Notice to CMGI Investors with Merrill Lynch Unlimited Advantage Accounts from The Law Firm of Klayman & Toskes, P.A.
SAN FRANCISCO, Oct. 31 /PRNewswire/ -- The law firm of Klayman & Toskes, P.A. ("K&T") (http://www.nasd-law.com) is pursuing an arbitration claim against Merrill Lynch with the New York Stock Exchange on the behalf of an investor with a multi-million dollar concentration in CMGI, Inc. (Nasdaq:CMGI). The claim, (NASD Case #2003-011774), seeks compensatory damages of $13,276,929.
This claim alleges specific sales practice violations by Merrill Lynch and does not allege the usual "analyst conflict" issues that have plagued Wall Street's investment banking world. So far, at least ten of these class action claims have been dismissed by the federal courts, and more dismissals are expected. Alternatively, this case alleges the failure to recommend hedging strategies known as "zero cost" collars to properly manage the investor's concentrated stock position. Additionally, the investor's residence is currently in bank foreclosure due to the structured financing secured by the brokerage firm's affiliated bank through the collateralization of the concentrated portfolio. The claim alleges that a conflict of interest exists because the loan origination fees paid would be "charged back" against the stockbroker if the loan was terminated prior to the initial loan guarantee period.
K&T currently represents numerous investors who have elected not to participate in the class action process. Arbitration as an alternative path will ultimately depend on whether the alleged losses are a result of sales practice violations and whether the alleged damages are large enough to justify the costs required to file a securities arbitration claim. A growing trend among investors is to use arbitration as a means of recovering losses. The latest statistics for investors suffering large losses reveal an overall lower recovery rate in class actions as opposed to arbitration. Empirical evidence shows that when an investor suffers losses in larger amounts, usually in excess of $100,000, an individual dispute resolution process such as an arbitration claim filed before the New York Stock Exchange or the National Association of Securities Dealers is the best means of recovering losses suffered.
The sole purpose of this release is to investigate, on behalf of our clients, sales practice violations at major brokerage firms. We would greatly appreciate any information concerning the method or process used by various brokerage firms with regard to the handling of investor stock portfolios. K&T has offices in California, Florida and New York and represents investors throughout the nation. If you wish to discuss this announcement or have information relevant to our securities arbitration claims, please contact Lawrence L. Klayman, of K&T at 888-997-9956 or visit us on our website at nasd-law.com.
SOURCE Klayman & Toskes, P.A.
CO: Klayman & Toskes, P.A.; Merrill Lynch; CMGI, Inc.
ST: California
SU: LAW
Web site: nasd-law.com
prnewswire.com
10/31/2003 17:31 EST |
