Source: https://www.scribd.com/document/66055796/Bennie-et-al-v-Munn-et-al-Amended-Complaint
Timestamp: 2019-01-22 10:16:50
Document Index: 782656962

Matched Legal Cases: ['§ 1983', '§ 1983', '§ 2201', '§ 1331', '§ 1983', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', '§ 8', 'in fine', '§ 8', '§ 8', '§ 1983', '§ 1983', '§ 1983', '§ 1983', '§ 1983', '§ 1983', '§ 1983', '§ 8', '§ 8', '§ 8', '§ 84', '§ 1988']

Bennie et al v. Munn et al Amended Complaint | Financial Adviser | Fourteenth Amendment To The United States Constitution
Bennie et al v. Munn et al Amended Complaint
4:11-cv-03089-RGK -CRZ Doc # 26
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA ROBERT R. BENNIE, JR., individually, and on behalf of BOB BENNIE WEALTH MANAGEMENT, INC. Plaintiff, v. JOHN MUNN, in his official and individual capacity, JACK E. HERSTEIN, in his official and individual capacity, RODNEY R. GRIESS, in his official and individual capacity, and JACKIE L. WALTER, in her official and individual capacity. Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 4:11-cv-03089
AMENDED COMPLAINT FOR DAMAGES FOR VIOLATION OF CIVIL RIGHTS (42 U.S.C. § 1983) DEMAND FOR JURY TRIAL
Plaintiff Robert R. Bennie, Jr. (“Mr. Bennie”), individually and, on behalf of Bob Bennie Wealth Management, Inc., by his attorneys, and for his Complaint against Defendants John Munn (“Mr. Munn”), in his official and individual capacity, Jack E. Herstein (“Mr. Herstein”), in his official and individual capacity, Rodney R. Griess (“Mr. Griess”) in his official and individual capacity, and Jackie L. Walter (“Ms. Walter”), in her official and individual capacity, (collectively “Defendants”) states as follows: NATURE OF THE CASE 1. This is an action to redress the deprivation of rights secured to Mr. Bennie by the
Due Process, Equal Protection and Free Speech Clauses of the First, Fifth and Fourteenth Amendments to the Constitution of the United States and Article I, Section 3 of the Nebraska Constitution, which deprivation of rights is actionable under 42 U.S.C. § 1983 and 28 U.S.C. § 2201.
OMA-329266-1
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JURISDICTION AND VENUE 2. The Court has original subject matter jurisdiction over this civil action pursuant to
28 U.S.C. §§ 1331 and 2201 because it involves the deprivation of rights secured by the United States Constitution and in violation of 42 U.S.C. § 1983, and all other claims are so related to claims within the Court’s original jurisdiction that they form part of the same case or controversy. 3. The individual Defendants, Mr. Munn, Mr. Herstein, Mr. Griess, and Ms. Walter,
are employees of the State of Nebraska and are located in Nebraska. Therefore, the Court has personal jurisdiction over each Defendant. 4. 5. All acts giving rise to this action occurred in Nebraska. Mr. Munn, Mr. Herstein, Mr. Griess and Ms. Walter are sued individually and in
their official capacities. PARTIES 6. Mr. Bennie is an individual residing in Lincoln, Nebraska. Mr. Bennie works as
an agent of a securities broker dealer and as an investment adviser representative of an investment adviser of securities. He is a Certified Financial Planner (CFP), and holds a Masters Degree in Business Administration (MBA) from Kansas State University and a Bachelor of Science Degree from the University of Nebraska-Lincoln. In 2009, Mr. Bennie was named one of the top 1,000 Financial Planners in the United States by Barron’s Magazine. He is a past Board Member of the Financial Planning Association of Nebraska, and is a nationally recognized presenter of hundreds of educational workshops to both investment professionals and the general public. 7. Mr. Munn is the Director of the Department of Banking and Finance (the
“Department”) for the State of Nebraska. Mr. Munn was duly appointed Director pursuant to 2
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Nebraska law under the Securities Act of Nebraska, Neb. Rev. Stat. § 8-1101 et seq (the “Act”). As Director, Mr. Munn’s responsibilities include the regulation of the securities industry under the Nebraska Securities Act (“the Act”), Neb. Rev. Stat. §§ 8-1101 to 8-1124. As part of those duties, Mr. Munn oversees the conduct of all persons in Nebraska who register as agents and investment adviser representatives under the Act. Furthermore, Mr. Munn is responsible for the training and supervision of the officers and examiners of the Department. Additionally,
Mr. Munn issues orders to entities and persons in the securities industry, and makes those orders available to the public. At all relevant times, Mr. Munn was acting under the color of state law. 8. Mr. Herstein is the Assistant Director of the Bureau of Securities (the “Bureau”)
for the State of Nebraska. Mr. Herstein was appointed by the Director as the Assistant Director of the Bureau of Securities within the Department pursuant to Neb. Rev. Stat. § 8-1120 and empowered with the Director’s delegated powers and duties under the Act. His duties and responsibilities include applying the Department’s regulations to agents and investment adviser representatives, and the training and supervision of the officers and securities examiners of the Bureau. At all relevant times, Mr. Herstein was acting under the color of state law. 9. Mr. Griess is the Investigation and Compliance Unit Supervisor for the Bureau of
Securities for the State of Nebraska. Upon information and belief, Mr. Griess is charged with registration and compliance matters related to agents and investment adviser representatives to ensure compliance with the Act and State regulations promulgated by the Department in accordance with the Act. At all relevant times, Mr. Griess was acting under the color of state law. 10. Ms. Walter is a securities examiner with the Bureau. Upon information and
belief, Ms. Walter is charged with investment adviser and broker-dealer examinations including reviewing registrations and applications for registration, and the conduct by registered entities 3
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and persons to ensure compliance with the Act and state regulations promulgated by the Department in accordance with the Act. At all relevant times, Ms. Walter was acting under the color of state law. STATUTORY AND REGULATORY BACKGROUND 11. The Department of Banking and Finance is a state administrative agency created
by Nebraska law. The Department, through its Director, is vested with the power and charged with the duty of enforcing all provisions of the Act. 12. Pursuant to Neb. Rev. Stat. 8-1103(1), agents and investment adviser
representatives are required to associate with, as applicable, a registered broker-dealer or investment adviser firm and register, as applicable, as agents of the broker dealer or investment adviser representative of the investment adviser. 13. As part of an overlapping system of regulation of the securities industry by
