IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

ADVANCE TRADING, INC., an )

Illinois corporation, )

Plaintiff, )

v. 1

LIEBEN, WHITTED, HOUGHTON, )

SLOWIACZEK & CAVANAGH, P.C. )

L.L.O. and T. GEOFFREY LIEBEN, )

individually,

Defendants.

Judge

Magistrate

Case No. 1:12-cv-33

COMPLAINT

NOW COMES Plaintiff Advance Trading, Inc. ("ATI"), by its attorneys, Freeborn &

Peters LLP, and for its Complaint against Lieben, Whiffed, Houghton, Slowiaczek &Cavanagh,

P.C., L.L.O. (the "Lieben Firm") and T. Geoffrey Lieben ("Lieben") (collectively, "Defendants")

alleges the following:

NATURE OF ACTION

1. This action seeks redress for Lieben's legal malpractice in representing and

advising ATI in connection with issues related to the Advance Trading, Inc. 401(k) Plan and

Employee Stock Ownership Plan (the "Plan"). Defendants negligently advised and therefore

caused ATI to amend the Plan and to make certain distributions to participants that were not

allowed under the Internal Revenue Code or the terms of the Plan as amended. As a result, ATI

has suffered substantial damages of no less-than $300,000.00.

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THE PARTIES

2. Plaintiff ATI is an Illinois corporation with its principal place of business in

Bloomington, Illinois. ATI is a commodity brokerage firm that provides risk management and

market guidance to clients throughout the state of Illinois, the rest of North America, the Middle

East and Asia.

3. Defendant Lieben, Whiffed, Houghton, Slowiaczek &Cavanagh, P.C., L.L.O. is a

professional legal services corporation incorporated in Nebraska with its principal place of

business in Omaha, Nebraska. The Lieben Firm mazkets its services and competes with firms

throughout the Midwest and Illinois as a supplier of legal services. On its website, Defendant

promises that its lawyers are "recognized leaders" who "are committed to the same level of

excellence and are dedicated to bringing our clients the highest degree of legal expertise and

services available in the Midwest."

4. According to the firm's website, Lieber is an attorney employed by the Lieber

Firm who specializes in estate, financial and retirement planning. Lieber concentrates his

practice in the creation and utilization of employee stock ownership plans ("ESOP"). Lieber is a

member of the American Bar Association.

5. On information and belief, Defendants solicit and market their legal services to

clients in the Northern District of Illinois. Defendant advertises several "representative clients"

in the Martindale directory located in Chicago, including ATI.

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JURISDICTION AND VENUE

6. This court has subject matter jurisdiction over this matter under 28 U.S.C. § 1332

because Plaintiff and Defendant are citizens of different states, and the amount in controversy

exceeds $75,000, exclusive of interest and costs.

FACTUAL ALLEGATIONS

A. ATI engaged Defendants to advise it in connection with' the Plan.

7. ATI offers its employees participation in a 401(k) Plan and ESOP (the "Plan").

To do so, ATI must meet certain requirements in the Internal Revenue Code to be a qualified

benefit plan.

8. Defendants market themselves as experts in the field of financial, estate and

retirement planning. Lieben specifically represents himself as having been practicing for more

than 40 years and having gained experience in nearly every aspect of this field. Lieben a

member of the ESOP Association, an association for the benefit of corporations that sponsor

employee stock ownership plans, and the American Bar Association's Employee Benefits

Committee of Tax Section, which focuses and educates members on developments and issues

relating to employee benefits under the Internal Revenue Code, ERISA and other laws.

9. In or around the fa11 of 2003, in reliance on Defendants' representations that they

specialized in advising clients with respect to employee benefit plans and ESOPs, ATI retained

Defendants as benefits counsel in connection with the Plan. Defendants agreed to advise ATI in

regards to various matters and specifically in regards to how to act in conformance with the

terms of the Plan and the Internal Revenue Code. From time to time over the next several years,

ATI sought Defendants' advice in matters pertaining to the Plan.

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10. In January 2009, ATI sought Defendants' advice to determine whether it was

possible for the Plan to make pre-age 59 '/2 distributions to certain participants which would be in

conformance with all applicable federal and state laws and the Internal Revenue Code and avoid

triggering a Plan disqualification. Defendants agreed to advise ATI with respect to this issue and

to draft appropriate amendments to the Plan (the "Agreement").

11. On January 21, 2009, Defendants advised ATI by e-mail that it was appropriate

for the Plan to make pre-age 59 %2 distributions and promised to draft and provide ATI with an

amendment that ATI could make to the Plan to accomplish this. A true and correct copy of a

January 27, 2009 internal e-mail forwarding Lieben's January 21, 2009 email is attached to this

Complaint as Exhibit A. At all times, Defendants knew that ATI would rely on this advice.

Defendants negligently failed to advise ATI that the Internal Revenue Code prohibited pre-age

59 %2 distributions from employee elected deferrals and employer safe harbor contributions.

