Shammami v. Allos et al

Filing 1

COMPLAINT filed by Mouayad Shammami against Alfred M. Allos, Broad Street Securities Inc., Stuart Burchard with Jury Demand. Plaintiff requests summons issued. Receipt No: 0645-2969573 - Fee: $ 350. County of 1st Plaintiff: Wayne - County Where Action Arose: Wayne - County of 1st Defendant: Oakland. [Previously dismissed case: USDC-EDMI, 2:07-cv-14214, Judge Duggan, Patrick J] [Possible companion case(s): None] (Attachments: # 1 Index of Exhibits, # 2 Exhibit, # 3 Exhibit, # 4 Exhibit, # 5 Exhibit, # 6 Exhibit, # 7 Exhibit) (Sullivan, Donald)

UNITED STATESDISTRICT COURT
FOR THE EASTERNDISTRICT OF'MICHIGAN
-

SOUTHERNDIVISION

MOUAYAD SHAMMAMI.
Plaintiff,
V.

ALFREDALLOS, STUARTBURCHARD.
and
BROAD STREET
SECURITIES.
Defendants,
JointlyandSeverally.
I
DONALD D. SULLIVAN
Attorneyfor Plaintiff
P.O.
Box 308
New Hudson, 48165
MI
(248)49r-6777
Fax:[phone]
Email:[e-mail]
1576271

t

COMPLAINT
NOW COMES, Plaintiff,MOUAYAD SHAMMAMI, by andthrough
the
his
undersigned
attorney record,andfor his COMPLAINT for ILLEGAL CHURNINGI-INDER
of
SECTION
1OB
SECURITIES
EXCHANGE
(SECRULE 10b.5),
ACT OF 1934
FRAUD,
CONVERSION,
MICHIGAN I-INIFORM
SECURITIES
ACT MCL 45T,2501,,
BREACHOF
CONTRACT,
BREACHoF FIDUCIARYDUTY, SECTION
20(a)coNTRoL PERSON
LIABILITY, VIOLATION OF THE MICHIGAN CONSUMER
PROTECTION
ACT
ACCOUNTING,andTINJUST
ENRICHMENT.states followine:
the

JURISDICTIONAL ALLEGATIONS
1 . At all pertinent
timesheretothe Plaintiff MOUAYAD SHAMMAMI, wasa
resident the city of HazelPark,Countyof wayne and Stateof Michigan.
of
2 . At all pertinent
timesheretothe Defendant
Alfred Allos wasa resident the City of
of
Commerce
Township,
Countyof Oakland the Stateof Michigan,residingat 8415
and
Hummingbird
Drive,Commerce, 48382.
MI
a
J.

At all pertinent
time heretothe Defendant
StuartBurchard
wasa resident the Citv
of
of SanFrancisco,
Countyof SanFrancisco,
State California,
of
residing 2030
at
VallejoStreet, 1001, Francisco, 94123.
No.
San
CA

4 . At all timespertinent
heretothe Defendant
BroadStreetSecurities foreign
was
corporation
incorporated the Stateof Nevada operating
in
and
within the Stateof
Michiganasa securities stockbrokerage
and
firm havinga registered
address 355
of
S. Old Woodward, 108,Birmingham,
Ste.
MI48009. Theregistered
agent Stuart
is
Burchard
who is listedon the Articlesof Incorporation the president.
as
jurisdiction founded
5 . Federal
is
under23 U.S.C.$1331 this cause actioninvolves
as
of
a federalquestion
underthe Securities
jurisdiction
Exchange of 1934.Pendent
Act
over commonlaw andstatelaw claimsis asserted.
6 . Thata previous
case
wasfiled on october3, 2007 in thepresent
court,Case
No.:
,
2:07-cv-14214, whichwasdismissedwithour
and
prejudice
pursuant an Order
to
Compelling
Arbitration February 2008.
on
13,
7 . ThatPlaintiff initiatedthe arbitration
throughthe FinancialInstitutions
National
Regulatory
Administration
(FINRA) filed on May 8, 2008,andproceeded
against
BroadStreet
Securities,
Pershing
LLC., andBankof New York Mellon.

8. That in preparation the June9, 2009,arbitration this matter,Defendant
for
of
Alfred
Allos filed an affidaviton May 23,2009(Exhibit A) from whichit wasdetermined
that he intentionally
concealed valueandactivity in the Plaintiff s account.
the
9. Thaton May 14,2009,
(Exhibit B) BroadStreet
Securities its attorney record
by
of
sought adjournment the arbitration
an
of
scheduled June9,2009,by reason the
for
of
declininghealthof Mary Mada.
10.Thatunbeknownst thePlaintiff,on March27,2009,an order of Summary
to
Suspension already
had
beenissued the MichiganOffice of Financialand
by
Insurance
Regulation
(Exhibit C), andyet, BroadStreetSecurities
continued act
to
without anynoticeto Plaintiff of its suspension counsel eitherof its principals,
by
or
President/Defendant
StuartBurchard, Mary Mada,Vice President.
or
11. Thatthe arbitration
hearingwasadjourned the request BroadStreetSecurities
at
of
andits attorney
until October
6,2009.
12.Thatleading to the October
up
6,2009,arbitration
hearing
neither
Defendant
Broad
StreetSecurities, principals, its attorneys
its
nor
responded numerous
to
discovery
requests at no time wasanynoticeof withdrawalreceived
and
from its attorneys.
13.At theOctober
6,2009,arbitration
hearing representative attorney Broad
no
nor
for
Street
appeared, only uponthe information
and
received
from a newly-assigned
arbitrator,
AnthonyBove,wasit determined Mary Madawasdeceased of
that
as
September
15,2009.
14.Plaintiff movedto adjournandfiled a motionfor leaveto file an Amended
Statement
of Claim namingthe President BroadStreetSecurities,
of
StuartBurchard, Alfred
and
Allos personally
whichwasgranted October 2009(Exhibit D)
on
30,

