LOS ANGELES (CN) - Several investors and two trust funds say they lost $52 million to a broker's fraudulent and risky investment choices. The investors say Deutsche Bank brokers Christopher Frank, John Javellana and Ken Ro "grossly misstated [their] professional qualifications" and falsely claimed that they would "generate a steady stream of risk free" investments.
Instead, the brokers allegedly tried "an extremely risky investment strategy in the writing of naked stock index options" - the riskiest form of options trading, which is already an extremely volatile type of investment. According to the lawsuit, naked stock index options is normally only for investors who are "willing to bear unlimited risk."
Even if the plaintiffs were interested in such high-risk investment, they say naked stock options trading requires a level of expertise that the defendants lack.
The brokers allegedly forged the plaintiffs' account records in an attempt to make it look like the plaintiffs requested the risky investments.
The plaintiffs want their $52 million back. They are represented in Superior Court by Walter Lack with Engstrom Lipscomb.
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