throbber
FILED
`8/30/2021 10:01 PM
`FELICIA PITRE
`DISTRICT CLERK
`DALLAS CO., TEXAS
`Darling Tellez DEPUTY
`
`CAUSE NO. DC-19-09573
`
`SHANKAR PRASADDAS,
`Plaintiff,
`
`v.
`PEPPERSTONE GROUP LIMITED,
`Defendant.
`
`§
`
`:
`;
`:
`:
`
`IN THE DISTRICT COURT OF
`
`DALLAS COUNTY, TEXAS
`
`101ST JUDICIAL DISTRICT
`
`PLAINTIFF’S THIRD AMENDED PETITI
`
`Plaintiff Shankar Prasad Das files this Second Amended Petition
`
`Pepperstone Group Limited, and in support thereof, would
`
`respectfully
`
`against
`
`Defendant
`
`show the Court as
`
`follows:
`
`I
`
`DI
`
`ERY
`
`TROL PL
`
`1.
`
`Plaintiff intends for
`
`discovery
`
`to be conducted under a Level 3
`
`Discovery
`
`Control
`
`Plan, and an Amended
`
`Scheduling
`
`Orderis on file with the Court.
`
`ll.
`
`PARTIES
`
`Das is an individual residing
`
`in Collin County, Texas.
`
`Pepperstone is a
`
`corporation organized
`
`and
`
`existing
`
`under the laws of Australia,
`
`2.
`
`3.
`
`with its
`
`principal
`
`office in Melbourne, Australia, that is
`
`doing
`
`business in the State of Texas and
`
`that has generally appeared
`
`in this matter.
`
`Il.
`
`JURISDICTION
`
`4,
`
`This Court has
`
`subject-matter jurisdiction
`
`over this action because the
`
`damages
`
`sought
`
`are within the jurisdictional
`
`limits of this Court. The Court has jurisdiction
`
`over
`
`Pepperstone because Pepperstone has
`
`purposefully
`
`availed itself of the
`
`privileges
`
`of
`
`doing
`
`business
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`Pace 1
`
`

`

`in the State of Texas, and the causes of action herein arise from or are related to
`
`Pepperstone’s
`
`contacts and activities in the State of Texas.
`
`IV.
`
`VENUE
`
`5.
`
`Venue is proper in Dallas County, Texas, pursuant to Texas Civil Practice and
`
`Remedies Code § 15.001,
`
`et. seq., because all or a substantial part of the events and/or omissions
`
`giving
`
`rise to the claims occurred in Dallas
`
`County,
`
`Texas.
`
`Vv.
`
`RULE 47
`
`STATEMENT
`
`6.
`
`Pursuant to Rule 47 of the Texas Rules of Civil Procedure, Das seeks monetary
`
`relief over
`
`$1,000,000,
`
`as well as all other relief to which Das deems himselfentitled.
`
`VI.
`
`INTRODUCTION
`
`7.
`
`Das was hired
`
`by Pepperstone in 2013 to
`
`solicit, screen, negotiate,
`
`and onboard
`
`clients onto the Pepperstone trading platform
`
`in its
`
`newly
`
`formed Dallasoffice.
`
`8.
`
`In
`
`exchange for Das’s onboarding
`
`customers to the Pepperstone trading platform,
`
`Pepperstone agreed
`
`to pay Das 50% ofall
`
`trading
`
`volume revenue for his customers
`
`(“Earned
`
`Commissions”).
`
`This was a dream cometrue for Das, and he put his heart and soulinto the
`
`position
`
`for two years. He sacrificed family time, weekends, sleep, and his own
`
`wellbeing
`
`in
`
`hopes of
`
`making
`
`a better life for his
`
`family.
`
`And
`
`thankfully,
`
`Das was
`
`very goodat his
`
`job,
`
`and within the
`
`first year, Das had brought
`
`at least $1,000,000 in
`
`trading volume revenue into Pepperstone.
`
`9.
`
`Das verified that he would be receiving his Earned Commissions with the
`
`Pepperstone Dallas and Pepperstone Australia offices on
`
`multiple
`
`occasions and wasassured that
`
`he would be
`
`paid
`
`for those commissions and any other
`
`trading
`
`those customers did while at
`
`Pepperstone.
`
`In reliance upon those promises,
`
`Das
`
`bought
`
`a
`
`house, helped pay for his family’s
`
`medical bills, and even conceived another child.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PAGE 2
`
`

