1
STATE OF SOUTH CAROLINA
COUNTY OF AIKEN
IN THE COURT OF COMMON PLEAS
FOR THE SECOND JUDICIAL CIRCUIT
Sue Ellen Benson,
Plaintiff,
vs.
Ameriprise Financial Services, LLC.,
Defendant.
Civil Action No: 2023-CP-__-_____
SUMMONS
(Jury Trial Demanded)
YOU ARE HEREBY SUMMONED and required to answer the Complaint in this
action, a copy of which is hereby served on you, and to serve a copy of your Answer to
the said Complaint upon the subscribers at 2110 N. Beltline Blvd., Columbia, South
Carolina 29204, within thirty (30) days after service hereof, exclusive of the day of such
service, and if you fail to answer the Complaint within the time aforesaid, judgment by
default will be rendered against you for the relief demanded in such Complaint.
Respectfully submitted,
RIKARD & PROTOPAPAS, LLC
s/ Jeremy C. Hodges
Robert G. Rikard (SC Bar 12340)
Jeremy C. Hodges (SC Bar 71123)
2110 N. Beltline Blvd.
Columbia, SC 29204
Post Office Box 5640 (29250)
PH: (803) 978-6111
FAX: (803) 978-6112
EMAIL: rgr@rplegalgroup.com
jhodges@rplegalgroup.com
Attorneys for Plaintiff
February 20, 2023
Columbia, South Carolina
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STATE OF SOUTH CAROLINA
COUNTY OF AIKEN
IN THE COURT OF COMMON PLEAS
FOR THE SECOND JUDICIAL CIRCUIT
Sue Ellen Benson,
Plaintiff,
vs.
Ameriprise Financial Services, LLC.,
Defendant.
Civil Action No: 2023-CP-__-_____
COMPLAINT
(Jury Trial Demanded)
Plaintiff Sue Ellen Benson brings this Complaint against Defendant Ameriprise
Financial Services, Inc. and hereby alleges as follows:
THE PARTIES
1. Sue Ellen Benson is a citizen and resident of Aiken County South Carolina.
2. Ameriprise Financial Services, LLC. (“Ameriprise”) (CRD# 6363) is a
diversified US financial services company that specializes in providing financial planning,
products, and services, including wealth management, asset management, insurance,
annuities and banking.
3. Ameriprise maintains its headquarters in Minneapolis, Minnesota.
Ameriprise does business in South Carolina via multiple brokers and offices, including a
branch office in Columbia, South Carolina, and an office in Martinez, Georgia that
services South Carolina residents, including Plaintiff.
4. John Douglas Engler, Sr. (CRD# 835827) was the registered representative
who handled Plaintiff’s accounts (hereinafter “Agent Engler”). Agent Engler is currently
employed by Ameriprise and maintains an office in Martinez, Georgia.
JURISDICTION AND VENUE
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5. The Court has subject matter jurisdiction over Plaintiff’s claims for relief as
the actions and omissions occurred in this County. The Defendant conducts business
here in South Carolina and utilized agents in South Carolina to promote its business
including the advisory services and investment products described herein.
6. Venue of this case is proper in Aiken County.
FACTUAL BACKGROUND
7. Sue Ellen Benson is 72 years old. Ms. Benson has a bachelor’s degree in
Art History from Ohio University and a master’s degree in elementary education from
Duquesne University. After graduating, Ms. Benson taught in Pennsylvania, Ohio, and
Florida.
8. In the 1980’s, Ms. Benson gave up her professional career and moved to
South Carolina to be closer to her parents and eventually to help run a horse farm that
her father had recently purchased in Aiken, South Carolina.
9. Despite not having any prior experience with horses or farms, Ms. Benson
successfully managed the farm with her parents for many years. She also cared for her
parents as they aged. Both her parents were quite ill for many years before they passed.
10. Ms. Benson’s father died in 2003. Following his death, Ms. Benson’s
mother met with several financial advisors in and around Aiken, South Carolina and
ultimately choose Agent Engler to manage her finances. At the time, Agent Engler was
affiliated with another financial institution.
