Malpractice Securities Fraud Insurance Bad Faith Attorney John C. Cabaniss Milwaukee, Wisconsin Antitrust Class Actions Lawyer

SECOND AMENDED COMPLAINT

Plaintiffs, Lisa Berman Cabaniss (formerly Lisa C. Berman), Marie A. Reckinghausen, Ruth M. Roesler, Rose Pohl, Brad W. Dickrell, Barbara Decker, Anthony L. Dickrell, Paul E. Van Rossum, Dario Darisighella. John E. Ripp and Irene Schneider-Steinborn for their complaint against defendants, allege as follows:

1. Plaintiff Lisa Berman Cabaniss (formerly Lisa C. Berman) is an adult residing at 2413 East Shorewood Boulevard, Shorewood, Wisconsin 53211.

2. Plaintiff Marie A. Reckinghausen is an adult residing at 5256 North 48th Street, Milwaukee, Wisconsin 53218.

3. Plaintiff Ruth M. Roesler is an adult residing at N49 W17800 Christopher, Menomonee Falls, Wisconsin 53051.

4. Plaintiff Rose Pohl is an adult residing at 12999 West Hampton Avenue, Apartment 133, Butler, Wisconsin 53007.

5. Plaintiff Brad W. Dickrell is an adult residing at N 4307 County Road E, Kaukauna, Wisconsin 54130.

6. Plaintiff Barbara Decker is an adult residing at 1155 Elm Grove Street, Elm Grove, Wisconsin 53122-2209.

7. Plaintiff Anthony L. Dickrell is an adult residing at N4307 County Road E, Kaukauna, Wisconsin 54130.

8. Plaintiff Paul E. Van Rossum is an adult residing at 6422 South 35th Street, # 2, Franklin, Wisconsin 53132-8716.

9. Plaintiff Dario Darisighella is an adult residing at 1032 East Manitowoc, Oak Creek, Wisconsin 53154.

10. Plaintiff John E. Ripp is an adult residing at 2818 Willard Avenue, Madison, Wisconsin 53704.

11. Plaintiff Irene Schneider-Steinborn is an adult residing at 4832 North Elkhart Avenue,

Whitefish Bay, Wisconsin 53217.

12. Defendant J.E. Liss & Co., Inc. ("J. E. Liss") is a Wisconsin Corporation located at the Pfister Hotel, 424 East Wisconsin Avenue, Milwaukee, Wisconsin 53202; its registered agent for purposes of service of process is Carol A. Liss; J.E. Liss, at all times pertinent to the issues in this case, was a licensed securities brokerage firm providing professional financial services; it represented and held itself out as a competent, independent financial planning and investment services company.

13. Defendant Jerry E. Liss is an individual residing in Milwaukee County; at all times pertinent to the allegations in this complaint he was president and chief executive officer of the defendant J.E. Liss.

14. Defendant Kenneth E. Schimpf, Jr. is an individual residing in Milwaukee County; at all times pertinent to the allegations of this complaint defendant Kenneth Schimpf was a first vice president of J.E. Liss.

15. Defendant Tom Butenhoff is an individual residing in Milwaukee County; at all times pertinent to the allegations of this complaint he was a first vice president of J.E. Liss.

16. Between 1990 and 1996, defendants acted as financial advisors and counselors to plaintiffs; in the course of providing financial investing advice to plaintiffs; the defendants recommended to plaintiffs they should invest monies in St. Louis Leasing Corporation ("Arch funds"); defendants represented to plaintiffs that an investment in the Arch funds was safe; defendants represented to plaintiffs that they were guaranteed to receive 10.5% per annum return on their investments; plaintiffs relied on defendants to recommend conservative investments; defendants recommended the Arch Funds as safe and guaranteed.

17. At all times pertinent to the issues in this case, defendant Jerry E. Liss represented to defendants Kenneth E. Schimpf, Jr., Tom Butenhoff and all other brokers employed by defendant J.E. Liss that the Arch funds were a conservative, safe investment that was guaranteed to pay a 10.5% return. Defendant Jerry E. Liss did not accurately and completely disclose the nature of the risk nor the extent of his conflicts of interest.