12. Defendants sent ATI an amendment to the Plan via email on January 21, 2009

that Defendants advised would allow "direct transfers of pre-59 '/2 401(k) accounts to IRAs and

other eligible retirement plans" ("Amendment"). In fact, the Amendment only allowed

distributions of after-tax, profit-sharing and ESOP dividend contributions. The Amendment

explicitly prohibited distributions from employee elected deferrals and was silent on distributions

from safe harbor contributions. A true and correct copy of the Amendment is attached to this

Complaint as Exhibit B. Defendants intended for ATI to implement and rely on the Amendment

in making distributions to pre-age 59 '/2 participants.

13. ATI paid Defendants for all of the professional legal services performed by

Defendants and ATI otherwise performed its obligations under the Agreement.

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B. Defendants' negligent advice caused ATI to make distributions that violated the

Plan as amended and the Internal Revenue Code.

14. In reasonable reliance on Lieben's advice, ATI implemented the Amendment to

the Plan that Defendants provided and advised its participants, in accordance with Defendants'

advice, that they could elect to transfer their 401(k) deferral accounts and safe hazbor matching

contribution accounts to IRAs without triggering a disqualification of the Plan or penalties under

the Internal Revenue Code. Consequently, several pre-age 59 '/2 participants did elect to transfer

funds from their 401(k) accounts to IRAs and ATI made distributions to them ("Disqualifying

Distributions").

15.. In or around August 2011, ATI discovered-that, despite Lieben's unqualified

advice that the Amendment would allow for the direct transfer of pre-age 59 '/2 401(k)

distributions, the Amendment in fact allowed only certain transfers. Specifically, item 4 of the

Amendment Lieben sent to ATI on January 21, 2009 prohibited distributions of employee

elected deferrals and was silent on the topic of safe harbor contributions.

16. In addition, ATI discovered that, despite Defendants' advice to the contrary, the

Internal -Revenue Code prohibited pre-age 59 %Z distributions of employee elected deferrals and

safe harbor contributions. Thus, even if the Amendment had allowed the transactions that

Defendants represented it would, the Disqualifying Distributions violated the Internal Revenue

Code and could disqualify the Plan. See Internal Revenue Code §401.

17. On August 28, 2011, Lieben admitted an email to ATI that his January 21,

2009 advice was "poorly worded." A txue and correct copy of an email dated August 29, 2011

forwarding that e-mail is attached to this Complaint as Exhibit C. Accordingly, on August 30,

2011, Defendants admitted in a letter to ATI that the Disqualifying Distributions were improper

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and must be corrected, and offered to advise and assist ATI in doing so. A true and correct copy

of that letter is attached to this Complaint as Exhibit D.

C. As a result of Defendants' actions, ATI bas been damaged.

18. Because the Disqualifying Distributions disqualify the Plan, ATI must now

take corrective actions to maintain the Plan's qualified status. As a result of the Disqualifying

Distributions made pursuant to Defendants' advice, ATI must, among other things, retroactively

amend the Plan back to 2009 so that the Plan documents correctly exclude pre-age 59 %z

distributions of safe harbor matching contribution accounts. In doing so, ATI has incurred and

will continue to incur costs including but not limited to attorney's fees, administrative fees and

IRS filing fees.

19. In order to maintain the qualified status of the Plan, ATI must also return the

Disqualifying Distributions to the appropriate participants' accounts. As a result, ATI already

incurred attorney's fees, transaction fees and/or IRS filing fees in the amount of $48,753.83, and

may incur more in the future.

20. In addition, because the Disqualifying Distributions caused ATI to enter into

prohibited transactions with respect to Disqualified Persons under the Internal Revenue Code,

ATI will incur otherwise inapplicable excise taxes in connection with at least four of the Plan

participants. As shown in the table below, ATI has calculated that the total amount of excise

taxes it will have to pay to the IRS as a result of Defendants' actions is $287,347.35:

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Age During Transaction Total Excise Taz Excise Tax

Transaction Date Disqualifying Percentage Amount

Distributions

Participant 1 52 02/18/09 $111,529.79 15% $16,729.47

53 07/10/09 $55,819.62 x 15% $8,372.94

53 07/29/09 $31,127.35 x 15% $4,669.10

53 02/03/10 $5,954:68 x 15% $893.20

53 02/03/10 $22,781.64 x15% $3,417.25

53 02/04/10 $14,886.67 x 15% $2,233.00

53 03/30/10 $45,955.70 x 15% $6,893.36

54 11/22/10 $19,226.65 x 15% $2,884.00

54 04/20/11 $21,019.66 x 15% $3,152.95

54 04/21/11 $42,039.33 x 15% $6,305.90

55 08/19/11 $8,102.79 x 15% $1,215.42

Participant 2 48 02/18/09 $16,574.54 x 15% $2,486.18

48 05/19/09 $23,677.94 x 15% $3,551.69

49 03/17/10 $267,795.28 x 15% $40,169.29

50 09/28/10 $257,819.35 x 15% $38,672.90

50 O1/10/11 $370,937.30 x 15% $55,640.60

50 02/01/11 260,009.47 x 15% $39,001.42

Participant 3 56 O1/OS/11 $279,188.98 x 15% $41,878.35

Participant 4 53 01/07/11 $61,202.23 x 15% $9,180.33

TOTAL $287,347.35

21. In addition, in order to ascertain which Disqualifying Distributions incur an excise

tax and calculate and pay the correct amount of excise taxes, ATI has incurred and will incur

attorney fees in addition to the excise taxes themselves.

COUNTI

BREACH OF CONTRACT

22. Plaintiff re-alleges and incorporates by reference paragraphs 1-20 as if fully set

forth herein.

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23. In or around January 2009, ATI and Defendants entered into a valid and

enforceable contract, as set forth in paragraphs 7-13 above.

24. ATI paid Defendants for all legal services performed in connection with the Plan,

including the advice and Amendment rendered by Defendants in January 2009, and otherwise

performed all of its obligations under the Agreement.

25. Defendants breached the Agreement of the parties by providing negligent advice

and counsel and failing to draft appropriate amendments to the Plan.

26. But for Defendants' material breaches of the Agreement, ATI would not have

amended the Plan and would not have made the Disqualified Distributions.

27. As a direct and proximate result of Defendants' breaches of the Agreement, ATI

has suffered and will continue to suffer damages in an amount not yet determined but which are

at least $300,000.00.

WHEREFORE, Advance Trading respectfully requests that the Court enter judgment in

its favor and against Defendants in an amount to be determined at trial, but which is not less than

$300,000.00, together with costs, interest and attorneys' fees accrued in connection with this

matter, any other damages recoverable under law, and any other and further relief as this Court

deems just and equitable.

COUNT II

PROFESSIONAL NEGLIGENCE

(In the Alternative to Count I)

28. Plaintiff re-alleges and incorporates by reference paragraphs 1-27 as if fully set

forth herein.

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29. The Lieben Firm is a professional services company that provides legal services

to employers and others regarding financial, retirement and estate planning, including employee

benefit plans and employee stock ownership plans. As a professional legal services company,

the Lieben Firm is in the business of providing information for the guidance of others in business

dealings.

30. Lieben is an attorney at the Lieben Firm with 40 years of experience in the area of

financial, retirement and estate planning. Lieben holds himself out as specializing in advising

clients with respect to employee benefits, taxation and trusts and estates. As an expert in this

field, Lieben claims to have lectured and written articles on these topics. On information and

belief, Lieben has designed and created employee benefit plans and ESOPs like the ones

implemented by ATI on which Lieben advised ATI.

31. In or around 2003, the parties entered into an agreement whereby Defendants

agreed to periodically provide professional legal services to ATI which included advising ATI

with respect to its Plan regarding conformance with all applicable federal and state laws,

including the Internal Revenue Code.

32. Based upon the business relationship between the parties, Defendants owed a duty

to ATI to provide accurate information to ATI with respect to the Plan and ESOP.

33. Defendants were negligent in the performance of their professional legal services

rendered to. ATI by failing to advise ATI that the Plan could not make pre-age 59 '/z distributions

of elected employee deferrals and safe harbor contributions and by providing an Amendment that

was ineffective to accomplish that even if it were allowed. As a result of Defendants'

negligence, ATI made Disqualifying Distributions in violation of the Internal Revenue Code.

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34. With respect to its representation of ATI, Defendants were negligent in that they

failed to use the ordinary skill, prudence and diligence as lawyers of ordinary skill and capacity

commonly possess and exercise in performance of the tasks that Defendants were obligated to

perform on behalf of ATI.

35. But for the professional negligence of Defendants, ATI would not have amended

its Plan and would not have made the Disqualified Distributions.

36. As a direct and proximate cause of Defendants' professional negligence, ATI has

suffered and will continue to suffer damages in an amount not yet determined but which are at

least $300;000.00.

WHEREFORE, Advance Trading respectfully requests that the Court enter judgment in

its favor and against Defendants in an amount to be determined at trial, but which is not less than

$300,000.00, together with costs, interest and attorneys' fees accrued in connection with this

matter, any other damages recoverable under law, and other and further relief as this Court

deems just and equitable.

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JURY DEMAND

Advance Trading respectfully demands trial by jury on all issues so triable.

Michael J. Kelly

Jeffrey W. Salmon

John C. Hammerle

Freeborn &Peters LLP

311 S. Wacker Drive, Suite 3000

Chicago, IL 60606

(312) 360-6000

January 5, 2012

Attorneys for Plaintiff

ADVANCE TRADING, INC.

Respectfully submitted,

ADVANCE TRADING, INC., Plaintiff

By: /s/Jeffrey W. Salmon

One of Its Attorneys

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