11. Not long afterwards, Ms. Benson’s mother was diagnosed with Parkinson’s
Disease. Ms. Benson became a full-time caregiver for her mother, in addition to her
responsibilities on the farm. Ms. Benson’s mother passed in 2006, and Ms. Benson
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inherited the bulk of her estate, including the farm, which was eventually sold.
12. Ms. Benson’s inheritance, which was entrusted to Agent Engler, should
have been sufficient to provide her with financial security for the rest of her life, especially
considering Ms. Benson’s needs, which are modest.
13. After the family farm was sold, Ms. Benson and her mother moved into a
in a double-wide trailer in Windsor, South Carolina, where Ms. Benson still lives today.
14. Ms. Benson does not care for travel, or luxury goods and has always lived
well within her means. Today, however, she lives in near poverty, surviving on social
security, what meager savings she has left after the mismanagement by Agent Engler
as described herein, and the kindness of others in the community.
15. At the beginning of their relationship, Agent Engler met with Ms. Benson
in person on a regular basis to discuss her accounts and Agent Engler’s recommended
investment strategy. During those meetings, Ms. Benson emphasized that she was very
conservative and trusted Agent Engler to protect her savings, conserve it, and where
possible (and with as little risk as possible), grow it such that it would provide her with
financial security for the rest of her life.
16. Agent Engler never told Ms. Benson her account was set up to trade on
margin, never explained the concept of buying and selling securities on margin, or the
risks and potential benefits of a margin trading strategy or any of the securities he bought
and sold on her behalf as part of that strategy.
17. Ms. Benson never saw or approved of the elections made by Agent Engler
on the Ameriprise Financial account application. Had she seen those elections and had
the risks and potential benefits of them been adequately explained to Ms. Benson, she
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would have rejected them.
18. Instead, Agent Engler never presented Ms. Benson with the entire account
opening application or any information related to it, other than the signature page, which
he urged her to sign.
19. Agent Engler always assured Ms. Benson that her investment strategy
carried no significant risk and would allow her to receive the best returns possible.
20. Ms. Benson did not read her account statements and did not possess
enough knowledge to understand them if she had read them. Instead, she exclusively
relied on Agent Engler for information regarding her investments and account.
21. Over time, however, Agent Engler stopped meeting with Ms. Benson on a
regular basis. Initially, Agent Engler would cancel scheduled meetings citing personal
health issues, out of town travel, or some other excuse for the cancellation. Eventually,
he stopped scheduling meetings with Ms. Benson altogether.
22. Instead, Agent Engler would call Ms. Benson without warning, often after
hours, to ask her to sign documents or other paperwork, which Agent Engler did not
explain to Ms. Benson.
23. At times, Agent Engler’s conduct during these calls and meetings was not
appropriate and suggested that he may be under the influence of alcohol or other
intoxicants. During one call, Agent Engler asked if he could come to Ms. Benson’s home
and engage in sexual intercourse, which Ms. Benson refused.
24.
In the fall of 2021, Agent Engler called Ms. Benson and asked her what
she was going to do. During the call, Agent Engler also told Ms. Benson that she didn’t
have any more money and would likely have to go on welfare to support herself. This
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was the last time that Ms. Benson spoke to Agent Engler.
25.
This call also marked the first time Ms. Benson had reason to be concerned
with Agent Engler’s investment strategy and handline of her account. Ms. Benson was
obviously troubled by these statements and immediately began investigating the
situation further, discussing it with friends and trusted advisers, and enlisted their help
in obtaining documents related to her account, including the Ameriprise account opening
application, which Ms. Benson saw for the first time in late November 2021.
26. Despite Ms. Benson’s relatively simple and straightforward individual
investment objectives and needs, Agent Engler implemented an aggressive margin
investment strategy in which a significant amount of capital was borrowed from
Ameriprise to purchase securities and financial instruments that were held in Ms.
