STOLL STOLL BERNE LOKTING & SHLACHTER P.C.

209 S.W. OAK STREET

PORTLAND, OREGON 97204

TEL. (503) 227-1600 FAX (503) 227-6840

Keith A. Ketterling, OSB No. 913368

Email: kketterling@stollberne.com

Timothy S. DeJong, OSB No. 940662

Email: tdejong@stollberne.com

Jacob S. Gill, OSB No. 033238

Email: jgill@stollberne.com

Nadia H. Dahab, OSB No. 125630

Email:ndahab@stollberne.com

STOLL STOLL BERNE LOKTING & SHLACHTER P.C.

209 SW Oak Street, Suite 500

Portland, Oregon 97204

Telephone: (503) 227-1600

Facsimile: (503) 227-6840

Steve W. Berman (admitted pro hac vice)

Email: steve@hbsslaw.com

Karl P. Barth (admitted pro hac vice)

Email: karlb@hbsslaw.com

Lee M. Gordon (admitted pro hac vice)

Email: lee@hbsslaw.com

HAGENS BERMAN SOBOL SHAPIRO LLP

1918 Eighth Avenue, Suite 3300

Seattle, Washington 98101

Telephone: (206) 623-7292

Facsimile: (206) 623-0594

Attorneys For Plaintiffs

[Additional Counsel of Record Listed on Signature Page]

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

PORTLAND DIVISION

LAWRENCE P. CIUFFITELLI, for himself 

and as Trustee of CIUFFITELLI 

REVOCABLE TRUST; GREG and ANGELA 

JULIEN; JAMES and SUSAN 

MACDONALD, as Co-Trustees of the 

MACDONALD FAMILY TRUST; R.F. 

MACDONALD CO.; ANDREW NOWAK, 

for himself and as Trustee of the ANDREW 

NOWAK REVOCABLE LIVING TRUST 

U/A 2/20/2002; WILLIAM RAMSTEIN; and

Case No. 3:16-cv-00580-AC

PLAINTIFFS’ OPPOSITION TO 

DEFENDANT TD AMERITRADE, INC.’S

MOTION FOR PROTECTIVE ORDER

Case 3:16-cv-00580-AC Document 184 Filed 12/09/16 Page 1 of 9
PAGE 1 - PLAINTIFFS’ OPPOSITION TO DEFENDANT TD AMERITRADE, INC.’S

MOTION FOR PROTECTIVE ORDER

STOLL STOLL BERNE LOKTING & SHLACHTER P.C.

209 S.W. OAK STREET

PORTLAND, OREGON 97204

TEL. (503) 227-1600 FAX (503) 227-6840

GREG WARRICK, for himself and, with 

SUSAN WARRICK, as Co-Trustees of the 

WARRICK FAMILY TRUST, individually 

and on behalf of all others similarly situated,

Plaintiffs,

v.

DELOITTE & TOUCHE LLP; 

EISNERAMPER LLP; SIDLEY AUSTIN 

LLP; TONKON TORP LLP; TD 

AMERITRADE, INC.; and INTEGRITY 

BANK & TRUST,

Defendants.

Defendant TD Ameritrade, Inc. (“TD Ameritrade”) seeks to defer all discovery “pending 

(1) disposition of TD Ameritrade’s Motion to Dismiss Plaintiffs’ First Amended Complaint, ECF 

113 and 138, and the Joint Motion to Dismiss The First Amended Complaint, ECF 74 (“Joint 

Motion”), and (ii) the lifting of the discovery stay in the SEC action.” Motion at 1. Following 

the analysis set forth in the Court’s Opinion and Order [ECF 174] (“Opinion”) resolving similar 

motions for protective orders by defendants Deloitte & Touche LLP and EisnerAmper LLP (the 

“Accounting Firms”) plaintiffs request that the Court order TD Ameritrade to provide to 

plaintiffs the following discovery:

(1) All agreements to which TD Ameritrade and any Aequitas company are parties. 

(2) Records of any meeting attended by any named plaintiff, a representative of TD 

Ameritrade and any participant in the TD Ameritrade Advisor Direct program.

Case 3:16-cv-00580-AC Document 184 Filed 12/09/16 Page 2 of 9
PAGE 2 - PLAINTIFFS’ OPPOSITION TO DEFENDANT TD AMERITRADE, INC.’S

MOTION FOR PROTECTIVE ORDER

STOLL STOLL BERNE LOKTING & SHLACHTER P.C.