`

`10.
`
`But Pepperstone
`
`was
`
`exploiting
`
`Das and did not count on Das
`
`being
`
`so
`
`at his
`
`good
`
`so when it had the
`
`job,
`
`opportunity,
`
`rather than pay Das his Earned Commissions, Pepperstone
`
`made up
`
`an excuse to terminate him. Pepperstone
`
`even
`
`attempted
`
`to
`
`strong-arm Dasinto
`
`signing
`
`away his rights.
`
`Das lost everything—his home, his profession, and evenhis child. Plaintiff now
`
`brings
`
`this action
`
`against Pepperstone
`
`to fix the brokenness its
`
`deception
`
`caused to Plaintiff and
`
`his
`
`family
`
`and recover the substantial commissionshe is owed.
`
`VII.
`
`STATEMENT OF FACTS
`
`A. PLAINTIFF WORKED WITH NASHITH WADUD AT F
`
`XCM,
`
`THEN AGAIN AT PEPPERSTONE.
`
`11.
`
`Das,
`
`a Dallas resident, began
`
`his career in online
`
`foreign-exchange trading by
`
`working
`
`at FXCM,Inc. from 2005 to 2012.
`
`year.
`
`12.
`
`13.
`
`14.
`
`15.
`
`Das met Nashith Wadud while working
`
`in the Sales department
`
`at FXCM.
`
`At the peak of Das’s time at FXCM, Das was
`
`compensated close to
`
`$100,000 per
`
`In 2011, Wadud left FXCM to work with Pepperstone.
`
`In 2013, Das left FXCM to
`
`join
`
`Wadud at
`
`Pepperstone.
`
`B. PEPPERSTONE ESTABLISHES A DALLAS OFFICE.
`
`16.
`
`Like FXCM, Pepperstone is an online “Foreign Exchange and Contracts-for-
`
`Difference Broker” that
`
`provides
`
`a
`
`technology platform
`
`to enable its customers to
`
`buy,sell,
`
`or
`
`trade variousfinancial instruments.
`
`17.
`
`OwenKerr is the Co-Founder and Chief Executive Officer of Pepperstone.
`
`18.
`
`Joe
`
`Davenport is the Co-Founder and Director of Pepperstone.
`
`19.
`
`Pepperstone,
`
`a
`
`company originally
`
`established in Australia, desired to have
`
`operations continue for “24/5”—twenty-four hours a
`
`day and five days’ per week.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PAaGE3
`
`

`

`20.
`
`To achieve this capability, Pepperstone established a Dallas office in the following
`
`ways.
`
`a. FIRST, PEPPERSTONE ALLEGEDLY CONTRACTED WITH CITT SERVICES, LLC.
`
`21.
`
`Pepperstone alleges that it contracted with CITT Services, LLC (“CITT”),
`
`a Texas
`
`limited
`
`liability company,
`
`to
`
`provide Pepperstone’s
`
`current customers with IT
`
`Support for
`
`Pepperstone’s technology platform (“Customer Support’).
`
`22,
`
`CITT’s principal office is located at 15660 Dallas Parkway, Suite 470, Dallas,
`
`Texas 75248. See Ex. A, CITT PIR.
`
`23, Wadud and Hannah Riveraare
`
`purportedly
`
`the
`
`principal
`
`owners and “Directors” of
`
`CITT. See id. According
`
`to his LinkedIn profile, Wadud was
`
`simultaneously
`
`a Director of CITT
`
`and the Director of US
`
`Operations
`
`and Head of Sales for Pepperstone from 2011 to 2019. See Ex.
`
`D, Nashith Wadud’s LinkedIn Page.
`
`24,
`
`CITT compensated Das $5,000 per month to
`
`perform Customer Support for
`
`Pepperstone. Importantly,
`
`CITT did not
`
`compensate Das for any other services he
`
`performed
`
`for
`
`Pepperstone.
`
`b.
`
`SECOND, PEPPERSTONE ESTABLISHED A PEPPERSTONE DALLAS OFFICE.
`
`25.
`
`Pepperstone, until 2019, listed three
`
`physical
`
`locations on its website: Australia,
`
`London, and Dallas. See Ex. B, Pepperstone WebArchive Screenshot.
`
`26.
`
`Thelisted location for Pepperstone’s Dallas Office was the same address as CITT’s
`
`principal
`
`location: 15660 Dallas
`
`Parkway,
`
`Suite 470, Dallas, Texas 75248.
`
`Compare
`
`Ex. A with
`
`Ex. B.
`
`27,
`
`Curiously, Pepperstone has since removed these physical
`
`locations from its
`
`website.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PaGE4
`
`

`

`C. WADUD, RIVERA, AND DAS OPERATED THE PEPPERSTONE DALLAS OFFICE.
`
`28.
`
`Pepperstone used the collective of Wadud, Rivera, and Das to
`
`operate its
`
`Pepperstone Dallas Office.!
`
`29,
`
`As noted above, Wadud was the Director of US Operations and Headof Sales for
`
`Pepperstone. See Ex. D, Nashith Wadud’s LinkedIn Page.
`
`30.
`
`Pepperstone also
`
`appointed
`
`Wadud as a Financial Adviser and as an Authorized
`
`Representative. See Ex. F, Pepperstone Sponsorship. Pepperstone
`
`was the Providing Entity under
`
`Australian law and
`
`provided
`
`Wadud the
`
`following
`
`Australian Financial Securities License
`
`identification number: 1002272. Id.
`
`31.
`
`Rivera was the Head of Pepperstone’s Latin America Operations. See Ex. G,
`
`Hannah Rivera’s LinkedIn Page.
`
`32.
`
`Das—in addition to his Customer Support role for which CITT paid
`
`him $5,000
`
`per month—wasa “Sales Specialist”
`
`at
`
`Pepperstone. See Ex. E, Email with Pepperstone Client.
`
`33.
`
`According
`
`to both CITT and Pepperstone, the two
`
`companies
`
`are
`
`separate and
`
`distinct entities, meaning
`
`Das’s Customer
`
`Support
`
`role at CITT was
`
`ofhis
`necessarily independent
`
`Sales Specialist role at
`
`Pepperstone.
`
`34.
`
`In fact, Pepperstone provided
`
`Das with his own
`
`Pepperstone email address:
`
`sam.das@pepperstone.com.
`
`See Ex. H, Das’s Email to David Swinden dated
`
`July 7, 2015.
`
`35.
`
`And Pepperstone Dallas had its own email group for communication and
`
`coordination with Pepperstone Australia, which Das was included in. See Ex. C.
`
`as the “Dallas Office” in email chains. See Ex. C, Email from
`
` 1
`
`Pepperstone referred to the collective operation
`Pepperstone General Manager Phil Horner.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PaGE5
`
`

