Salomon Smith Barney Sued 579682

Law Firm of Klayman & Toskes, P.A. represents dozens of WorldCom employees in claims against Salomon Smith Barney

April 11, 2002

2 Min Read

NEW YORK -- The Law Firm of Klayman & Toskes, P.A., representing dozens of WorldCom employees, continues to investigate and pursue claims on its clients' behalf against Salomon Smith Barney, Inc., a unit of Citigroup, Inc. (NYSE: C - news). The law firm's investigation has now expanded to include Salomon Smith Barney's Jericho, New York branch office. A claim was filed April 9, 2002 before the National Association of Securities Dealers, Inc. ("NASD") alleging unlawful conduct at this Jericho, New York branch office. Klayman & Toskes, P.A. represents a large group of WorldCom employee stock option plan participants with damages that continue to grow and now exceed $30 million. The suit alleges that Salomon Smith Barney, Inc., through its registered representative Brian Frances Hayes ("Hayes") failed to recommend to WorldCom, Inc., (Nasdaq: WCOM - news) employee stock option participants hedging strategies to protect their concentrated position in WorldCom as a result of the exercise of their stock options through the use of margin. Hayes joined the employ of MFS Communications Company Inc., ("MFS") in March of 1991, which later merged with WorldCom in 1996. Hayes continued his employment with WorldCom until August 1997, when he began working for Salomon Smith Barney. WorldCom employees have brought claims against Salomon Smith Barney for its mismanagement of their portfolio given the fact that there were options strategies available at the time of exercise that would protect the value of the margined, concentrated portfolio, known as a "zero cost" collar. The claims seek compensatory and punitive damages for violations of the Securities and Exchange Act of 1934, state securities laws, common law fraud, breach of contractual and fiduciaries duties, and gross negligence. The unlawful conduct perpetrated on these WorldCom employees, as alleged in the claims, reflect what appears be a systemic and pervasive fraud. WorldCom Inc. Salomon Smith Barney

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