18. In reliance on the representations of defendants, plaintiffs purchased Arch Funds in the following amounts:

a. Lisa Berman Cabaniss invested $6,050.46 in her own name and $5,473.65 on behalf of her minor daughter, Hilary Showers.

b. Marie A. Reckinghausen invested $36,000.00.

c. Ruth M. Roesler invested $54,900.00.

d. Rose Pohl invested $10,000.00.

e. Brad W. Dickrell invested $10,000.00.

f. Barbara Decker invested $9,000.00.

g. Anthony L. Dickrell invested $52,000.00.

h. Paul E. Van Rossum invested $20,000.00.

I. Dario Darisighella invested $10,000.00.

j. John E. Ripp invested $25,000.00.

k. Irene Schneider-Steinborn invested $15,000.00.

19. Unbeknownst to plaintiffs and others similarly situated, defendants were aggressively promoting and selling shares in the Arch funds between approximately 1990 and 1995.

20. Approximately 3000 people nationally invested a total of approximately $50 million dollars in the Arch funds; of the national investment in the Arch funds defendants sold approximately $35 million dollars.

21. Unbeknownst to plaintiffs and others similarly situated, defendants were receiving brokerage commissions of 10% plus fees of up to 1.5% on all sales of Arch funds greatly in excess of industry norms; defendants did not disclose nor were plaintiffs and others similarly situated informed that in addition to highly inflated commissions defendants were receiving stock in St. Louis Leasing Corporation in consideration of their sales efforts and defendant Jerry E. Liss was serving on St. Louis Leasing Corporation's Board of Directors; at no time did defendants disclose to plaintiffs or others similarly situated the high risk involved in investing in the Arch funds nor did defendants disclose their conflicts of interest in advising customers to invest in said funds while simultaneously receiving inflated commissions, stock and a board directorship.

22. At no time did defendants advise plaintiffs or others similarly situated that in fact investment in the Arch funds was not guaranteed; nor did defendants advise regarding the risky nature of the investment.

23. Defendants represented in writing and promotional materials that "you can earn 10.5% guaranteed monthly payments for 3 years."

24. Defendants knew that the prospectus for the Arch funds indicated the investment involved "a high degree of risk...suitable only for persons of substantial means." At no time in its aggressive marketing and sales of these investments did defendants warn plaintiffs or others similarly situated that the investment involved a high degree of risk or that payments could be suspended at anytime.

25. In early 1996, plaintiffs were advised that St. Louis Leasing Corporation had filed bankruptcy; despite due demand plaintiffs have received only a small portion of the monies they originally invested (less than 50%); plaintiffs have not been reimbursed to date for most of their principal nor have they received the guaranteed interest of 10.5%; plaintiffs seek return of their principal and the promised interest (10.5% per annum).

COUNT I - NEGLIGENT MISREPRESENTATION

26. Plaintiffs hereby reallege and incorporate herein paragraph nos. 1 - 25.

27. Defendants were negligent in their marketing, sale and recommendations regarding the Arch funds.

28. Defendants' misrepresentations and omissions of material facts and failure to competently advise plaintiffs as detailed in this complaint constitute a breach of the duty of care.

29. Defendants' negligent misrepresentations caused plaintiffs to suffer actual damages in an amount to be determined at trial.

30. Defendants are liable for the monies lost plus interest to plaintiffs as a result of their negligent misrepresentations and omissions.

COUNT II - FRAUDULENT MISREPRESENTATION

31. Plaintiffs reallege and incorporate herein paragraphs nos. 1 - 30.

32. Defendants knew that each misrepresentation was untrue when made and that each representation was made recklessly with utter disregard for truth or falsity. Defendants made the misrepresentations set forth in this complaint with the intent to deceive and defraud plaintiffs and induce plaintiffs to act upon said misrepresentations.

