Anwar et al v. Fairfield Greenwich Limited et al

Filing 1525

NOTICE of Filing. Document filed by Joaquina Teresa Barbachano Herrero. (Attachments: #1 Exhibit)(Lindsey, Harold)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

PASHA ANWAR, et al.,
Plaintiffs,
Master File No. 1:09-cv-00118-VM-THK
v.
FAIRFIELD GREENWICH LIMITED, et al.,
Defendants.
This document relates to:
Joaquina Teresa Barbachano Herrero v. Standard
Chartered Bank International (Americas) Limited and
Standard Chartered PLC, 1:11-cv-03553-VM
THIRD AMENDED COMPLAINT
Plaintiff, JOAQUINA TERESA BARBACHANO HERRERO (“Barbachano”), by and through
undersigned counsel and pursuant to the Federal Rules of Civil Procedure, hereby files this Amended
Complaint for Damages against Defendants, STANDARD CHARTERED BANK INTERNATIONAL
(AMERICAS) LIMITED and STANDARD CHARTERED PLC (collectively, the “Defendants”), and
alleges as follows:
NATURE OF THE ACTION, THE PARTIES, JURISDICTION AND VENUE
1.

This is an action for violation of state securities laws, breach of fiduciary duty, fraud,

gross negligence, and negligent misrepresentation. It arises from fraudulent and/or negligent investment
advice and recommendations rendered, and the material omissions of fact made by the Defendants and/or
their predecessors in interest to Barbachano, which caused the unsuitable investment of the assets in
Barbachano’s portfolio, exposing those assets to substantial risk and, ultimately, multi-million dollar
losses, the unsuitable leveraging of Barbachano’s portfolio through a multi-million dollar loan, and the
further investment (and loss) of some of the assets contained in Barbachano’s portfolio in the massive
Ponzi scheme perpetrated by Bernard Madoff.

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

2.

Barbachano is a resident and citizen of Mexico. In late 1996, she became a client of

American Express Bank, Ltd. and its subsidiary, American Express Bank International (collectively
“AEBI”), in Miami, Florida, the predecessors of the Defendants. AEBI provided financial and investment
advice to Barbachano, assigning its employee, Jennifer Sierra (“Sierra”), as Barbachano’s “Relationship
Manager.” As a result, and continuing thereafter, Barbachano reposed her trust and confidence in AEBI
and Sierra, which AEBI and Sierra accepted, entering in to a fiduciary relationship with Barbachano.
Indeed, AEBI, by and through Sierra, eventually managed all aspects of Barbachano’s personal finances
and investments.
3.

Defendant Standard Chartered PLC is organized and existing under the laws of the

United Kingdom, with a place of business at 1 Aldermanbury Square, London, EC2V 75B, United
Kingdom, and is the parent corporation of Defendant Standard Chartered Bank International (Americas)
Limited, by and through its wholly owned subsidiaries, Standard Chartered Holdings Ltd. and Standard
Chartered Americas.
4.

Defendant Standard Chartered Bank International (Americas) Limited is a corporation

organized under the laws of the United States and is authorized to do business in Florida with a place of
business at 1111 Brickell Avenue, Miami, Florida 33131.
5.

AEBI was an Edge Act corporation that offered traditional private banking services to

individuals outside of the United States and was headquartered in Miami, Florida at all relevant times.
6.

In or about February 2008, Defendant Standard Chartered Bank PLC acquired the

American Express Bank, Ltd. and all of its subsidiary companies and affiliated companies, including
AEBI, changing its name to Standard Chartered Bank International (Americas) Limited. For ease of
reference, Standard Chartered Bank PLC, AEBI, and Standard Charter Bank International (Americas)
Limited shall collectively be referred to as the “Bank.”
7.

This Court has jurisdiction pursuant to the Edge Act of 1913 (12 U.S.C. § 632).

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

8.

Venue is proper in the United States District Court for the Southern District of Florida

pursuant to 28 U.S.C. § 1391(b) because a substantial part of the events or omissions giving rise to the
claims alleged herein occurred in Miami, Florida.
9.

This action was originally filed in the United States District Court for the Southern

District of Florida. By order of the United States Judicial Panel on Multidistrict Litigation entered on
May 20, 2011, this action was transferred to the United States District Court for the Southern District of
New York for inclusion in the coordinated and consolidated pretrial proceedings in In re Fairfield
Greenwich Group Securities Litigation.
FACTUAL ALLEGATIONS
10.

In 1994, Barbachano inherited approximately $6 million following the death of her

father, a well-known movie producer in Mexico.
11.

In late 1996, Barbachano became a client of the Bank, and Sierra was assigned as her

Relationship Manager.

Barbachano advised Sierra that she had no knowledge of finances and

investments and that her goal was to preserve her inheritance while making a modest return. In that
regard, Barbachano advised Sierra that she (Sierra) should treat Barbachano like an “old widow” when
making investment recommendations and not to gamble with her assets. Sierra advised Barbachano that
her investment objective was “capital preservation and growth.” Sierra further advised Barachano that
her investment risk factor was considered “moderate conservative” and that her overall investment
position would be conservative, but when the market presented an opportunity, Sierra would take some
small risks. See Exhibit A, attached hereto and incorporated herein.
12.

In addition, Sierra arranged for Barbachano to place a substantial part of her assets in a

trust, which was subsequently created in the Cayman Islands, with AMEX International Trust (Cayman)
Ltd., an affiliate of AEBI, acting as “Trustee,” and, later, with Standard Chartered Trust (Cayman) Ltd.,
an affiliate of the Defendants, acting as “Trustee.” The trust was initially named “Las Trojes,” and was
later re-named “Los Camotes,” with the assets transferred into the trust by Barbachano and held by the
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

Trustee for the benefit of Barbachano through two companies, Fardoll Co. Ltd. and Vegadeo Co. Ltd.
Barbachano was the grantor and beneficiary of the assets held by the trust through the companies.1
13.

Throughout their relationship, the Bank, by and through Sierra, made all investment

decisions for Barbachano.

In particular, Sierra, and together at times with John Dutkowski

(“Dutkowski”), a Senior Investment Specialist of the Bank, would tout investments to Barbachano, advise
Barbachano that the investments she and Dutkowski recommended were not risky, and assure Barbachano
that the Bank reviewed in detail all the investments that Sierra and Dutkowski recommended and would
continually monitor Barbachano’s investments.

Sierra would also show investment documents to

Barbachano but would not necessarily leave them for Barbachano to review because, as Sierra said, she
“would not understand them.” For example, in the Bank’s “call report,” dated July 30, 2004, Sierra writes
that “[Barbachano] is still in the process of learning the investment management of the account.” The
July 30, 2004 call report is attached hereto as Exhibit B.
14.

The Bank, by and through Sierra, became involved in all aspects of Barbachano’s

investments and finances. Sierra met with Barbachano approximately four times each year (if not more)
in both Miami, Florida and Mexico to review her portfolio and make recommendations. Sierra also spoke
by telephone with Barbachano on a monthly or even more frequent basis concerning her investments and
finances, repeatedly assuring Barbachano that she (Sierra) was monitoring her investments. Sierra also
managed withdrawals and deposits for Barbachano, caused the payment of bills for Barbachano’s Florida
residence and credit cards, and ensured the payment of taxes. In addition, Sierra befriended Barbachano,
often meeting her for dinner and taking a vacation with her to Key West, Florida. When Barbachano
decided to sell her Florida residence, Sierra caused her (Sierra’s) husband to act as Barbachano’s broker,
thus obtaining a commission from the sale.

1

Because of the affiliated relationship between the Trustee and the Defendants, it would be futile
to demand that the Trustee bring suit against the Defendants.
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

Fairfield Investments
15.

In or about January 2004, the Bank, by and through Sierra, began touting to Barbachano

an investment in Fairfield Sentry Limited Fund (“Fairfield”), which was eventually exposed as a feeder
fund for Madoff’s Ponzi scheme. Sierra represented that the investment in Fairfield was a “risk reducer”
for Barbachano’s investment portfolio. Sierra further represented that the Bank had investigated Fairfield
and that Fairfield was not risky, had “no volatility,” provided a six (6) to seven (7) percent annual return,
and was a safe, conservative investment. Sierra also represented to Barbachano that an investment in
Fairfield was an opportunity for only a select number of investors.
16.

Unbeknownst to Barbachano, the Bank, by and through Sierra and Dutkowski, only

began touting investment in Fairfield after Fairfield agreed to pay a “trailer fee” to the Bank in the amount
of one-half of one percent of each investment per year. The Bank failed to disclose to Barbachano the
payment of this “trailer fee” at any time. The Bank also failed to disclose to Barbachano that it only
agreed to market Fairfield after Fairfield agreed to pay the Bank the “trailer fee.”
17.

On February 2, 2004, on the recommendation of Sierra, upon which Barbachano

reasonably relied, Barbachano invested $300,000.00 in Fairfield.
18.

Also, in 2004 and 2005, Barbachano, through an investment account maintained with

UBS, invested approximately $100,000.00 in Fairfield.
19.

In or about January 2006, Barbachano transferred the investments she maintained at UBS

to AEBI, and as a result, approximately ninety-five (95) percent of Barbachano’s funds were managed by
the Bank.
20.

