Many claims related to the overconcentration in Citigroup stock in full-service brokerage accounts focus on the fact that many of these portfolios were mismanaged, given that risk management strategies were available that would have offered investors protection for the value of their portfolio. Securities arbitration lawyers say that protective puts and collars, stop loss and limit orders, “zero cost” collars and other “hedge” strategies are risk management strategies that could have been used to protect clients’ portfolios.

Protective puts, limit orders and stop loss orders are a way to give an account an exit strategy and downside protection in the event that a stock declines in value. A “zero cost” collar is a hedging strategy that creates a range of value, allowing the portfolio to maintain its value, irrespective of the direction and fluctuation of the price of the underlying stock. In many cases, investment fraud lawyers say that investors’ concentrated positions were directly exposed to fluctuations in the securities markets because of a failure of full-service brokerage firms to utilize these risk management strategies.

In settling the class action lawsuit, Citigroup has agreed to pay $590 million. The class action alleged that, just prior to the financial crisis, shareholders were misled regarding Citigroup’s exposure to subprime mortgage debt.

Holders of a full-service brokerage account who suffered significant losses as a result of an overconcentration in Citigroup stock may be able to recover their losses through securities arbitration. If you are one of these investors, find out more about your legal rights and options by contacting a securities arbitration lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

According to the complaint, which was filed in Manhattan federal court, John Picket, the CSO’s founder, leveraged the assets of the fund in order to purchase debt in the German firm’s offering worth around 558 million Euros, or $730 million. Allegedly, following Pickett’s actions, the CSO fund suffered significant losses. Reportedly, in December 2007, Pickett resigned.

Beach’s investment fraud lawyers stated in the complaint that, “investors were not informed that his departure was the result of his breaches of the fund’s investment restrictions.” Citigroup spokeswoman Danielle Romero-Apsilos declined to comment in relation to the suit.

According to securities fraud attorneys, this is not the first case against Citigroup in relation to the CSO fund. In April 2008, a hedge fund firm filed a lawsuit against Citigroup. The case is Robeco-Sage Capital v. Citigroup Alternative Investments LLC, 601030/2008, New York Supreme Court (Manhattan). Robeco-Sage Capital alleged that Pickett’s “disastrous” investment had resulted in damages to the firm. According to Manhattan court records, this case is no longer active.

The current case is Beach v. Citigroup Alternative Investments LLC, 12-cv-7717, U.S. District Court for the Southern District of New York (Manhattan).

According to the bank, Citigroup Alternative Investments has, since the alleged misconduct occurred, been restructured. Part of the bank was renamed Citi Capital Advisors.

If you suffered significant losses in the now-defunct Citigroup CSO, you may be able to recover your losses through securities arbitration. To find out more about your legal rights and options, contact an investment fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

New York City investor Margaret Hill filed the case in 2011 and requested over $3.5 million in damages. Her losses were a result of Citi’s Rochester Municipal Fund. Investment fraud lawyers say Hill’s case alleged that she was sold unsuitable investments by Citigroup Global Markets Inc. which, in addition, misrepresented facts.

According to the allegations against Citigroup, Hill bought the Rochester Fund as an alternative to her individual municipal bond funds because Citigroup said it would pay more interest and would be a “safe” alternative to her funds at that time. However, the Rochester Fund reportedly consisted primarily of tobacco bonds and risky derivative securities. After purchasing the bond in 2007, Hill sold the funds in 2009, suffering losses amounting to $2.9 million.

Securities fraud attorneys say it is often falsely assumed that wealthy investors are more sophisticated investors than the average investor. However, brokerage firms and financial advisors are still responsible for adequately disclosing all risks associated with a particular investment. In this case, the value of the derivative securities that made up the fund depends on the underlying assets’ performance which can experience significant fluctuations.