federal and state agencies, and self-regulatory organizations like the Financial Industry Regulatory Authority (“FINRA”), an associated person accomplishes this registration by filing through his or her employing broker-dealer a Form U-4 with the Central Registration Depository (“CRD”), which is maintained and administered by FINRA. The Department requires this registration through the CRD at FINRA pursuant to 48 NAC 6-004.01. 14. Pursuant to Neb. Rev. Stat. § 8-1103(4)(a), a registration automatically becomes
effective on the thirtieth (30) day after the application for registration is filed unless a denial order is in effect or a proceeding is pending under subsection 9 of that section. 15. Neb. Rev. Stat. § 8-1103(9)(a) provides, in part, “the director may by order deny,
suspend, or revoke registration of any. . . agent. . . or investment adviser representative . . . if he or she finds that the order is in the public interest and that the applicant or registrant,” has committed one of nine prohibited actions or one of four situations exist. (emphasis added). 4
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One of the prohibited actions permitting the Director to take adverse action
against an applicant or registrant is upon a finding that he or she “has filed an application for registration . . . which . . . was incomplete in any material respect or . . . was . . . false or misleading with respect to any material fact.” Neb. Rev. Stat. § 8-1103(9)(a)(i). 17. The Act expressly provides that the Director may summarily postpone or suspend
registration pending a final determination. However, if the Director summarily issues an order, he or she “shall promptly notify the applicant or registrant . . . that [the order] has been entered and of the reasons therefor and that within fifteen business days after the receipt of a written request the matter will be set down for hearing.” Neb. Rev. Stat. § 8-1103(9)(c)(ii). The statute emphasizes that “No order may be entered under this section denying or revoking registration without appropriate prior notice to the applicant or registrant, as well as the employer or prospective employer if the applicant or registrant is an agent or investment adviser representative, and opportunity for hearing.” Id. 18. Neb. Rev. Stat. § 8-1103(4)(d) permits the Director to “restrict or limit an
applicant as to any function or activity in this state for which registration is required under the Securities Act of Nebraska.” 19. As part of the registration process, the Act requires an agent or an investment
adviser representative to notify the Director in the event his employment with a registered broker-dealer or investment adviser is terminated. Neb. Rev. Stat. §§ 8-1103(1), (2)(d). 20. The Act requires the Defendants to register every eligible applicant and imposes
substantive limitations and constraints on the exercise of official discretion subject to the mandatory language in the Act.
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FACTUAL BACKGROUND 21. From March 1997 until November 2010, Mr. Bennie was an agent and investment
adviser representative associated with LPL Financial Corporation (“LPL”). During this time, and subsequently, Mr. Bennie operated his business as Bob Bennie Wealth Management, Inc. 22. In 2009, Mr. Bennie was named as one of the top 1,000 Financial Planners in the
United States by Barron’s Magazine. He was nominated for this honor by LPL. 23. Mr. Bennie has been registered as an agent and investment adviser representative
with the Nebraska Department of Banking and Finance continually since 1995. He advises and assists individuals in making investment decisions. The securities industry is Mr. Bennie’s chosen profession, and he derives substantially all of his income through his status as a registered agent and investment adviser representative. Mr. Bennie’s professional practice, business, and livelihood depend entirely on his registration as a broker dealer agent and investment adviser representative. 24. At no time from 1995 to 2010 (over 15 years) was Mr. Bennie ever the subject of
any disciplinary action by the Department. 25. Throughout his thirteen-plus years with LPL, Mr. Bennie maintained a stellar and
impeccable record. For each of the last ten years he was with LPL, Mr. Bennie was in the top 5% of all LPL representatives in production (usually in the top 1% or 2%). He never had so much as even a reprimand of any kind. 26. Mr. Bennie is a former member of the collegiate rodeo team at UNL and an
accomplished rider. He is also a leader in the “Tea Party” movement in Lincoln, Nebraska. 27. From August 18 through December 27, 2009, Mr. Bennie paid for and appeared
in television advertisements directed at viewers in the Lincoln, Nebraska area.
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The script of the advertisement stated, “Hi folks, I’m Bob Bennie. If you’re an
investor and understand capitalism has made our economy the envy of the world, . . . if you know it’s a basic American right to keep and bear arms to protect yourself and your family (change to shot of Bob on his horse wearing a cowboy hat], if you believe freedom is what makes America great . . . Then I’d like to meet you. We’ll discuss how I can help you to protect and grow your wealth in this volatile economy. If we decide to do business, I’ll contribute $100 towards your purchase of a firearm. God Bless You and God Bless America!” 29. After the television ad appeared, the Defendants embarked on a concerted scheme
of harassment aimed at Mr. Bennie because of his political views as described in detail below. 30. 31. The Defendants referred to Mr. Bennie’s television ad as the “gun slingin ad.” The Defendants’ scheme included subjecting Mr. Bennie to an unrelenting string
of five (5) separate investigations within a four (4) month period related to his public political statements or advertising. 32. When Mr. Bennie and/or his broker-dealer would address one inquiry from the
Defendants, they would immediately launch another inquiry. 33. The Defendants discussed proposed orders imposing large fines on Mr. Bennie
before the inquiries were even addressed by Mr. Bennie’s broker-dealer. 34. In November 2009, an unknown securities analyst at the Department obtained an
old DVD containing a short, professionally produced presentation distributed by Mr. Bennie to select clients, and reviewed it for regulatory compliance. 35. The DVD presentation explains a service available to Mr. Bennie’s clients called
“eMoney,” which is not an investment product or a sales promotion item. eMoney is computer software that allows Mr. Bennie’s customers to organize and access their account balances and other key documents electronically. 7
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36. presentation. 37.