`

`36.
`
`Via his Pepperstone email account, Das would solicit, screen, negotiate, and
`
`onboard customers onto
`
`Pepperstone’s trading platform,
`
`as well as interact with Pepperstone’s
`
`current and
`
`potential
`
`customers and Pepperstone employees
`
`based around the world.
`
`37.
`
`Between 2013 and 2015, Das
`
`regularly worked 80-hour weeks, odd hours, and
`
`weekends—to the detriment of his health and
`
`wellbeing—all
`
`to earn his Pepperstone commissions.
`
`D. PEPPERSTONE USED THE DALLAS OFFICE TO PERFORM SALES.
`
`38.
`
`As a Sales Specialist for Pepperstone, Das solicited and developed personal
`
`connections with
`
`potential customers, screened and monitored said customers to determinea risk
`
`profile
`
`of that
`
`particular
`
`customer
`
`for Pepperstone, negotiated
`
`with customers on trade
`
`commissions, spread charges, and rebates, and assisted with onboarding
`
`new customers onto
`
`Pepperstone’s platform (“Sales”).
`
`See Ex. X, Affidavits of Clients.
`
`39.
`
`After the Dallas Office onboarded customers, the customers were directed to
`
`buy
`
`securities via Pepperstone’s online platform based in Australia, rather than buy securities out of
`
`the Dallas office, in order to circumvent certain U.S. securities
`
`regulations
`
`on such
`
`practices.
`
`a. SOLICITATION.
`
`40.
`
`Wadudand Das
`
`targeted
`
`two types of customers for Pepperstone: (1) professional
`
`fund managers and
`
`active traders,
`
`(2)
`
`as
`
`explained
`
`more below.
`
`i. PROFESSIONAL FUND MANAGERS.
`
`41.
`
`Professional fund managersare licensed individuals that make recommendations,
`
`trades, and investment decisions on behalf of clients.
`
`42.
`
`To service these fund managers, Pepperstone’s
`
`online
`
`platform
`
`has a “Multi-
`
`Account Manager” (“MAM”)tool.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PAGE 6
`
`

`

`43,
`
`A MAMtoolis software that allows fund managersto
`
`place orders in bulk on behalf
`
`of
`
`multiple
`
`clients.
`
`44,
`
`Pepperstone’s
`
`website has an intake form for
`
`professional
`
`fund managers to
`
`indicate their interest in
`
`learning
`
`more about Pepperstone’s
`
`MAM tool.
`
`45.
`
`Whena
`
`professional
`
`fund managerfilled out this intake form,
`
`an email would be
`
`sent to Wadud’s email account, nash.wadud@pepperstone.com,
`
`with the
`
`inputs provided by
`
`the
`
`fund manager.
`
`46.
`
`A7.
`
`Pepperstone internally
`
`referred to these indications of interest as “MAM leads.”
`
`From here, Wadud,
`
`as Director of US
`
`Operations
`
`and Head of Sales for
`
`Pepperstone, would assign specific
`
`“MAM Leads” to the Pepperstone Sales Specialists. See Ex. I,
`
`Skype Log Excerpt.
`
`Das was one such Sales
`
`Specialist.
`
`48.
`
`Das also used his
`
`personal
`
`connections from his time at FXCM to solicit MAM
`
`leads. After making initial contact, Das would follow up with the fund manager via Skype, email,
`
`or
`
`phone.
`
`ii. ACTIVE TRADERS.
`
`49,
`
`Active traders are individuals that are
`
`high net-worth, high-volumetraders.
`
`50.
`
`Active traders
`
`perform
`
`trades on behalf of themselves.
`
`51.
`
`As with the
`
`professional
`
`fund managers, Das would use his
`
`personal
`
`connections
`
`from his past at FXCM tosolicit active traders or would receive leads from Pepperstone. See Ex.
`
`Y, Das-Kerr Email.
`
`b. SCREENING.
`
`52.
`
`After engaging
`
`an MAMlead, Das would ensure that the lead did not reside in the
`
`United States.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PAGE7
`
`