On or about February 17, 2006, Sierra and Dutkowski reviewed Barbachano’s

investments (see Exhibit C, attached hereto and incorporated herein) and recommended that the
investments in Fairfield be kept in Barbachano’s portfolio as a “risk reducer,” a recommendation upon
which Barbachano reasonably relied. See “Investment Proposal” dated February 2006, which is attached

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

hereto and incorporated herein as Exhibit D. Thereafter, the Bank would continue to recommend that
Barbachano maintain and increase her investment in Fairfield.
21.

In 2006, Barbachano decided to sell her residence in Florida. Sierra caused her husband,

John Naranjo and his company, Acqua International Reality, to act as Barbachano’s broker, thus
obtaining a commission from the sale of her residence.
22.

In June 2006, after receiving the net proceeds from the sale of Barbachano’s residence,

Sierra caused Barbachano to invest an additional $400,000.00 in Fairfield. However, The Bank did not
obtain Barbachano’s written authorization for this additional investment.
23.

Sierra and Dutkowski always touted the investment in Fairfield as a “risk reducer” for

Barbachano’s investment portfolio, representations upon which Barbachano reasonably relied.

For

example, and as stated above, in February 2006, Sierra and Dutkowski presented Barbachano with an
“Investment Proposal” that stated Fairfield was a “risk reducer.” See Exhibit D. Moreover, during their
conversations, Sierra and Dutkowski repeatedly told Barbachano that the investments in her portfolio
were safe, were suitable to her investment objectives and risk tolerance, and that the Bank properly
investigated and monitored those investments.
24.

However, during this time, neither Sierra nor Dutkowski advised Barbachano that

Fairfield was a feeder fund for Bernard L. Madoff Investments Securities, LLC (“BLMIS”), that the Bank
had received and was continuing to receive a “trailer fee” for the investment, and that the sole function of
Fairfield, other than raising money from investors and extracting healthy fees for its sponsor, Fairfield
Greenwich Group (“FGG”), was to turn over those investments to BLMIS, which was controlled by
Bernard L. Madoff.
25.

Furthermore, despite various representations made by Sierra and Dutkowski, as described

above, the Bank failed to conduct adequate due diligence concerning the Fairfield investment in violation
of both the Bank’s internal due diligence standards and those prevalent in its sector of the financial
industry. Specifically:
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

a. In violation of its own internal policies, the Bank recommended the Fairfield
investment without doing any initial or on-going due diligence on Fairfield’s subadvisor, BLMIS; and ,
b. The Bank ignored obvious red flags, which should have put it on notice – and which
made it reasonably foreseeable – that Madoff was engaged in a fraud, including but
not limited to:
i. BLMIS’ invariable positive monthly return and low standard deviation;
ii. The lack of any comparable product with comparative returns;
iii. The fact that BLMIS performed both execution and custodial functions with
the invested funds, which was exclusively controlled by Bernard Madoff;
iv. The fact that BLMIS failed to file required SEC Form 13-Fs prior to
February 2007, and, those that were filed after February 2007, evidenced
discrepancies between amounts reported and amounts the company was
supposedly managing;
v. The fact that financial institutions investing with BLMIS, including the
Bank, were not generally allowed to go visit BLMIS for due diligence
purposes;
vi. The fact that BLMIS’ financial audits were conducted by a two-man firm,
Friedhling & Horowitz;
vii. The fact that BLMIS did not charge an administrative fee for its services or a
share of supposed profits;
viii. The fact that BLMIS did not allow any real-time electronic access to trading;
and

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

ix. The fact that BLMIS utilized outdated technology, including paper trading
confirmations, which were sent daily via U.S. mail to feeder funds, such as
Fairfield.
26.

In addition, the Bank failed to disclose that Fairfield’s due diligence concerning BLMIS

was similarly inadequate. For example, Fairfield failed to prepare any independent accounting report
regarding the design or operational effectiveness of the internal controls at BLMIS.
27.

Barbachano reasonably relied on the Bank’s representations, by and through Sierra and

Dutkowski, regarding Fairfield and had Barbachano been aware that those representations were false, she
would not have invested in Fairfield.
28.

Likewise, had Barbachano been aware that the Bank failed to conduct adequate due

diligence concerning the Fairfield investment, in violation of both the Bank’s internal due diligence
standards and those prevalent in its sector of the financial industry, that the Bank was receiving a “trailer
fee” from Fairfield and had only agreed to market Fairfield after Fairfield had agreed to pay the “trailer
fee,” and that Fairfield had failed to conduct adequate due diligence regarding BLMIS, Barbachano would
not have invested in Fairfield.
Lack of Suitability of Barbachano’s Portfolio Investments
29.

The Bank’s stated risk tolerance for Barbachano was always moderate conservative, with

an investment objective of capital preservation and growth. See Exhibit A. However, by June 2008, the
Bank, by and through Sierra and Dutkowski, had made substantial changes to the composition of
Barbachano’s portfolio, increasing the risk in the portfolio by substantially allocating Barbachano’s assets
to equities and alternative investments while simultaneously decreasing the amount of assets held in cash
and bonds. Thus, by June 2008, the allocation of Barbachano’s portfolio to cash and bonds was a mere

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

eleven (11) percent, that allocation of assets was unsuitable to Barbachano’s investment objective of
capital preservation and growth and her risk tolerance of moderate conservative. 2
30.

Specifically, on or about June 6, 20007, Sierra and Dutkowski met with Barbachano and

her husband, Hector Velasquez (“Velasquez”), in Mexico City.

During this meeting, Sierra and

Dutkowski recommended that Barbachano reallocate her assets based on then-existing market conditions,
while maintaining her position in Fairfield. Dutkowski and Sierra claimed that they would diversify her
portfolio to minimize risk, using an investment risk factor of “moderate conservative” for Barbachano’s
assets, and that Barbachano should expect earnings of five (5) to seven (7) percent for 2008. When
Velasquez asked what Barbachano’s losses could be, Dutkowski advised that in the worst of cases,
Barbachano could suffer losses of ten (10) to twelve (12) percent.
31.

During the June 2007 meeting, Barbachano reiterated to Sierra and Dutkowski that she

did not understand anything about investments and that she wanted to be clear that she did not want to
risk her money. This message was repeatedly told by Barbachano to Sierra and Dutkowski during
subsequent meetings on or about September 26, 2007 and June 2, 2008
32.

Moreover, during a February 28, 2008 meeting between Barbachano, Velasquez, Sierra,

Dutkowski, and Carla Borelly (Sierra’s assistant) in Mexico City, Dutkowski described current market
conditions, and Barbachano and Velasquez “reminded [Dutkowski and Sierra] to be cautious in the event
things turned worse instead of better.” See the Bank’s March 5, 2008 call report, authored by Sierra,
Exhibit E, attached hereto and incorporated herein. Also, a month earlier, on January 18, 2008, Sierra
advised Velasquez that Dutkowski had stated that the American market is “extremely undervalued and
oversold,” thus providing further assurances to Barbachano that her assets were not at risk and that the

2

The respective allocations of and investments contained in Barbachano’s portfolio for the
months of June 2006, December 2007, June 2008, December 2008, and September 2009 are set forth in
Exhibit F, attached hereto and incorporated herein.
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

Bank was monitoring her investments. However, by the summer of 2008, Sierra believed that market
conditions were highly volatile and that the markets were “going crazy.”
33.

Furthermore, during a June 2, 2008 meeting with Barbachano, Sierra, Velasquez, and

Dutkowski in Mexico City, Barbachano repeatedly asked Sierra if everything was under control with her
accounts, and Sierra continuously assured Barbachano that everything was fine and that Barbachano had
nothing to worry about since Sierra was taking care of everything.
34.

By the end of July 2008, over forty-two (42) percent of Barbachano’s portfolio was

invested in Signature Global Equities – an investment that the Bank rated four out of five on its risk
matrix (with five being the most risky and one being the most conservative). Moreover, by the end of
July 2008, over sixteen (16) percent of Barbachano’s portfolio was invested in Fairfield – an investment
that was a fraud and one in which the Bank had failed to conduct adequate due diligence or disclose to
Barbachano that it was receiving “trailer fees” for her continued investment in that product.
35.

In or about June 2008, Barbachano also advised Sierra that she wanted to withdraw

substantial funds from the portfolio managed by the Bank in order to purchase and renovate property in
Mexico. Barbachano’s withdrawal of funds from her portfolio would result in both Sierra receiving
reduced compensation from the Bank and the Bank collecting reduced fees from Barbachano for her
assets under management.
36.

Sierra discouraged Barbachano from withdrawing assets from her portfolio and, instead,

persuaded Barbachano to obtain a multi-million dollar loan from the Bank. Further, the Bank caused the
loan to be secured by the assets contained in Barbachano’s investment portfolio and, thus, increased the
volatility of the portfolio.
37.

In so doing, Sierra had Dutkowski prepared an analysis, based on past performance of

Barbachano’s portfolio, to persuade Barbachano that she should obtain the loan from the Bank rather than
liquidate a portion of her portfolio. Sierra also told Barbachano that she did not need to worry about

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

risking her money because Barbachano had a very secure portfolio. When Barbachano raised the
possibility of only taking a loan for half the amount, Sierra insisted that a full loan was the better course.
38.

It was unsuitable investment advice for Sierra to recommend that Barbachano leverage

her portfolio and obtain a multi-million dollar loan from the Bank when Sierra knew that the market was
experiencing extreme volatility. In addition, Sierra did not advise Barbachano that it was to her (Sierra’s)
financial benefit for Barbachano to obtain a loan from the Bank rather than reduce the amount of assets
contained in Barbachano’s portfolio.
The Fallout
39.