209 S.W. OAK STREET

PORTLAND, OREGON 97204

TEL. (503) 227-1600 FAX (503) 227-6840

(3) Any payments made by any Aequitas company to TD Ameritrade and/or received 

by TD Ameritrade in connection with the purchase or sale of any Aequitas 

security (including from any investment advisor).

(4) All documents that TD Ameritrade created, reviewed, or received relating to the 

Aequitas securities, including documents relating to the creation, issuance, 

transfer, assignment, acceptance, purchase, sale, and promotion of any Aequitas 

security.

(5) Transaction-level documents relating to the named plaintiffs in TD Ameritrade’s 

possession, custody, or control. See Opinion at 20, ¶ 2.

(6) Communications between TD Ameritrade and the named plaintiffs regarding 

Aequitas securities.

(7) Requests for information sent by TD Ameritrade to Aequitas and any Advisor 

Direct Program participant (including Strategic Capital) that sold Aequitas 

securities to TD Ameritrade customers. See Opinion at 20, ¶ 3.

(8) Information received by TD Ameritrade in response to the requests for 

information identified in (7), above. See Opinion at 20, ¶ 4.

(9) Records of any meeting between TD Ameritrade and any Aequitas company.

(10) The names, job titles, and designated primary office locations of TD Ameritrade 

employees responsible for the Advisor Direct Program during 2010 through 2015. 

See Opinion at 20, ¶ 5.

Case 3:16-cv-00580-AC Document 184 Filed 12/09/16 Page 3 of 9
PAGE 3 - PLAINTIFFS’ OPPOSITION TO DEFENDANT TD AMERITRADE, INC.’S

MOTION FOR PROTECTIVE ORDER

STOLL STOLL BERNE LOKTING & SHLACHTER P.C.

209 S.W. OAK STREET

PORTLAND, OREGON 97204

TEL. (503) 227-1600 FAX (503) 227-6840

I. Attempts to Compromise Were Unsuccessful

In conferences between the parties before the filing of this motion, TD Ameritrade was 

unwilling to provide any merits discovery. TD Ameritrade was willing only to produce the 

named plaintiffs’ own Aequitas investment records (confirmations of purchases, copies of the 

securities, and account statements). Plaintiffs made two proposals, and both were rejected. After 

the Court issued its Opinion and Order resolving the motions for protective order filed by the 

Accounting Firms, plaintiffs asked TD Ameritrade to reconsider its position. TD Ameritrade did 

not respond. 

II. By Application of the Court’s Analysis, TD Ameritrade Should Also Be Required to 

Provide Meaningful Merits Discovery While the Motions to Dismiss Are Pending

In addressing the Accounting Firms’ motions for protective order, the Court held that:

Staying all discovery is not appropriate, . . . and allowing limited 

discovery while the motions to dismiss are pending maintains the intent and 

purpose of the 2015 amendment [to Federal Rule of Civil Procedure 26(b)(1)]. 

Although the pending motions to dismiss raise credible challenges to Plaintiffs’

First Amended Complaint, it is far from certain that a successful motion to 

dismiss would be dispositive and could well result in Plaintiffs filing another 

amended complaint. The Accounting Firms explicitly acknowledged these 

possibilities at oral argument, and implicitly acknowledged them previously when 

they proposed to provide to Plaintiffs some of the discovery they sought. (See

Rule 26(f) Report (ECF No. 94), at 7-9.)

Accordingly, staying all discovery until the court resolves the pending 

motions to dismiss is not warranted. Limited, focused merits discovery will be 

allowed while the motions to dismiss are pending.

Opinion at 19. Applying the same analysis, there is no reason for TD Ameritrade to receive a 

full stay of discovery.

There is no possibility that TD Ameritrade’s motions to dismiss will result in dismissal 

with prejudice of the claims against TD Ameritrade. TD Ameritrade purposefully 

Case 3:16-cv-00580-AC Document 184 Filed 12/09/16 Page 4 of 9
PAGE 4 - PLAINTIFFS’ OPPOSITION TO DEFENDANT TD AMERITRADE, INC.’S

MOTION FOR PROTECTIVE ORDER

STOLL STOLL BERNE LOKTING & SHLACHTER P.C.

209 S.W. OAK STREET

PORTLAND, OREGON 97204

TEL. (503) 227-1600 FAX (503) 227-6840

mischaracterizes plaintiffs’ claims as arising under ORS 59.115(4), in an effort to shift to 

plaintiff the burden of proof as to TD Ameritrade’s knowledge of Aequitas’ primary violations. 

