Anwar et al v. Fairfield Greenwich Limited et al

Filing 1129

ENDORSED LETTER addressed to Judge Victor Marrero from Richard E Brodsky dated 5/1/2013 re: Counsel writes on behalf of Maridom Limited, Caribetrans, S.A and Abbot Capital Inc. Plaintiffs in one of the Standard Chartered Cases. This letter is in reply to the April 30, 2013 letter from Sharon Nelles of Sullivan & Cromwell, LLP to Your Honor, responding to letters fro various Standard Chartered Plaintiffs (including mine dated April 22. 2013 ["Maridom Letter]) concerning leave to amend their respective complaints. This letter is addressed solely to points made (or not made) by Ms. Nelles in response to my letter. The Defendants' letter ignores many of the points made in the Maridom Letter, including the highly significant fact, Maridom Letter at 2, that, as now presented, the proposed Maridom amendment is substantially narrower than the proposed second amended complaint, which the court earlier rejected as tardy. Anwar v. Fairfield Greenwich Ltd., No. 09-cv-118, 2012 WL 1415621 (S.D.N.Y. Apr. 13, 2012) (holding that all amendments were required several months before discovery commenced), reh'g denied, 283 F.R.D. 193 (2012). Undeniably, any prejudice that the earlier amendment might have caused the defendants will be considerably lesened were the Court grant leave to amend as we now request. ENDORSEMENT: The Clerk of Court is directed to enter into the public record of this action the letter above submitted to the court by Maridom Plaintiff's. The Court has received sufficient argument in the correspondence to date relating to the matter set forth above. No further submissions will be considered. (Signed by Judge Victor Marrero on 5/2/2013) (js)

From: Richard E Brodsky

Fax: (SSS) 391·5$19

To: Hon. Victor Marrero

Fa)": +1 (212j 805·6382

Page ;2 of 5 511120134:45

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THE BRODSKY LA W FIRM, Pl
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RICHARD

E. BRODSKY, ATTORNEY AT LAW

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May 1, 2013

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Honorable Vibtor Marrero
United StatefDistrict Judge
Daniel Patric Moynihan U.S. Courthouse
500 Pearl Str et
New York, N w York 10007-1312

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Re: 1tnwar, et ale v. Fairfield Greenwich Limited, et al.,
9-cv-118(VM)(THK)

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Dear Judge i\farrero:
I write Ion behalf of my clients, Maridom Limited, Caribetrans, S.A.,
and Abbot C~ital, Inc. (the "Maridom Plaintiffs"), Plaintiffs in one of the
Standard Chitered Cases. This letter is in reply to the April 30, 2013 letter
from Sharon elles of Sullivan & Cromwell, LLP to Your Honor, responding
to letters fro various Standard Chartered Plaintiffs (including mine dated
April 22. 2013 ["Maridom Letter]) concerning leave to amend their respective
complaints. Tlhis letter is addressed solely to points made (or not made) by
Ms. Nelles in response to my letter.
The Defendants' letter ignores many of the points made in the
Maridom Letter, including the highly significant fact, Maridom Letter at 2,
that, as now ~resented, the proposed Maridom amendment is substantially
narrower tha~ the proposed second amended complaint, which the court
earlier rejected as tardy. Anwar v. Fairfield Greenwich Ltd., No. 09-cv-118,
2012 \VL 141~621 (S.D.N.Y. Apr. 13,2012) (holding that all amendments
were requil'e~ several months before discovery commenced), reh'g denied. 283
F.R.D. 193 (2012). Undeniably, any prejudice that the earlier amendment
might have c~used the Defendants will be considerably lessened were the
Court to grant leave to amend as we now request.
Having: ignored this critical fact, the Defendants resort to the
thol'Oughly mistaken notion that additional discovery will be required

because we seek to add a claim under the Florida Blue Sky Act. Specifically,
Ms. Nelles states:

200 S. BISCAYNE BOULI;VAnn. STL 1930 • MIAMI. FI.OltiOA 33131

WWW.THl:8RODSlo.:YU\Wl.lRM.COM

786-220,3328. [e-mail]

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From: Richard E. Brodsky

Fax: (aSS) 391-5819

To: Hon. Victor Marrero

Fay: [phone]

