CHEYENNE - A pension plan owned by emergency-room physicians is suing a Cheyenne brokerage firm, RBC Dain Rauscher, Inc., for losing $2.5 million of the plan's assets.

Vincent Ross, M.D., of Cheyenne filed the federal court lawsuit on behalf of himself and Restated Employees Profit Sharing Plan and Trust, a defined contribution pension plan created and owned by Emergency Medical Physicians (EMP).

The lawsuit also names as a defendant Maureen A. Kougl of Dain Rauscher, who managed the EMP pension plan investments.

The lawsuit, which claims the defendants breached their fiduciary duty, said that $3 million in retirement assets were transferred to two Dain Rauscher investment accounts in January 1996.

The pension plan trustees wanted a "conservative focus," with diversification, the lawsuit said. The bulk of the money was to be reinvested on a "time-average" basis in three mutual fund companies with only 10 to 15 percent of the assets invested in individual stocks.

But the defendants invested 83 to 90 percent of the plan's assets in equities, either individual stocks or mutual stock funds, the lawsuit said.

In February 1998, Kougl reported the value of the plan was $4.3 million. In February 2000, Kougl reported the plan assets were valued at $6.1 million. But on Feb. 24, 2001, Kougl reported at a meeting with plan trustees in Denver that the value of the assets was down to $3.3 million.

By October, 2001, the pension fund assets tumbled to $2 million, which was less than the original $3 million transferred to Dain Rauscher.

The board of directors for the trust, the lawsuit said, are practicing physicians with little expertise and "even less time to actively manage the assets," the lawsuit said. That is why the board gave Dain Rauscher complete discretionary control of the assets, the action added.

The lawsuit claims that Dain Rauscher converted to managed accounts in the summer of 1998 without the consent of the plan's trustees and assessed a .0125 management fee on all the retirement accounts.

The defendants also received money from commissions for selling the plan's mutual funds with sales loads of 3.5 percent to 5.75 percent.

The commissions totaled $363,864 between 1998 and 2001, in addition to $206,317 in management fees for the same period, the lawsuit said..

The action claims that over a 48-month period, Dain Rauscher and Kougl lost nearly $1.5 million in fund assets because of excessive trading and "churning."

For example, the lawsuit said, Kougl made 427 purchases and sales of individual stocks and mutual funds in 1998, 922 in 1999, 770 in 2000 and 172 in 2001.

"On many occasions," the lawsuit said, Kougl repurchased the same stock within a short time of selling, often at a price higher than the initial sales price.

Dain Rauscher officials could not be reached for comment Thursday afternoon.

The lawsuit seeks a court judgment to make good to the plan all losses estimated to total at least $2.5 million.