Benson’s brokerage account as collateral for the margin loans. The leverage conferred
by this margin investment strategy tends to amplify both gains and losses and subjects
the investor to the risk of margin calls where securities are liquidated without prior notice
or consent.
27. Agent Engler also utilized aggressive short term, market timing strategies
and moved money within Ms. Benson’s investment account in and out of markets or
between securities based on predictions of when the market would go up or down. This
strategy resulted in large quantities of securities being purchased and sold in quick
succession, often days. Market timing is the opposite of a buy-and-hold strategy where
securities are purchased and held for a long period, regardless of market volatility.
28. Ms. Benson’s brokerage account was not allocated across traditional
industry sectors and did not adhere to other well-accepted principles of asset allocation.
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Instead, Agent Engler’s aggressive trading strategies created concentrated and risky
positions that subjected Ms. Benson to unsuitable and inappropriate risks, which were
not explained to Ms. Benson.
29. Despite overwhelming research from academics, regulators, and even
Ameriprise itself, Agent Engler was permitted to engage in a futile margin market timing
strategy for years. Unsurprisingly and just as the collective research suggests, Agent
Engler’s margin, market timing strategies exposed Ms. Benson to the very real and
realized risk of actual devastating financial loss.
30. Additionally, Agent Engler failed engage with Ms. Benson in a fair and
balanced discussion of the risks associated with his recommended strategies, margin,
the securities he selected, and research used in developing these strategies and
constructing Ms. Benson’s portfolio.
31. Similarly, Agent Engler did not obtain or attempt to obtain Ms. Benson’s
permission or authorization for trades he executed within her brokerage account.
FIRST CAUSE OF ACTION
(Negligence)
32. Plaintiff re-alleges and incorporates by reference the preceding
paragraphs of this Complaint as if fully set forth herein.
33. Agent Engler offered investment advice and recommendations to Plaintiff
and thus owed a clear duty to exercise reasonable care, skill, diligence, and prudence.
34. Agent Engler breached that duty to Plaintiff and acted with negligence by
recommending unsuitable and risky investment strategies and securities and failing to
advise Plaintiff of the potential risks and rewards associated with both such that Plaintiff
lacked such an understanding.
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35. Agent Engler also breached that duty to Plaintiff and acted with negligence
by failing to perform reasonable diligence to understand the nature of the securities and
investment strategy he recommended to Plaintiff as well as the potential risks and
rewards related to them such that he had a reasonable basis to believe his
recommendations were suitable for at least some investors.
36. Agent Engler further breached that duty to Plaintiff and acted with
negligence by failing to have a reasonable basis to believe that his recommendations
were suitable for Ms. Benson based on Ms. Benson’s investment profile, including but
not limited to her age, other investments, financial situation and needs, tax status,
investment objectives, investment experience, investment time horizon, liquidity needs,
risk tolerance, and other information that Ms. Benson disclosed or could have disclosed
to Agent Engler had he exercised reasonable diligence and inquired about those
subjects.
37. Agent Engler represented to Plaintiff that the investment strategy and
securities he recommended were safe, suitable, and appropriately tailored to her
investment profile. This was a misrepresentation.
38. As a direct and proximate result of Agent Engler’s negligence, Plaintiff has
suffered substantial financial losses.
39. Agent Engler’s acts and omissions constitute negligence and gross
negligence because they constitute an extreme departure from what a reasonably
careful person would do in the same situation.
40. Further, as the principal for Agent Engler, Ameriprise is directly responsible
and answerable for Agent Engler’s actions.
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41. Ameriprise operates through their duly chosen representatives.
Ameriprise is required to supervise the activities of its registered representatives,
registered principal, and other associated persons and to implement and maintain a
system that is reasonably designed to achieve compliance with applicable securities
laws and regulations as well as industry rules. Final responsibility for proper supervision
rests with Ameriprise.