The DVD was well over two (2) years old at the time the Defendants reviewed the
On or about November 16, 2009, Defendant Griess contacted LPL and alleged
that the DVD should contain additional disclosure language regarding Mr. Bennie’s investment adviser services. While the DVD contained the disclosure, “Securities offered through Linsco Private Ledger,” Mr. Griess asserted it should have also stated, “Investment advisory services offered through Linsco Private Ledger.” 38. Whereas the DVD pertains to a computer software service to organize and access
documents, it is not clear whether any disclosure was needed. Nevertheless, after a series of discussions and e-mails over a month-long period with Mr. Griess, LPL consented to Mr. Griess’ request to add the disclosure, and e-mailed him a response indicating such. 39. On or about December 17, 2009, Mr. Griess forwarded LPL’s e-mail confirming
their agreement to add the additional disclosure to Mr. Herstein, who wrote in reply, “Bob [Bennie] is always seen wearing a cowboy hat lately, so I say ‘Hang Him High’.” 40. Mr. Herstein’s “Hang Him High” comment is a direct reference to Mr. Bennie’s
television advertisements. Mr. Bennie owns horses, and was shown riding a horse and wearing a western-style “cowboy” hat in the television advertisement. 41. On or about December 30, 2009, Mr. Griess self-initiated a complaint against
Mr. Bennie to the Department. The complaint simply stated, “Television advertisement *entered for tracking purposes.” 42. Although Mr. Griess self-initiated the complaint against Mr. Bennie for his
television advertisement, he did not state the basis for the complaint on the form he filed. 43. At the time the complaint was initiated, the television advertisement had been
running for several months, but had actually stopped being aired three days earlier. 8
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Also on or about December 30, 2009, Mr. Griess telephoned LPL to discuss his
self-initiated complaint against Mr. Bennie’s television advertisement, and also sent LPL a letter on Department letterhead regarding, “R. Bennie Television Advertisement.” In the letter,
Mr. Griess wrote, “Upon receipt, please review DVD and feel free to respond via email. At this time, the Department would like to know if Mr. Bennie sought approval of the advertisement and content therein through LPL Compliance. Segment 1 of the DVD contains a partial run of the advertisement referencing $100 towards the purchase of a firearm.” Mr. Griess signed the letter as “Securities Investigation and Compliance Unit Supervisor.” 45. In response to Mr. Griess’ letter about the television advertisement, LPL
responded in an e-mail to Mr. Griess that it was “double checking our cash/non-cash compensation policy internally” and would follow-up with Mr. Griess. 46. LPL’s response correctly identified that the only issue related to the applicable
rules on agents and advisers giving away cash or gifts, and should have had nothing to do with the political content of the advertisement. 47. As a professional regulator, Mr. Griess should have known the rules regarding
gifts, or should have reacquainted himself with the rules regarding gifts prior to his initiating a complaint against Mr. Bennie and confronting a regulated entity, in his official capacity, about an advertisement containing political content. 48. Mr. Griess was or should have been aware of FINRA Rule 3220 which provides
that regulated entities and their agents are not permitted to give anything of value in excess of one hundred dollars ($100) per individual per year to any person where such payment is in relation to the business. This is exactly the amount of the offer in Mr. Bennie’s ad. 49. Only one day after he received LPL’s initial e-mail response, wherein LPL stated
it would follow up with him, Mr. Griess sent an e-mail to Mrs. Sheila Cahill (“Mrs. Cahill”), 9
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Legal Counsel for the Department, stating, “Just wanted to recap on the orders I spoke of at the [Department] meeting.” “2. Bob Bennie – Jack [Herstein] has suggested 25K per violation of which we have 2. Failing to disclose IA [investment adviser] business on the CD featuring Bennie and the “Do business with me and I’ll put forth $100 towards the purchase of a firearm for you” (I suspect this one didn’t get [LPL] Compliance approval, but it’s just a guess at this point.) I’m currently corresponding with LPL Compliance and will keep you posted.” 50. Mr. Griess and Mr. Herstein were proposing fines against Mr. Bennie before any
investigation and without a legitimate basis. They were discussing orders to fine Mr. Bennie $25,000 for the television advertisement while admitting that they had not even verified whether the advertisement had been pre-approved. 51. On January 15, 2010, Mr. Griess sent an e-mail to Mrs. Walter stating, “[A]s it
stands right now I’m planning on hitting Mr. Bennie up for about $50K (2 ad violations @ $25K/ea.) We’ll see where it goes.” 52. On February 1, 2010, the Lincoln Journal Star (“LJS”) newspaper published an
article with the headline, “Bennie acts as Lincoln’s Tea Party Voice.” 53. The LJS article mentions Mr. Bennie’s television advertisement, and includes
quotations from Mr. Bennie expressing criticism of both major political parties and several political figures, including, Mr. Bennie’s political opinion regarding Senator Ben Nelson and President Obama. The article also included separate criticisms by Mr. Bennie of the Republican Party and some of its leaders. A copy of the entire LJS article was kept by the Defendants in the Department’s files. 54. The very day the article is published, February 1, 2010, Mr. Griess sent an e-mail
to LPL forwarding an internet link to the LJS article and stating that Mr. Bennie was quoted in the article saying the following about President Obama, “I’m a freedom-loving American and 10
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he’s a communist,” “I’m honest and he’s dishonest. He didn’t tell us all of what he was going to do,” “I believe he’s an evil man.” 55. Within days of the LJS article, Mr. Griess contacted Mr. Bennie and informed
him that he has started an inquiry into Mr. Bennie’s television advertisement. 56. During that conversation, Mr. Bennie informed Mr. Griess that the advertisement
stopped running in December of 2009 and that the advertisement had been pre-approved by LPL’s advertising compliance section prior to airing. 57. Although Mr. Griess had opened an inquiry into the television advertisement in
December 2009, he only contacted Mr. Bennie about that inquiry after the publication of the LJS article wherein Mr. Bennie criticized President Obama. 58. On February 2, 2010, Mr. Griess sent an e-mail to Mrs. Cahill stating, “I’ve
scheduled a conference call with LPL concerning Bob Bennie and his recent string of activities; i.e. lack of IA disclosure, gun slingin ads, and calling Obama a ‘communist’ and an ‘evil’ man issues. . . . Would like to have you present if you can make it. Jack’s [Mr. Herstein] coming too.” 59. On February 2, 2010, Mrs. Cahill responded to Mr. Griess’ e-mail stating, “Count
me in. I think we probably need to have a brief discussion prior to the call about the concerns being raised and the way in which we will raise those concerns. The last thing we want is a Journal Star headline reading something like ‘State interferes with Bennie’s free speech.’ In addition, we need to be mindful of potential political ramifications – given the party affiliation of Bennie and the current administration.” 60. Although the Defendants were well aware of the implications of their actions with
