Investor Anthony Schultz Files For Arbitration Against Salomon Smith Barney, Inc.
Anthony Schultz, a thirteen year employee of CISCO Systems, Inc. (Nasdaq: CSCO – news) filed an arbitration with the National Association of Securities Dealers against Salomon Smith Barney, Inc, a unit of Citgroup, Inc. (NYSE: C – news) alleging that his broker failed to inform him of the availability of hedging strategies to protect his concentrated CISCO position against a significant decrease in price. Mr. Schultz acquired more than 128,000 shares of CISCO through employee stock option grants and was directed by his employer to open a Salomon Smith Barney, Inc. account to exercise his CISCO options and manage the portfolio. An inexperienced investor, Mr. Schultz was never advised how hedging strategies could protect his life’s work.
Mr. Schultz told his broker that he was retiring and going to travel for one year. The price of CISCO collapsed and Mr. Schultz lost several million dollars which represented substantially all of his net worth and must now return to work.
Mr. Schultz is represented by Aidikoff & Uhl, a Beverly Hills and Indian Wells, California law firm that represents customers in securities arbitrations. According to Philip M. Aidikoff, “When dealing with retirement money, brokerage firms have an obligation to protect customers like Mr. Schultz. Although, hedging strategies aren’t new to the market, Mr. Schultz was never properly advised how to manage his downside risk.”
Aidikoff & Uhl represents a number of investors who have suffered losses at full service brokerage firms who did not properly advise customers how to manage concentrated positions in their company’s stock.