UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION

JACOB DANESHRAD; JOSEPH 

DANESHRAD; HASSAN 

BLURFRUSHAN,

Plaintiffs,

v.

TREAN GROUP, LLC; NANCY 

STUBENRAUCH; MARK FRANTZ

Defendants.

CASE NO. 20-CV-03887

Hon. Jorge L. Alonso

 

Magistrate Judge Sunil R. Harjani

FIRST AMENDED COMLAINT

Plaintiffs Jacob Daneshrad, Joseph Daneshrad and Hassan Blufrushan (herein 

collectively referred to as “Plaintiffs”) hereby complain against Trean Group, LLC

(“Trean”), Nancy Stubenrauch (“Stubenrauch”), Mark Frantz (“Frantz”) (hereinafter 

collectively referred to as “Defendants”): 

1. Plaintiffs, and each of them, at all relevant times were domiciled in the State of 

California. 

2. Stubenrauch is a member of Trean and at all relevant times was domiciled in 

the state of Illinois.

3. Frantz is an individual who at all relevant times was domiciled in the state of 

Illinois. 

4. All three members of Trean at all relevant times were domiciled in the state 

of Illinois. 

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5. Plaintiffs are informed and believe and thereon allege that at all times 

material hereto, each Defendant acted as an agent, duly authorized, for and on behalf of 

each other Defendants within the course and scope of such agency and authority.

FACTUAL ALLEGATIONS

6. Plaintiffs are a group of high net worth investors who have more than 15-year 

experience in trading futures options. Trean is a futures Introducing Broker (“IB”). In or 

about August 2018, Defendant Frantz, who was an employee of Trean, approached 

Plaintiff Jacob Daneshrad (“Jacob”), who was acting on behalf of all Plaintiffs, and 

solicited Jacob to use Trean services as an introducing broker. 

7. Jacob advised Frantz as to exactly what type of trading Plaintiffs were 

interested in conducting and discussed margin and risk requirements as well as brokerage 

fees. Frantz recommended to Jacob the Clearing Firm of FCStone (“FCStone”) and 

advised Jacob as to FCStone’s fees and risk policies for the type of trading Plaintiffs were 

interested in. 

8. Jacob produced to Frantz the latest trade statements with the prior brokerage 

and Frantz assured Jacob that Trean and FCStone were agreeable to the trade practices of 

Plaintiffs and that Plaintiffs should have no problem using the services of Trean. Frantz 

also represented to Jacob that Frantz and Trean had the knowledge and the expertise to 

handle Plaintiffs’ trading activity. 

9. Based on the representations made by Frantz, Plaintiffs along with non-parties 

Emil Daneshrad and William Josephson opened 4 accounts with FCStone and deposited 

about One million dollars in total for trading. Emil Daneshrad and William Josephson 

have assigned their rights and claim for damages as a result of Defendants’ tortious 

conduct to Joseph Daneshrad.

10.On or about December 31, 2018 when the market was at its lowest, 

Stubenrauch, a member as well as an employee of Trean, who was the chief financial 

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officer and Frantz’ superior, had a meeting wherein both Stubenrauch and Frantz, in bad 

faith, and in violation of their fiduciary duty to Plaintiffs and without any regard for 

Plaintiffs’ interests, decided that Trean should abruptly and immediately terminate its 

relationship with Plaintiffs’ as their introducing broker. Stubenrauch instructed Frantz to 

advise Plaintiffs of Trean’s decision. Stubenrauch and Frantz made this decision 

knowing full well that their decision would force FCStone to stop allowing Plaintiffs to 

trade any more. That is exactly what happened. 

11.Neither Frantz nor anyone else from Trean ever advised Plaintiffs that Trean, 

at its discretion, would abruptly terminate its relationship with Plaintiffs and thereby 

freeze Plaintiffs’ accounts in the middle of Plaintiffs’ trading activity.

12.Plaintiffs accounts were designated as “hedge account,” but Stubenrauch had 

no idea what a “hedge account” was in relation to Plaintiffs’ trading activity. Moreover, 

Stubenrauch lacked knowledge of risk exposure in Plaintiffs’ accounts and was 

consistently confused and would look at the wrong account to check for margin 

compliance and, therefore, most of the time was unaware that Plaintiffs had made 

adjustments to come into margin compliance.

