The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, announced today that it is investigating claims on behalf of BNP Paribas (OTC: BNPQY.PK) (“BNP”) shareholders who sustained investment losses due to an over-concentration of shares in BNP. Trading at $39.80 per share earlier this year, BNP has declined about 60% and is now trading around $15.00 per share. Mounting pressure on European banks, including BNP, is directly linked to Europe’s sovereign debt crisis. If Greece defaults, losses would increase at European banks and raise even greater concern over the ability of euro-zone nations to repay their debts. On September 14, 2011, Moody’s downgraded the credit ratings of Societe Generale and Credit Agricole after significant volatility in the markets as investors worried about their exposure to Greece’s debts. While Moody’s Aa2 rating on BNP remained unchanged, the bank remains under review for a possible downgrade. Last week, BNP announced plans to sell $96 billion worth of assets to reduce funding needs, shore up capital and perhaps to avert the downgrade suffered by Societe Generale and Credit Agricole.
According to Steven D. Toskes of K&T, “What is unfolding in Europe is similar to what we saw in America in 2008, with the tightening of the credit markets and the collapse of Lehman Brothers. With exposure to Greece, European banks have started to extend less credit to borrowers, and investors are worried about their exposure to these banks. It’s usually a bad sign when credit begins to constrict.”
Investors who held BNP stock at a full service brokerage firm and sustained substantial losses may be able to recover their losses through the arbitration forum established by the Financial Industry Regulatory Authority (“FINRA”). FINRA’s Arbitration Department is where investors, both retail and institutional, go to seek redress as a result of sales practice violations committed by their brokerage firm, including claims of over-concentration, misrepresentation and omission, unsuitable recommendations and failure to supervise. Investors who held large, concentrated positions in BNP may have a claim for mismanagement of their portfolio given the fact that there were risk management strategies that would have protected the value of the concentrated position in BNP. 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, would have created a range of value that the portfolio would have maintained irrespective of the fluctuation and direction of the underlining stock price.
If you wish to discuss this announcement or sustained investment losses of $250,000 or more in BNP, please contact Steven D. Toskes or Jahan K. Manasseh of Klayman & Toskes, P.A., at 888-997-9956, or visit us on the web at http://www.nasd-law.com