15.Plaintiff served Amended
its
Statement Claim (Mouayad
of
Shammami Broad
v.
StreetSecurities,
Inc., Mary Mada,deceased,
Alfred Allos, and StuartBurchard)on
Defendant
Burchard
with the assistance FINRA on or aboutJanuary
of
2I,2010, in
accordance FINRA arbitration
with
rules.
16.Plaintiff wasunable serve
to
uponDefendant
Allos nor wasFINRA ableto assist
in
serving
him because
Defendant
Allos hadreturned his countryof origin (Iraq)and
to
providedno currentinformationto FINRA.
IT.That Defendant
Burchard
neither
filed his UniformSubmission
Statement
or
answered statement claim,andon January
the
of
27,2011,the Plaintiff movedfor
entryof DefaultJudgment the amount $208,572.60 costs fees
in
of
plus
and
consistent its expert
with
opinionon damages.
(Exhibit E)
18.That in response the Plaintiff s motionfor entryof default
judgment,Defendant
to
Burchard
issued writtenresponse February
a
on
14,2011(Exhibit F) whichindicated
thathe hadoorecently
relinquished licenses"
my
because "deficiencies
of
in
conjunction
with a firm audit."
19.At no time duringthe pendency the arbitration this matterdid FINRA provide
of
in
noticethat anyof the respondents,
BroadStreet,
Burchard, Allos hadtheir licenses
or
or membership
suspended,
revokedor relinquished.
20. And,despite absence a meritorious
the
of
defense,
FINRA administratively
denied
the motionandduringa pre-trialhearingon April 6,2011,the arbitration
wasfinally
setto beheard May 10,20IL
on
2l.That on May 4,2011,yet another
motionto adjourn arbitration filed by
the
was
Defendant
Burchard
goodcause, upondiscussing matterin
without apparent
and
the

person
with the Plaintiff consideration givento re-file thepresent
was
lawsuitasthe
Defendants
haveforfeitedtheir right to arbitration orderto preventagainst
in
the
furthercreation delayandhardship
of
uponthe Plaintiff.
22.Thaton May 5,2011,thePlaintiffcontacted
undersigned
counsel
with newsthat
Defendant
Allos hadrecentlyreturned
from Iraq,wasliving in Commerce
Township,
Michigan,andprovidingan address him.
for
23. ThaIthe Defendants thepresent
in
action,Alfred Allos, StuartBurchard, Broad
and
StreetSecurities, no longermembers NASD or FINRA andareno longer
are
of
entitledto arbitration their memberships beenrevokedor suspended.
as
have
COMMON ALLEGATIONS
24.Plaifiiff restates incorporates preceding
and
paragraph thoughfully restated
each
as
herein.
25. Plaintiff, MouayadShammami,
into
entered an agreement the Defendant
with
BroadStreetSecurities asset
for
management investment
and
advicefor a
securities,
equities or a stockportfolio from on or aboutJuly29,2002,to
and
June 2007.
30,
26.Pluntiff, MouayadShammami, warranted the Defendant
was
by
BroadStreet
Securities he would be dealtwith fairly in accordance the standards
that
with
of the profession thatthe Defendant
and
BroadStreet
maintained soundness
a
of acumen its financialmanagement investment
in
and
advice.
27.Pluntiff, MouayadShammami,
informedDefendant
BroadStreetSecurities
that his investment
objectives
wereintended conservative
for
capital
preservation
objectives, not intended high risk or speculation, that
and
for
but

only afterAllos madeunauthorized
trades incurredhugelosses
and
under
somepu{ported
"Day TradingAuthority" did Defendants
Burchard,
Allos and
Madaact in concert change investment
to
his
purposes concealment.
in
28. only afterthe Defendant,
BroadStreet,
Aloos,andMadadiscovered
that
unauthorized
trades churning
and
werebeingconducted the Plaintiff s
on
account trades
and
which wereactivelyconcealed
from him, did the
Defendant,
particularlyMada,perpetrate frauduponthe Plaintiff by having
a
him backdate provideafter-the-fact
or
authorizationveiled the form of a
in
change objectives ooprofit speculative" trades
of
to
and
for
previously
made
from July 29,2002,to
Novemb 27,2005,under
er
different
objectives
and
which couldnot havebeenauthorized
after-the-fact a matterof law aswell
as
asin fact because the activeconcealment.
of
29. The Defendant
BroadStreetSecurities
represented it possessed
that
the
requisite
skill, careandexpertise control,manage operate
to
and
the
investment
portfolio of the Plaintiff so asto carryout his legitimate
investment
objectives.Plaintiff lackedthe degree sophistication that the
of
as
Defendant
represented possessing respect tradingsecurities.
as
with
to
30. The Defendant
BroadStreetSecurities a legalduty underthe Michigan
had
Uniform Securities andthe Securities
Act
Exchange of 1934andother
Act
applicable
regulations obtainspecificinformationso asto determine
to
the
investment
objectives the Plaintiff andnot to unilaterallysolicit an
of
amendment thoseinvestment
of
objectives
afterspeculative
tradingand
churninghadin fact occurred the Plaintiff s account
on
underprior objectives.