`

`53.
`
`Pepperstone could not
`
`perform certain business activities in the United States or
`
`run afoul of certain Australian securities restrictions,
`
`so it had to screen
`
`out, i.e., refrain from
`
`soliciting,
`
`U.S. residents.
`
`c. RISK PROFILING.
`
`54.
`
`Das would
`
`speak
`
`with an MAM lead and learn more information about the fund
`
`manager’s trading strategy, potential trading volume,
`
`and
`
`clients, and then would evaluate the fund
`
`manager’s level of sophistication
`
`to determineif the fund manager would likely lose or
`
`gain money
`
`for his or her clients on the Pepperstone platform.
`
`55.
`
`This “risk
`
`profiling”
`
`was an
`
`ongoing activity
`
`that Pepperstone conducted and would
`
`result in Pepperstone’s placing each customereither in Pepperstone’s
`
`“A Book,” for low-risk
`
`or
`
`clients,
`
`Pepperstone’s
`
`“B Book,” for
`
`high-risk clients,
`
`as
`
`explained
`
`further below.
`
`56.
`
`After
`
`onboarding
`
`an MAM lead, Das and Wadud would continue to monitor a fund
`
`manager’s performance. See Ex. J, Skype Log Excerpt; Ex. K, Skype Log Excerpt.
`
`d. NEGOTIATION.
`
`57.
`
`Another part of Das’s role with Pepperstone
`
`was to
`
`negotiate
`
`the terms of
`
`Pepperstone’s trade commissions, spread charges, and rebate structure—i.e., the price of doing
`
`business with
`
`Pepperstone—with potential, new, and
`
`existing
`
`customers.
`
`i. PEPPERSTONE’S REVENUE: TRADE COMMISSIONS AND MARGIN SPREAD
`
`CHARGES.
`
`58.
`
`One of
`
`Pepperstone’s
`
`methods of
`
`earning
`
`revenue was to
`
`charge
`
`active traders, fund
`
`managers, and the sub accounts that fund managers traded on behalf of,
`
`a trade commission for
`
`each trade executed on
`
`Pepperstone’s trading platform (“Trade Commissions”).
`
`59.
`
`Another Pepperstone method of
`
`earning
`
`revenue was to
`
`charge
`
`a
`
`spread.
`
`A
`
`spread
`
`is the difference between the bid and ask price of a
`
`particular
`
`contract the trader wants to execute.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`Pace 8
`
`

`

`60.
`
`61.
`
`The spread
`
`was
`
`usually measured as a
`
`percentagein point (“pip”).
`
`Pepperstone would add a certain amountof
`
`pip
`
`to enable a trade to be executed on
`
`its
`
`platform (“Spread Charges’’).
`
`ii. REBATE STRUCTURE.
`
`62.
`
`To entice
`
`professional
`
`fund managers to onboard and
`
`actively
`
`trade onits
`
`platform,
`
`Pepperstone would offer rebates to fund managers(“Rebates”). See Ex. H.
`
`63.
`
`The Rebate structure would be based on the number of trades a fund manager
`
`executed on behalf of themselves and their subaccounts.
`
`64.
`
`The more trades made by the fund manager, the more money Pepperstone would
`
`earn from Trade Commissions and
`
`Spread Charges,
`
`and thus, the more the fund manager could
`
`earn via a Rebate.
`
`65.
`
`Das and Wadud would monitor each fund manager’s trading activity
`
`to determine
`
`if the fund manager
`
`was
`
`simply making meaningless
`
`trades in order to secure a Rebate.
`
`iii. PRICING STRATEGY.
`
`66.
`
`Das, in close consultation with Kerr, Owen, and Wadud, would
`
`negotiate
`
`customers who
`
`sought higher Rebates, lower Trade Commissions, lower
`
`Spread Charges,
`
`with
`
`or a
`
`combination thereof.
`
`67.
`
`Negotiation
`
`with customers would
`
`depend
`
`on the customer’s
`
`trading
`
`volume, risk
`
`profile,
`
`and other metrics
`
`indicating
`
`the overall value the individual
`
`presented
`
`to
`
`Pepperstone.
`
`E. THE “A” AND “B” BOOKS: PEPPERSTONE’S EXTREMELY LUCRATIVE PRACTICE.
`
`68.
`
`The risk
`
`profile
`
`that Das
`
`performed
`
`for each customer enabled Pepperstone
`
`to
`
`determine if it should place
`
`a customeronits “A” Bookorits “B” Book.* See Ex. H.
`
` ?
`
`customers to different books is commonly referred
`Within the foreign exchange industry, this practice of diverting
`to as “A/B book.” However, Pepperstone’s internal labeling system would refer to the A Book as “s-ndd” or “S” to
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PAGE 9
`
`

`

`i, THE “A” BOOK.
`
`If a customer were
`
`69.
`
`order to a
`
`“A” Book, Pepperstone would send the
`liquidity provider,’ charge the customer a Trade Commission and/or a
`
`on
`
`placed
`
`Pepperstone’s
`
`Spread Charge
`
`for placing the order, and then place the order into the customer’s account.
`
`ii. THE “B” BOOK.
`
`70.
`
`If a customer were
`
`on
`
`placed
`
`Pepperstone’s
`
`“B” Book, then Pepperstone would
`
`also charge the customer a Trade Commission and/or a
`
`Spread Charge for placing the order, but
`
`this time, unbeknownst to the customer, rather than
`
`sending
`
`the order to a
`
`liquidity provider,
`
`Pepperstone would hold the customer’s order
`
`internally.
`
`71.
`
`The function of the “B” Book was to allow Pepperstone
`
`to realize a
`
`if a
`
`gain
`
`customer lost money
`
`on a trade.
`
`72,
`
`Whena customer on
`
`Pepperstone’s
`
`“B” Book
`
`attempted
`
`to
`
`liquidate
`
`its
`
`position
`
`on
`
`a
`
`particular trade in which the customerrealized a
`
`loss, Pepperstone would send the customer the
`
`amount it would have been entitled to had Pepperstone actually
`
`executed the customer’s initial
`
`order and then executed the
`
`subsequent
`
`order to
`
`liquidate
`
`the customer’s
`
`position.
`
`73.
`
`This process allowed Pepperstone
`
`to
`
`pocket the difference between the customer’s
`
`initial order
`
`(held internally
`
`and not sent to the market) and the customer’s realized loss.
`
`74,
`
`This, in effect, meant
`
`Pepperstone acted as a market maker for customers on its “B”
`
`Book,and thereby, Pepperstone would bet against its own customer’s trade.
`
`
`
`mean
`“Non-Dealing Desk” and would refer to the B Book as “x-dd” or “X” to mean those traders remaining internal
`Das uses the industry-common “A/B book”
`at
`Pepperstone’s “Dealing Desk.” For the sake of simplicity,
`nomenclature.
`
`3
`
`A
`
`entity that acts as a market maker in a
`liquidity provider is an
`orseller of a
`asset.
`buyer
`particular
`
`given
`
`asset class. The liquidity provider
`
`acts as a
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PaGE 10
`
`