13.Trean’s termination of its relationship with Plaintiffs was targeted at hurting 

and damaging Plaintiffs’ interests because Plaintiff Joseph Daneshrad called on 

Stubenrauch’s incompetence and lack of knowledge about the hedge account margin 

requirements relating to the type of trading that Plaintiffs were conducting.

14.On information and belief, Plaintiffs allege that Trean did not have a policy for 

terminating its relationship with any of its clients.

15.Once Trean advised FCStone that they no longer wished to be the broker for 

Plaintiffs, FCStone froze all of Plaintiffs accounts and placed all the accounts on “closing 

only” restrictions. Plaintiff’s accounts were put on “closing only” position not because 

Plaintiffs were in violation of any of the FCStone’s margin requirements or risk 

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assessment, but solely because Stubenrauch and Frantz, acting on behalf of Trean, simply 

decided to pull the rug from under Plaintiffs. As a result, Plaintiffs were forced to 

liquidate all of their positions and close the accounts and suffered over $500,000.00 in 

damages. 

FIRST CAUSE OF ACTION

(Breach of Fiduciary Duty against All Defendants)

16. Plaintiffs re-allege the preceding paragraphs and incorporate them herein by 

reference. 

17. At all times herein mentioned, Defendants owed fiduciary duties to Plaintiffs 

to deal fairly, honestly, and openly since they were the representatives, agents and brokers 

for Plaintiffs in their dealings with FCStone.

18. Defendants breached their fiduciary duties to Plaintiffs by knowingly, 

intentionally and without any reasonable basis deprived Plaintiffs of their ability to trade 

their positions with FCStone at the time when Plaintiffs were in their most vulnerable 

position without any concern for the interests of Plaintiffs.

19. As a direct and proximate result of the breach of fiduciary duties by 

Defendants, Plaintiffs have been damaged, in an amount, according to proof at trial. 

20. Defendants’ conduct alleged above were outrageous, malicious, and 

oppressive with the intent to benefit Defendants at the expense of Plaintiffs in conscious 

disregard of Plaintiffs’ rights and interests and, therefore, Plaintiffs are entitled to an 

award of exemplary and punitive damages. 

SECOND CAUSE OF ACTION

(Intentional Interference with Contractual Relations against All Defendants)

21. Plaintiffs re-allege the preceding paragraphs and incorporate them herein by 

reference.

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22. In or about September 2018, Plaintiffs, and each one of them, entered into a 

contract (the “Contract”) with FCStone to trade futures options. 

23. Frantz and Stubenrauch knew of the existence of the Contract between 

Plaintiffs and FCstone. 

24. Frantz and Stubenrauch engaged in the aforementioned conduct that 

prevented performance or made performance of the Contract by FCStone difficult.

25. Frantz and Stubenrauch intended to disrupt the performance of the Contract 

or knew that disruption of performance was certain or substantially certain to occur.

26. Frantz and Stubenrauch’s conduct was a substantial factor in causing 

Plaintiffs’ harm in the amount over $500,000.00. 

27. Frantz and Stubenrauch’s aforementioned actions were conducted with 

malice, oppression, and fraud in order to take advantage of Plaintiffs in their most 

vulnerable position. Defendants maliciously deprived Plaintiffs from being able to 

conduct their trading activity with FCStone with the intent to benefit Defendants at the 

expense of Plaintiffs in conscious disregard of Plaintiffs’ rights and interests. Therefore, 

Plaintiffs are entitled to an award of exemplary and punitive damages. 

THIRD CAUSE OF ACTION

(Negligence against All Defendants)

28. Plaintiffs re-allege the preceding paragraphs and incorporate them herein by 

reference.

29. Defendants were negligent in acting as the agent and the broker for Plaintiffs 

in that they were not competent and lacked basic knowledge of the type of futures options 

trading that Plaintiffs were conducting. Defendants breached their duty of due care by 

abruptly and unilaterally terminating their relationship with Plaintiffs as alleged herein. 

