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High Hat Executive Claims on Stock Losses

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We have represented individuals with significant assets, in excess of $5,000,000 to $100,000,000 in particular stock and investment advice claims.  These High Net Worth  and Ultra-High Net Worth clients may suffer from investment losses as a result of holding concentrated positions in a single security or sector.   Many times, these, these individuals are hard working, hard driving business builders, who have significant shares in their company when that company goes public.  They may be the founders of public companies and key employees,  particularly in technology and telecommunication, who received large grants of stock options or Rule 144 restricted stock.
Even these High-Hat customers may suffer from poor advice and risk management strategies that would have protected the value of the concentrated portfolio. Available but little used risk management strategies include loans secured by stock, stop loss and limit orders, protective puts and collars.   As commonly known to brokers, stop loss orders, limit orders and protective puts provide an account with downside protection and an exit strategy should the stock decline in value.   There is also a safety hedge strategy, known as a “zero cost” collar, which can be employed to  create a range of value that the portfolio would have maintained irrespective of the fluctuation and direction of the underlining stock price.   The brokerage firm’s lack of discussion or use of these important 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, sometimes with disastrous results.
Many times, High-Hat or executive claimants are particular adverse to discussing the situation, or to publicity.  We handle these claims in a strictly confidential manner, with the highest level of discussion with the brokerage firm.  We know how to handle the sophisticated business issues that may arise between a founder and his or her’s company’s continued work with a brokerage firm.  Because there are a number of strategies for compensation and correction of these circumstances, we can offer the executive with a potential claim the nuanced advice that is needed in these very particular and sensitive situations.
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