`

`75.
`
`This was an
`
`extremely lucrative practice for Pepperstone because the vast
`
`majority
`
`of its customers on its “B” book
`
`experienced
`
`losses.
`
`76.
`
`Das and Wadud
`
`actively
`
`monitored
`
`particular
`
`customers’
`
`performance
`
`to
`
`help
`
`Pepperstone decide if someone should be placed
`
`on the “A” Book or the “B” Book. See Ex. L,
`
`Skype Log Excerpt.
`
`F. PLAINTIFF’S COMPENSATION STRUCTURE
`
`77.
`
`Asstated, regardless of whether Pepperstone placed
`
`a customer on the “A” Book
`
`or the “B” Book, Pepperstone would
`
`charge
`
`the customer a Trade Commission and
`
`Spread Charge
`
`for each order a customer
`
`placed.
`
`78.
`
`For every customer that Das and Wadud onboarded, Das was
`
`promised by
`
`Pepperstone
`
`a
`
`payment of 50% of each Trade Commission and
`
`Spread
`
`earned
`
`by Pepperstone (the
`
`“Earned
`
`Commission”).
`
`See Ex. M, Skype Log Excerpt.
`
`79, Wadud, via Skype, would provide
`
`Das
`
`updates
`
`on his Earned Commissions on a
`
`regular
`
`basis. Id.
`
`80.
`
`Wadud,
`
`as Director of US
`
`Operations
`
`and Head of Sales for Pepperstone, would
`
`consistently refer to the Earned Commissions.
`
`81.
`
`Per
`
`Pepperstone’s agreement, Das,
`
`as a Sales
`
`Specialist
`
`for Pepperstone, is entitled
`
`to an Earned Commission on a
`
`continuing
`
`basis for every customer that Das
`
`originated
`
`and for
`
`every trade those customers made from origination
`
`to date.
`
`82.
`
`By
`
`late 2015, the Earned Commissionstotalled at least $1,000,000. See id. (Plaintiff
`
`and Pepperstone discussing
`
`at least $125,000 earned from just
`
`one client’s trading activity,
`
`so that
`
`numberis likely higher).
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`Pace 11
`
`

`

`83.
`
`Accordingly, Pepperstone is obligated
`
`to pay Das a minimum of $500,000 for the
`
`Earned Commissionsup until Das’s termination on
`
`July 8, 2015. And Pepperstoneis also
`
`obligated
`
`to pay for all Earned Commissions to the present made from the customers that Das onboarded.
`
`This amount continues to accrue each day because, upon information and
`
`belief,
`
`some of Das’s
`
`customers continue to trade with Pepperstone today, resulting in more than $3,500,000 in Earned
`
`Commissions owed to Das.
`
`84.
`
`However, Pepperstone has wholly failed to pay any Earned Commissions to
`
`Plaintiff.
`
`85.
`
`Instead, Pepperstone dismissed Das in a coordinated and intentional effort to avoid
`
`paying
`
`Das his Earned Commissions.
`
`G. THE EVENTS LEADING TO DAS’S DISMISSAL
`
`86.
`
`In the middle of 2015, Das discovered that one of
`
`Pepperstone’s
`
`servers was
`
`onboarding Japaneseclients.
`
`87.
`
`Pepperstone had
`
`agreed
`
`with the Australian Securities and Investment Commission
`
`(“ASIC”)
`
`to exit the Japanese market
`
`by
`
`October 13, 2014.
`
`88.
`
`Dasbelieved that the server
`
`activity he observed wasin violation of Pepperstone’s
`
`agreement with ASIC.
`
`89,
`
`Das
`
`reported
`
`this
`
`activity
`
`to Wadud as the Head of Pepperstone Dallas.
`
`90. Wadud told Das that he would talk to the Pepperstone’s Australia branch and
`
`resolve this matter.
`
`91.
`
`Instead,
`
`on
`
`July 8, 2015, approximately
`
`between 9:00 AM and 10:00 AM, Wadud
`
`called Das into a
`
`meeting
`
`at the Pepperstone Dallas office where Jeffrey
`
`R.
`
`Sandberg (Counsel for
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PAGE 12
`
`

