Tales of the stock market crash of 1929 contain images of victims jumping from windows of Wall Street buildings. An eerily sign of the similarities to the current 21st Century crash may be the recent suicide of a despondent broker at Deutsche Bank Alex Brown Securities (Deutsche Bank), who left a note telling clients to contact a lawyer to seek recovery of losses.
A law suit, with Smith’s suicide letter attached, was soon filed by Bernard and Joan Spain, of Pennsylvania, and Lonnie Duncan, of California, trustee of the Duncan Family Trust. The initial paragraph of the letter states:
“Since you are reading this, I have just taken my life. It was necessary because the alternatives were totally unpalatable. I consider you a friend first and a client second. That said, I had a fiduciary relationship with you that charged me with putting your interest first. I can say that I always tried to do that. However, some of the investment recommendations that I chose did not work out the way I had anticipated. I regret that very much.”
According to the suit, clients of the late Russell Smith, a broker in the Houston, Texas, office of Deutsche Bank, were lured into moving more than $13 million in funds from FDIC insured and other high quality investments into what they were told was a “virtually risk-free” fund. The suit also names “Arthur Kreidel” as a representative in Deutsche Bank’s Houston office alleging that he assisted Smith to persuade the Spains and Duncan to invest as limited partners in the Aravali Fund, with Aravali Partners LLC as the fund’s general partner. [The firm reports an “Arthur Kieval” as its Houston Regional Executive in 2006]
The petition states that the Spains and Duncan were told they had a rare opportunity to invest in Aravali Fund which was previously available to institutions only. Smith and others met privately with these clients, including at expensive New York restaurants, explaining that the Aravali Fund had decades of success dealing in high quality municipal bonds. The fund, reportedly investigated by Deutsche Bank and its representatives, was described as “virtually risk free” was and recommended to them by Deutsch Bank, but it is now worthless.
The law suit, which also states that these investors were never provided with proper or complete information and documentation regarding the investment or its fees, also names the Aravali Fund, Aravali Partners LLC and its president, Mark Young. Deutsche Bank apparently claims it had no knowledge of the activities of its representatives as they sold the Aravali fund to these investors.
For additional information contact attorney Kirk G. Smith at the law firm of Shepherd Smith Edwards & Kantas LTD LLP.