In fact, ORS 59.115(4) applies only to “a person whose sole function in connection with the sale 

of a security is to provide ministerial functions of . . . custody services.” (Emphasis added.) TD 

Ameritrade’s function extended well beyond providing custodial services. Plaintiffs allege that 

TD Ameritrade is liable pursuant to ORS 59.115(3) because it participated and materially aided 

the sale of Aequitas Securities by referring customers to investment advisors for the purpose of 

purchasing the Aequitas Securities and by providing custodial services for those securities. FAC 

¶¶ 19, 30(e), 37, 191. Accepting plaintiffs’ allegations, the securities sales would not have 

occurred without TD Ameritrade’s participation and aid. 

The parties disagree about the applicable pleading standard and whether plaintiffs are 

required to plead additional factual detail to support these allegations. However, as 

demonstrated at pages 2-3 of Plaintiffs’ Opposition to Defendant TD Ameritrade, Inc.’s Motion 

to Dismiss Plaintiffs’ First Amended Complaint [ECF 126], plaintiffs can easily provide detailed 

factual allegations if required to do so.

1

 For example, plaintiffs can plead the following:

 TD Ameritrade made the referrals pursuant to its AdvisorDirect program, which 

included a small number of investment advisors. Before including them in the 

program, TD Ameritrade performed extensive due diligence on the advisors. 

 Strategic Capital, an investment advisor affiliated with Aequitas, was one of the 

advisors in AdvisorDirect. TD Ameritrade knew that Strategic Capital was heavily 

selling Aequitas Securities. TD Ameritrade representatives attended meetings 

 

1 TD Ameritrade contends that, by setting forth the additional detail they can provide if required 

to do so, plaintiffs have conceded that their pleading does not state a claim. Motion at 1. Of 

course, plaintiffs make no such concession by showing that they can satisfy any pleading 

standard, even if the higher pleading standard TD Ameritrade argues for is imposed.

Case 3:16-cv-00580-AC Document 184 Filed 12/09/16 Page 5 of 9
PAGE 5 - PLAINTIFFS’ OPPOSITION TO DEFENDANT TD AMERITRADE, INC.’S

MOTION FOR PROTECTIVE ORDER

STOLL STOLL BERNE LOKTING & SHLACHTER P.C.

209 S.W. OAK STREET

PORTLAND, OREGON 97204

TEL. (503) 227-1600 FAX (503) 227-6840

between clients of TD Ameritrade and representatives of Strategic Capital, at which 

Aequitas Securities were sold to TDAmeritrade customers. TD Ameritrade 

representatives were also present when Strategic Capital advisors presented the 

Aequitas Securities and documentation to TD Ameritrade clients. These meetings 

frequently occurred in TD Ameritrade’s offices. TD Ameritrade had Aequitas 

offering documents and promotional materials in its offices.

 TD Ameritrade representatives knew that customers found the Aequitas Securities to 

be very attractive because of the interest rates that Aequitas offered.

 Plaintiff Ciuffitelli was referred to Strategic Capital by his TDAmeritrade account 

representative, Tim Kenton, in September 2010. Mr. Kenton promoted Aequitas to 

Mr. Ciuffitelli as a great investment with a big return and told Mr. Ciuffitelli that 

many of his other clients were investing with Aequitas.

 TD Ameritrade made special accommodations for its customers so that they could 

invest in Aequitas.

These allegations place TD Ameritrade in the role of facilitator of the sales of Aequitas 

Securities to TD Ameritrade’s customers. 

Thus, plaintiffs would be well-positioned to argue that full discovery should proceed. 

However, plaintiffs are willing to accept limited, meaningful initial merits discovery. The 

specific items of discovery set forth in the first paragraph of this Opposition includes categories 

of discovery that this Court ordered the Accounting Firms to provide. Because TD Ameritrade 

did not produce audit workpapers, plaintiffs have also specified topics of discovery directed 

toward TD Ameritrade’s relationship with investment advisors selling Aequitas securities, its 

interactions with customers purchasing Aequitas securities, its relationship with Aequitas, its due 

diligence regarding the participating investment advisors and Aequitas, its compensation for 

sales of Aequitas securities, and documents created by TD Ameritrade relating to the Aequitas 

securities.

Case 3:16-cv-00580-AC Document 184 Filed 12/09/16 Page 6 of 9
PAGE 6 - PLAINTIFFS’ OPPOSITION TO DEFENDANT TD AMERITRADE, INC.’S

MOTION FOR PROTECTIVE ORDER

STOLL STOLL BERNE LOKTING & SHLACHTER P.C.