`

`third-party witness, Coneisha Sherrod (Vice President of United Way, Fort
`
`Worth),
`
`CITT) and a
`
`were
`
`present.
`
`92.
`
`Oddly, Sandberg presented
`
`Das with a termination letter from Pepperstone, and
`
`further alleged for the first time that Das was
`
`employed only by CITT, not
`
`Pepperstone. See Ex.
`
`N, Sandberg
`
`Letter.
`
`93.
`
`Daswasthen presented
`
`an offer of $25,000, and told he would be required
`
`to release
`
`all claims against Wadud, Rivera, and CITT. The letter, dated July 8, 2015, stated that Das had
`
`less than one hourto agree to the offer. /d.
`
`94,
`
`Das
`
`rejected
`
`CITT’s settlementoffer.
`
`95.
`
`On July 8, 2015, Nashith Wadud sent a
`
`companywide email to
`
`Pepperstonestating
`
`that
`
`they
`
`have “terminated Sam Das’
`
`employment
`
`effective
`
`immediately.”
`
`See Ex. W, Nash Email.
`
`96.
`
`On
`
`July 9, 2015, CITT sent a
`
`follow-up
`
`letter
`
`revoking
`
`the settlement offer and
`
`reiterating Das’s termination. See Ex. O, Sandberg Second Letter.
`
`H. PLAINTIFF’S DEMAND FOR EARNED COMMISSIONS
`
`97.
`
`On
`
`July 12, 2015, Das
`
`directly
`
`emailed Pepperstone
`
`owners Joe
`
`Davenport and
`
`OwenKerr to request his Earned Commissions from Pepperstone. See Ex. P, Das Email dated July
`
`12, 2015.
`
`98.
`
`On
`
`July 14, 2015, Davenport acknowledged Pepperstone's
`
`direct
`
`relationship
`
`when
`
`he stated that “[Pepperstone] very much liked working with [Plaintiff]” but that Das would have
`
`to deal with this “issue” with Wadud. See Ex. Q, Davenport Email dated
`
`July 14, 2015.
`
`99,
`
`On
`
`July 29, 2015, Das
`
`requested
`
`that Pepperstone hold his commissions until he
`
`resolved this matter with Wadud.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PaGE 13
`
`

`

`100.
`
`The same
`
`day, Davenport responded “Sounds good and let me know how you go
`
`[sic].” See Ex. R, Davenport Email dated
`
`July 29, 2015.
`
`101. On
`
`August 6, 2015, Glenn Janik, Das’s
`
`prior counsel, sent a demand letter
`
`requesting the commissions owed. See Ex. S, Janik Email dated August 6, 2015.
`
`102. On
`
`August 21, 2015, counsel for
`
`Pepperstone/CITT responded
`
`by
`
`rejecting
`
`the
`
`offer. See Ex. T, dated
`
`August 21, 2015.
`
`103.
`
`Subsequent
`
`to Das’s departure from Pepperstone,
`
`many
`clients that Das onboarded
`
`and
`
`managed
`
`reached out
`
`to
`
`Pepperstone demanding
`
`an
`
`explanation
`
`as to
`
`Dasleft
`
`why
`
`Pepperstone. See Ex. U, Pepperstone Client’s Email dated
`
`July 10, 2015;
`
`see also Ex. V,
`
`Pepperstone Client’s Email dated July 21, 2015.
`
`104.
`
`Pepperstone respondedby notifying
`
`Plaintiffs clients that Plaintiff was no
`
`longer
`
`“with
`
`Pepperstone.”
`
`Ex. V.
`
`105.
`
`Incredibly, Pepperstone is now
`
`attempting
`
`to take the position that Das was never
`
`an
`
`employee
`
`of Pepperstone and that Pepperstone
`
`never
`
`promised
`
`Das any Earned Commissions
`
`(so apparently
`
`Das worked for
`
`free)
`
`from his Sales
`
`Specialist position
`
`with Pepperstone.
`
`Thankfully, the evidence speaks volumes to the contrary.
`
`I. THE EFFECT ON DAS’S FAMILY.
`
`106.
`
`Dasisa
`
`first-generation immigrant
`
`from India and came to Americato build a better
`
`life for his family.
`
`107. Das worked
`
`incredibly long
`
`hours in the financial sales markets for years, slowly
`
`working
`
`his way up to a
`
`very prestigious position
`
`as a Sales
`
`Specialist
`
`with Pepperstone.
`
`108. Das did all of this to support his family, afford to
`
`provide medical care to one of
`
`his children that is
`
`chronically ill, and to
`
`buy
`
`a house for his three children.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PaGE 14
`
`