regard to Mr. Bennie’s First Amendment rights, they decided to disregard those rights. The email from the Department’s Legal Counsel indicates a conscious effort to cover up the Defendants’ motives. 11
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Furthermore, the Defendants used their regulatory position and power to schedule
a conference call with a regulated entity to discuss Mr. Bennie’s statements criticizing President Obama, while privately noting they must be careful due to the party affiliation of the Governor. 62. On February 3, 2010, an LPL representative responded to Mr. Griess’ request for
a conference call stating that he would be joined on the call by LPL’s Associate Counsel, Mr. Ken Juster. 63. On February 4, 2010, Mr. Griess e-mailed LPL and scheduled the requested
conference fall for February 8th. Mr. Griess also stated to LPL, “On a side note for discussion Monday also, should LPL anticipate imposing any kind of heightened supervision, more frequent/unannounced exam schedule, specialized advertisement approval process or other sanction(s) that may provide the Department with a little better sense that the firm is ‘on top of’ addressing this type of activity which in turn may be of some comfort to use and really is in the best interest of the public, would be nice to know also.” 64. Mr. Griess’ e-mail demonstrates that he used his official position and regulatory
authority to pressure LPL, a regulated entity, to sanction Mr. Bennie for his political speech, even after having been warned by the Department’s Legal Counsel about concerns regarding Mr. Bennie’s First Amendment rights. 65. According to handwritten notes dated February 4, 2010, and maintained in the
Department’s files, LPL had informed the Defendants that both Mr. Bennie’s television advertisement and the eMoney DVD had been approved by LPL’s compliance section prior to their use. 66. On February 8, 2010, prior to the scheduled conference call between Mr. Griess,
Mr. Herstein, Mrs. Cahill, and LPL officials, Mr. Griess e-mailed LPL stating, “we have yet to
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receive the requested documents in preparation for today’s call.” The documents requested pertained to Mr. Bennie’s television advertisement and the LJS article. 67. Also prior to the conference call, Mrs. Cahill sent Mr. Griess an e-mail asking,
“Did LPL ever sent the copy of the approved script for Bennie’s gun ad?” 68. In response to Mr. Griess’ request for documentation on the television
advertisement and the LJS article, LPL wrote, “I have attached the paperwork associated with the review of the TV commercial. The newspaper article was not submitted for review.” 69. The attached documentation showed that the television advertisement had been
reviewed by LPL’s advertising compliance analyst and one version of the advertisement was “approved with changes/comments” on September 7, 2009, and another version had been “approved as is” on September 11, 2009. 70. Upon his receipt of the documentation from LPL, Mr. Griess forwarded those
documents on to Mr. Herstein and Mrs. Cahill in an e-mail stating, “This just in…” 71. Handwritten notes from the conference call indicate that a reporter from the LJS
had approached Mr. Bennie to conduct the interview that resulted in the LJS article. The notes also show that LPL was instructed to discuss the Defendants’ issues with Mr. Bennie’s “gun” advertisement with him, and that they were informed other LPL registered agents had a similar practice of offering gift cards and certificates. Finally, the notes show that as a result of the pressure from the Defendants, LPL agreed that Mr. Bennie would be reassigned to a Senior Analyst for supervision. 72. Additional handwritten notes contained in the Department’s files from the
conference call summarize the call, including: that LPL had approved Mr. Bennie’s presentations; that the LJS article was not submitted to LPL prior to publication for review, but that LPL would pay additional attention and talk with Mr. Bennie about the LJS article; that 13
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“B[ob] B[ennie] received call from Don Walton to ask for interview (as one of Tea Party, strong Republican),”; that LPL was of the view the interview was not related to Mr. Bennie’s or LPL’s business; that LPL informed the Department that other registered agents provided customers with gift certificates for doing business with the registered agent, but that LPL was unsure if any others contained specific references to firearms; that, at the Defendants’ request, LPL would provide the Department with the number of gift cards for guns Mr. Bennie had given out; that LPL had talked with Mr. Bennie the week prior and expressed concerns about the advertisement due to Defendants’ inquiries; that Mr. Bennie had agreed to take the advertisement off the air; that the Defendants questioned LPL on what were its policies and guidelines regarding registered agents expressing their political views; that LPL responded that it did not have any policies or guidelines on registered agents expression of their political views; and, that as a result of the call from their regulators, LPL would reassign Mr. Bennie to an LPL senior analyst for supervision. 73. In an e-mail labeled “follow up to items requested on 2.8.10,” LPL wrote to
Mr. Griess, “See questions and answers below regarding the items we discussed on Monday.” In the content of the e-mail, LPL replied to Mr. Griess that Mr. Bennie had discontinued the television advertisement on December 27th because he had “found it to be ineffective, and that Mr. Bennie had distributed one (1) gift card related to that advertisement. Additionally, LPL communicated that it “does not have any specific guidelines that focus on communicating political views to the public.” 74. Also in February 2010, Mr. Munn received through the mail a copy of a “one-on-
one” dinner invitation from Mr. Bennie related to his investment business. 75. Rather than simply discarding the invitation, Mr. Munn forwarded the invitation
on to Mr. Griess and asked for him to review it.
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Soon thereafter, Mr. Griess contacted Mr. Bennie regarding the dinner invitation,
and Mr. Bennie informed Mr. Griess that the invitation had been pre-approved by both FINRA and LPL’s advertising compliance department. 77. On February 18, 2010, Mr. Griess sent an e-mail to Mr. Bennie’s broker dealer,
LPL, regarding “yet another public communication from Bob Bennie,” and attached the dinner invitation to the message. In the body of the e-mail, Mr. Griess wrote, “As you know, we’ve recently discussed other communication from Mr. Bennie and pursuant to those discussions, LPL indicated that Mr. Bennie was to be assigned to a ‘Senior Analyst’ to review/approve communications prior to their release. The assignment appears to be unsuccessful as this
communication is non-compliant.” Mr. Griess went on to state, “The Department requests that LPL provide the following information on the Senior Analyst assigned to and responsible for the review/approval of Mr. Bennie’s communications with the public.” Also in the e-mail,
Mr. Griess demanded, in large, bold type that all “scheduled/accepted ‘one-on-one’ dinner meetings are to be cancelled immediately.” Mr. Griess concluded the e-mail by threatening regulatory action against LPL: “The Department is expressly concerned, not only with the persistent, multiple, repeated acts of non-compliance, but with the continued failure of LPL to act in an appropriate manner to remedy the issues. The Department may invoke whatever administrative action deemed necessary and appropriate under its authority against both Mr. Bennie and/or LPL Financial to insure compliance.” 78. In the February 18, 2010 e-mail, Mr. Griess expressly threatened LPL with