In 2008-09, Barbachano suffered losses of approximately forty-three (43) percent in her

portfolio, including all monies invested in Fairfield when Madoff’s Ponzi scheme was revealed on
December 11, 2008. Even excluding the investment in Fairfield, Barbachano lost approximately twentysix (26) percent of the value of her portfolio – losses that Barbachano would not have suffered if the Bank
had managed her portfolio consistent with Barbachano’s risk level and investment objective.
40.

In late August 2009, Sierra left the employment of the Bank. On August 19, 2009,

however, and prior to her departure from the Bank, Sierra advised Barbachano (while at Barbachano’s
home in Mexico) that she should sue the Bank because her assets had been mismanaged – specifically,
that there were suitability issues related to Barbachano’s portfolio and that the Bank was a “mess.” Sierra
also told Barbachano that she (Sierra) did not obtain written authorization from Barbachano for many of
the investments made and sold by the Bank on her behalf, as she was required to obtain, and failed to
make changes to the trust, as Barbachano had requested. Further, upon Sierra’s departure from the Bank,
she failed to give Barbachano documents that Barbachano had previously requested.
41.

On or about September 9, 2009, the Bank, by and through its representative and

Barbachano’s new relationship manager, Jose del Vecchio (“Del Vecchio”), met with Barbachano and
Velasquez in Mexico City. Del Vecchio told Barbachano that her portfolio had been mismanaged.
Rather than having a moderate conservative portfolio, many of her assets had actually been placed in
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

high-risk investments and Barbachano’s portfolio was actually “aggressive,” which was the reason she
had lost so much money. Del Vecchio also criticized Sierra’s management of Barbachano’s account.
42.

In October 2009, Del Vecchio, along with Dutkowski, recommended a new allocation of

Barbachano’s remaining assets to align her portfolio with her investment objectives. The proposal
reduced Barbachano’s investment in equities and increased her position in fixed income assets, which
would re-allocate the composition of the portfolio to make it more conservative. The Bank, by and
through Del Vecchio and Dutkowski, proposed that Barbachano’s investment in Signature Global
Securities be reduced by $1.2 million (reducing her equity assets from approximately fifty-one (51)
percent of her portfolio to approximately twenty-four (24) percent of her portfolio) and that she invest
$1.7 million in PIMCO Global Bonds (increasing her fixed income assets from approximately twentythree (23) percent of her portfolio to approximately sixty-one (61) percent of her portfolio). A copy of the
October 2009 “Investment Proposal” is attached hereto and incorporated herein as Exhibit G.
43.
assets.

Thereafter, Barbachano attempted to end her relationship with the Bank and transfer her

However, the Bank, by and through Del Vecchio, attempted to have Barbachano execute

documents releasing the Bank from any liability for the losses that she had suffered.

The Bank also

failed to provide Barbachano with account documentation that she repeatedly requested. And, to release
her assets, the Bank demanded that Barbachano repay her loan full, which Barbachano ultimately did in
order to transfer her assets.
44.

Finally, in or about April 2010, Barbachano closed her accounts with the Bank.
COUNT I

INVESTMENT FRAUD – VIOLATION OF FLORIDA STAT. §§ 517.301 & 517.211(2)
(AGAINST ALL DEFENDANTS)
45.

Barbachano realleges paragraphs 1-44 as if fully set forth herein.

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

46.

This is an action against the Defendants for violations of the anti-fraud provisions of

section 517.301 of the Florida Statutes, part of the Florida Securities and Investors Protection Act (the
“Act”), which seeks recovery pursuant to section 517.211(2) of the Florida Statutes, all part of the Act.
47.

Section 517.301 provides in relevant part that:

It is unlawful and a violation of the provisions of [Chapter 517] for a person:
(a) In connection with the rendering of any investment advice or in connection with the offer,
sale, or purchase of any investment . . ., directly or indirectly:
1. To employ any device, scheme, or artifice to defraud;
2. To obtain money or property by means of any untrue statement of a material fact or
any omission to state a material fact necessary in order to make the statements made, in
the light of the circumstances under which they were made, not misleading; or
3. To engage in any transaction, practice, or course of business which operates or would
operate as a fraud or deceit upon a person.
48.

Section 517.211(2), Fla. Stat., also provides in relevant part:

Any person purchasing or selling a security in violation of s. 517.301, and every director,
officer, partner, or agent of or for the purchaser or seller, if the director, officer, partner,
or agent has personally participated or aided in making the sale or purchase, is jointly and
severally liable to the person selling the security or purchasing the security from such
person in an action for rescission, if the plaintiff still owns the security, or for damages, if
the plaintiff has sold the security.
49.

The shares of Fairfield were a “security” as that term is used in the Act. In addition, the

Defendants rendered investment advice in connection with Fairfield and other securities and investments
in Barbachano’s investment portfolio, which also included securities with Global Signature Equities.
50.

Defendants, by and through Bank employees working from the Bank’s Miami, Florida

location, rendered unsuitable investment advice to Barbachano in connection with the purchase and sale
of securities in her investment portfolio, causing that portfolio to be allocated among investments
unsuited to her investment objectives and risk tolerance. In so doing, Defendants employed a device,
scheme, or artifice to defraud Barbachano; Defendants obtained money or property by means of untrue
statements of a material fact and/or failure to state material facts necessary in order to make the
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

statements made, in the light of the circumstances under which they were made, not misleading; and/or
Defendants engaged in a transaction, practice, or course of business which operated or would operate as a
fraud or deceit upon Barbachano.
51.

The Defendants knew or should have known that the allocation of investments were

unsuitable for Barbachano; the Defendants recommended the investments to Barbachano notwithstanding
the unsuitability thereof and her lack of investment sophistication; the Defendants, fraudulently and/or
negligently made material misrepresentations of material facts and failed to disclose material information
relating to the suitability of the investments that they recommended; and the Defendants often made
investment decisions without obtaining Barbachano’s written authorization.
52.

In particular, by June 2008, the Bank, by and through Sierra and Dutkowski, had made

substantial changes to the composition of Barbachano’s portfolio, increasing the risk in the portfolio by
allocating the vast majority – eighty-nine (89) percent – of Barbachano’s assets to equities and alternative
investments while decreasing the amount of assets held in cash and bonds. Thus, by June 2008, the
allocation of Barbachano’s portfolio to cash and bonds had been reduced. That reallocation of assets was
unsuitable to Barbachano’s investment objective of capital preservation and growth and her risk tolerance
of moderate conservative.
53.

Moreover, by July 2008, over forty-two (42) percent of Barbachano’s portfolio was

invested in Signature Global Equities – an investment that the Bank rated four out of five on its risk
matrix (with five being the most risky and one being the most conservative). Also, by July 2008, over
sixteen (16) percent of Barbachano’s portfolio was invested in Fairfield – an investment that was a fraud
and one in which the Bank had failed to conduct adequate due diligence, monitor, or disclose to
Barbachano that it was receiving “trailer fees” for her purchase and continued investment in that security.
54.

Furthermore, in 2008, the Defendants caused Barbachano to obtain a multi-million dollar

loan from the Bank rather than liquidate a portion of her portfolio. It was unsuitable investment advice
for Sierra to recommend that Barbachano leverage her investment portfolio and obtain a multi-million
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

dollar loan from the Bank when Sierra knew that the market was experiencing extreme volatility. In
addition, Sierra did not advise Barbachano that it was to her (Sierra’s) financial benefit for Barbachano to
obtain a loan from the Bank rather than reduce the amount of assets under management in Barbachano’s
portfolio.
55.

The Defendants knew or should have known that the recommendations made to

Barbachano were unsuited to her investment objectives and risk tolerance.
56.

The Defendants acted or purported to act as a fiduciary to Barbachano in rendering her

investment advice in connection with the purchase and sale of securities in her investment portfolio.
57.

Barbachano justifiably relied upon Defendants’ misrepresentations and omissions,

following their investment recommendations and decisions in connection with the purchase and sale of
securities in her investment portfolio.
58.

In addition, the Defendants acted as an undisclosed agent of Fairfield in connection with

Barbachano’s purchase of that security and the Bank’s recommendation that Barbachano maintain her
investment in Fairfield, obtaining hidden “trailer fees” from Fairfield for Barbachano’s purchase and
continued investment in the Fairfield securities.
59.

The Defendants also failed to conduct adequate due diligence and ignored obvious red

flags in connection with their recommendation that Barbachano purchase and maintain her investment in
Fairfield securities, while fraudulently and/or negligently representing to Barbachano that they had
reviewed in detail all the investments recommended to her, and while fraudulently and/or negligently
touting the investment in Fairfield as a “risk reducer” for Barbachano’s investment portfolio, and
fraudulently and/or negligently representing that Fairfield had “no volatility,” would provide a six (6) to
seven (7) percent annual return, and was a safe, conservative investment, when the Bank failed to conduct
any due diligence to make and/or verify these representations.
60.

Furthermore, the Defendants’ failure to disclose to Barbachano the “trailer fees” obtained

from Fairfield constitutes an omission of a material fact in connection with the purchase or sale of a
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

security, and the Defendants acted fraudulently and/or negligently in failing to the disclose that fact in
order to conceal from Barbachano their material misrepresentations, lack of due diligence, hidden
financial incentive, and breach of fiduciary duties in connection with Barbachano’s purchase of, and
continued investment in the Fairfield securities.
61.