`

`109. Das—in reliance upon Pepperstone’s promises made by
`
`Joe Davenport, Owen
`
`Kerr, Nashith Wadud, and others within Pepperstone leadership—worked
`
`for Pepperstone for two
`
`years, performing
`
`18+ hour
`
`days,to be entitled to his Earned Commissions. Das knew that he was
`
`entitled to very large commissions for his work with Pepperstone and purchased
`
`a house and
`
`fathered another child in
`
`anticipation
`
`of this
`
`life-changing salary
`
`Das had earned with Pepperstone.
`
`110.
`
`So, when Pepperstone refused to pay Das, terminated him on false pretenses, and
`
`called him “crazy” for ever
`
`thinking he would see his Earned Commissions, the stress was too
`
`much for Das and his
`
`family
`
`to bear.
`
`111. His wife lost the
`
`baby
`
`because ofthe stress. Das was
`
`nearly
`
`driven mad with
`
`grief
`
`at
`
`
`
`losing his career and his child. His family had to sell the house that he had slaved awayforall
`
`those years. Dasfelt like an absolute failure because of how Pepperstone treated him.
`
`112. And Pepperstone nearly got away with it.
`
`113. But now, Das will get his day
`
`in court,
`
`a
`
`jury will have the chance to makethis
`
`and this case will serve as an
`
`right,
`
`example
`
`to
`
`companies
`
`like Pepperstone, showing
`
`them that
`
`cannot abuse and take
`
`they
`
`advantage
`
`of their
`
`employees
`
`without consequences.
`
`VU.
`
`OF
`
`114. Das
`
`hereby incorporates by
`
`reference the
`
`allegations
`
`of all other
`
`paragraphs (both
`
`preceding
`
`and
`
`following)
`
`of this Third AmendedPetition.
`
`115. All conditions precedent
`
`to
`
`bringing this lawsuit have occurred or been waived.
`
`A. VIOLATION OF THE TEXAS SALES REPRESENTATIVE ACT
`
`116. Das
`
`incorporates
`
`his factual
`
`allegations
`
`containedin this Petition.
`
`117.
`
`Per
`
`Chapter 54 of the Texas Business and Commerce Code, knownas the Texas
`
`Sales
`
`Representative
`
`Act
`
`(the “Act’”), Das,
`
`as a Sales
`
`Specialist
`
`for Pepperstone working
`
`in its
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PaGE 15
`
`

`

`Dallas office,
`
`was entitled to his Earned Commissionsfor his entire employment with Pepperstone
`
`and to the present.
`
`118. Das was
`
`Sales
`
`Representative
`
`for Pepperstone within the
`
`meaning
`
`of the Act and
`
`solicited on behalf of Pepperstone orders for the purchase of Pepperstone’s product: the access to
`
`trades on the Pepperstone platform,
`
`the technical support for
`
`professional
`
`fund managers to
`
`efficiently
`
`onboard subaccounts and
`
`efficiently
`
`trade on behalf of subaccounts on
`
`Pepperstone’s
`
`platform, and the automated rebate structure to incentivize trades on
`
`Pepperstone’s platform.
`
`119. Because Das’s oral contract with Pepperstone did not
`
`comply
`
`with the
`
`provisions
`
`of Section 54.002 of the Act, Pepperstone
`
`was
`
`required
`
`to pay Dasall his Earned Commissions
`
`by
`
`the 30th working day after the date of his termination from Pepperstone, which would have been
`
`Saturday, August 8, 2015. Tex. Civ. Prac. & Rem. Code §§ 54.002, 54.003. Das did not receive
`
`any of his Earned Commissions as of
`
`August 8, 2015,
`
`nor
`
`any timeafter.
`
`120.
`
`Further, Pepperstone had a
`
`continuing duty post-employment
`
`to pay Das his Earned
`
`Commissions for all customers that he onboarded, and who traded on the Pepperstone platform,
`
`within 30
`
`working days
`
`of each trade made, but Pepperstone has failed to pay any Earned
`
`Commissionsas of the filing of this Third AmendedPetition.
`
`121. Das’s Earned Commissionsasofthe filing of this lawsuit total at least $3,500,00,
`
`and continue to accrue.
`
`122.
`
`Further, because Das’s contract with Pepperstone did not
`
`comply with Section
`
`54.002 of the Act, Dasis entitled to three times the
`
`unpaid
`
`commissions due to him at the time of
`
`judgment,
`
`or at least $10,500,000,
`
`as well as reasonable attorneys’ fees, which continue to accrue
`
`through judgment.
`
`Tex. Civ. Prac. & Rem. Code § 54.004.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PAGE 16
`
`

`

`B. BREACH OF CONTRACT
`
`123. Das
`
`incorporates
`
`his factual
`
`allegations
`
`containedin this Petition.
`
`124.
`
`Pepperstone hired Das as a Sales
`
`Specialist
`
`and
`
`agreed
`
`to
`
`compensate Das for his
`
`Sales services.
`
`125.
`
`The
`
`compensation agreed
`
`to
`
`the
`
`by
`
`parties
`
`was as follows: Pepperstone would pay
`
`Das 50% ofall trade revenue
`
`(50%
`
`of all Trade Commissions and
`
`Spread Charges)
`
`on trades made
`
`customers that Das had onboarded. Pepperstone agreed
`
`by
`
`to pay Das this revenuefor the life of
`
`the customers—.e., for each trade those customers made on
`
`Pepperstone’s trading platform during
`
`and after Das’s
`
`employment.
`
`126.
`
`Pepperstone
`
`never
`
`paid
`
`Das these Earned Commissions, despite Das’s tirelessly
`
`working
`
`for Pepperstone for two years.
`
`127.
`
`Injustice
`
`can be avoided
`
`only by enforcing
`
`the contract and
`
`awarding
`
`Das his
`
`Earned Commissions for his entire employment with Pepperstone—and the Earned Commissions
`
`he would have continued to receive had Pepperstone
`
`not
`
`prematurely
`
`terminated Das’s
`
`employment
`
`in order to
`
`deprive
`
`him of those commissions
`
`already
`
`earned—in the amountof at
`
`least $3,500,000.
`
`C. QUANTUM MERUIT
`
`128. Das
`
`incorporates his factual allegations containedin this Petition.
`
`129.
`
` Pleaded in the alternative, Das,
`
`as a
`
`Pepperstone Sales
`
`Specialist, performed
`
`or
`
`delivered the Sales services to
`
`Pepperstone.
`
`130.
`
`Pepperstone accepted the Sales Specialist services and knew,
`
`or under the
`
`circumstances
`
`reasonably
`
`should have known, that Das
`
`expected payment from Pepperstone for
`
`the Sales
`
`Specialist
`
`services. The Sales
`
`Specialist
`
`services were an
`
`ongoing arrangement and were
`
`performed with an
`
`expectation of an
`
`ongoing Earned Commission.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PAGE 17
`
`