Page 3 of 5 5/112013 4:45

Honorable Vi~tor Marrero
May 1,2013
Page 2

The Maridom Plaintiffs state that they intend to assert entirely
new allegations, including that Standard Chartered was an
'agent' of Fairfield Greenwich and that the purchases and sales
of the Fairfield Funds occurred in Florida. (April 22, 2013 Letter
from the Maridom Plaintiffs. at 3-4 (,Maridom Letter'}.) This
would require a return to fact discovery, including discovery
relating to, among other Issues, where these plaintiffs actually
purchased or sold shares in the Fairfield Funds and the nature
of the relationship between Standard Chartered and Fairfield
Greenwich.
The claim that additional discovery would be required to defend the
Florida Blue Sky claim is not supported by reference to actuall'equests for
production, interrogatories or depositions that would be required. This is not
surprising, because the indisputable fact is that Standard Chartered
Defendants do not need discovery to learn "where these plaintiffs actually
purchased or sold shares in the Fairfield Funds and the nature of the
relationship between Standard Chartered and Fairfield Greenwich."
On the issue ofwhero the sales occurred, the Defendants need no
discovery to learn where the recommendations to invest in Sentry were
formulated by Standard Chartered Bank International (Americas) Limited
(its name after the acquisition of American Express Bank Ltd. in February
2008), from where written and telephonic comm unications with the Maridom.
Plaintiffs emanated, and where the Defendants and the Maridom Plaintiffs
met from time to time when not meeting in the Dominican Republic. The
answer to all three questions is Florida, and it is shown by the depositions
already taken and the documents already produced. The Defendants have
already sought and obtained relevant documents from the Maridom Plaintiffs
and have taken all-day depositions of the principals of all three of the
Maridom. Plaintiffs. They also have produced corporate records of Standard
Chartered's specific individual contacts with the Maridom Plaintiffs, as well
as correspondence and emails with these clients. The Defendants know where
the sales occurred.
It is equally erroneous to suggest that the Defendants need discovery
to know the nature of their relationship with Fairfield Greenwich. The
Defendants produced many documents concerning that relationship.
including voluminous emails negotiating over how much money Fairfield
Greenwich would pay Standard Chartered for recommending Sentry to its
clients (agreement on which was a precondition to Standard Chartered's
finally agreeing to offer Sentry to its individual clients). In addition,

From: Richard E. Brodsky

Fax: [phone]

To: Hon. Victor Marrero

Fay: [phone]

Page 4 of 5 511120134:45

Honorable Victor Marrero
May 1, 2013
Page 3

Standard Chartered produced to the Standard Chartered Plaintiffs copies of
written agreements with Fairfield Greenwich whereby St.andard Chartered

entered into a formal relationship as a "distributor" of Fairfield Sentry shares
to the Bank's private banking clients_ The 2006 Private Distribution
Agreement between Standard Chartered and Fairfield Greenwich expressly
provided that Standard Chartered would "participate in the distribution of
the Shares of [Sentry] Fund to its clients on a private placement basis," in
exchange for which Standard Chartered would receive "50 basis points [0.5%]
of [Fairfield Greenwich's] management fee per annum in connection with
existing, new and transferred investments from [its] private banking clients."
The Agreement further stated: "In soliciting Investors for the Funds and
otherwise performing the duties hereunder, the Distributor shall be regarded
as an independent agent and marketing representative."
Lest the Defendants argue that they need discovery to learn facts from
their prior employees, this argument is eliminated when it is understood that
Standard Chartered's alternate counsel (Greenberg Traurig, P.A., counsel for
Standard Chartered in several arbitrations arising from these same events)
represented nearly all of the key former officials of Standard Chartered in
their depositions in this case, 01' Standard Chartered has supplied counsel to
those persons. The depositions revealed that Sullivan & Cromwell lawyers
were present at the deposition preparation sessions for these persons, and at
the deposition all defense counsel asserted that conversations at those
sessions were protected by attorney-client privilege even in the absence of a
joint defense agreement, Accordingly, there can be no argument that
Standard Chartered needs discovery to inquire of its own former employees
about the facts,
For their part, the Maridom Plaintiffs have never suggested the need
for more discovery: indeed, if there were any question in this respect, the
Maridom Plaintiffs explicitly waive additional discovery on any aspect of the
pleadings if they were permitted to amend.
As to putative delay, the Defendants only go through the motions in
stating that permitting an amendment would materially slow down the
process of these cases. These cases have proceeded at a glacial pace precisely
because the Defendants have written (or at least followed) the book on
slowing down the progress of a case. Every nit that could have been picked in
discovery was duly picked. Every ploy to slow down expert discovery has been
resorted to, It is outlandish for the Defendants to complain about delay when
they have set the standard for delay in this case.

From: Richard E Brodsky

Fax: [phone]

To: Hon. Victor Marrero

Fa,..: +1 \212/805-6382

Page 5 of 5 511/2013 4:45

Honorable Victor Marrero
May 1, 2013
Page 4

Against the plain need for permitting amendments to be freely granted
when justice so requires, the Defendants' non-existent showing of the "need
for discovery" and its plaintive cries of "undue delay" are woefully insufficient
and should not be allowed by this Court to carry the day.
The Maridom Plaintiffs are constrained to remind the Court that it
explicitly ruled that leave to amend expired months before discovery
commenced, and that any amendment after that date was therefore tardy.
2012 WL 1415621, at *1-2. This was an unprecedented ruling, and one that,
under law, is not appealable until after the Maridom case is concluded.
Respectfully, there is still time to amend this highly prejudicial ruling, and
the Court should not be swayed by Standard Chartered's specious arguments
that the Court should not do so.
Thank you for your consideration of this letter.
Sincerely yours,

Richard E. Brodsky

cc:

Counsel for Standard Chartered Defendants
Counsel for all Standard Chartered Plaintiffs