Barbachano justifiably relied upon Defendants’ misrepresentations and omissions with

regard to the Defendants’ recommendation to purchase and to continue to invest in the Fairfield securities.
62.

Barbachano has suffered substantial damages as a result of Defendants’ material

omissions and false and/or negligent misrepresentations of material facts.
63.

Likewise, Barbachano has suffered substantial damages as a result of Defendants’ failure

to take reasonable steps to substantiate the investment recommendations made to her by conduting due
diligence, which recommendations caused and induced her investment losses.
WHEREFORE, Plaintiff, Joaquina Teresa Barbachano Herrero, demands judgment against
Defendants for damages, prejudgment interest, attorneys’ fees pursuant to Section 517.211(6) of the
Florida Statutes and costs, and for such other relief as the Court deems just and proper.
COUNT II
BREACH OF FIDUCIARY DUTY
(AGAINST ALL DEFENDANTS)
64.

Barbachano realleges paragraphs 1-44 as if fully set forth herein.

65.

This is an action against the Defendants for breach of fiduciary duty.

66.

Defendants entered into and had a fiduciary relationship with Barbachano, and

Defendants. Barbachano and the Defendants also shared a relationship whereby Barbachano reposed her
trust and confidence in Defendants regarding their investment recommendations and decisions.

In

particular, Defendants rendered investment advice to Barbachano and directed her investments and
finances. Moreover, Sierra became involved in all aspects of Barbachano’s investments and finances, and
Sierra befriended Barbachano, obtaining Barbachano’s trust and confidence in Sierra’s recommendations.
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

The Defendants, by and through Sierra and Dutkowski, knew Barbachano’s investment objectives and
risk tolerance. The Defendants, by and through Sierra and Dutkowski, made continuing representations
and recommendations regarding the investments that they touted to Barbachano, the due diligence that the
Defendants performed with regard to those investments, the Defendants’ continued monitoring of the
investments contained in Barbachano’s portfolio, and the safety and security of her portfolio investments.
The Defendants further undertook to make recommendations regarding whether to liquidate or not assets
contained in Barbachano’s portfolio.
67.

As such, Defendants owed Barbachano fiduciary duties of loyalty and care, including

duties to make suitable investment recommendations and decisions only after conducting reasonable due
diligence, researching potential investments, and disclosing all material facts, including the risks involved
in any investment.
68.

Defendants also owed Barbachano fiduciary duties to render investment and financial

advice suitable to her investment objectives and risk tolerance, including suitable recommendations
regarding the asset allocations contained in Barbachano’s portfolio.

The Defendants further owed

Barbachano fiduciary duties to review the investments contained in her investment portfolio, to render
suitable recommendations regarding the increase or liquidation of assets in her investment portfolio,
including whether to borrow against and leverage those assets, to continuously monitor the investments
contained in Barbachano’s portfolio, and to cause the purchase or sale of investments on behalf of
Barbachano only after obtaining Barbachano’s written authorization.
69.

In addition, Defendants owed Barbachano a fiduciary duty not to make material

misrepresentations of fact or to omit material facts, including the disclosure of any facts that would give
rise to a conflict of interest.
70.

Defendants breached the fiduciary duties that they owed to Barbachano by causing her to

make investments unsuited to her investment objectives and risk tolerance, including the failure to
allocate investments consistent with those investment objectives and risk tolerance, by causing
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

Barbachano to obtain a multi-million dollar loan from the Defendants rather than liquidating part of her
investment portfolio, by failing to disclose in connection with the loan that it was to Sierra’s financial
benefit that Barbachano obtain the loan rather than liquidate part of her portfolio, and by often making
investment decisions without obtaining Barbachano’s written authorization, including the purchase of
Fairfield securities. The Defendants knew or should have known that the allocation of investments
contained in Barbachano’s investment portfolio was unsuitable for her investment objectives and risk
tolerance; the Defendants recommended investments to Barbachano notwithstanding the unsuitability
thereof and her lack of investment sophistication; and the Defendants fraudulently and/or negligently
made material misrepresentations and failed to disclose material information relating to the suitability of
the investments it recommended and the recommendation that Barbachano leverage her portfolio and
obtain a multi-million dollar loan in 2008 rather than liquidate part of her portfolio.
71.

Furthermore, in breach of their fiduciary duties, the Defendants ignored obvious red

flags, failed to conduct reasonable due diligence, disclose material facts, and adequately research and/or
disclose the risks involved in Fairfield, which investment Defendants fraudulently and/or negligently
touted as a “risk reducer” for Barbachano’s investment portfolio and fraudulently and/or negligently
represented as having “no volatility,” as providing a six (6) to seven (7) percent annual return, and as a
safe, conservative investment.
72.

The Defendants, in breach of their fiduciary duties, also failed to monitor Barbachano’s

investments, including her investment in Fairfield.
73.

In addition, the Defendants breached their fiduciary duties of care and loyalty that they

owed to Barbachano by accepting “trailer fees” from Fairfield and by failing to disclose the same to
Barbachano. In so doing, the Defendants acted as an agent of Fairfield and under a conflict of interest
that the Defendants had a duty to disclose to Barbachano.
74.

Barbachano justifiably relied upon Defendants’ investment advice, expertise, and skill

and she suffered substantial damages as a result.
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

75.

Likewise, Barbachano has suffered substantial damages as a result of Defendants’ failure

to take reasonable steps to substantiate the investment recommendations made to her, which
recommendations caused and induced her investment losses.
76.

Defendants’ breach of fiduciary duty constitutes intentional misconduct or gross

negligence, as those terms are defined in section 768.72, Fla. Stat. Accordingly, Barbachano reserves the
right to amend the Complaint to seek punitive damages.
WHEREFORE, Plaintiff, Joaquina Teresa Barbachano Herrero, demands judgment against
Defendants for damages, costs, prejudgment interest, and for such other relief as the Court deems just and
proper.
COUNT III
FRAUD, INCLUDING FRAUDULENT CONCEALMENT
(AGAINST ALL DEFENDANTS)
77.

Barbachano realleges paragraphs 1-44 as if fully set forth herein.

78.

This is an action against Defendants for common law fraud, including fraudulent

concealment.
79.

Defendants acted as investment advisors for Barbachano.

In so doing, Defendants

rendered investment advice to Barbachano and directed her investments and finances. Moreover, Sierra
became involved in all aspects of Barbachano’s investments and finances, and Sierra befriended
Barbachano, obtaining Barbachano’s trust and confidence in Sierra’s recommendations. The Defendants,
by and through Sierra and Dutkowski, knew Barbachano’s investment objectives and risk tolerance. The
Defendants, by and through Sierra and Dutkowski, made continuing representations and
recommendations regarding the investments that they touted to Barbachano, the due diligence that the
Defendants performed with regard to those investments, the Defendants’ continued monitoring of the
investments contained in Barbachano’s portfolio, and the safety and security of her portfolio investments.

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

The Defendants further undertook to make recommendations regarding whether to liquidate or not assets
contained in Barbachano’s portfolio.
80.

Accordingly, Defendants owed Barbachano duties to render investment and financial

advice suitable to her investment objectives and risk tolerance, including suitable recommendations
regarding the asset allocations contained in Barbachano’s portfolio.

The Defendants further owed

Barbachano duties to review the investments contained in her investment portfolio, to render suitable
recommendations regarding the increase or liquidation of assets in her investment portfolio, including
whether to borrow against and leverage those assets, to continuously monitor the investments contained in
Barbachano’s portfolio, and to cause the purchase or sale of investments on behalf of Barbachano only
after obtaining Barbachano’s written authorization.
81.

In addition, Defendants owed Barbachano duties not to make fraudulent, material

misrepresentations of fact or to omit material facts, including the disclosure of any facts that would give
rise to a conflict of interest, with respect to any and all of the duties that Defendants undertook on behalf
of Barbachano.
82.

Defendants fraudulently misrepresented material facts and fraudulently concealed and

failed to state material facts necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading. Specifically, the Defendants, by and through
Sierra and Dutkowski, acting with the intent to deceive and defraud, misrepresented to Barbachano that:
a. The investment recommendations made to her were consistent with her investment
objectives and moderate conservative risk tolerance when, in fact, the investment
recommendations resulted in an aggressive investment portfolio, unsuited to
Barbachano’s investments objective and risk tolerance;
b. Obtaining a multi-million dollar loan from the Defendants that leveraged the assets
contained in Barbachano’s portfolio, rather than liquidating part of that portfolio, was
suitable to her investment objective and risk tolerance when, in fact, it was not;
c. The Bank performed adequate due diligence with regard to all recommended
investments, including Fairfield, when, in fact, the Bank failed to conduct adequate
due diligence; and
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

d. The Fairfield investment was a “risk reducer” for Barbachano’s investment portfolio
and that the Fairfield investment had “no volatility,” provided a six (6) to seven (7)
percent annual return, and was a safe, conservative investment.
83.

The Defendants also fraudulently concealed and failed to disclose material facts to

Barbachano and ignored red flags, further demonstrating its fraudulent intent with regard to the
misrepresentations set forth above, including the Defendants’ failure to disclose that:
a. The Bank received a “trailer fee” from Fairfield;
b. The Bank was acting as an agent of Fairfield;
c. The Bank only agreed to tout Fairfield to its clients, including Barbachano, after
Fairfield agreed to pay the “trailer fee” to the Bank; and
d. Sierra financially benefitted from Barbachano obtaining a multi-million dollar loan
from the Bank rather than liquidating a part of her portfolio.
84.

