NEW YORK--(BUSINESS WIRE)--The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, announced today that it is investigating the damages sustained by investors who held large, unhedged concentrated positions in General Electric Company stock (NYSE:GE) (“GE”). Since trading at $31.60 per share in December 2016, the price of GE stock has dropped about 50.6% and is currently trading around $15.61 per share. As a result of this decline, GE shareholders who held large concentrated stock positions in GE have sustained substantial losses.
Investment portfolios holding large concentrated stock positions carry significant downside risks. In some cases, investors holding these positions are unable or unwilling to sell due to adverse tax consequences, company or regulatory restrictions or corporate culture. Full service brokerage firms whose customers hold large concentrated stock positions have a duty to ensure that their customers understand the risks associated with concentration, and to disclose and recommend the availability of risk management strategies which can be used to protect the value of the concentrated portfolio. Such risk management strategies include stop loss and limit orders, protective puts and collars. Stop loss orders, limit orders and protective puts provide an account with downside protection and an exit strategy should the stock decline in value. A hedge strategy, known as a “zero cost” collar, creates a range of value that the portfolio maintains irrespective of the fluctuation and direction of the underlying stock price. The failure to use risk management strategies as well as the failure to “hedge” the value of a concentrated portfolio directly exposes an investor’s concentrated position to the fluctuations in the volatile securities markets.
The sole purpose of this release is to investigate whether strategies deployed by investment firms were suitable for GE investors with concentrated stock positions. GE investors who held accounts at full-service brokerage firms, and have information relating to the manner in with the firm handled their concentrated, leveraged portfolios, are encouraged to contact the attorneys of Klayman & Toskes, P.A., at (888) 997-9956, or visit our firm’s website at www.nasd-law.com.
About Klayman & Toskes, P.A.
K&T is a leading national securities law firm which practices exclusively in the field of securities arbitration and litigation, on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm represents high net-worth, ultra-high-net-worth, and institutional investors, such as non-profit organizations, unions, public and multi-employer pension funds. K&T has office locations in California, Florida, New York and Puerto Rico.