administrative action if it did not take punitive action against Mr. Bennie for publications and advertising that Mr. Griess characterized as non-compliant, but had actually been pre-approved by FINRA and/or the LPL compliance department or which were protected First Amendment speech. 15
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Later on February 18, 2010, Mr. Herstein sent an e-mail to Mr. Griess
commenting on Mr. Griess’ earlier threatening e-mail stating, “Excellent e-mail Rod.” 80. Minutes later, Mr. Griess responded, “Thank-you kindly. Hopefully they’ll get
the message loud and clear that the Department is just about to the ‘end of its rope’ with the crap. If not, $$$$$$$$.” 81. The “crap” referred to by Mr. Griess was the pre-approved television
advertisement, dinner invitations, and the non-securities related LJS article on Mr. Bennie’s Tea Party activities. Mr. Griess’ reference to $$$$$$$$ refers to the Defendants’ intention to levy a large fine ($50,000). 82. Soon thereafter, Mr. Herstein responded to Mr. Griess’ e-mail stating, “Actually I
thought it to be one of your finest. They may not agree.” 83. On February 25, 2010, Mr. Munn sent an e-mail to Mr. Herstein and Mr. Griess
stating, “The Governor called Mr. Bennie this morning. Mr. Bennie told him that this is all politically motivated. He also told him that LPL and his federal regulator okayed the materials he has been using. . . He [the Governor] asked me to keep him posted and hoped we could resolve this sooner rather than later.” 84. That same day, Mr. Munn wrote a memorandum to Governor Heineman stating,
“On December 7, 2009, we came into possession of a compact disk which Mr. Bennie had given to one of his clients. The client knew one of our securities analysts and forwarded the compact disk to her. Our analyst felt that the presentation on the compact disk was lacking some of the disclosures that Investment Advisor Representatives are required to provide when they promote their investment services or an investment product. Investment Advisor Representatives are required to clear promotional materials they use through the Investment Advisor firm they work under. The firm in this case is LPL Financial. Before we contacted LPL Financial to ask if they 16
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had approved the presentation on the compact disk, a television advertisement featuring Mr. Bennie appeared which contained an offer to potential clients of a $100 donation towards purchase of a firearm for those choosing to do business with him. We again wondered if LPL Financial had approved this promotion. In early February, I received a mailing at my home from Mr. Bennie inviting me to a one-on-one dinner with him to talk about important issues that may impact my financial goals. A copy of the mailing is attached. . . . . When I shared the invitation with my staff, concerns were again raised about the adequacy of the disclosures contained in the mailing. We have discussed these three concerns with LPL Financial. They are reviewing their records to see if they did approve each of the three promotions. Our immediate concern is LPL Financial’s oversight of Mr. Bennie’s activities. We have not contacted Mr. Bennie. We will decide about contacting him once we have a response from LPL Financial.” 85. Contrary to Mr. Munn’s memorandum, the Defendants already knew both the CD
presentation and the television advertisement had received pre-approval prior to their use by Mr. Bennie. Additionally, Defendants officials had already planned to impose fifty thousand dollars ($50,000) in fines against Mr. Bennie for these pre-approved materials at time the Governor was told the Department was just looking into whether the items had been approved. 86. On February 26, 2010, LPL responded to Mr. Griess’ threatening e-mail about the
dinner invitation stating, “We respectfully disagree with your assertion that the invitation is noncompliant.”. . . “We believe that the invitation is compliant with firm policy and applicable securities regulations. Further, this piece has been approved by the FINRA Advertising
Regulation Department (approval attached…) accordingly, unless you object, we would like to allow Mr. Bennie to keep future appointments he has scheduled. Finally, we strongly disagree with you allegations of ‘persistent, multiple, repeated acts of non-compliance’ and the ‘continued failure of LPL to act in an appropriate manner to remedy the issues. Except for the missing 17
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disclosure on the eMoney Client Video, all advertisements by Mr. Bennie that you have brought to our attention were (1) properly submitted for review by Mr. Bennie; (2) properly reviewed and approved by LPL’s advertising compliance unit; and (3) consistent with all applicable standards under state and federal securities laws, rule and regulations. Therefore, Mr. Bennie has not committed ‘persistent, multiple, repeated acts of non-compliance,’ and the firm has not failed in its duty to supervise Mr. Bennie’s communications with the public.” 87. On March 1, 2010, Mr. Griess forwarded LPL’s response e-mail about the dinner
invitation to Mr. Munn, and stated, “Here is LPL’s response. Let me know if you require anything further. (In terms of their response, I felt it was very well scripted and answered accurately and appropriately. The response was prepared to address the invitation you received, and not to go into any more detail regarding the firearm gifting or advertising issues related to the first two occurrences.)” 88. On March 2, 2010, Mr. Griess sent an e-mail to LPL stating, “please find the
attached Sun Life Financial Seminar recently received by our Assistant Director of Securities . . . . It’s a classic example. The invitation contains no mention of LPL in this case, but honestly, what are the chances of a potential client attending this seminar, doing business from an insurance perspective only? . . . . Yet from this invitation, the potential client doesn’t have a clue of Mr. Bennie’s other associations. One would think, especially from a sales prospective, that Mr. Bennie would want to inform the potential client of his many financial related facets and how they all tie together. Why not disclose up front.” 89. On March 9, 2010, LPL responded to Mr. Griess’ Sun Life Insurance Seminar e-
mail stating, “Rod, this invitation was approved on 1/29/10 by LPL Financial. The reviewer did not require Mr. Bennie to add broker dealer disclosure as she erroneously believed he was distributing invitation on approved letterhead that contained broker dealer disclosure. We agree 18
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that LPL disclosure should have been included with invitation. We reviewed the matter with Mr. Bennie and confirmed that he will disclose his affiliation with LPL at the seminar. We also reviewed this oversight with Mr. Bennie’s assigned reviewer.” 90. 91. That same day, Mr. Griess forwarded the e-mail to Mr. Munn and Mr. Herstein. The next day, March 10, 2010, Mr. Herstein replied to Mr. Griess in an e-mail
stating, “Was this the new ‘expert reviewer’? My response to their response would be ‘that’s it.’ We should keep this in a reserve file and move on and hopefully he [Mr. Bennie] will eventually hang himself along with LPL.” 92. Later on March 10, 2010, Mr. Herstein e-mailed Mr. Munn informing Mr. Munn
that he instructed Mr. Griess to “do nothing with Bennie and only keep this latest in a reserve file only.” 93. On or about October 4, 2010 another LJS article entitled “Tea Party: Reduce State
Spending,” was placed in the Department’s files related to Mr. Bennie. 94. On November 2, 2010, LPL abruptly terminated its relationship with Mr. Bennie.
