Anwar et al v. Fairfield Greenwich Limited et al

Filing 1227

ENDORSED LETTER: addressed to Judge Victor Marrero from Timothy A. Duffy dated 11/20/2013 re: The PwC and Citco Defendants therefore respectfully submit that consideration of this issue might best be deferred pending those anticipated decisions. If: however, the Court is inclined to address the issue now, the PwC and Citco Defendants respectfully request to participate in any further briefing the Court may require and any conference that may be held. ENDORSEMENT: The Clerk of Court is directed to enter into the public record of this action the letter above submitted to the Court by the PwC and Citco defendants. So Ordered. (Signed by Judge Victor Marrero on 11/21/2013) (js) Modified on 11/21/2013 (js).

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Timothy A. Duffy, P.C.

To Call Writer Directly:
(312) 862·2445
[e-mail]

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November 20, 2013

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VIA HAND DELIVERY

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Judge Victor Marrero
United States District Court
Southern District of New York
500 Pearl Street
New York, New York 10007
Re:

Anwar, et al. v. Fairfiehl Greenwich Limited, et al.

Master File No. 09-CV-00118 (VM) (THK)

Dear Judge Marrero:

I write on behalf of my client, PricewaterhouseCoopers LLP ("PwC Canada"), and its co­

defendants PricewaterhouseCoopers Accountants N.V. ("PwC Netherlands"), Citco Fund

Services (Europe) B.V., Citco (Canada) Inc., Citco Bank Nederland N.V. Dublin Branch, Citco

Global Custody N.V., Citco Fund Services (Bermuda) Limited, The Citco Group Limited

(collectively, the "Citco Defendants"), in response to the various letters that have been submitted

to Your Honor on the issue of whether SLUSA preempts the claims in the Standard Chartered

case and/or Anwar.

The PwC and Citco Defendants agree that the Second Circuit's recent decision in In re

Herald, Primeo & Thema Sec. Litig., 730 F.3d 112 (2d Cir. 2013), mandates dismissal of the

common-law claims pending against them in Anwar. In its decision, the Second Circuit held that

claims by investors in funds that invested with Madoff" s firm, Bernard L. Madoff Investment

Securities, Inc. ("BLMIS"), against banks that handled those funds were barred by SLUSA:

The complaints, fairly read, charge that JPMorgan and BNY knew of the fraud,
failed to disclose the fraud, and helped the fraud succeed-in essence, that
JPMorgan and BNY were complicit in Madoffs fraud. These allegations are
more than sufficient to satisfy SLUSA's requirement that the complaint allege a
"misrepresentation or omission of a material fact in connection with the purchase
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or saIeo' a covere d securIty.
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Similarly, the fact that plaintiffs allege claims sounding in negligence, breach of
fiduciary duty, and the like does not preclude preclusion under SLUSA where, as
here, it is obvious that the banks' liability, under any claim, is premised on their

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KIRKLAND &. ELLIS LLP

November 20, 2013
Page 2

participation in, knowledge of, or, at a minimum, cognizable disregard of Madoff
Securities' securities fraud.
In re Herald, 730 F.3d at 119 & n.7. The common-law claims pending in Anwar against the
PwC and Citco Defendants are likewise premised on their alleged "participation in, knowledge
of, or, at a minimum, cognizable disregard" of the BLMIS fraud.
Indeed, the only difference between the two cases is that the bank defendants in In re
Herald rendered services to BLMIS, not to the funds, whereas the PwC and Citco Defendants
rendered services to the funds, not to BLMIS. But this is a distinction without a difference.
Both the banks in In re Herald and the PwC and Citco Defendants in Anwar are alleged to have
made misrepresentations or omissions regarding the assets stolen by BLMIS that caused the
plaintiffs injury. That the PwC and Citco defendants are alleged to have made these
misrepresentations or omissions directly to the Anwar plaintiffs, as opposed to indirectly through
others, speaks only to the mechanism of causation, not the nature of the alleged conduct or injury
- which is the same in both cases, and which the Second Circuit has now confirmed falls within
the ambit ofSLUSA.
Nevertheless, the PwC and Citco Defendants appreciate, as others have pointed out, that
both the Second Circuit and the Supreme Court have additional cases pending that are likely to
address this issue further and provide additional guidance to the Court; in particular, the Kingate
case, the Second Circuit will address circumstances that are indistinguishable from those present
here. The PwC and Citco Defendants therefore respectfully submit that consideration of this
however, the Court is
issue might best be deferred pending those anticipated decisions.
inclined to address the issue now, the PwC and Citco Defendants respectfully request to
participate in any further briefing the Court may require and any conference that may be held.

If:

cc:

Counsel of Record (via e/mail)

The Clerk of Court is directed to enter into the public record
of this action the letter above submitted to the Court by

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SO ORDERED.

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