Barbachano justifiably relied upon Defendants’ fraudulent misrepresentations, following

the investment recommendations made by Sierra and Dutkowski.
85.

As a direct and proximate result of the Defendants’ fraudulent misrepresentations,

concealment, and omissions, Barbachano has suffered substantial damages.
86.

Defendants’ conduct was so reckless or wanting in care that it constituted a conscious

disregard or indifference to the rights of Barbachano. Accordingly, Barbachano reserves the right to
amend the Complaint to seek punitive damages.
87.

WHEREFORE, Plaintiff, Joaquina Teresa Barbachano Herrero, demands judgment

against Defendants for damages, costs, prejudgment interest, and for such other relief as the Court deems
just and proper.
COUNT IV
GROSS NEGLIGENCE
(AGAINST ALL DEFENDANTS)
88.

Barbachano realleges paragraphs 1-44 as if fully set forth herein.

89.

This is an action against the Defendants for gross negligence.
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

90.

Defendants acted as investment advisors for Barbachano.

In so doing, Defendants

rendered investment advice to Barbachano and directed her investments and finances. Moreover, Sierra
became involved in all aspects of Barbachano’s investments and finances, and Sierra befriended
Barbachano, obtaining Barbachano’s trust and confidence in Sierra’s recommendations. The Defendants,
by and through Sierra and Dutkowski, knew Barbachano’s investment objectives and risk tolerance. The
Defendants, by and through Sierra and Dutkowski, made continuing representations and
recommendations regarding the investments that they touted to Barbachano, the due diligence that the
Defendants performed with regard to those investments, the Defendants’ continued monitoring of the
investments contained in Barbachano’s portfolio, and the safety and security of her portfolio investments.
The Defendants further undertook to make recommendations regarding whether to liquidate or not assets
contained in Barbachano’s portfolio.
91.

Accordingly, Defendant owed Barbachano duties of care to make suitable investment

recommendations and decisions only after conducting reasonable due diligence, researching potential
investments, and disclosing all material facts, including the risks involved in any investment.
92.

Defendants also owed Barbachano duties to render investment and financial advice

suitable to her investment objectives and risk tolerance, including suitable recommendations regarding the
asset allocations contained in Barbachano’s portfolio. The Defendants further owed Barbachano duties to
review the investments contained in her investment portfolio, to render suitable recommendations
regarding the increase or liquidation of assets in her investment portfolio, including whether to borrow
against and leverage those assets, to continuously monitor the investments contained in Barbachano’s
portfolio, and to cause the purchase or sale of investments on behalf of Barbachano only after obtaining
Barbachano’s written authorization.
93.

In addition, Defendants owed Barbachano duties not to make material misrepresentations

of fact or to omit material facts, including the disclosure of any facts that would give rise to a conflict of
interest.
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

94.

Defendants breached the duties that they owed to Barbachano and were grossly negligent

by causing her to make investments unsuited to her investment objectives and risk tolerance, including the
failure to allocate investments consistent with those investment objectives and risk tolerance, by causing
Barbachano to obtain a multi-million dollar loan from the Defendants rather than liquidating part of her
investment portfolio, by failing to disclose in connection with the loan that it was to Sierra’s financial
benefit that Barbachano obtain the loan rather than liquidate part of her portfolio, and by often making
investment decisions without obtaining Barbachano’s written authorization, including the purchase of
Fairfield securities. The Defendants knew or should have known that the allocation of investments
contained in Barbachano’s investment portfolio was unsuitable for her investment objectives and risk
tolerance; the Defendants recommended investments to Barbachano notwithstanding the unsuitability
thereof and her lack of investment sophistication; and the Defendants were grossly negligent in making
material misrepresentations and failing to disclose material information relating to the suitability of the
investments it recommended and the recommendation that Barbachano leverage her portfolio and obtain a
multi-million dollar loan in 2008 rather than liquidate part of her portfolio.
95.

Furthermore, in breach of their duties owed to Barbachano, the Defendants were grossly

negligent in failing to conduct reasonable due diligence, disclose material facts, and adequately research
and/or disclose the risks involved in Fairfield, which investment Defendants negligently touted as a “risk
reducer” for Barbachano’s investment portfolio and negligently represented as having “no volatility,” as
providing a six (6) to seven (7) percent annual return, and as a safe, conservative investment.
96.

The Defendants, in breach of their duties owed to Barbachano, were also grossly

negligent in failing to monitor Barbachano’s investments, including her investment in Fairfield.
97.

In addition, the Defendants breached their duties owed to Barbachano and were grossly

negligent by accepting “trailer fees” from Fairfield and by failing to disclose the same to Barbachano. In
so doing, the Defendants acted as an agent of Fairfield and under a conflict of interest that the Defendants
had a duty to disclose to Barbachano.
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

98.

Barbachano justifiably relied upon Defendants’ investment advice, expertise, and skill

and she suffered substantial damages as a result.
99.

Likewise, Barbachano has suffered substantial damages as a result of Defendants’ failure

to take reasonable steps to substantiate the investment recommendations made to her, which
recommendations caused and induced her investment losses.
100.

As a direct and proximate result of Defendants’ gross negligence, Barbachano has

suffered damages.
101.

Defendants’ conduct was so reckless or wanting in care that it constituted a conscious

disregard or indifference to the rights of Barbachano. Defendants’ conduct constitutes gross negligence,
as defined in section 768.72, Fla. Stat.

Accordingly, Barbachano reserves the right to amend the

Complaint to seek punitive damages.
WHEREFORE, Plaintiff, Joaquina Teresa Barbachano Herrero, demands judgment against
Defendants for damages, costs, prejudgment interest, and for such other relief as the Court deems just and
proper.
COUNT V
NEGLIGENT MISREPRESENTATION
(ALL DEFENDANTS)
102.

Barbachano realleges paragraphs 1-44 as if fully set forth herein.

103.

This is an action against the Defendants for negligent misrepresentation.

104.

Defendants acted as investment advisors for Barbachano.

In so doing, Defendants

rendered investment advice to Barbachano and directed her investments and finances. Moreover, Sierra
became involved in all aspects of Barbachano’s investments and finances, and Sierra befriended
Barbachano, obtaining Barbachano’s trust and confidence in Sierra’s recommendations. The Defendants,
by and through Sierra and Dutkowski, knew Barbachano’s investment objectives and risk tolerance. The
Defendants, by and through Sierra and Dutkowski, made continuing representations and
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

recommendations regarding the investments that they touted to Barbachano, the due diligence that the
Defendants performed with regard to those investments, the Defendants’ continued monitoring of the
investments contained in Barbachano’s portfolio, and the safety and security of her portfolio investments.
The Defendants further undertook to make recommendations regarding whether to liquidate or not assets
contained in Barbachano’s portfolio.
105.

Accordingly, Defendants owed Barbachano duties to render investment and financial

advice suitable to her investment objectives and risk tolerance, including suitable recommendations
regarding the asset allocations contained in Barbachano’s portfolio.

The Defendants further owed

Barbachano duties to review the investments contained in her investment portfolio, to render suitable
recommendations regarding the increase or liquidation of assets in her investment portfolio, including
whether to borrow against and leverage those assets, to continuously monitor the investments contained in
Barbachano’s portfolio, and to cause the purchase or sale of investments on behalf of Barbachano only
after obtaining Barbachano’s written authorization.
106.

In addition, Defendants owed Barbachano duties not to make material misrepresentations

of fact or to omit material facts, including the disclosure of any facts that would give rise to a conflict of
interest, with respect to any and all of the duties that Defendants undertook on behalf of Barbachano.
107.

Defendants negligently misrepresented material facts and negligently failed to state

material facts necessary in order to make the statements made, in the light of the circumstances under
which they were made, not misleading.

Specifically, the Defendants, by and through Sierra and

Dutkowski, negligently represented to Barbachano that:
a. The investment recommendations made to her were consistent with her investment
objectives and moderate-conservative risk tolerance when, in fact, the investment
recommendations resulted in an aggressive investment portfolio, unsuited to
Barbachano’s investments objective and risk tolerance;
b. Obtaining a multi-million dollar loan from the Defendants that leveraged the assets
contained in Barbachano’s portfolio, rather than liquidating part of that portfolio, was
suitable to her investment objective and risk tolerance when, in fact, it was not;
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

c. The Bank performed adequate due diligence with regard to all recommended
investments, including Fairfield, when, in fact, the Bank failed to conduct adequate
due diligence; and
d. The Fairfield investment was a “risk reducer” for Barbachano’s investment portfolio
and that the Fairfield investment had “no volatility,” provided a six (6) to seven (7)
percent annual return, and was a safe, conservative investment.
108.

The Defendants also failed to disclose material facts to Barbachano and ignored obvious

red flags, further demonstrating its negligent scienter with regard to the misrepresentations set forth
above, including the Defendants’ failure to disclose that:
a. The Bank received a “trailer fee” from Fairfield;
b. The Bank was acting as an agent of Fairfield;
c. The Bank only agreed to tout Fairfield to its clients, including Barbachano, after
Fairfield agreed to pay the “trailer fee” to the Bank; and
d. Sierra financially benefitted from Barbachano obtaining a multi-million dollar loan
from the Bank rather than liquidating a part of her portfolio.
109.

Barbachano justifiably relied upon Defendants’ negligent misrepresentations, following

the investment recommendations made by Sierra and Dutkowski.
110.

As a direct and proximate result of the Defendants’ negligent misrepresentations and

omissions, Barbachano has suffered substantial damages.
111.