42. Ameriprise exercises control over their registered representatives in
several ways, including but not limited to approving products that their registered
representatives may recommend and sell to customers, by requiring registered
representatives to follow written procedures and guidelines to supervise the types of
business in which it engages and to supervise the activities of registered
representatives, registered principals, and other associated persons that are reasonably
designed to achieve compliance with applicable securities laws and regulations as well
as industry rules.
43. Ameriprise is required to conduct a review, at least annually, of the
activities of each office that includes periodic examination of customer accounts to detect
and prevent irregularities or abuses.
44. Ameriprise had a heightened duty to supervise its off-site representatives,
including Agent Engler, who conducted securities activities with minimal, if any,
supervision from an off-site non-branch location with no on-site supervisors.
45. Upon information and believe, during the relevant period, Amerprise’s off-
site registered representatives were subject to supervision by one or more groups or
field supervisors that consisted of registered principals who reviewed individual
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transactions by registered representatives, reviewed correspondence, and conducted
periodic reviews of registered representatives and their accounts to ensure compliance
with internal guidelines and applicable law and industry regulations.
46. Upon information and belief, as part of Ameriprise’s supervision, these
principals and field supervisors conducted reviews of the investment strategies and
securities recommended and sold by Agent Engler, as well as reviewed certain customer
accounts and various communications between Agent Engler and his customers.
47. If these principals or field supervisors had followed up on any of the red
flags in these accounts, communications, and files, Agent Engler’s improper conduct
could have been detected.
48. Ameriprise failed to reasonably supervise Agent Engler.
49. Ameriprise also failed to conduct appropriate supervision and meaningful
suitability determinations regarding the investment strategy and securities that Agent
Engler recommended and sold to Ms. Benson. Ameriprise failed to determine and
confirm Ms. Benson’s investment profile and objectives and reconcile those with the
investment strategy and securities recommended and sold by Agent Engler.
50. As the principal for its agents, the registered representatives and field
supervisors, Ameriprise is directly responsible and answerable for their actions and
omissions.
51. As a direct and proximate result of the above-described actions and
omissions, Plaintiff has suffered severe economic and emotional harm related to the
financial losses caused by the unsuitable investment strategy and securities described
herein.
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52. The injuries to Plaintiff were the direct and proximate result of the negligent
and grossly negligent acts and omissions of the Defendant Ameriprise and its Agent
Engler.
53. Plaintiff is therefore entitled to actual, compensatory, and punitive
damages.
SECOND CAUSE OF ACTION
(Breach of Fiduciary Duty)
54. Plaintiff re-alleges and incorporates by reference the preceding
paragraphs of this Complaint as if fully set forth herein.
55. Plaintiff reposed her trust and confidence in Ameriprise, through its Agent
Engler, and relied on Ameriprise to advise her in selecting a suitable investment strategy
and managing her investments.
56. Ameriprise therefore undertook a fiduciary duty to Plaintiff to act fairly and
honestly, in good faith and loyalty, and in the sole best interest of Plaintiff under both
common law principles of agency and industry rules.
57. The specific fiduciary responsibilities of a broker, even for a non-
discretionary account, include:
a. The duty to recommend an investment strategy and security only after
studying it sufficiently to become informed of its nature, price and
financial prognosis;
b. The duty to carry out the customer’s orders promptly and in a manner
best suited to serve the customer’s interests;
c. The duty to inform the customer of the risks involved in adopting an
investment strategy and in purchasing or selling a particular security;
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d. The duty to transact business only after obtaining prior authorization
from the customer.
58. A fiduciary owes duties of not only utmost good faith and honesty, but
also that of competence, which requires more than ordinary care. A broker is judged
against the standard of prudence and care expected of a financial professional.
59. In one or more particulars as set forth herein, Ameriprise breached its
fiduciary duties by recommending Plaintiff adopt an unsuitable and inappropriate
investment strategy and purchase unsuitable securities that, collectively and individually,
were not in Plaintiff’s best interests.