Defendants were also negligent in not advising Plaintiffs in advance that Plaintiffs would 

be at the mercy of Trean to terminate its relationship abruptly at any time and at their sole 

discretion.

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30. Plaintiffs were harmed and Defendants’ negligence was a substantial factor 

in causing Plaintiffs’ harm.

FOURTH CAUSE OF ACTION

(Fraud by False Promise against Frantz and Trean)

31. Plaintiffs re-allege the preceding paragraphs and incorporate them herein by 

reference.

32. In or about August 2018, Frantz represented to Jacob that Frantz and his 

employer, Trean and FCStone were agreeable to the trade practices of Plaintiffs and that 

Plaintiffs would not have any problem using the services of Trean. Frantz also 

represented to Jacob that Frantz and Trean employees were knowledgeable and 

experienced in the type of futures options trading that Plaintiffs were interested in and 

that Trean would provide competent support for Plaintiffs’ trading activity. Frantz 

represented that Plaintiffs had to only comply with FCStone’s margin and risk 

requirements and as long as FCStone was satisfied with Plaintiffs trading activity there 

would no problem. Frantz never advised Plaintiffs that Trean would have unfettered 

discretion to terminate its relationship with Plaintiffs and abruptly stop Plaintiffs’ trading 

activity in its track.

33. Based on the representations made by Frantz, Plaintiffs and non-parties, who 

have assigned their claims to Joseph Daneshrad, opened 4 accounts with FCStone and 

deposited about One million dollars in total for trading. 

34. Frantz’ representations and promises were in fact false and were intended 

for Plaintiffs to rely on these promises in order to induce Plaintiffs to enter into the 

Contract with FCStone with Trean as brokers making commission on each trade.

35. Plaintiffs reasonably relied on Frantz’ promises to their detriment. In 

reliance on Frantz’ false promises and representations, Plaintiffs were induced to and did 

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enter into the Contract with FCStone. Had Frantz not made the false promises and 

representations, Plaintiffs would not have entered into the Contract with FCStone. 

36. Plaintiffs’ reliance on Frantz’ promises were a substantial factor in causing 

harm to Plaintiffs. 

37. Frantz’ promise were made in the course of employment and on behalf of 

Trean. As a proximate result of Frantz’ false promises and representations, Plaintiffs 

have suffered damages, in a sum according to proof at trial.

38. Plaintiffs, therefore, allege that Frantz and Trean are guilty of fraud as 

defined by Civil Code Section 3294 with regard to the foregoing misrepresentations. The 

aforementioned conduct of Frantz was willful and malicious. Frantz and Trean’s conduct 

deprived Plaintiffs of substantial property or legal rights or otherwise caused injury and 

was despicable conduct that subjected Plaintiffs to a cruel and unjust hardship in 

conscious disregard of Plaintiffs’ rights, so as to justify an award of exemplary and 

punitive damages, in an amount according to proof at trial.

FIFTH CAUSE OF ACTION

(Fraud in the Concealment against Frantz and Trean)

39. Plaintiffs re-allege the preceding paragraphs and incorporate them herein by 

reference.

40. Frantz intentionally failed to disclose important facts that Plaintiffs did not 

know and could not reasonably have discovered. Frantz never advised Plaintiffs that 

Trean, at its discretion, would abruptly terminate its relationship with Plaintiffs and 

thereby freeze Plaintiffs’ accounts in the middle of Plaintiffs’ trading activity.

41. Frantz intended to deceive Plaintiffs by concealing the facts herein alleged. 

42. Plaintiffs would not have entered into the Contract with FCStone had 

Plaintiffs known the concealed facts.

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43. Plaintiffs relied on Frantz’ deception, and the reliance was reasonable under 

the circumstances.

44. Frantz’ concealment was a substantial factor in causing harm to Plaintiffs.

45. As a proximate result of Frantz’ concealment, Plaintiffs have suffered 

damages in a sum according to proof at trial.