Upon information and belief, LPL’s action was related to the continued pressure and harassment from the Defendants related to Mr. Bennie and to LPL’s anticipated Initial Public Offering (“IPO”) and its desire to separate from Mr. Bennie prior to that event. LPL announced the pricing of its IPO on November 4, 2010 and made its IPO on November 17, 2010. 95. Upon separation from LPL, Mr. Bennie performed due diligence on several other
broker-dealers and promptly associated with Prospera Financial (“Prospera”) effective November 23, 2010. 96. As required by Neb. Rev. Stat. §§ 8-1103(1), (2)(d), Mr. Bennie notified the
Department of the transfer of his association from LPL to Prospera by filing a U-4 form through the CRD at FINRA. 19
Filed: 09/01/11 Page 20 of 33 - Page ID # 114
On or about December 2, 2010 (a full month after abruptly terminating its
relationship with Mr. Bennie) LPL made a U-5 filing in which it claimed the termination was due to violation of internal firm policies and procedures. In so doing, LPL hoped to avoid provisions in their contract with Mr. Bennie prohibiting termination without the requisite advance notice. 98. Immediately following LPL’s termination of its broker-dealer relationship,
Mr. Bennie retained, at his own expense, a qualified expert third party to perform an independent audit of his entire firm. After reviewing all of Mr. Bennie’s files, the auditor verified Mr. Bennie had not acted improperly or in violation of LPL policies and procedures during his association with LPL. 99. On December 3, 2010, Prospera wrote a letter to Mr. Herstein stating, “While we
have not received any request for additional information, we believe you are reviewing Mr. Bennie’s file because of the disclosures on his U4. In order to expedite your review, Mr. Bennie has supplied the enclosed notarized statement concerning the disclosure issues. We believe this information will help you in you decision process and permit you to enter his registration as ‘Approved’.” In the attachment to the letter, Prospera and Mr. Bennie provided the results of the independent audit that revealed he had not violated any LPL policies that they claimed formed the basis of his termination. 100. On December 7, 2010, Mr. Griess e-mailed Mr. Herstein informing him that
Prospera had contacted Mr. Griess “to see if [the Department] needed anything further to assist in expediting the registration.” Mr. Griess went on to write, “I mentioned to [Prospera] that we were merely in the preliminary stages of this and due to the severity of the reported disclosure, particularly the discharge termination from LPL, the Department in all likelihood may be inclined to perform an unannounced audit of Mr. Bennie’s office.” Thereafter, Mr. Griess 20
Filed: 09/01/11 Page 21 of 33 - Page ID # 115
quoted Neb. Rev. Stat. § 8-1103(4)(a): “If no denial order is in effect and no proceeding is pending under subsection (9) of this section registration shall become effective at noon of the thirtieth day after an application is filed. . . .” (emphasis in the original) Mr. Griess next wrote, “May have to check with legal, but proceeding may imply formal hearing, not simply a request for more information, examination or inquiry.” 101. In response to Mr. Griess’ warning about the statute, Mr. Herstein wrote back, “I
don’t see why this would be treated any different than any other applicant applying for a license.” 102. Also on December 7, 2010, Mr. Griess wrote an e-mail to Ms. Cahill,
Mr. Herstein, and Ms. Walter indicating that the Department had received a disclosure summary and “plea for assistance/expedition dated December 3, 2010” from Prospera. 103. Later that day, Ms. Cahill wrote to Mr. Griess, Mr. Herstein, and Ms. Walter
stating, “I agree that we don’t get intimidated. I think that any higher up who starts to push will back off once we mention the reason that LPL gave for terminating Bennie. As long as we are not dragging our feet on requesting information, we should be fine.” 104. On December 17, 2010, without any contact with Mr. Bennie and without any
type of notice or a hearing, the Department summarily issued an order (the “December Order”) signed by Mr. Munn that suspended Mr. Bennie’s ability to operate his thirteen-year-old investment business by placing the following conditions on Mr. Bennie: (1) all securities and advisory activities of Bennie shall be solely limited to existing customers of Bennie, who transfer their accounts to Prospera from LPL; (2) Bennie shall not advertise or solicit new clients; (3) Bennie will not act as a principal or in any compliance or supervisory capacity regarding the securities activities of other agents of Prospera; (4) Bennie will timely comply fully with all
Filed: 09/01/11 Page 22 of 33 - Page ID # 116
requests for information from the Department. A true and correct copy of the December Order is attached hereto as Exhibit A. 105. The December Order made findings as to Mr. Bennie’s ability to serve and solicit
any and all new clients without providing Mr. Bennie any form of notice of the allegations or factual support for the Department’s so-called findings or an opportunity for a hearing at which Mr. Bennie could challenge those allegations. 106. The Defendants did not even contact Mr. Bennie subsequent to their surprise
December Order until January 18, 2011, when they contacted his new broker-dealer, Prospera. 107. As 60 percent to 70 percent of the revenues for Mr. Bennie’s business are
generated from new clients and new business, the December Order made the business economically unsustainable, and the Order severely restricted Mr. Bennie’s ability to operate his business in his chosen profession and thereby earn a livelihood. 108. Additionally, in light of the federal statutory requirements and corresponding
limitations on state law, the Orders were a suspension of Mr. Bennie’s registration. 109. In addition to completely cutting off the ability to serve or even solicit new or
additional clients and the vast majority of his income, the Department’s December Order prevented Mr. Bennie from registering as an agent and investment adviser representative in a number of other states, as well as cutting off his business with several major insurance companies. 110. The Defendants knew, or should have known, that the December Order would
have a detrimental effect on Mr. Bennie’s registration in other states given the reporting requirements of FINRA and the CRD, which is used by all, or nearly all, of the state securities regulators as well as the Securities and Exchange Commission through FINRA. Additionally, the December Order was distributed publically via the Department’s website. 22
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Defendants’ actions through the December Order effectively destroyed the value
and utility of Mr. Bennie’s registration and business as it instantly eliminated the source of the vast majority of his income, as well as causing existing clients to transfer their accounts, thereby making his business economically unsustainable. 112. As a result of the Defendants’ actions, Mr. Bennie experienced a decrease in his
Assets Under Management (“AUM”) of $25,000,000.00 between December of 2010 and the spring of 2011. 113. After the surprise December Order, Mr. Bennie made complaints to the
Governor's Office, the Nebraska Attorney General, Mr. Herstein and the Department’s legal counsel about the denial of notice and a hearing. In response, the Defendants issued an
Amended Order on February 17, 2011 (the “February Order”), again signed by Mr. Munn. Again without a hearing, the Amended Order maintained significant portions of the suspension including the prohibitions on advertising, soliciting of new clients and acting as a principal or in any compliance or supervisory capacity for other agents. A true and correct copy of the February Order is attached hereto as Exhibit B. 114. After the issuance of the December and February Orders, many of Mr. Bennie’s
clients declined to complete transfers of their accounts from LPL to Prospera. Furthermore, as a direct result of the Orders, all prospective clients were unable to retain Mr. Bennie for his professional services. As a direct result of the December and February Orders, Mr. Bennie lost $25,000,000.00 of Assets Under Management. 115. Although Mr. Griess had indicated on December 7, 2010, the likelihood of a