31.TheDefendant
BroadStreet
Securities its agents employees
by
and
exercised
dominionof controloverthe equities
account the Plaintiff in a manner
of
which exceeded
representations limitationson the authoritymadeby the
or
Defendant.
32. The account Plaintiff did not providefor discretionary
of
investment the
by
brokerage
firm andany suchinvestments
wereto be according the
to
Plaintiff s specific
requests
andlor
objectives.
33. Thatin breach Section10b andcontract, well asthe commission a
of
as
of
fraudandconversion,
Defendant's
employees,
Allos andMada,incurred
significant
losses
uponthe Plaintiff s account makingtrades
by
which were
not in fact requested the Plaintiff andfor which thereexistsno other
by
explanation
otherthanillegal chuming.
34. ThatDefendant
BroadStreet Allos did engage hundreds
and
in
of
unauthorized inexplicable
and
trades,
opening closingpositions
and
without
any gainson the same while incurringcommissions, closingout other
day
and
positions
despite incurrence losses
the
of
whendirected Plaintiffto hold
by
saidstocksin his portfolio; for example, by no way a limitationon May 3,
and
2006,Plaintiff purchased
1000shares TaserInternational
of
(TSR)at a price
of 10.54 share, thenon May 19,2006,
per
and
sold900 shares
at9.20per
share
incurring
over$1000.00 losses whichAllos claims500were
in
of
solicitedsales him, and400 wereunsolicited
by
which makes sense all.
no
at
35. Thatreplete
throughPlaintiff s account similarlyinexplicable
are
transactions
which shouldhavebeenflaggedby Defendant
BurchartandMada,suchason

February
2,2005,600shares "Ask Jeeves
of
Inc." waspurchased a costof
at
$17,156.50, soldon theverysame for a significant (-$833.54).
and
day
loss
36.Notwithstanding Plaintiff s objectives, Defendant
the
the
Broadstreet
Securities
engaged hundreds unauthorized excessive
in
of
and
solicitedsales,
marginpurchases,
shortsales othertransactions a duplicitous,
and
of
repetitive
andnon-beneficial
naturefor the specificandapparent
purpose churning
of
the Plaintiff s account asto create
so
excessive
commissions BroadStreet
for
Securities, employees agents of which is evidenced a patternor
its
and
all
by
practice
evidenced.
37. Defendant
Broadstreet,
Burchard,
Allos andMadacollectively,admitted
to
the Plaintiff to havingchurned securities, particularon oneoccasion
his
in
in
the Defendant
Broadstreet
officesin the presence Defendant's
of
witnesses
whenthe Plaintiff requested purchase
to
additional
LearandGeneral
Motors
stock,wasinformedthat Defendant already
had
disposed that stockwithout
of
his consent,
contrary his position incuninglosses.
to
and
38. The Defendant
BroadStreetSecurities,
Burchard Allos shared the
and
in
profits from the overtrading churningof the Plaintiff s account way of
and
by
excessive
commissions service
and
charges.
39. Thatthe Defendant
BroadStreet,
Burchard, its employee
and
Alfred Allos
knew or shouldhaveknownof the conduct subordinates the exercise
of
in
of
duecarefurthered pattern,
a
scheme patternof fraudor deception
or
by
excessive
tradingdisproportionate the sizeof the account generate
to
to

commission
constituting
constnrctive
fraudunderSECRule 10b-5, cFR
17
$ 2 4 0 .1 0 b -s.
40. The Plaintiff wasin fact deceived relieduponthe integrityof the broker,
and
its underwriters parentbrokerage
and
house.
41. The Plaintiff wasunaware excessive
that
trades
werebeingconducted the
as
same
wereactivelyconcealed
from him or disguised
within apparently
legitimate
account
statements omissions tradenoticesrequired be
or
of
to
delivered contract law for eachtrade.
by
and
42.ThatPlaintiffwasoffered$14,000.00 theDefendants
by
BroadStreet,
and
Allos asacknowledged ExhibitA.
in
43.ThePlaintiffrefused accept $14,000.00
to
the
offered him because
to
from
January
r,2005, to December
2006, PlaintifPs
the
account well over
lost
Seventy
Five Thousand
($75,000.00)
Dollarsin principal
valuein addition
to
the commissions service
and
charges, well asthe valueof the account
as
would havebut for this illegal churningall of which represent
compensable
losses the Plaintiff andfor which an accounting requested.
of
is
44. These
communications
maderegarding Plaintiff s demand recoupment
the
for
weremadedirectlyto BroadStreet,
Aloos andMada,pursuant the sales
to
contract includedrequests the Defendant's
and
for
voluntaryagreement
to
resortto altemative
dispute
resolution arbitration
and
clauses
thereunder,
however, breach the contract Defendant
in
of
the
refused voluntarilysubmit
to
to arbitration,
providean accounting respond willful breach contract
or
in
of

so asto vitiateany suchADR remedies entitlethe Plaintiff directremedy
and
throughthe lawsuitclaimedherein.