If you suffered significant losses as a result of your investment in a municipal bond that was falsely represented as “safe,” you may be able to recover you losses through securities arbitration. To find out more about your legal rights and options, contact an investment fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

The now infamous class action suit against Lehman Brothers has its roots in the claim that the risks associated with PPNs were not disclosed to investors. When Lehman Brothers filed for bankruptcy, the principal on the PPNs — for which Lehman was the borrower — became unprotected and investors were left with unexpected losses. According to claimants in the case, they were led to believe that as long as they held them to maturity, their PPNs were 100 percent principal protected. Claimants also say they were told that as long as their underlying indices maintained their worth, the PPNs were principal protected. Furthermore, the risks associated with PPNs were not disclosed and customers were not notified of the decline of Lehman Brothers which could affect the value of the investments.

The case against Lehman Brothers deals primarily with broker misconduct in misleading investors about the safety of their investments. However, if other allegations are true and firms truly pushed PPNs at the same time that they were reducing their own PPN holdings, it is a question outright broker fraud as opposed to failure to disclose.

If you’ve invested in PPNs and believe your losses were a result of broker misconduct, contact an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

The outside advisers handling Lehman Brothers’ bankruptcy – mostly bankers and lawyers – have made over $1.4 billion for their services since Lehman Brothers went bankrupt three years ago. If you’re a Wall Street insider, Lehman Brothers, which is bankrupt and out-of-business, is a fantastic place to work.

Meanwhile, investors holding Lehman Brothers structured notes are slated to get back only about one fifth of the money they invested in the notes when the Lehman Brothers bankruptcy litigation finally winds up. Financial advisers at UBS and other brokerage firms peddled Lehman Brothers structured notes with great-sounding names like “100% principal protected” notes and “Return Optimization” notes. But for investors getting back only twenty cents on the dollar, their principal wasn’t protected and their returns weren’t optimized.

Of course, if you’re a Wall Street insider working on the Lehman Brothers bankruptcy, your principal is well-protected and your returns are fully-optimized.

If UBS sold you one of these notes, or if you’ve lost money in any Lehman Brothers note, give us a call. We may be able to help.

Here’s a list of some of the names of Lehman Brothers notes sold by UBS – –

*100% Principal Protection Absolute Return Notes Linked to the Euro/U.S. Dollar Exchange Rate

*100% Principal Protection Notes with Interest Linked to the Year-Over-Year Change in the Consumer Price Index

*Aussie Bull Notes 100% Principal Protected at Maturity

*Principal Protected Note with Enhanced Participation Linked to a Basket of Commodities

*Principal Protected Note with Enhanced Participation linked to a Global Currency Basket

*Annual Review Notes with Contingent Principal Protection Linked to the S&P 500® Index

*Partial Protection Participation Notes Linked to a Basket of Global Index Funds

*Return Optimization Securities Linked to an International Index Basket

*Return-Enhanced Notes Linked to a Basket of Ten Commodities

*Reverse Exchangeable Notes Linked to Common Stock

*FX Basket-Linked Notes

Though it may appear that the most recent UBS incident and Lehman Brothers’ collapse are different events, according to Forbes’ article, “The players may be different but the rules are the same.” The “Delta One” trading desk used by the UBS trader and ETFs he was trading have a similar concept to the Lehman Brothers Principled Protected Notes sold by Lehman and UBS and both were excessively risky. Furthermore, UBS and Lehman worked cooperatively to dump the PPNs on investors, causing them significant losses.

Since the fiasco began, claimants been victorious in almost all securities arbitration cases against UBS and recovered their losses that resulted from the Lehman Structured Product Notes. However, criminal charges have not been brought against any Lehman executives, a measure of justice that is yet to be realized. According to an article in The New York Times, this is a case in which “brokers selling complex securities that they once contended were safe and sound have saddled individual investors with billions in losses since the credit bubble burst. Remember auction-rate securities? Those were peddled to investors as just as good as cash — until they no longer were after that market seized up in 2008.”

According to the Forbes article, “The legacy of Lehman is that Wall Street’s greed trumps any sense of obligation the banks might have to their own customer.” If this is true and nothing is done to prevent situations like this in the future, an already risky investment world will continue to be a perilous one for the average investor.