Case: 2:10-cv-01160-ALM-TPK Doc #: 1 Filed: 12/22/10 Page: 1 of ...

Case: 2:10-cv-01160-ALM-TPK Doc #: 1 Filed: 12/22/10 Page: 31 of 36 PAGEID #: 3193. Wachovia breached its fiduciary duties owing to SERS by failing toproperly assess the risk in investing in Sigma and the Other Investment and whetherSigma and the Other Investments satisfied the investment objectives of SERS. Wachoviaalso breached its fiduciary duties by failing to timely sell the Sigma MTNs when it wasknown to Wachovia that Sigma was experiencing severe financial problems that were notlikely to improve. Wachovia even failed to share its knowledge of Sigma’s true financialcondition with SERS. Selling SERS’ interest in Sigma may have affected the paymenton the Sigma notes held by Wachovia itself. Thus, having SERS hold the Sigma MTNswas only beneficial for Wachovia and not SERS.94. As a direct, proximate and foreseeable result of Wachovia’s breach offiduciary duties owing to SERS, the Plaintiff has suffered substantial damages.VIII. THIRD CAUSE OF ACTION: CLAIM PURSUANT TO SECTION 215FOR VIOLATION OF SECTION 206 OF THE INVESTMENT ADVISERS ACT95. Plaintiff repeats and re-alleges each and every allegation contained aboveas if fully set forth herein.96. Plaintiff sets forth this claim pursuant to Section 215 of the InvestmentAdvisers Act of 1940, 15 U.S.C. § 80b-15. Wachovia was an “investment adviser” toPlaintiff pursuant to the Investment Advisers Act of 1940. As a fiduciary, Wachovia wasrequired to serve Plaintiff in the manner consistent with the fiduciary standards set forthin Section 206 of the Investment Advisers Act, 15 U.S.C. § 80b-6, that governs theconduct of investment advisers.97. Wachovia through its agents, breached its fiduciary duties to the Plaintiffby engaging in a deceptive scheme, practice and course of conduct pursuant to which itknowingly and/or recklessly engaged in acts, transactions, practices and course of31