Defendants’ conduct was so reckless or wanting in care that it constituted a conscious

disregard or indifference to the rights of Barbachano. Defendants’ conduct constitutes gross negligence,
as defined in section 768.72, Fla. Stat.

Accordingly, Barbachano reserves the right to amend the

Complaint to seek punitive damages.
WHEREFORE, Plaintiff, Joaquina Teresa Barbachano Herrero, demands judgment against
Defendants for damages, costs, prejudgment interest, and for such other relief as the Court deems just and
proper.

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

COUNT VI
NEGLIGENCE
(ALL DEFENDANTS)
112.

Barbachano realleges paragraphs 1-44 as if fully set forth herein. This is an action for

negligence against Defendants.
113.

At all material times, Defendants owed a duty to Plaintiff to exercise reasonable care.

114.

Defendants breached that duty to exercise reasonable care and failed to use the care that a

reasonably careful person would use under like circumstances, by among other things, doing or failing to
do the following:
a.

Making units in the Fairfield Sentry Fund available to Plaintiff and other

customers to purchase and recommending the purchase of units of the Fairfield Sentry Fund to Plaintiff
and other customers while:
i.

Knowing that Madoff Securities was functioning in the multiple roles of

investment manager, broker, and custodian for the assets of Fairfield Sentry and, therefore, knowing that
no independent third party served as neither the investment manager, the broker for the supposed
execution of trades, or the custodian and no independent means existed for, among other things, verifying
the accuracy of the trades being reported by monthly statements and trade confirmation, the accuracy of
the reports of the value of the assets that supposedly were under management and held in custody, and the
accuracy of the performance record being reported;.
ii.

Knowing that financial institutions that invest in Fairfield Sentry were

not allowed to go and visit Madoff or Madoff Securities for due diligence purposes and knowing that
American Express Bank would not be permitted to speak with Madoff about any aspect of Madoff’s
management, brokerage, and custody of the assets of Fairfield Sentry;
iii.

Failing to conduct a reasonable due diligence investigation directly of

Madoff Securities including, but not limited to, failing to review documents and actual trade tickets,
Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

failing to conduct reasonable due diligence interviews of Madoff and the alleged traders and analysts who
supposedly implemented the strategy, and failing to observe them during trading hours;
iv.

Failing to conduct reasonable due diligence investigation into the alleged

due diligence (both initial and ongoing) and supervision conducted by Fairfield Greenwich and Fairfield
Sentry into Madoff, Madoff Securities, Madoff’s two-person accounting firm, the counterparties on the
alleged option trades, the alleged trading, the review of alleged trades, and the systems to prevent fraud
and the gaps in those systems as actually being implemental;
v.

Failing to conduct a reasonable due diligence investigation into the

performance record being reported by Fairfield Sentry and whether it was reasonable given the reports in
industry publications, the nature of the split-strike conversion strategy, the movement of the S&P 100,
and the negative skew of put to call premiums on the S&P since 1986 as published by the Chicago Board
of Options Exhange (“CBOE”);
vi.

Failing to conduct a reasonable due diligence investigation into the split

strike conversion strategy as it was supposedly being employed by Madoff for Fairfield Sentry;
vii.

Failing to conduct a reasonable due diligence investigation of the alleged

counter-parties on the over-the-counter options allegedly being purchased and sold by Madoff for
Fairfield Sentry, including an investigation of the identity of these counter-parties, interview of the
counter-parties, review of the contracts for the options with these counter-parties, and investigation of the
financial wherewithal of these counter-parties to perform their obligations under the option agreements;
viii.

Failing to conduct a reasonable due diligence investigation of the two-

person public accounting firm hired by Madoff to audit and report on the trading conducted for Fairfield
Sentry and the other feeder funds;
ix.

Failing to communicate to its relationship managers and investment

specialists the essential facts relating to the due diligence investigation, which, if so communicated,

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

would have prevented relationship managers and investment specialists from recommending Fairfield
Sentry;
x.

Failing to recognize as part of its due diligence investigation that a new

version of the Private Placement Memorandum removed all references to Madoff and Madoff Securities
and their multiple roles as the investment manager, the broker, and the custodian;
xi.

Failing to recognize that since 1986 the premiums for equidistant puts on

the S&P 500 Index have been higher than equidistant calls, which is known and published on the website
of the CBOE as the Skew Index, and that therefore, the carry neutral explanation given by Madoff was
impossible and the performance record of Fairfield Sentry was highly suspect;
b.

Failing to monitor the Plaintiff’s investment in Fairfield Sentry after Defendant

recommended the purchase of the units of Fairfield Sentry to Plaintiff and other customers, including but
not limited to, failing to take or advise that action be taken in order to protect Plaintiff’s investment while;
i.

Knowing that Madoff Securities continued to function in the multiple

roles of investment manager, broker, and custodian for the assets of Fairfield Sentry with no independent
third party serving as either the investment manager, the broker for the supposed execution of trades, or
the custodian and with no independent means existing to, among other things, verify the accuracy of the
trades being reported by monthly statements and trade confirmations, the accuracy of the reports of the
value of the assets that supposedly were under management and held in custody, and the accuracy of the
performance record being reported;
ii.

Knowing that Madoff and Madoff Securities continued to prohibit

financial institutions that invested in Fairfield Sentry from being allowed to go and visit Madoff or
Madoff Securities for due diligence purposes and knowing that American Express Bank would not be
permitted to speak with Madoff about any aspect of Madoff’s management, brokerage, and custody of the
assets of Fairfield Sentry;

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

iii.

Failing to conduct a reasonable ongoing due diligence investigation

directly of Madoff Securities including, but not limited to, failing to review documents and actual trade
tickets, failing to conduct probing interviews of Madoff and the alleged traders and analysts who
supposedly implemented the strategy, and failing to observe them during trading hours;
iv.

Failing to conduct a reasonable ongoing due diligence investigation into

the alleged due diligence (both initial and ongoing) and supervision conducted by Fairfield Greenwich
and Fairfield Sentry into Madoff, Madoff Securities, Madoff’s two-person accounting firm, the
counterparties on the alleged option trades, the alleged trading, the review of alleged trades, and the
systems to prevent fraud and the gaps in those systems as actually being implemented;
v.

Failing to conduct a reasonable ongoing due diligence investigation into

the performance record being reported by Fairfield Sentry and whether itt was reasonably given the nature
of the split-strike conversion strategy, the movement of the S&P 100, and the negative skew of put to
callpremiums on the S&P 500 since 1986 as published by the Chicago Board of Options Exhange
(“CBOE”);
vi.

Failing to conduct a reasonable ongoing due diligence investigation into

the split strike conversion strategy as it was supposedly being employed by Madoff for Fairfield Sentry;
vii.

Failing to conduct a reasonable ongoing due diligence investigation of

the alleged counter-parties on the over-the-counter options allegedly being purchased and sold by Madoff
for Fairfield Sentry, including an investigation of the identity of these counter-parties, interviews of the
counter-parties, review of the contracts for the options with these counter-parties, and investigation of the
financial wherewithal of these counter-parties to perform their obligations under the option agreements;
viii.

Failing to conduct a reasonable ongoing due diligence investigation of

the two-person public accounting firm hired by Madoff to audit and report on the trading conducted for
Fairfield Sentry and the other feeder funds;

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

ix.

Failing to communicate to its relationship managers and investment

specialists the essential facts relating to the due diligence investigation, which, if so communicated,
would have prevented relationship managers and investment specialists from continuing to recommend
Fairfield Sentry;
x.

Failing to recognize as part of its due diligence investigation that a new

version of the Private Placement Memorandum removed all referenes to Madoff and Madoff Securities
and their multiple roles as the investment manager, the broker, and the custodian.
xi.

Continuing to fail to recognize that since 1986 the premiums for

equidistant puts on the S&P 500 Index have been higher than equidistant calls, which is known and
published on the website of the CBOE as the Skew Index, and that therefore, the carry neutral explanation
given by Madoff was completely fallacious and the performance record of Fairfield Sentry was highly
suspect;
xii.

Failing at a meeting on April 15, 2008, with Madoff to recognize that the

“asymmetric” profit profile described by Madoff was impossible since 1986, failing to question Madoff
competently and thoroughly about his strategy and the scope of this supposed assets under management,
failing to question Madoff competently and thoroughly about the systems in place to prevent fraud and
the gaps in those systems as actually being implemented; and failing to send personnel to the meeting
who possessed an adequate basic knowledge of the equity and over-the-counter options markets to
understand that Madoff’s explanations made no sense.
115.

As a direct and proximate result of the foregoing negligence of Defendants, Plaintiff

suffered damages in the amount of the investment made by Plaintiff in Fairfield Sentry and interest
thereon.

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

Herrero v. Standard Chartered Bank International (Americas) Limited, et al., 1:11-cv-03553-VM
Master File No. 1:09-cv-00118-VM-THK

WHEREFORE, Plaintiff demands judgment against Defendants for compensatory damages, plus
pre-judgment interest, costs and for such further relief as the Court deems just and proper.

PLAINTIFF’S DEMAND FOR JURY TRIAL
116.

Plaintiff demands a trial by jury on all issues so triable of right by a jury.