SECURITIES FRAUD (UNLAWF'UL CHURNING)
VIOLATION OF SECURITIESEXCHANGE ACT OF 1934
SECTTON
10(b)

45. Plaintiff restates incorporates reference
and
by
eachof thepreceding
paragraphs thoughfully restated
as
herein.
46. As promulgated the Security
in
Exchange
commission
Rule l0b-5 (17 c.F.R.
and
(17
see
$10b-5), 15U.S.C.A.
978(c) C.F.R.9240.15c-7) alsoBtueChip
Stamps ManorDrugStores,421 723,95S.Ct.1917(1975),the
v.
U.S.
foregoing
factualallegations hereupon
premised this cause actionand
are
in
of
arebeingfiled thereunder.
47.Plairtiff reliedupontheDefendants
BroadStreet,
Burchard Allos,their
and
apparent ostensible
and
agents fairly andwith requisiteskill careand
to
expertise
cany out the objectives protectthe financialinterests the
and
of
Plaintiffaccording thepurposes the Security
to
of
Exchange of 1934.
Act
48. In defiance the lawsunderthe Act andin breach its contractual
of
of
and
fiduciarydutiesto the Plaintiff,the Defendants
engaged deceptive
in
and
fraudulent
practices,
particularlychumingof the Plaintiffsaccount cause
to
excessive
commissions service
and
charges, investment bondsand
and
in

stocks
marketed tied to otherinterests the Defendants its brokerage
or
of
and
house
with motivations
otherthanthosesafeguarding Plaintiff.
the
49.In defiance the lawsundertheAct andin breach its contractual
of
of
and
fiduciarydutiesto the Plaintiff,the Defendants
engaged deceptive
in
and
fraudulent
practices,
particularlythe solicitation the Plaintiff to make
of
purchases stocks margin,to sell stocksshortor to investment other
of
by
in
products
that Defendant
Pershing Mellon hadan ownership
and
interest.
50. In defiance the lawsundertheAct andin breach its contractual
of
of
and
fiduciarydutiesto the Plaintiff,the Defendants
engaged deceptive
in
and
fraudulent
practices,
particularlythe dissemination falseandmisleading
of
statements to expected
as
returnor the financialsoundness certain
of
investments asto inducethe Plaintiff to makeunwarranted excessive
so
or
trades, trades
or
which would benefits
interests the brokerage
of
house its
and
underwriter opposed the securing interests the Plaintiff.
as
to
the
of
51. ThatDefendants
engaged manipulative,
a
deceptive fraudulent
and
deviceor
contrivance contending the Plaintiff authorized
by
that
certaintrades
or
characterized Plaintiff s status asto give the falseappearance the
the
so
that
Plaintiff authorized
certaintrades
which in fact he did not.
52.In particular,
afterDefendant
BroadStreet,
Burchard Madadiscovered
and
that its agentAloos andothers
hadcommitted churningof Plaintiff s
the
account, unilaterallysolicitedthe Plaintiffls signature a change
it
on
in
objectives
formsoasto shielditself from liability for trades
previously
made

withouthis authorityor contrary moreconservative
to
objectives placeat
in
thetime of thosetrades.
53. Defendant
BroadStreet's
solicitation an after-the-fact
of
authorization the
of
Plaintiff s previouslychurned
account,
which Defendant
Burchard
knew or
shouldhaveknownin the exercise duecare,or uponwhich he hadactualor
of
constructive
notice,without specifically
notifyingthe Plaintiff of the reason
for his signature
uponthe contrived
form is directevidence precisely
of
the
prohibitedcontrivance,
fraudulent
deviceor artificewhich falls within the
purviewof Section
10b.
54. ThatDefendants
engaged manipulative,
a
deceptive fraudulent
and
deviceor
contrivance cause appearance thePlaintiff wasin controlof his
to
the
that
own account
whenin fact he wasreliantuponthe adviceandexpertise the
of
Defendants.
55. ThatDefendants
engaged manipulative,
a
deceptive fraudulent
and
deviceor
contrivance cause appearance the Plaintiff wasuffeasonable,
to
the
that
uncooperative,
irresponsible,
ignorant reckless asto shield
or
so
the
Defendants
from its liability from mismanagement.
56. Thateachof the foregoing
deceptive fraudulent
practices
and
involved
dissemination falseandmisleading
of
information telephone by mail,
by
and
aswell asthe concealment information failureto sendsuchitemsby
of
by
mail, in the commission suchpractices
of
effectingthe PlaintifPsinterstate
commerce
with theNew York StockExchanse others.
and

57. Thatthe Defendants accepting
by
commissions applyingthose
and
commission thegross
to
receipts its enterprise engaged ajoint
of
is
in
enterprise
throughsalesmanship,
deviceandartificeto inducethe Plaintiff and
others maketrades the advancement the Defendants
to
in
of
profits.
collective
58. Thatthe Defendants, inducingtrades,
by
disseminating
falseinformation,
makingtrades
withoutthe approval a person
of
havinga non-discretionary
account,
disguising
trades,
falselyallegingtrades unsolicited
as
whenin fact
they aresolicited,failureto identify a proprietary
interest the brokerage
of
house prospective
in
purchases,
excessive
trading,churning, othersuch
and
fraudulent,
deceptive
devices artificesareliable for the damages
and
consequential,
compensatory,
punitiveandstatutory, well ascostsand
as
attorney
feesto this Plaintiff.