46. Plaintiffs, therefore, allege that Frantz and Trean are guilty of fraud as 

defined by Civil Code Section 3294 with regard to the foregoing misrepresentations. The 

aforementioned conduct of Frants and Trean were willful and malicious. Frantz’ conduct 

deprived Plaintiffs of substantial property or legal rights or otherwise caused injury and 

was despicable conduct that subjected Plaintiffs to a cruel and unjust hardship in 

conscious disregard of Plaintiffs’ rights, so as to justify an award of exemplary and 

punitive damages, in an amount according to proof at trial.

SIXTH CAUSE OF ACTION

(Fraud by Intentional Misrepresentation against Frantz and Trean)

47. Plaintiffs re-allege the preceding paragraphs and incorporate them herein by 

reference.

48. Frantz made the foregoing false representations of important facts to 

Plaintiffs. 

49. Frantz knew that the representations were false or made the representations 

recklessly and without regard for their truth. Frantz made the false representations with 

the intention to deceive and defraud Plaintiffs to enter into the Contract.

50. Frantz intended that Plaintiffs rely on the representations. 

51. Plaintiffs reasonably relied on the representations. Frantz made the 

representations with the intention of inducing Plaintiffs to act in reliance on the 

representations in the manner herein alleged, or with the expectation that Plaintiffs would 

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so act. Had Frantz not made the false promises and representations, Plaintiffs would not 

have entered into the Contract with FCStone.

52. Plaintiffs’ reliance on Frantz’ representations was a substantial factor in 

causing harm to Plaintiffs.

53. As a proximate result of Frantz’ intentional misrepresentation, Plaintiffs 

have suffered damages in a sum according to proof at trial.

54. Plaintiffs, therefore, allege that Frantz and Trean are guilty of fraud as 

defined by Civil Code Section 3294 with regard to the foregoing misrepresentations. The 

aforementioned conduct of Frantz was willful and malicious. Frantz’ conduct deprived 

Plaintiffs of substantial property or legal rights or otherwise caused injury and was 

despicable conduct that subjected Plaintiffs to a cruel and unjust hardship in conscious 

disregard of Plaintiffs’ rights, so as to justify an award of exemplary and punitive 

damages, in an amount according to proof at trial.

SEVENTH CAUSE OF ACTION

(Negligent Misrepresentation against Frantz and Trean)

55. Plaintiffs re-allege the preceding paragraphs and incorporate them herein by 

reference.

56. Frantz made the foregoing false representations of important facts to 

Plaintiffs. 

57. Frantz did not honestly believe or did not have reasonable grounds for 

believing that the representations were true when he made it.

58. Frantz intended that Plaintiffs rely on the representations. Frantz made the 

representations with the intention of inducing Plaintiffs to act in reliance on the 

representations in the manner herein alleged, or with the expectation that Plaintiffs would 

so act. 

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59. Plaintiffs reasonably relied on the representations. Plaintiffs, at the time of 

the representations of Frantz as herein alleged, and in reliance on these representations, 

were ignorant of the falsity of Frantz’ representations and believed them to be true.

60. Plaintiffs’ reliance on Frantz’ representations were a substantial factor in 

causing harm to Plaintiffs. As a proximate result of the negligent misrepresentations of 

Frantz as herein alleged, and in reliance on these representations, Plaintiffs were induced 

to enter into the Contract with FCStone. Had Frantz not made the false promises and 

representations, Plaintiffs would not have entered into the Contract with FCStone.

61. By reason of the negligent misrepresentations of Frantz, Plaintiffs have been 

damaged in an amount according to proof at trial.

WHEREFORE, Plaintiffs pray for judgment against Defendants as follows:

AS TO ALL CAUSES OF ACTION:

1. For compensatory and consequential damages according to proof;

2. For general damages according to proof;

3. For prejudgment interest as allowed by law;

4. For costs incurred herein; and

5. For such other and further relief as the Court deems just and proper.

AS TO CAUSES OF ACTION 1, 2, 4, 5 and 6:

6. For exemplary and punitive damages, according to proof.

DEMAND FOR JURY TRIAL

Plaintiffs demand a trial by jury of any issue triable of right by a jury.

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Date: January 11, 2021 DANESHRAD LAW FIRM, APC

By: _________________________

Joseph Daneshrad, Esq.

Attorney for Plaintiffs 

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