Anwar et al v. Fairfield Greenwich Limited et al

Filing 1276

ENDORSED LETTER addressed to Judge Victor Marrero from Sharon L. Nelles dated 6/9/2014 re: SCB thus respectfully renews its request for judgment on the pleadings pursuant to SLUSA. ENDORSEMENT: The Clerk of Court is directed to enter into the public record of this action the letter above submitted to the Court by defendants Standard Chartered Bank. (Signed by Judge Victor Marrero on 6/10/2014) (tn)

SULLIVAN & CROMWELL LLP

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MELBOURNE-SYON£V

By Hand
Honorable Victor Marrero,
United States District Judge,
Daniel Patrick Moynihan United States Courthouse,
500 Pearl Street,
New York, New York 10007.
Re:

Anwar, et af. v. Fairfield Greenwich Ltd., et af., No. 09-CV -118
(S.D.N.Y.) - Standard Chartered Cases

Dear Judge Marrero:
We write on behalf of the Standard Chartered Defendants ("SCB") in connection
with SCB's November 12,2013 request for a pre-motion conference to dismiss all claims in the
above-referenced actions pursuant to the Securities Litigation Uniform Standards Act of 1998
("SLUSA") (Letter from S. Nelles, Dkt. No. 1226). In particular, we write to alert the Court that
the Second Circuit has denied the petition for panel rehearing in Trezziova v. Kohn (In re Herald,
Primeo, & Thema Securities Litigation), 730 F.3d 112 (2d Cir. 2013). No. 12-156, slip op. at 3
(2d Cir. May 28,2014) (enclosed as Exhibit A). The Second Circuit reaffirmed its prior holding
that SLUSA barred state law claims brought against banks by investors in Madoff "feeder
funds." The Second Circuit explained that although the Madofffeeder funds were not
themselves "covered securities" under SLUSA, plaintiffs in Trezziova necessarily "'tried to take .
. . an ownership position in' ... [the] covered securities" that the feeder funds purported to
purchase through Bernard L. Madoff Investment Securities LLC. Trezziova, slip op. at 8
(quoting Chadbourne & Park LLP v. Troice, 134 S. Ct. 1058, 1067 (2014». Thus, SLUSA
applied to bar plaintiffs' state law claims under the Supreme Court's recent decision in
Chadbourne. Id. at 7-8; see also Letter from S. Nelles (Dkt. No. 1246).
The Court will recall that the Standard Chartered Plaintiffs urged the Court to
defer its consideration of SCB's request for a pre-motion conference until after the Supreme
Court ruled in Chadbourne and the Second Circuit ruled on the pending petition for rehearing in
Trezziova. (Nov. 19,2013 Letter from R. Brodsky at 11-12 (Dkt. No. 1223).) With Chadbourne
and Trezziova now decided, and for all the reasons set forth in SCB's prior submissions (and
with reference to Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71 (2006) and
Romano v. Kazacos, 609 F.3d 512 (2d Cir. 2010», the Court should proceed to dismiss the

Honorable Victor Marrero

-2­

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Standard Chartered Cases. SCB thus respectfully renews its request for judgment on the
pleadings pursuant to SLUSA?
Respectfully submitted,

Sharon L. Nelles
(Enclosure)
cc:

Standard Chartered Plaintiffs' Steering Committee (bye-mail)

SCB has articulated its positions in prior submissions to the Court, which are docket
entries 1226, 1236 and 1246. The Standard Chartered Plaintiffs submitted letters on these issues
at docket entries 1220, 1223, 1224, 1244 and 1249, as did the parties in the Anwar class action at
docket entries 1225, 1227, 1247 and 1248.
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Under Section ILA of the Court's Individual Practices, the Standard Chartered Plaintiffs
have two business days to respond to this letter. However, SCB understands that one ofthe
members of the Standard Chartered Plaintiffs' Steering Committee, Mr. Richard E. Brodsky, is
out of the office until June 10,2014. In light ofMr. Brodsky's unavailability, SCB does not
oppose the Court providing the Standard Chartered Plaintiffs until June 12,2014 to respond.