F'RAUD.CONVERSIONDECEIT AND MISREPRESENTATION
59.Plaintiffrestates incorporates reference
and
by
each
ofthe preceding
paragraphs thoughfully restated
as
herein.
60. Plaintiff wasa partyto a contract
with the Defendant,
BroadStreet,
Burchard
andAllos which providedhim with asset
management,
securities
brokerage
andinvestments
amongotherthings.
61. Defendants
knowinglymisrepresented
materialterms,conditions the
and
performance its obligations
of
with the intentto deceive, otherwise
or
concealed
terms,conditions its breach malfeasance the performance
or
or
in
of
its obligations
with the intentto deceive Plaintiff.
the

62. Defendants
knew,or reasonably
shouldhaveknown,that the Plaintiff would
rely uponthe representations the Defendants virtue of the special
of
by
skill
andexpertise the Defendants
that
published in fact intended the
and
that
Plaintiff would rely uponthoserepresentations.
63. Plaintiff in fact relieduponthe representations the Defendants
of
and
otherwise
actedor deferred
from takingactionin reliance those
on
representations.
64. Plaintiff in fact actedor deferred
from takingactionbased factsknownto
on
him which wereincomplete,
deceptive falseto his detriment.
or
65.As directevidence Defendant
of
BroadStreet,
Burchard Allos' noticeof
and
questionable
activity in the Plaintiffls account, soliciteda change
it
in
objectives
form andan after-the-fact
authorizationfor
unsound
and
unauthorized
trades
madefor the solepurpose incurringa commission
of
and
which in fact resulted substantial
in
losses the Plaintiff.
to
66. ThatDefendants
collectivelyknewor shouldhaveknown of the illegal
churningin the Plaintiff s account hada fiduciaryduty to notify him of
and
the suspected
chuming,but instead a fraudulent,
in
deceptive
designor
artifice,created document which no consideration received
a
for
was
which
attempted
illegally to waivethe Plaintiff s right to remedies unauthorized
for
trades
previouslycommitted for which he waswithout actualnotice.
and
67. TheDefendant's
attempt askthe Plaintiff to authorize
to
eachandeverytrade
that hadpreviously
beenmadeon his account
wasdeceptive,
without any
consideration not authorized
and
underthe Securities
Exchanse
Commission

Act of 1934,nor
anywhere sucha form contained the standard of
is
in
set
formsor regulations
anticipated the code.
by
68. The self-made
change objectives
in
form is clearlythe contrivance
described
in Section andis evidence anillegalattempt waive,disclaim
10b
of
to
or
prejudice legalright to which the Plaintiff wasentitledandwasnot received
a
for consideration merelyto shieldthe Defendants
but
from iltegalactivitythat
it knew or shouldhaveknownwasongoing.
69. Defendants
maderepresentations to the soundness certaininvestments
as
of
andthe saleof certaininvestments
which it knew or shouldhaveknown
would resultin the financialdetriment the Plaintiff which is a commonlaw
of
fraudoutside violations
of
under10(b), IDS v. Firstof Michigan533F.2d
see
340(6thCir. r976).
70. Defendants
undertook contractual
the
obligationto preserve assets the
the
of
Plaintiff andto advise
him according his stated
to
financialinvestment
objectives amaterialpartofthecontract.
as
71. Defendants
knowinglyinduced solicitedthe Plaintiff to makecertain
and
investments
which theyknew or shouldhaveknownwerenot in the interest
of
preservation stated
asset
or
investment
objectives.
T2.Defendants
knowinglyinduced solicitedtradesfrom the Plaintiff in
and
marketsecurities which the Defendants
in
possessedpecuniary
a
interest
in
additionto the commission service
and
from which it benefitby each
charges
tradesolicitedandwhich wereknowinglyinapposite its obligations the
of
to
Plaintiff.

73. Defendants
BroadStreet,
Allos, Burchard,
Mada,andothersexecuted
trades
on behalfof the Plaintiff without explicit or impliedauthorityto do so
pursuant the termsof the contract according the standards the
to
and
to
of
profession.
74. Defendants, particular, not limited to stockbrokersAllos, Burchard
in
but
and
otherssolicitedunsound
investment
advicewhich they knew or shouldhave
knownwould be relieduponby the Plaintiff andwork to his financial
detriment their own financialgainandto the financialbenefitof brokerage
for
houses
offeringcertainstocks trade.
for
75. Defendant
BroadStreet its agents convertthe propertyof the Plaintiff
by
did
to its own by engaging hundreds unauthorized
in
of
trades produce
to
a
commission service
and
charges
with the intentto permanently
deprivethe
Plaintiff of his moneyfor which the Plaintiff is entitledto an awardof treble
or tripledamages
underMCL 9600.2919a.
76. As a direct,naturalandproximate
resultof the misrepresentations the
of
Defendants concealment materialfact,the Plaintiff in fact reliedupon
and
of
to his detriment incurredsignificant
and
financiallosses relateddamages.
and