33. Plaintiffs relied upon the misrepresentations of defendants to their damages; they have invested principle in Arch funds; they have lost the time value of their monies; they have not received the return on investment guaranteed; and they have lost the opportunity to invest the monies in a sound investment all to plaintiffs' damages in an amount to be determined at trial.

COUNT III - NEGLIGENCE

34. Plaintiffs hereby reallege and incorporate herein paragraph nos. 1- 33.

35. Defendants were negligent in their marketing, sale and recommendations regarding the Arch funds.

36. Defendants' negligence was a proximate cause of damages to plaintiffs.

COUNT IV - STRICT LIABILITY - - BREACH OF FIDUCIARY DUTY

37. Plaintiffs hereby reallege and incorporate herein paragraph nos. 1- 36. 38. Plaintiffs placed their trust and confidence in defendants and won their reliance and on their representations that they were expert in the field of financial planning. By holding themselves out as experts on whom plaintiffs should rely for financial planning advice, defendants had a fiduciary relationship with plaintiffs.

39. Defendants owed a special duty of care to plaintiffs based on their fiduciary relationship, including, but not limited to, a duty to disclose any and all information relevant to plaintiffs' investments, and a duty to solicit plaintiffs to purchase only those securities and investments which were suitable in light of their investment objectives.

40. In making misrepresentations and omissions of material fact, and in soliciting the purchase of high risk securities, as detailed in this complaint, defendants breached their fiduciary duty to plaintiffs, and are thereby strictly liable in an amount to be determined at trial. Defendants are strictly liable for the damages caused by their breach of fiduciary duty owed to plaintiffs.

COUNT V - CIVIL CONSPIRACY

41. Plaintiffs hereby reallege and incorporate herein paragraph nos. 1- 40.

42. Defendants Jerry E. Liss, Kenneth E. Schimpf, Jr. and Tom Butenhoff combined and conspired together and with Robert A. Chlebowski for the purpose of selling Arch funds by falsely and fraudulently misrepresenting the nature of the investment as "safe with a guaranteed return of 10.5% interest."

43. Defendants Jerry E. Liss, Kenneth E. Schimpf, Jr. and Tom Butenhoff combined and conspired together and with Robert A. Chlebowski to sell Arch funds without fully disclosing the nature of the risks or the existing and potential conflicts of interest.

44. As a result of the conspiracy by and between Jerry E. Liss, Kenneth E. Schimpf, Jr., Tom Butenhoff and Robert A. Chlebowski, the defendants Jerry E. Liss, Kenneth E. Schimpf, Jr. and Tom Butenhoff are jointly and severally liable to each plaintiff for their lost principal together with interest for each and every unlawful act, representation and/or omission undertaken in furtherance of the civil conspiracy by defendants and/or Robert A. Chlebowski.

COUNT VI - PUNITIVE DAMAGES

45. Plaintiffs hereby reallege and incorporate herein paragraph nos. 1- 44.

46. The fraudulent misrepresentations of defendants were made in deliberate indifference to the rights of plaintiffs for the purpose of maximizing the monies made by defendants to the detriment and prejudice of their customers and clients thereby entitling plaintiffs to punitive damages in an amount to be determined at trial.

WHEREFORE, plaintiffs demand judgment against the defendants in accordance with the demands of this complaint together with costs, interest from the date of the investment, attorneys fees, disbursements and such other relief as the court may deem just and equitable.

Dated this ___ day of ______________________, 1999.

LAW OFFICE OF JOHN C. CABANISS

Attorney for Plaintiffs

_________________________________________

JOHN C. CABANISS
State Bar No. 1002857

P.O. ADDRESS:
250 East Wisconsin Avenue
Suite 725
Milwaukee, Wisconsin 53202-4205
Phone: (414) 278-6066
Fax: (414) 278-1229

CO-COUNSEL

Mark E. Sanders
State Bar I.D. No. 1005704
Mary Beth Peranteau
State Bar I.D. No. 1027037
Halling & Cayo, S.C.
839 North Jefferson Street
Milwaukee, Wisconsin 53202
Phone: (414) 271-3400

PLAINTIFFS HEREBY DEMAND TRIAL BY JURY