209 S.W. OAK STREET

PORTLAND, OREGON 97204

TEL. (503) 227-1600 FAX (503) 227-6840

III. The Stay of Discovery from the Aequitas Receiver Does Not Necessitate a Stay of 

Discovery as to Production by TD Ameritrade

The stay of discovery from the receivership entities does not justify a stay of discovery 

between the parties to this lawsuit. There is no reason to put all discovery on hold for the 

receivership. The Receiver has indicated that the parties may have to wait several months to 

obtain documents from the Aequitas companies. However, there is a lot of discovery to 

complete in this matter. Discovery between the parties should begin now, and discovery from 

the Receiver can commence at the appropriate time. This is the most efficient way to proceed 

and to advance the lawsuit to resolution.

IV. Any Issues of Customer Privacy Can Be Protected Via the Protective Order Already 

in Place

At page 8 of its Motion, TD Ameritrade contends that “many of the Requests seek 

personal information involving third parties, including TD Ameritrade’s customers, who have 

personal privacy rights that TD Ameritrade is obligated to protect under multiple federal and 

state privacy laws; evaluating all documents with regard to these privacy rights would be a timeintensive and burdensome process.” Plaintiffs believe that the limited discovery proposed in this 

Opposition avoids any such concerns. However, any such concerns are easily resolved by 

designating documents “Confidential” pursuant to the Stipulated Protective Order [ECF 156] 

already in place and governing document production in this case. 

CONCLUSION

For the reasons set forth herein, in the Opinion and in plaintiffs’ oppositions to the 

Accounting Firms’ motions for protective order, discovery should not be stayed. At a minimum, 

Case 3:16-cv-00580-AC Document 184 Filed 12/09/16 Page 7 of 9
PAGE 7 - PLAINTIFFS’ OPPOSITION TO DEFENDANT TD AMERITRADE, INC.’S

MOTION FOR PROTECTIVE ORDER 

STOLL STOLL BERNE LOKTING & SHLACHTER P.C. 

209 S.W. OAK STREET 

PORTLAND, OREGON 97204 

TEL. (503) 227-1600 FAX (503) 227-6840

TD Ameritrade should be required to make production of the items specified in the opening 

paragraph of this Opposition. 

DATED this 9th day of December, 2016. 

STOLL STOLL BERNE LOKTING & SHLACHTER P.C. 

By: s/Nadia H. Dahab

Keith A. Ketterling, OSB No. 913368 

Timothy S. DeJong, OSB No. 940662

Jacob S. Gill, OSB No. 033238 

Nadia H. Dahab, OSB No. 125630 

209 SW Oak Street, Suite 500 

Portland, OR 97204 

Telephone: (503) 227-1600 

Facsimile: (503) 227-6840 

Email: kketterling@stollberne.com 

tdejong@stollberne.com 

jgill@stollberne.com 

ndahab@stollberne.com 

-AndSteve W. Berman (admitted pro hac vice) 

Email: steve@hbsslaw.com 

Karl P. Barth (admitted pro hac vice) 

Email: karlb@hbsslaw.com 

Lee M. Gordon (admitted pro hac vice) 

Email: lee@hbsslaw.com

HAGENS BERMAN SOBOL SHAPIRO LLP 

1918 Eighth Avenue, Suite 3300 

Seattle, WA 98101 

Telephone: (206) 623-7292 

Facsimile: (206) 623-0594 

-AndCase 3:16-cv-00580-AC Document 184 Filed 12/09/16 Page 8 of 9
PAGE 8 - PLAINTIFFS’ OPPOSITION TO DEFENDANT TD AMERITRADE, INC.’S

MOTION FOR PROTECTIVE ORDER

STOLL STOLL BERNE LOKTING & SHLACHTER P.C.

209 S.W. OAK STREET

PORTLAND, OREGON 97204

TEL. (503) 227-1600 FAX (503) 227-6840

Robert S. Banks, Jr., OSB No. 821862

Email: bbanks@SamuelsLaw.com

Darlene D. Pasieczny, OSB No. 124172

Email: darlenep@SamuelsLaw.com

SAMUELS YOELIN KANTOR LLP

Attorneys at Law

111 SW 5th Avenue, Suite 3800

Portland, OR 97204-3642

Telephone: (503) 226-2966

Facsimile: (503) 222-2937

Attorneys For Plaintiffs

Case 3:16-cv-00580-AC Document 184 Filed 12/09/16 Page 9 of 9