MICHIGAN UNIFORM SECURITIESACT
77. Plaintiffrestates incorporates reference
and
by
eachofthe preceding
paragraphs thoughfully stated this paragraph.
as
in
78. ThatDefendant
BroadStreet andtheir actualor ostensible
agent,
including
but not limited to Burchard Allos, areregulated
providers licensed
and
and

securities
brokerssubject theregulations prohibitionscontained the
to
and
in
Michigan
UniformSecurities MCL 9451.2501 seq..
Act,
et
79.The Plaintiff haddealings
with eachof these
Defendants way of a
by
relationship
governed
undersaidAct for the tradingof securities
and
investment
advice.
80.Defendants,
individuallyandcollectively,
violatedthe MichiganUniform
Securities including,but not limited to eachof the following ways:
Act
a. Misrepresenting scope materialconditions the services
the
and
of
beingprovidedto the Plaintiff.
b. Misrepresenting obligations dutiesowedto the Plaintiff under
the
and
the Act andby the termsof anyandall agreements
underwhich the
Plaintiff andDefendants in privity of contract.
are
c. Misrepresenting soundness certaininvestments the
the
of
and
pecuniary
interest Defendants securities
of
in
traded.
d. Falselyandfraudulently
contending trades
that
werespecifically
requested the Plaintiff whenin fact Plaintiff madeno suchrequests.
by
e. Falselyandfraudulently
engaging excessive
in
overtrading
and
churning of the Plaintiff s equities accountover which the Defendant
and its agent exercisedcontrol contrary to the investment objectives of
the Plaintiff.
f.

Falsely and fraudulently engagingcontendingthat certain tradeswere
made by the Plaintiff when in fact they were not placed by the
Plaintiff.

g

Falselyandfraudulently
documenting
certain
tradeswhich may have
beenauthorizedby Plaintiff asunsolicited,
the
whenin fact they were
solicited.

h. Failureto notify the Plaintiff of a stockbroker'sownership
or

pecuniary
interest stocks
in
marketed solicitedfor tradingto the
or
Plaintiff.
Failureto delivertradeslipsto the Plaintiff or fraudulently
discarding
certaintradeslipsto prevent Plaintiff from identifyingovertrading
the
andchurning
ofhis account.
J

Exercising
dominionor controloverthe Plaintiff s account trading
and
thereofbeyond conditions forth in his agreement those
the
set
or
anticipated
underthe act.
Failureto notify or communicate the Plaintiff the existence
to
of
clearlyexistingwarningsignsand actual
evidence overtrading
of
of
his account.
Knowingly engaging repetitive,
in
unsound financiallydetrimental
and
transactions the Plaintiff s account the pu{pose generating
on
for
of
commissions,
service
charges unlawfulpromotion volumein the
or
or
saleof stocksin which Defendant
maintained pecuniary
a
interest.

m. Realizing
that illegal churning,
incurrence losses clearlyunsound
of
by

trades, unauthoizedtrades
and
werebeingconducted Plaintiff s
on
account,
contriveda change objectives
of
form evidencedfor the sole
purpose waiving or disclaiming Plaintiffls remedies.
of
the

n. Failingto fully inform the reason therequest his signature
for
for
on
the clearlycontrived
form whichthe Defendants
knewor shouldhave
knownexisted.
o. Attemptingto manipulate Plaintiff into ratifyingpreviously
the
unauthorized
trades
according the contrivedform contained
to
in
without discharging ethicalandcontractual
its
dutiesto the Plaintiff
that unauthorized,
unsound trades
or
clearlyoutsideof his objectives
weremadeto his financialdetriment.
81.As a direct,naturalandproximate
resultof the violationsof the Michigan
Uniform Securities asdelineated
Act
aboveor asmay be discovered
hereinafter, Plaintiff lost significant
the
valueof his stockportfolio,incurred,
expenses,
service
charges losses lostthevalueofunrealized
and
and
potential
capitalgainsfor which he is entitledto recover, additionto penaltyinterest,
in
prejudgment
interest,
costsandattorney
fees.
BREACH OF CONTRACT
82.Plaintiffrestates incorporates reference
and
by
each
ofthe preceding
paragraphs thoughfully restated
as
herein.
83.Plaintiff entered a contract financialasset
into
for
management,
stockmarket
adviceandsecurities
tradingwith the Defendant
BroadStreet.
84.Pursuant the termsandconditions the agreement andbetween
to
of
by
the
Plaintiff andDefendant
BroadStreet Pershing, Defendants
and
the
were
obligated providetradingslipsto the Plaintiff for transactions
to
madeon his
account.

85.In breachof that duty underthe contract, Defendants not in fact
the
did
providetradingslipsfor hundreds trades
of
madeon his account
which were
not authorizedby Plaintiff or otherwise
the
madecontraryto his investment
objectives.
86.Defendant
agreed preserve equities the Plaintiff andnot to make
to
the
of
trades his financialdetriment withouthis express
to
or
assent.
87.In contravention that contractual
of
duty,the Defendants its agents
by
engaged
in hundred unauthoizedtransactions
of
withoutthe express
request at the
or
directionof the Plaintiff.
88.Defendant
promised to incurunwarranted,
not
excessive usurious
or
feesand
commissions thehandling his account
in
of
eitherexpressly,
impliedlyor by
operation securities
of
laws.
89.In contravention those
of
duties
expressly,
impliedlyor constructively
imposed
uponthe contract, Defendants its agents cause be
the
by
did
to
charged
excessive
commissions,
service andcharges.
fees
90. Defendant
promised protectthe financialinterests the Plaintiff and
to
of
providesoundfinancialadvice.
91. Defendants
breached agreement makingnumerous
that
by
trades losses,
for
makingsales
immediately
afterpurchases commissions feesfor rvhich
the
and
depleted
evenminimal gainsandfailedto retainstocksso asto realize full
the
potentialof gainswhile the valueof a stockcontinued rise.
to
92. Defendant
agreed communicate
to
honestly
with the Plaintiff andkeephim
informedof activity in his account.