Department audit of Mr. Bennie’s office, and in complete disregard to the thirty (30) day automatic registration approval in the statute, it was not until March 9, 2011 that the Defendants conducted an on-site records inspection at Mr. Bennie’s offices with Mr. Bennie’s full 23
Filed: 09/01/11 Page 24 of 33 - Page ID # 118
cooperation. After the audit of Mr. Bennie’s records, the Defendants found no basis for the suspension of Mr. Bennie’s registration. 116. Finally, after three months of Mr. Bennie of being suspended from servicing any
new clients or soliciting any new business, and five (5) days after their audit of Mr. Bennie’s office, the Department issued an order on March 14, 2011 (the “March Order”) fully approving Mr. Bennie’s registration as an agent and investment adviser representative. A true and correct copy of the March Order is attached hereto as Exhibit C. 117. Nowhere in the March Order did the Department acknowledge that it had
determined Mr. Bennie had not acted improperly, or directly address the suspensions contained in or the implications of the December and February Orders. 118. Despite finding no basis for the suspension of Mr. Bennie’s registration during its
on-site inspection, or otherwise, from December 2010 to March 14, 2011, the Defendants persisted with harassing inquiries and numerous demands for records and information regarding Mr. Bennie. These inquiries were wholly unrelated to the initial allegations, and persisted through April of 2011- more than a month after the lifting of the suspension of Mr. Bennie’s registration. 119. This harassment included multiple e-mails from Ms. Walter to Mr. Bennie’s
broker-dealer, Prospera, requiring Prospera (a regulated entity) to respond to numerous “questions” and “inquiries.” 120. Additionally, Mr. Herstein required Prospera to transmit all of Mr. Bennie’s
account balances to the Department on a weekly basis. 121. Ms. Walker demanded that Prospera provide her detailed documentation proving
Mr. Bennie had not opened any new accounts since the December Order, in an effort to catch Mr. Bennie in a technical violation of the December Order. 24
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Upon issuance, and up until May 13, 2011, both the December and February
Orders were published on the Department’s public internet website, and upon information and belief, remain available by request to the public. After repeated verbal and written requests by Mr. Bennie, the Defendants finally took down the December and February Orders from the Department’s web site on May 13, 2011. 123. At no point during the relevant period of time did Defendants afford Mr. Bennie
any form of notice or an opportunity to be heard. 124. Despite the blatant disregard of his rights, Mr. Bennie and Prospera willingly and
promptly responded to all requests for information and documentation they received from the Defendants. 125. After fifteen-plus years of running a highly successful investment business, the
timing of the Defendants’ actions and harassing inquiries was not coincidental. The Defendants’ actions and inquiries were politically motivated and they colored the Defendants’ unprecedented later actions and orders, including their denial of Mr. Bennie’s due process rights, as described above. FIRST CLAIM FOR RELIEF: 42 U.S.C. § 1983 - DUE PROCESS 126. Plaintiff realleges paragraphs 1 through 125 of this Amended Complaint as if
fully set forth herein. 127. The foregoing actions by the Defendants violate 42 U.S.C. § 1983 and the Fifth
and Fourteenth Amendments to the United States Constitution, as well as article I, section 3 of the Nebraska Constitution.
Filed: 09/01/11 Page 26 of 33 - Page ID # 120
The Due Process Clause of the Fourteenth Amendment to the United States
Constitution, along with the Nebraska Securities Act, confers rights, privileges, or immunities within the meaning of 42 U.S.C. § 1983. 129. Under Nebraska law, Mr. Bennie has a property interest in his agent and
investment adviser registration, a liberty interest in pursuing his occupation and vocation, and a liberty interest in his good name and reputation. 130. The right to notice and a hearing either prior to or immediately following the
Department’s finding of facts and suspension of an agent or investment adviser registration was a clearly established legal principle as of the time of the December Order and subsequently. 131. The Defendants had an obligation under the Act to register Mr. Bennie upon his
compliance with the applicable standards. The Act bound the officials by requiring specific findings of prohibited actions or situations prior to denying, suspending, revoking, censuring, or baring Mr. Bennie’s registration. 132. The property and liberty interests of an agent and/or an investment adviser
representative in his or her professional registration and ability to practice his or her profession were clearly established as of the time of the December Order and subsequently. 133. Professional positions, including those of agent and investment adviser
representative, in the securities industry are common occupations, which while regulated, are of the type that could not be outlawed or forbidden by the State of Nebraska. 134. Mr. Bennie had a reasonable expectation to his continued registration given the
structure and mandatory language of the Act, including the requirement of automatic registration upon the passage of thirty days, the requirement of a finding of cause to revoke, suspend, deny, censure or bar a registrant or applicant, the requirement of notice and an opportunity to be heard 26
Filed: 09/01/11 Page 27 of 33 - Page ID # 121
prior to the Defendants’ findings, and his prior continuous registration of approximately 15 years. 135. The right to notice and a hearing before an agent and/or investment adviser
representative can have their professional registration suspended, denied, or revoked was clearly established at the time of the December Order and subsequently. 136. Additionally, Mr. Bennie’s professional reputation has been stigmatized by the
suspension of his registration and through the public dissemination and publication of the December and February Orders finding him unfit to serve or even solicit new clients. 137. The Defendants’ actions were taken in deliberate indifference to Mr. Bennie’s
rights and seriously damaged his standing and association in his community and within the securities industry; accordingly, Mr. Bennie’s due process rights required an opportunity for him to refute the charges leading to the Defendants’ actions and Orders. 138. Furthermore, due to federal statutes, regulations, and industry rules, the
Defendants’ actions damaged Mr. Bennie’s registration and professional rights in states other than Nebraska and the national self-regulatory organization, thus placing a tangible burden on his professional practice and employment. 139. As a direct result of the Defendants’ actions, Mr. Bennie suffered significant
damages, including but not limited to, loss of income, loss of clients, loss of future profits, and loss of assets under management as well as harm to his business reputation and good will. The precise amount of these damages will be proven at trial. SECOND CLAIM FOR RELIEF: 42 U.S.C. § 1983 - EQUAL PROTECTION VIOLATION 140. Plaintiff realleges paragraphs 1 through 139 of this Amended Complaint as if
fully set forth herein. 27
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The foregoing actions by the Defendants violate 42 U.S.C. § 1983 and the
Fourteenth Amendment to the United States Constitution, as well as article I, section 3 of the Nebraska Constitution. 142. Upon information and belief, the Defendants utilized their power as government
officials to treat Mr. Bennie differently than other similarly situated individuals who publicly advertise their investment services and who have been required to notify the Department of their association with a new broker-dealer. 143. The Defendants knew of Mr. Bennie’s political views and leadership in the Tea
Party movement prior to his notifying the Department of his association with Prospera. The Defendants repeated baseless inquiries into Mr. Bennie’s television ads, mailings, and registration demonstrate that the Defendants singled Mr. Bennie out for intentional harassment and discrimination. 144. Upon information and belief, the content and nature of the December and