Exhibit A

12-156-cv(L)

Trezziova v. Kohn
UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term, 2012
(Argued: AprilS, 2013;

Petitions filed October I, 2013;

Decided: May 28, 2014)

Docket No. 12-1S6-cv (L), 12-162 (Con)

In re:

HERALD, PRIMEO, AND THEMA

DANA TREZZIOV A, NEVILLE SEYMOUR DAVIS,

Plaintiffs-Appellants-Petitioners,
REPEX VENTURES, S.A., ON BEHALF OF ITSELF AND ALL OTHERS SIMILARLY SITUATED,

ScHMUEL CABILLY, KOREA EXCHANGE BANK,

Plaintiffs,
-v.SoNJA KOHN, PRIMEO SELECT FUND, PRIMEO EXECUTIVE FUND, HANNES SALETA,

ERNST & YOUNG GLOBAL LIMITED, HSBC SECURITIES SERVICES (LUXEMBOURG) S.A.,

HSBC HOLDINGS PLC, BANK MEDICI, UNICREDIT, BANK AUSTRIA, PIONEER GLOBAL

ASSET MANAGEMENT S.p.A., ALFRED SIMON, KARL E. KANIAK, HANS-PETER

TIEFENBACHER, JOHANNES P. SPALEK, NIGEL H. FIELDING, JAMES E. O'NEILL,

ALBERTO LARoCCA, DECLAN MURRAY, URSULA RADEL-LESZCYNSKI, MICHAEL

WHEATON, BA WORLDWIDE FUND MANAGEMENT, LTD., PIONEER ALTERNATIVE
INVESTMENT MANAGEMENT LTD., BANK OF BERMUDA (CAYMAN) LIMITED, BANK OF
BERMUDA (LUXEMBOURG) S.A., BANK OF BERMUDA LIMITED, ERNST & YOUNG
(CAYMAN), ALBERTO BENBASSAT, STEPHANE BENBASSAT, GENEVALOR, BENBASSAT &
CIE, GERALD J.P. BRADY, JOHN HaLLIWELL, SONJA KaHN, DANIEL MORRISSEY,
DAVID T. SMITH, WERNER TRIPOLT, BANK MEDICI AG, UNICREDIT SPA, HSBC
INSTITUTIONAL TRUST SERVICES (IRELAND) LTD., HSBC SECURITIES SERVICES
(IRELAND) LTD., HSBC HOLDINGS PLC, PRICEWATERHOUSECOOPERS INTERNATIONAL
LTD., PRICEWATERHOUSECOOPERS (DUBLIN), PRICEWATERHOUSECOOPERS LLP,
PRICEWATERHOUSECOOPERS BERMUDA, THEMA ASSET MANAGEMENT LIMITED, BA
WORLDWIDE FUND MANAGEMENT LIMITED, PETER MAOOFF, ANDREW MADOFF,
MARK MAOOFF, WILLIAM FRY, JPMORGAN CHASE & CO., BANK OF NEW YORK
MELLON, HERALD (LUX), MESSRS. FERDINAND BURG AND CARLO REDING, THE
COURT ApPOINTED LIQUIDATORS FOR HERALD (LUX), HERALD ASSET MANAGEMENT
LIMITED, UNICREDIT BANK AUSTRIA AG, HERALD USA FUND,ERNST & YOUNG S.A.,
FRIEDRICH PFEFFER, FRANCO MUGNAI, THEMA INTERNATIONAL FUND PLC,

Defendants-Appellees-Respondents,
BERNARD L. MADOFF, BERNARD L. MADOFF INVESTMENT SECURITIES, BANK MEDICI

S.A., PETER SCHEITHAUER, HERALD USA FUND, HERALD LUXEMBURG FUND, BANK

AUSTRIA CREDITANSTALT, UNICREDlT S.A., PIONEER ALTERNATIVE INVESTMENTS,

HSBC SECURITIES SERVICES, S.A., HAML, PAUL DE SURY, GABRIEL SAFDIE, WILLIAM

A. JONES, HELMUTH E. FREY, ANDREAS PIRKNER, RICHARD GODDARD, ERNST &

YOUNG, FRIEHLING & HOROWITZ,

Defendants.
Before:
PARKER and CARNEY,

Circuit Judges,

and RAKOFF,

District Judge:

• The Honorable Jed S. Rakoff, United States District Judge for the Southern
District of New York, sitting by designation.