93. Defendant not in fact communicate to the extentit communicated,
did
and
it
did soby misrepresenting
activityin his account losses
and
incurred.
94. As a direct,naturalandproximate
consequence the breach these
of
of
Defendants
obligationreferenced
hereinandthosediscovered
duringthe
course discovery, Plaintiff lost the valueof principalandpotential
of
the
income
from his account,
including incurrence losses,
the
of
commissions
and
service
feeswhich would not haveotherwise
resulted for the breach the
but
of
contract.
BREACH OF F'IDUCIARYDUTY
95.Plaintiffrestates incorporates reference
and
by
each
ofthe preceding
paragraphs thoughfully restatedherein.
as
96. Defendant
BroadStreet licensed
as
stockbrokerandunderwriter the saleof
of
certainsecurities
pursuant a contract financialmanagement
to
for
services
with the Plaintiff did undertake
specificfiduciarydutiesto protectthe
financialinterests the Plaintiff.
of
97. Thosefiduciarydutiesboundthe Defendants well asits employees,
as
supervisors eachandeveryoneofthem to undertake
and
suchrequisite
care
andexpertise would a reputable,
as
honest reasonable
planning
and
asset
professional fulfill its fiduciarydutiesto the Plaintiff.
to
98. In breach its fiduciarydutiesto the Plaintiff asexpressed contract,
of
by
those
implied or imposed law, theDefendants breach fiduciaryduty in
by
did
its
eachof the following ways,includingbut not limited to:
a. Failureto inform the Plaintiff of activity on his account.

Failureto advise Plaintiff of the incurrence sales a loss.
the
of
for
commissions service
and
charges.
Failureto inform the Plaintiff of purchases equities.
of
d. Failureto notify the Plaintiff of transactions his account.
on
Ultra viresactivity or actions
which theDefendants
knewor should
haveknownwerecontrary the financialinterestof Plaintiff.
to
Conflictsof interest the solicitation saleof unsound
in
for
stocks
to
incur commissions increase volumeof tradeson stocks which
or
the
in
the Defendants
possessedpecuniary
a
interest.
g

Breachof trust in that the Plaintiffsstockportfolio wasrendered
useless him andcaused hardship
to
him
from havingthe account
fuozen isolated
or
underfearthat saidunauthorized
activitvwould
continue.

h. Failureto monitoror supervise account
an
evidencing
unlawfuland
detrimental
financialactivity.
i. Failureto takeactionto preserve,
secure remedythe account
or
after
notificationby the Plaintiff that afraudhadbe committed.
99. As a direct,naturalandproximate
resultof the Defendants
breach fiduciary
of
dutiesto the Plaintiff the Plaintiff did suffercompensable
losses his stock
in
portfolio,lossof principal,
gain,incurred
lossof prospective
excessive
commissions, service
and
charges.

CONTROL PERSONLIABILITY UNDER S20(a)
100. Plaintiffrestates incorporates preceding
and
paragraph reference
each
by
asthoughfully restated
herein.
101. Thatpursuant Section
to
20(a)of the Security
Exchange of 1934,
Act
Defnedant
Burchard
wasin a positionto prevent losses the illegality
the
and
of activity at BroadStreet,
with Defendant
Allos, andMadaby his own
admissions.
102. ThatDefendant
Burchard
lacksa goodfaith defense his claimsthat he
to
wasunaware the significant
of
losses
beingincumed the Plaintiff s account,
in
andyet he attempts justify thoselosses
to
based his own knowledge.
on
103. ThatDefendant
Burchard President BroadStreetSecurities,
as
of
directly
or indirectlycontrolled Defendant
the
Alfred Allos who is in violationof the
Security
Exchange (10b)andis jointly andseverally
Act
liableto the Plaintiff
for his losses.
104. ThatDefendant
Burchard legallyenforceable
had
controloverDefendant
Allos andparticipated creating environment
in
an
rampant a lack of
for
discipline,
policy or practices identifyinganddiscouraging
for
illegal trading
activities,suchaschurningofclient accounts.
105. Thatthe Defendant
knew or reasonably
shouldhaveknownbased the
on
significantlosses
occurringin the Plaintiff s account, turnoverratio,the
the
amountof commissions
generated, complaints the Plaintiff andothers
and
by
includingFINRA andthe MichiganOFIR Commission unlawfulactivity
of
ongoingandfailedto takeappropriate
remedial
action.