`

`131.
`
`Pepperstone accepted the Sales Specialist services but then refused to compensate
`
`Das the
`
`agreed-upon
`
`Earned Commissions.
`
`132.
`
`The Sales Specialist services were
`
`reasonably worth the sum ofat least $500,000
`
`at the time they
`
`were furnished in the first half of 2015 and have continued to accrue with each
`
`newtrade that Das’s customers have
`
`performed
`
`on
`
`Pepperstone’s trading platform
`
`for the past six
`
`years.
`
`133. Because of Pepperstone’s failure to honor the agreement with Das, Das has been
`
`damagedin the amountofat least $3,500,000.
`
`D. PROMISSORY ESTOPPEL
`
`134. Das
`
`incorporates
`
`his factual
`
`allegations
`
`contained in this Petition.
`
`135.
`
`Pleaded in the alternative, Pepperstone made a
`
`promise
`
`to Das, namely that in
`
`exchange
`
`for his Sales
`
`Specialist employment
`
`with Pepperstone, he would receive his Earned
`
`Commissions.
`
`136. Das
`
`reasonably and substantially relied on the promise
`
`to his detriment by agreeing
`
`to leave FXCM and
`
`join Pepperstone
`
`as its Sales
`
`Specialist
`
`and
`
`by continuing
`
`to work for
`
`Pepperstone for years upon the continued inducementand
`
`promise
`
`of the Earned Commissions
`
`by
`
`Pepperstone. Das staked his and his family’s future upon Pepperstone’s promise and wasruined
`
`when Pepperstone brokeits
`
`promise.
`
`137. Das’s reliance was foreseeable
`
`by Pepperstone,as it was foreseeable that Das would
`
`believe his employer, Pepperstone, that he would be paid what had been agreed-to by the parties
`
`for his
`
`long hours, weekends, and
`
`sleepless nights
`
`as
`
`Pepperstone Dallas’s Sales
`
`Specialist.
`
`Das
`
`continually
`
`confirmed his payment of the Earned Commissions with Pepperstone, and so it was
`
`foreseeable to
`
`Pepperstone that Das was
`
`relying upon that promise of Earned Commissions.
`
`PLAINTIFF’S THIRD AMENDED PETITION
`
`PAGE 18
`
`

`

`138.
`
`Injustice
`
`can be avoided only by enforcing Pepperstone’s promise and awarding
`
`Das his Earned Commissions for his entire
`
`employment
`
`with
`
`Pepperstone—and
`
`the Earned
`
`Commissions he would have continued to receive had Pepperstone
`
`not
`
`prematurely
`
`terminated
`
`Das’s employment
`
`in order to
`
`deprive
`
`him of those commissionsalready earned—in the amount
`
`of at least $3,500,000.
`
`E. UNJUST ENRICHMENT
`
`139.
`
`Das
`
`incorporates
`
`his factual
`
`allegations
`
`contained in this Petition.
`
`140.
`
`Pleaded in the alternative, Pepperstone obtained a benefit from the customers that
`
`Das
`
`onboarded—trading volumeofat least $7,000,000
`
`as of the time ofthis pleading.
`
`141.
`
`This benefit to
`
`Pepperstone
`
`cameat the expense of Das, who worked
`
`tirelessly
`
`for
`
`2 years to onboard these customers to
`
`Pepperstone’s platforms, but never received a cent from
`
`Pepperstonein return.
`
`142.
`
`To allow Pepperstone
`
`to retain the benefits of Das’s hard work would
`
`unjustly
`
`enrich Pepperstone.
`
`143.
`
`Further, because Pepperstone intentionally
`
`misled Das into
`
`thinking
`
`he would
`
`receive 50% of the trade revenue for these customers for the life of the customer, and because
`
`Pepperstone terminated Das to
`
`intentionally avoid paying
`
`Das any of his Earned Commissions, it
`
`would be
`
`unjust
`
`for Pepperstone
`
`to retain any of the benefit of Das’s work.
`
`144.
`
`Thus, Das asks the Court to award him the entire benefit to
`
`Pepperstone of his
`
`work—not merely the 50% that Pepperstone promised
`
`to him. As of the date of this pleading, that
`
`amountis at least $7,000,000.
`
`145. Das also requests that, because
`
`Pepperstone’s
`
`actions were
`
`intentional, the Court
`
`award Das
`
`disgorgement of any enhanced value of the revenue obtained from those custome

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket