or other credit-intense company, or are too heavily invested in the financial sector and banking industry. According to Mr. Stein, even if the brokers did not recommend that their customers make such investments, brokers had a duty to recommend diversification or apply other hedging strategies.
Brokers are required to know their customers' financial abilities, risk tolerances and investment objectives. But in any case, "It is not in any customer's best interests to be over-concentrated in any one stock or any one sector of the market," says Jack Stein, Senior Partner at Stein, Stein & Pinsky, P.A., and former enforcement attorney for the U.S. Securities and Exchange Commission. "Diversification and hedging strategies are fundamental for protecting your or your customer's investment portfolio," he continued.
Investors suffering losses as a result of holding over-concentrated positions in significantly depreciated stocks, including National City Corporation (NYSE:NCC), Morgan Stanley (NYSE:MS), Fannie Mae (NYSE:FNM), Freddie Mac (NYSE:FRM), Wachovia Corp. (NYSE:WB), General Electric Co. (NYSE:GE), Apple Inc. (Nasdaq:AAPL), Washington Mutual (NYSE:WM), American International Group (NYSE:AIG), MBIA (NYSE:MBI), Ambac Financial Group (NYSE:ABK), Citigroup (NYSE:C), Lehman Brothers Holdings (NYSE:LEH), Merrill Lynch (NYSE:MER), UBS (NYSE:UBS), Bank of America Corp. (NYSE:BAC), General Motors Corp. (NYSE:GM), or Ford Motor Company (NYSE:F), are urged to seek legal advice regarding their rights to recover losses from their brokerage firms. Stein, Stein & Pinsky, P.A. has opened an investigation in this area, and is inviting investors who have lost more than $250,000 to contact them for a free consultation.
Speak directly to attorneys Craig Stein (cstein@steinpinsky.com) or Joshua Pinsky (jpinsky@steinpinsky.com), by emailing or calling toll free to 1-888-222-4124. You can also learn more about Stein, Stein & Pinsky, P.A. by logging onto www.steinpinsky.com.