VIOLATION OF THE CONSUMERPROTECTION ACT
106. Plaintiffrestates incorporates reference
and
by
eachofthe preceding
paragraphs thoughfully restated
as
herein.
107. Thatunderthe MichiganConsumer
Protection
Act, the Defendant
Broad
Street Pershing
and
advertised saleof certaingoodsor services,
the
namely
financialasset
planningpackages,
stock,commodities equities.
and
108. Materially
falsestatements factwerecontained saidadvertisements
of
in
which wereintended the Defendants be relieduponby the Plaintiff, and
by
to
werein fact relieduponby the Plaintiff to his financialdetriment.
109. Amongthose
falseadvertisements thatprofessionals
were
employed
by
the Defendants
werelicensed,
bonded possessed requisite
and
the
skill, care
andexpertise providehigh qualityinvestment
to
packages.
110. Uponinformation belief,certain
and
employees theDefendants
of
were
not in factlicensed,
bonded havingpossessed requisite
or
the
skill, careand
expertise providethe high qualityinvestment
to
packages
marketed.
111.

Upon informationandbelief,certainemployees the Defendants
of
offered

advice undertook
and
responsibilities
whichonly a StockBrokerSeries
Seven
(7) licensed
brokercouldengage
whenin factno suchlicensure
existed.
1I2.

Defendants
advertised
growthstatistics thePlaintiffwhichwere
asset
to

falseandmisleading.
113. Defendants
advertised
recommendations clienttestimonials
and
which
werefalseandmisleadins.

ll4.

Defendant
BroadStreet
advertised it has"no quotas"andareunder
that
'onosales
pressure
from the company
(pershing,
Mellon) to includeany
specificinvestment a client's portfolio," which is falseandmisleading.
in

115' Defendant
BroadStreet
advertised it provides
that
"continuous
valueadded
service," provides detailed
and
a
"identification needs goals,',
of
and
whichis falseandmisleading.
116. As evidence the foregoing is clearthatDefendant
of
it
BroadStreet,
Pershing Madain particular,
and
unilaterallysought change investment
to
the
objectives the Plaintiff andseekhis ratificationof eachandeveryprevious
of
tradeon his account
despite
their actualor constructive
knowledge the
of
illegality of certaintrades,
which wasfalseandmisleading.
Il7 .

As a direct,natural proximate
and
resultof thePlaintiff s reliance these
on

falseadvertisements, wasleadto believethat his needs goalswould be
he
and
met andthat his portfoliowould continuously value,however,
add
because
of
the falsity of thoserepresentations goalswerenot achieved no value
his
and
wasadded.
118. To the contrary, Defendants its agents
the
by
underthe apparent
pressure
to sell Pershing Mellon stocksso asto increase
and
volumewithoutany
apparent
concern the potentialgrowthof PlaintifPsassets, engage a
for
did
in
patternor practice
evidencing misuse Plaintiff s account achieve
the
of
to
a
quota.
ACTION FOR AN ACCOUNTING

I 19. Plaintiffrestates incorporates reference
and
by
eachofthe preceding
paragraphs thoughfully restated
as
herein.
120'

Pursuant the termsof the contract professional
to
for
services financial
or

asset
management a licensed
by
Series
Seven StockBroker,the
(7)
Defendants
undertook duty to account eachandeverysaleoccurring
a
for
on
the account the plaintiff.
of
121' As part of Plaintiff s complaintis thatmanyof the hundreds
of
unauthorized
transactions
werenot evidenced tradingslips,noticesor
by
reflected account
on
statements.
122. Furthermore,
because the sophistication the manipulation the
of
of
of
PlaintifPsaccount conceal the Defendants unauthorized
to
by
the
trading
scheme practices, Defendants
or
the
mustbe ordered providea complete
to
accounting all commissions,
of
service
charges eachandeverytransaction
and
madeon this account.
I23'

Furthermore,
because thenature thedamages
of
of
alleged
involvethe sale

of stocks
without express
authorityof the Plaintiff or otherwise
churningof
his account
contraryto his soundinvestment
objectives, detailed
a
analysis
of
the lossof prospective
gainrequires the Defendants
that
providesuchan
accounting.
UNJUSTENRICHMENT
124' Plaintiff restates incorporates reference
and
by
eachandeverypreceding
paragraph thoughfully restated
as
herein.

125. Thatthe Defendants
BroadStreet,
Burchard Alfred Allos shared theprofits
and
in
from excessive
tradesandcommissions the detriment the Plaintiff.
to
of
126. Thatthe Plaintiff did not orderthetrades which commissions
for
weregenerated,
andyet the commissions
werededucted
from his account.
I27.

ThatDefendants
shouldnot be allowedto retainthe amounts
received themas
by

the same
would be inequitable
DAMAGES
I28.

Plaintiff restates incorporates preceding
and
each
paragraph thoughfully
as

restated
herein.
129. As a direct,naturalandproximate
resultthe Plaintiff did incur consequential
and
compensatory
damages
whichwerereasonably
foreseeable, follows:
as
A. Actuallosses $208,572.60 his brokerage
of
from
account.
B. Losses prospective
of
gains
from stocks
whichwerenot bought soldas
or
directed.
C. Arbitration
costs.
D. Attorneyfees.
E. Costs
F. Interest.
WHEREFORE, Plaintiff praysfor judgmentof in an amountcommensurate
the
herewithandfor suchfurtherrelief asthe courtdeems andjust.
fair

JURY DEMAND

NOW COMES,the Plaintiff andpra
triableasof risht.

May 6,2011
. SULLIVAN
P.O. x 308
New Hudson, 48165
MI
(248)49r-6777
[e-mail]

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