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Plaintiffs-Appellants Neville Seymour Davis and Dana Trezziova filed
petitions seeking panel rehearing or rehearing en banc of both this panel's
opinion concerning SLUSA and its related summary order concerningforum non

conveniens. Because we did not misapprehend or overlook any point of law or fact
and because the intervening Supreme Court ruling concerning SLUSA,

Chadbourne & Park LLP v. Troice, 134 S. Ct. 1058 (2014), confirms our opinion's
logic and holding, we deny the petitions for panel rehearing.

Appearances:
ERIC ALLEN ISAACSON (Joseph D. Daley, Robbins Geller Rudman
& Dowd LLP; Francis A. Bottini, Jr., Albert Y. Chang, Bottini &
Bottini, Inc.), Robbins Geller Rudman & Dowd LLP, San
Diego, CA, for Plaintiff-Appellant-Petitioner Neville Seymour

Davis.
PATRICE L. BISHOP, Stull, Stull & Brody, Beverly Hills, CA,for

Plaintiff-Appellant-Petitioner Dana Trezziova.
ANDREW RHYS DAVIES (Laura R. Hall), Allen & Overy LLP, New
York, NY,for Defendant-Appellee-Respondent JPMorgan Chase &

Co.
LEWIS J. LIMAN (Jeffrey A. Rosenthal), Cleary Gottlieb Steen &
Hamilton LLP, New York, NY,for Defendant-Appellee­

Respondent The Bank of New York Mellon Corporation.
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THOMAS G. RAFFERTY (Antony 1. Ryan), Cravath, Swaine &
Moore LLP, New York, NYJor Defendant-Appellee-Respondent

PricewaterhouseCoopers (Dublin) on behalfof the "Forum Non
Conveniens Defendants.
1/

Thomas J. Moloney, David E. Brodsky, Cleary Gottlieb Steen &
Hamilton LLP, New York, NY, for Defendants-Appellees­

Respondents HSBC Holdings pic, HSBC Securities Services
(Ireland) Limited, HSBC Institutional Trust Services (Ireland)
Limited, and HSBC Securities Services (Luxembourg) S.A.
Michael E. Wiles, Debevoise & Plimpton LLP, New York, NYJor

Defendants-Appellees-Respondents Alberto Benbassat, Stephane
Benbassat, Genevalor, Benbassat & Cie, Gerald J.P. Brady, Daniel
Morrissey, David T. Smith, Thema Asset Management Limited, and
Thema International Fund pIc.
William R. Maguire, Marc A. Weinstein, Hughes Hubbard &
Reed LLP, New York, NY,for Defendant-Appellee-Respondent

Ernst & Young (Cayman).
Michael S. Flynn, Davis Polk & Wardwell LLP, New York, NYJor

Defendant-Appellee-Respondent PricewaterhouseCoopers LLP.
Sanford M. Litvack, Dennis H. Tracey, III, Lisa J. Fried, Hogan
Lovells US LLP, New York, NY,for Defendant-Appellee­

Respondent PricewaterhouseCoopers Bermuda.
Jay P. Lefkowitz, Joseph Serino, Jr., David S. Flugman, Kirkland
& Ellis LLP, New York, NY, for Defendants-Appellees­

Respondents Herald USA Fund, Franco Mugnai, and Friedrich
Pfeffer.
Jeff G. Hammel, Maria A. Barton, Latham & Watkins LLP, New
York, NY, for Defendant-Appellee-Respondent Hannes Saleta.

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Richard A. Martin, Katherine L. Maco, Alison K. Roffi, Orrick
Herrington & Sutcliffe LLP, New York, NY, for Defendant­
Appellee-Respondent Ernst & Young S.A.
Claudius O. Sokenu, John Gueli, Shearman & Sterling LLP, New
York, NY,for Defendant-Appellee-Respondent Ernst & Young

Global Limited.
Franklin B. Velie, Jonathan G. Kortmansky, Mitchell C. Stein,
Sullivan & Worcester LLP, New York, NY,for Defendant­

Appellee-Respondent UniCredit Bank Austria AG.
Price O. Gielen, Nathan Daniel Adler, Neuberger, Quinn, Gielen,
Rubin & Gibber, P.A., Baltimore, MD, for Defendant-Appellee­

Respondent Sonja Kohn.
Brett S. Moore, Porzio Bromberg & Newman P.c., New York, NY,

for Defendant-Appellee-Respondent Herald (LUX) by and through
Messrs. Ferdinand Burg and Carlo Reding, the Court-Appointed
Liquidators for Herald (LUX).
Susan L. Saltzstein, Marco E. Schnabl, Skadden, Arps, Slate,
Meagher & Flom LLP, New York, NY, for Defendant-Appellee­

Respondent UniCredit S.p.A.
Mitchell J. Auslander, James c. Dugan, Wilkie Farr & Gallagher
LLP, New York, NY, for Defendant-Appellee-Respondent William

Fry.
Fraser L. Hunter, Jr., Wilmer Cutler Pickering Hale and Dorr LLP,
New York, NY,for Defendant-Appellee-Respondent

PricewaterhollseCoopers International Ltd.