60. As a proximate result of the breaches of fiduciary duties by Amerprise, and
its Agent Engler, Plaintiff has suffered substantial financial losses and is entitled to
recover actual, compensatory, and punitive damages for same.
THIRD CAUSE OF ACTION
(Violation of S.C. Uniform Securities Act)
61. Plaintiff re-alleges and incorporates by reference the preceding
paragraphs of this Complaint as if fully set forth herein.
62. Ameriprise is in the business of providing Plaintiff and other customers
directly and through publications as to the advisability of investing in, purchasing, and
selling securities.
63. Ameriprise provides this advice for compensation and as a part of its
regular business.
64. Agent Engler acted as a broker, and as an integral component of
investment related advice provided through Ameriprise, he provided investment advice
regarding securities for compensation.
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65. Accordingly, Ameriprise is an “Investment Adviser” as that term is defined
by S.C. Code Ann. § 35-1-102(15).
66. Agent Engler was employed by Ameriprise and in that capacity made
recommendations and gave investment advice regarding securities and held himself out
as providing investment advice regarding securities. Agent Engler received
compensation in exchange for his investment advice regarding securities.
67. As such, Agent Engler is an “Investment Adviser Representative” as that
term is defined by S.C. Code Ann. § 35-1-102(16).
68. Ameriprise and Agent Engler’s untrue material statements of fact and
omissions of material facts regarding the investment strategy and securities told to
Plaintiff were misleading and operated as a fraud or deceit on Plaintiff in violation of S.C.
Code Ann. § 35-1-501 and 502.
69. Accordingly, Plaintiff brings this claim against Ameriprise and its Agent
Engler pursuant to S.C. Code Ann. § 35-1-509(e) and (f).
70. Ameriprise possessed the power to control, directly and indirectly, the
conduct of Agent Engler as it relates to the investment strategy and securities sold to
Plaintiff.
71. As such, Ameriprise is subject to control person liability and is jointly and
severally liable for violations of the S.C. Uniform Securities Act with and to the same
extent as Agent Engler pursuant to S.C. Code Ann. § 35-1-509(g)(1) and Plaintiff brings
this claim against Ameriprise for control person liability pursuant to that section.
72. Plaintiff is therefore entitled to and prays for (1) actual damages; (2)
consequential damages; (3) consideration paid for the advice of Ameriprise and Agent
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Engler; (4) interest at the legal rate or interest from the date of payment of that
consideration; (5) costs; (6) reasonable attorneys’ fees; and (7) such other relief as is
just, equitable, and proper.
PRAYER FOR RELIEF
WHEREFORE, having set forth their claims, Plaintiff prays for a judgment against
Defendant as follows:
A. For actual damages;
B. For consequential damages;
C. For consideration paid for the advice of Ameriprise and Agent Engler
pursuant to S.C. Code Ann. § 35-1-509(e), (f);
D. Interest at the legal rate of interest from the date of payment of that
consideration pursuant to S.C. Code Ann. § 35-1-509(e), (f);
E. For punitive damages to be determined by the finder of fact;
F. For prejudgment interest at the highest legal rate;
G. For the costs of this action pursuant to S.C. Code Ann. § 35-1-509(e),
(f) and common law;
H. For reasonable attorneys’ fees pursuant to S.C. Code Ann. § 35-1-509;
I. For such other relief as is just, equitable and proper.
JURY DEMAND
Plaintiff demands a trial by jury on all issues.
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Respectfully submitted,
RIKARD & PROTOPAPAS, LLC
s/ Jeremy C. Hodges
Robert G. Rikard (SC Bar 12340)
Jeremy C. Hodges (SC Bar 71123)
2110 N. Beltline Blvd.
Columbia, SC 29204
Post Office Box 5640 (29250)
PH: (803) 978-6111
FAX: (803) 978-6112
EMAIL: rgr@rplegalgroup.com
jhodges@rplegalgroup.com
Attorneys for Plaintiff
February 20, 2023
Columbia, South Carolina
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