February Orders caused to be issued by the Defendants against Mr. Bennie are unprecedented and unlike the treatment afforded to any prior similarly situated registrant or applicant. 145. Defendants knew that their deliberate indifference to Mr. Bennie’s rights and their
intentional actions would impact and seriously damage Mr. Bennie’s ability to practice his chosen profession. 146. Defendants’ actions in issuing their Orders and conducting their inquiries in a
harassing manner was intentional and irrational, as they were motivated in whole or part by Mr. Bennie’s political speech and political views. 147. As a direct result of the Defendants’ actions, Mr. Bennie suffered significant
damages, including but not limited to, loss of income, loss of clients, loss of future profits, and
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loss of assets under management as well as harm to his business reputation and good will. The precise amount of these damages will be proven at trial. THIRD CLAIM FOR RELIEF: 42 U.S.C. § 1983 - FIRST AMENDMENT FREE SPEECH VIOLATION 148. Plaintiff realleges paragraphs 1 through 147 of this Amended Complaint as if
fully set forth herein. 149. The foregoing actions by the Defendants violate 42 U.S.C. § 1983 and the First
and Fourteenth Amendments to the United States Constitution, as well as article I, section 3 of the Nebraska Constitution. 150. Mr. Bennie's political activities as a leader in the Tea Party movement, his public
statements on the Second Amendment and his public statements concerning his views of political leaders and their policies are protected by the First Amendment to the United States Constitution. 151. The Defendants have no legitimate interest in using their positions and authority
to suppress Mr. Bennie's speech on these matters or to punish Mr. Bennie for his political statements and views. 152. The Defendants utilized their power as government officials to impose penalties
and to take other punitive actions against Mr. Bennie due to his political views and public statements on matters of public concern in violation of his First Amendment rights. 153. The Defendants, acting under color of state law, intentionally and callously
disregarded Mr. Bennie's clearly established right to free speech guaranteed by the First Amendment and the Nebraska Constitution. 154. Defendants knew that their deliberate indifference to Mr. Bennie’s rights and their
intentional actions would impact and seriously damage Mr. Bennie’s ability to practice his chosen profession. 29
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Defendants’ actions in issuing their Orders, conducting their multiple inquiries in
a harassing manner, and pressuring Mr. Bennie's broker-dealer to take punitive actions on their behalf, was intentional and motivated in whole or part by Mr. Bennie’s political speech and political views. 156. As a direct result of the Defendants’ actions, Mr. Bennie suffered significant
damages, including but not limited to, loss of income, loss of clients, loss of future profits, and loss of assets under management as well as harm to his business reputation and good will. The precise amount of these damages will be proven at trial. FOURTH CLAIM FOR RELIEF: THE NEBRASKA SECURITIES ACT, AS APPLIED, IS UNCONSTITUTIONAL 157. Plaintiff realleges paragraphs 1 through 156 of this Amended Complaint as if
fully set forth herein. 158. Plaintiff alleges the Defendants’ actions in depriving him of his property and
liberty without due process are prescribed by the clear terms of Neb. Rev. Stat. § 8-1103(9). To the extent that the Defendants assert their actions in depriving Plaintiff of his property and liberty without a notice or opportunity for a hearing are authorized by Neb. Rev. Stat. § 8-1103, Plaintiff alleges as follows: 159. As implemented by the Defendants, and as applied to Mr. Bennie, the Nebraska
Securities Act, specifically Neb. Rev. Stat. § 8-1103(4)(d), violates the due process clauses of the Nebraska Constitution and the Fifth and Fourteenth Amendments to the United States Constitution in that Mr. Bennie was subjected to restrictive and inhibiting measures, including public censure and stigma, suspension of his securities registration, and significant impact on his registration in other states, without due process of law.
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Defendants’ application of the Act infringed upon Mr. Bennie’s constitutionally
protected liberty and property rights. 161. Unless restrained and enjoined by this Court, there is every reason to believe the
Department, through the Defendants, will continue to disregard agents’ and investment adviser representatives’ constitutional rights in this manner without due process of law. 162. The Nebraska Administrative Procedure Act (“APA”) specifically forecloses
judicial review of the Defendants’ actions and their unconstitutional use of the Act. The APA provides for the exclusive means of judicial review of a final decision of an agency, but only when such decision results from a “contested” case. Neb. Rev. Stat. § 84-919. No provision is made for the summary, non-adversarial proceedings involved in issuing “conditional” registrations which include the suspension of an agent/investment adviser representative’s registration and the ability to serve or solicit all new clients. Thus, Mr. Bennie is afforded neither pre-deprivation nor post-deprivation remedies. 163. The issuance of orders containing a suspension of all services for new clients and
all solicitation of new business based on third-party allegations against an agent/investment adviser representative without notice of those allegations or an opportunity to rebut or challenge the allegations at a hearing violates Mr. Bennie’s federal and state constitutional rights. PRAYER FOR RELIEF Based on the foregoing facts and claims for relief, Plaintiff respectfully requests the Court grant the following relief: 1. Order that the Defendants, in their individual capacities, pay compensatory
damages in the amount of $6,430,000.00, or such amount as determined at trial, resulting from Defendants’ violations of Plaintiff’s constitutional rights and the resulting loss of income, loss of
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clients, loss of future profits and loss of assets under management, as well as harm to his business reputation and good will. 2. Order that the Defendants, in their individual capacities, pay punitive damages in
such amount as determined by the Court, resulting from Defendants’ callous and reckless violation of Plaintiff’s Constitutional rights and the resulting permanent irreparable harm to his reputation and business. 3. Direct the Defendants to cease disseminating the December and February Orders
to the public, and to expunge any references to the December and February Orders from all public records under their control. 4. In the alternative, and only upon a finding that state law does not require Notice
and a Hearing to Mr. Bennie, declare the Securities Act of Nebraska unconstitutional as applied by the Defendants, and enjoin the Defendants and their successors from continuing to implement the challenged statutory provisions and related regulations and practices. 5. Award Plaintiff attorneys’ fees as a result of having to pursue this action as
provided for under 42 U.S.C. § 1988. 6. Grant such other and further relief as the Court deems just and proper.
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Dated this 1st day of September, 2011. Respectfully submitted, ROBERT R. BENNIE, JR., individually, and on behalf of BOB BENNIE WEALTH MANAGEMENT, INC., Plaintiffs
By: __Steve Grasz______________________ Steve Grasz (#19050) David M. Newman (#24549) HUSCH BLACKWELL LLP 1620 Dodge Street, Suite 2100 Omaha, NE 68102 Telephone: (402) 964-5000 Facsimile: (402) 964-5050 steve.grasz@huschblackwell.com david.newman@huchblackwell.com Attorneys for Plaintiffs
CERTIFICATE OF SERVICE I hereby certify that on the 1st day of September, 2011, I electronically filed the above and foregoing with the Clerk of the Court using the CM/ECF system which sent notification of such filing to the following: Mark C. Laughlin Timothy J. Thalken mlaughlin@fraserstryker.com tthalken@fraserstryker.com
s/ Steve Grasz
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