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PER CURIAM:

On September 16, 2013, this Court filed an opinion affirming the judgment
of the United States District Court for the Southern District of New York (Richard
M. Berman, Judge), which dismissed the plaintiffs' state-law claims against
defendants JPMorgan Chase & Co. and Bank of New York Mellon Corporation as
precluded by the Securities Litigation Uniform Standards Act of 1998 ("SL USA"),
15 U.s.C. § 78bb(f). In re Herald, Primeo, and Thema, 730 F.3d 112 (2d Cir. 2013)
(holding that SLUSA precludes state-law class action claims against these banks
because the claims are predicated on the banks' involvement with the fraudulent
securities transactions of Bernard L. Madoff Investment Securities ("Madoff
Securities"». Simultaneously, this Court filed a summary order affirming the
District Court's dismissal of claims against the remaining defendants on the
ground offorum non conveniens. In re Herald, Pimeo, and Thema, 540 F. App'x 19 (2d
Cir.2013).
Plaintiffs-Appellants Dana Trezziova and Neville Seymour Davis filed
petitions seeking panel rehearing and rehearing en banc of both the SLUSA
opinion and the forum non conveniens summary order. In view of the Supreme

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Court's grant of certiorari to an appeal from a Fifth Circuit judgment concerning
the reach of SLUSA, we postponed a decision on these petitions. Now that we
have reviewed the resulting Supreme Court opinion, Chadbourne & Park LLP v.

Troice, 134 S. Ct. 1058 (2014), and received briefing from the parties concerning its
effect on In re Herald, the petitions are ripe for determination. Because the fraud
perpetrated by Madoff Securities was material to a decision by one or more
Il

individuals (other than the fraudster) to buy or to sell a 'covered security,'

If

Troice, 134 S. Ct. at 1066, the Supreme Court's ruling confirms the logic and
holding of In re Herald. Accordingly, we deny the petitions.

Troice clarifies the scope of SLUSA by delineating an outer limit to its
requirement that the fraud be "in connection with the purchase or sale of a
covered security." 15 U.s.C § 78bb(f)(1). Specifically, Troice arose from the
scheme by Allen Stanford to induce victims to purchase certificates of deposit of
the Stanford Investment Bank, certificates that were rendered worthless when
Stanford's Ponzi scheme was revealed. But those certificates of deposit were
indisputably not "covered securities," and the closest that the plaintiffs in Troice
could get to statutorily defined "covered securities" was the allegation that
Stanford induced purchase of the uncovered securities by, among other

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misrepresentations, vague promises that the Stanford Investment Bank had
significant holdings in various covered securities.
This, the Supreme Court held, was too remote. The plaintiffs in Troice were
not seeking, directly or indirectly, to purchase covered securities. See Troice, 134 S.
Ct. at 1062. Thus, a plaintiff in Troice was entirely distinguishable from "a victim
who took, tried to take, or maintained an ownership position in the statutorily
relevant securities through 'purchases' or 'sales' induced by the fraud." ld. at
1067 (emphasis supplied).
Madoff Securities, by contrast, fraudulently induced attempted
investments in covered securities, albeit through feeder funds (not alleged in the
instant complaints as anything other than intermediaries), and the defendant
banks are alleged to have furthered that scheme. Madoff Securities' victims thus
"tried to take ... an ownership position in the statutorily relevant securities," i.e.,
covered securities. That Madoff Securities (a Ponzi scheme) fraudulently failed to
follow through on its promise to place the investments in covered securities does
not in any respect remove this case from the ambit of SLUSA as defined in Troice.
We have considered the other arguments raised in the petitions, and they
are without merit. Accordingly, we DENY the petitions for panel rehearing.

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