Respectfully submitted,
By: /s/ H. Eugene Lindsey III, Esq.
H. Eugene Lindsey III
Florida Bar No. 130338
New York Bar No. 2421923
[e-mail]
KATZ BARRON SQUITERO FAUST
2699 S. Bayshore Drive, 7th Floor
Miami, Florida 33133-5408
Telephone: [phone]
Facsimile: [phone]
Attorneys for Plaintiff

Katz, Barron, Squitero, Faust, Friedberg, English & Allen, P.A.
2699 S. Bayshore Drive, Seventh Floor, Miami, FL 33133 [phone]; [phone]

IPMHIPICAPI

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Pp'opoeel PeepeI'e(1 Eoz
6P.'neve 4652
PeepsI;ed by JeIvIifeI Siena
Tel. (305) 530 - 2558
Peesented in July 25, 2002

TB000645
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Objectives

Your Objectives
Current Asset Allocation

Proposed Asset AHocation
Current Curretrfcy Exposure

Proposed Currency Exposure
Proposed AHB Portfolio

Proposed AEB Investment and Details

AEB Investment Rationale

9,

This proposal is a tuoi to assist you and your iketauonstdp Manager tn developing your current and/or long. tenn
invesrmrnt strategy io using this propnssl, please rernenrhrc thc fofloudngtmpnrctnt
points. Thc proposed
A@et Allc cation and prnposed ABB Pnrtfohn are based upon (1) your Eutancist gmrls anr! invcstntent eategocies
you wi lt to avoid or hrnlt; (2) thr drnr. fmmes of your Enanctsi gosh and (3) his totied
performance of major
catcgoncs of mv «trnenm anal stl B's ccortormcs erpests'orecasts shout Eutum long tcun performance of
tiuancid msrltctn Tl.ey show you potential comhinadons and pmpontons oEvarious tyttes of investments that
seek trs Inuvc 1'ou tovrsrd your gnancisl goals at a level of dsk acceptshle to lou '1'hcte is no guarantee that the
propos 3 asset siiocauons aad prnpomrl inveshncutts nit) perfoun as forecasted or ms tlrcy have. in th» past.
Ther. is ro gusmotee that peur gnanciat goals sv(tl hc met,

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Global I'iced income 01/01/95
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Btun Liq tuduy 5/31/93

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TB000684

DA'IP,. 7/5Q/Q4

CALL RPPOP;f

CLIENT/PROSPECT NAME:

DATE OF VISIT: 7/i8/Q4

/z-a-grx

Pablo Bxubachano - AUMS5. iMM
Isabel Barbaahsria —
ALJMS 3,5MM
c'r5 /gyo~/
Teresa Barbachano -AUM$ 2,gMM
Jose Antonio De Ands —AUMS llviM &t & r&7 g 5 p

Pl.ACE OF ML'ETING'esiaurant in Miami
PERSOiNS PRESENT; Jenrtifcr Sians
clients
PURPOSE OI' IEFTINGL 'The undersigned held a dinner with above-mentioned
wtule they were in Miami on. vacation. It had be«n a while since tbe undersigned
long-tiros
extmided an invitatian to the Bazbacliano family and their husbaiids/wives,
clients of the Banlc, Mr. Jose Antonio Dc Ands was m Miami as wall only for thc
weekend and did riot mined joining the gxoup for «linnez,

The uridersigned vrantcil io «xtend Lhe invitation as ihe'Bcrbachano family, especially
Pablo Barbs«hano, is negotiating the sale ol'the rest of the Elms in his lib~sty as weti as
the sale af teal estate property. Once the sale is done, fixnds received fzom thc sale of the
film" will be distributed amongst the 'I brothms and sisteis (Mr, I"xancisoo Barbachano
was not present),
Ci dFNT INFORlvIATION:
The Barbachruio faniiiy is doing avail, Pubic and iiis wife recently had a baby boy. The
first. for 'Pablo's secaml wife an«i:thc thizd for him. Isabel and Federico aro also doixig
tvell. Fedexico continues warl«ir g as a high exe«utive iro Grupo Birribo iii Mexico City,
Texesa arid Hector are happy mid doing well. 'I'hcy have been married now for one Veer+
snd seem to be doing well,

Pablo Barbachzino, 1"ablo commented, to the undersigried that he is in the middle of
nepotiatioas to sale property irnid in ivIexico, 1'roceeds from this sale vrill be added to the
account. IIe also meutioried that lie is scel&ing a buyer for tlie films left in his library. In
addition, hc is pur«hasirig invcstuicnt property in Miami with a. group of investors, They
already owned en apartment

building ir Cooomit Crrave and are loci«Ing to buy s. second

ane.
lnet eal'lier in Jiuie vdih Ayria Piouzi in Mexico Ciiy to discuss
i nsunirice. 5 le is interested in obmining life insurance to protect his second vdfe and
chilitrmi as well in tha «v«uL that hc dies, Pabio confirmed his interest in the insurance,
Lo
however, he does naL Lhiult that hc is able to do it immediately iis ho requiresliquidity
closes on the sale of
provide colltitcral Ior the finunciiig, He mentioned Llrat as soon as lie
ivir. Barbachana

the property land he would pi oceer1.

ll~
EXHIBIT

lnXHII8ll"Lt

,,p r't,

CQ NF I

DENT

I AL

L.

SCEL

I

EIBrbBChano

00000007

„

Barbachano,

2...

Isabel Barbachano; Isabel and. I'ederico are domg very wali, Federico worl«s as a high
executive for Grupo Jlitnbo an&1 he is dotng extretrtely weH. Pederico manages tbe
investmcnts I"or Isabel and controls distributions in. the account, Ifc is happy with the
asset ailocation in the portfolio and does not wish to ntake inrmediate changes. They do
not have a high spending pattern.
Teresa is still in the process of Inurning thc inveslment
mattagement ofher account, Hector, her husband, is helping her wlttt the int'onnntion
snd decisions although he is not an authotdzed signatory in the account, They recently
cams back front a vacsrson ro, Asia, winch they comtrlellted svas gleet., We are nor
mal«ing any Iuther changes in the portfolio since the ones implemented earlier this year
vvben oltr InvestlYlettt Specialist met with ilsem In January Jointly with the undersiglred,

Teresa Jgarbachano:

dose Antonio IJe Andm He was in. Mtsmi for a short visit sincehe lrad a court
appearance to make. Mr, De Ands. vras charged with public disorderly conduct bacl« in
March vvhite on vacation with his wife and other friend couple in Miami Seaclu Ee
claims he wss tmjusdy charged and hired a lawyer to represent him. in tbe case. Thc case
will probably bc dismtssed and charges dropped, according to tho lawyer, cs tlscre is no
evidence other thsr an ovensealous police force in South Beach. Of course„Mr. De Aoda
is concernerl and worried abourhis name and any probient that this tnay cause tor him
Mr, .lose Antonio De Ands cao be a goodsource of referral as he is s prominent Tax
Accountant in Mexico.

INVHSTMEbJTS:
All portfolios;ue fully invested atnt changes aro made at this time,

POLLOW-TJP:
Continuo fre«iuent contact with tbc Barbachsno family cs v cll as Ivlr. Jose Anlomo De

Ands.

itMNAME: .Jetuufcr Siena
SIGNATURE

CQNFIDENTIAI

SCEI T HariJSOhano

00000008

DATE: 2/24/06

CLIENT/PROSPECT NAME: Teresa Barbachana and Hector Velaztluez
DATE OP VISIT: 2/17/06

PLACE OF MEETING! Miami Office

PERSONS PRESENT! Jennifer Sierta snd John Dutkawskl

PURPOSE OP MEETING: Client visited the office for an Investment Presentation on
tire partfofio and the addition of assets transferred recently. After the meeting, the
undersigned invited the dli ents far lunch.

CLIENT INFORMATION:
Mrs. Barbachsno decided at the end af 2005 to transfer back to AEBI her partfolia held
at UBS. She had split her portfolio 50/50 back in 2002. However, she has been unhappy
for comet!me with ths tnatlagelnent and performance af the yottfolia at UBS,.

The!ransfer was camyletcd in Febnuuy (we still have one position to be received).
INVESTMENTS
Barbaohana aud hsr husband were very haypy with the 2005 portfolio results. The
Investment Presentation included ad&ion to cttisthg positions already held in the
portfolia and one new product- Glabal Emerging Short-Term Bond Fund, Clients
agmed ta sell the yasitians received fram UBS and invest said fhnds acconling to the
presentatiatt,
!'rs.

Clients were very unhappy to leatn the final bahnce received from UBS as they had
different expected amounts. They will discuss the differences with the RM which
managed that account.

FOLLOtvV

UP!

Process sll the changes to the pottfolia as agreed upam

RM NAME: Jennifer Sierra
SIGNA'I

I+8,

EXHIBIT

C
A Kl t:I ptit=

s IT In

t

T

t-tartvttwh~nn

AAAAAAtN

a,

ml

ba

s'm

~X@fAK.
Ibg

iuggu

~dl~ruII

(pi,

American Exl&rasa p rivals Bank is a global
marxslbig nnms used by ibmerioar

Express gunlr Lrd (a subsidiary of Amsnran Express
Coinpany) and ds subsidiaries

TB000891

We begin with a thorough assessment of your needs and goals, as determined through
American Express Private Bank's proprietary evaluation process. Investments are
selected with the goal of maximizing return and minimizing risk in accordance with each
investor's risk protile and time horizon.

oG~-

IX
UJ

3

NWW~~
reals

K

't. Conservative —
More concerned with preserving capital than maximizing capital gains,
Can tolerate infrequent, very moderate negative returns.
2. tVtoderate —
Seeks higher returns and, consequently, is able to tolerate several quarters
of negative returns through difl'icult phases of a market cycle.
Seeks maximum capital gains, and is able to tolerate more than one year
3. Aggressive —
of negative returns in exchange for the highest potential returns,
A'HI
R85

reossssz

~~~A"

'»

SIE

I

5

Based on your responses to the Investment Questionnaire

and our discussions, the
information below is our understanding
needs, VVe invite you to teil us what
of your
items you would like to discuss further and clarify.

investment Objective:
Risk Tolerance:
Time Horizon:
Reference Currency:
Booking Location:

Moderate Growth
Moderate

7 Years
US Dollars
Geneva

IEAIQIN

EXPA»55

f..'I '" »

6

A

The pie chart below illustrates your current asset allocation,
Others

14%

~ e

f
1

I

Alternstlve

Inv,

17%

Ertulttes

67%

Bonds
rra

Cash or Neer Cosh
6%

Me Ioel

TEtaaaaed

0

I

a

laf

We propose to invest your financial assets iii a global poritolio that will diversify your investment risk between
asset classes and markets. The objective of this proposal is to develop for ycu a US-based portfolio coherent
with a moderate tolerance for investment rislc It is designed to be held for the long term and has exposure to
equities which, historically, have outperformed cash and bonds, Alternative investments are reoommended to
enhance the asset allocation risk/reward ratio and limit ths downside volatility of your portfolio.
Eqoiass
Its'/o

Atisrnsiivs Inv.

s3'/

Cash ol Nsar Cash
7 "/

Bonds
24'/I
AAIEAISSI
EKAAass

TB000696

Based on our understanding,

the pie chart below illustrates your current exposure by currency,

Others

8%

Ia

EUR
4%
HKO

4%

JPY
12%

Usc
7'I%1

A

5

flAR

R555

TEt000696

~E/S

+PAL
E-R*.-.

E

„-RErP

ErS *t7

tl'e propose to re-allocate your assets across the currencies

illustrated

below.

QttESES
16E/7

BUR
6'/E

HKD
EtE/7

JPY

USO

13%

67%

R

RESS

7

TB000697

furr
eektas
kk

e

Based on our discussions, the pie chart below illustrates your current geographic exposure.

Others
GkA

Asia Ex Japan

7%

Europe
7%

USA/GAD
GG%

Japan
i G%

expnea

masssss

4
rl

!

eee."e

.

ae

ee

After a careful analysis of your goals, we propose the geographic allocation illustrated
4

below,

Ottgsrs

11%

Asia Bx Japan

8%

I18ArCAD

47%

Burapa
O'Yr

Japan
1n%

Lat

Al'a.

11%
ag

1

404a
g

TB000699

e

',s

e

Based on our discussions, this pie chart illustrates

r e

th

e distribution of assets

by region that you

currently hold,
Bonds Others

Others USA/CAC

'/%

Equi//es

Others

3ls

Cash or Near Cash
Afternative

USA/CAD

Inv,

5%

LISA/CAD

17%
Equitres Asia Ea Japan

7%
I a'sl

Ilsl

I IS In s i

lll Il a

I

Equitws Europe

7%

I!

1

%lit!i

Ã

I

!

I I' il.l! I.i
II

I

3 I 31

1

a

%S

,.-.':,Ii~ilia,".7
reeelasase
'

Bquitlea USA/CAC

s/ Lra...——

Equittee Japan

13'I

33%

Reer

re

TB000700

~Rages
~nasl

s

We recommend

a

allocating your assets to reflect the distribution

Allsrnatlve Inv
USAICAD

22%

RJ

e r

belotpr.

Soluble

Isa

t
tpdd

Others

10%
aquinas Others

cash or Near Cash
USAICAD

7%

Bonds USA/CAD
3%

Equitiss Asia Ea Japan
8%

Bonds Lat. Anu

w

I. ~

Il

11%

I

II
II

'lS

,:rl

t

II

-

Equities Europe
S%

'I

'a

~

S lie

I

Il

NJ@
Equities Japan

USAICAD
'quides

1tn/

11%

ltleRICIN
RRRAeee

TB00070'I

e "

Currently,

the assets

in

your portfolio are distributed

d

according to the Illustration below
Bonds Others

Others

US D

2%

14%

Equlfiee Others
6%

Cosh or hiesr Cssh
USD
itlternsttve

Inv. USO

17%

Equities EUrt
6%

Equaes rtttO

I
)Zs

Bonds USD

,

6%

II

+I. IIII

II
~II I I)
II
%II

II

II I

II

Si

Equities JPY

12%

IIIkWK ~L;iIIs
III

Gse

Equities USD

29%
EAGAN

TB0007rt2

td

su

e

n

0

To achieve your goals, we propose to re-allocate your assets across currencies according to the
illustration

below.
Bonds Others
Ahernat(ue Inn. USD

Equities Others
7%

24%

Cash or Near Cash
USD

Bquitiss EUR
6%

Equitise IIKD
4%

Bonds USD
21%

B quit(en dn Y
'I 3%
Bq(ritiee UBD
'Ines

enleeu
Ree

le

TB000700

s

er P'
i

to our discussions, we'vs based our analysis and recommendations
provided below.
In addition

on the infonrnation

Investsbie

Products

Assets

Amount (USD)

0.96%
0 96%

47,268
47,286

Global Products

11,19%

662,871

DP Trad 1216bsl Mod

11 19%

8. 74%

Assets

Amount (US D)

723,043
439,284
293,759

62.26%
36,28%
15,99%

Invsstsble

Products

552,67'I

'l4. 64%
6 89%

you

2,680,686I
1,790,860
769,826

Cash or Near Cash
Money Market

lsk Reducers
Fairlield Sent
lobsl MNgco

'oF

ultlss
Sig Global Eq
Nordea

I

NA

Value

J

Yield Enhsnosrs
AEF Emer Mkt Debt
Fermat FX Fin 6 Futures
Structured Products

20,97%
4 69%
2 11%
'l4 17%

1,036,665
23'I,712
104,033
899,940

Total

100,00%

4,939,651

TB000704

Here's our recommendation including the products, investment percentages, and the amount
reference currency vve propose to allocate to each product and asset class,
Recommended
Products

c/

Assets

Investsble
Amount (USD)

Recommended
Products

I

Money Markel

0.62%
0,52%

26,648
25,648

Cash or Near Cash

Borlds

10.12la

Glo Emefa Mkt 8-Term Bonds

1 ar12%

20.24ol«
20. 24'lo

36.28%

Yield Enhancsrs
AEP Emer Mkl Debt
Permal FX Fm 1! Futures

18,22%
10 12olo

Tots

1,790,880
1,790,860

35.26/.

100.00%

'1,000,000
1,000,000

1484%

as

lnveet8ble
Amount (USD)

Assets

Sia Global Eq

500,000
500,000

Global Products

Eqifltl

in your

723,043
439,264
283,759

DP Trad

Otfefkaf

Mod

P/sk Red actfrs
I-'airffel5

lobal MN

8 spiy
ns FoF

8,39'la
5 74%

I

Soa,aaa
500,000
400,000

Blf 0%

4,939,581

SR IOIR

Roan

as.

efer la Apse

ndin I

st Ihe snrl of this proposal lor Information an the inception dales of pradocts

fnclrlrlad

in

ice

porttotro

ss

Reit sa tile

cse ot henchrnarh data pror la these

Inception dates

In

Ihs pe forlnence chal

'TSOOOTOO

AR

IBIICQ

0.00
24 0.00
230.00
22 0,00
2 0.00
200.00
'I 90.00
160.00
'l70.00

"

60.00
140.00

..-

2nd

160.00--

"

30.00-20,00

'0.00
00.'00

90.00

Hklkki+IH+H+I I+H+IHH+HH+H+fkki
@Ca

~b

@ch

@ou

pdh

ech

race

H+I H+I+I I+H+H+I H+H+HHkHI
rein

iaia

erin

end

9a

rand

3v

UD

SBP 600

—

Current Portfolio

Sl? P 600
Return
Rislc

0,23
194,07

Portfolio ourrenoy
Slerdttg data

~o chdp pdp
eo Bo eo

Proposed Portfolio

Proposed Portfolio
g 73%
6 67%
0,66
233 40

6,63%
B.31%
0.69
216,47

'16.07%o

Bnarpe Ratio
Ending Value

cpa

—

Current Portfolio

7,53%

p.a,

kl+ktkI II+I+I+II IH

UGD

Jan-97
At

nRIrAN

Rane
h

ish

Irepmsenlsihewlu
tr

lperlornlunc

wlualpmlmmarne,

olisaAmedoandp

Idtcovd\atpotntsllhr

maanal

efmenlproductsincluderlrnthepreparer
tnplereama hle plhorouaavaaahl
ifnmaerraotolmlaatrlnhea
twwlmsnip
duns UotsdwqmpmlrwaiondalwlmhstoiswtoAI
v

Id

tie

prior le Ihs In epic n dale oint v of Ihe res pm
pc oasis end inlorsml oa ol recluse Inc d, pie

Ave

am

leva stmeol

rear lo

Urn

riel iho «harl uses, m
Al\p andre I. peel pv der mace
pradu

TB000706

riia

n-

'r'

rE

P

t

Irr

.g-

js

e

E

6/

to our discussions,
provided below.

In addition

we'e based

our analysis and recommendations

on the information

Investsble

Assets

Assets

Money Maritet

0 98%
0,96%

4?,288
47,266

'l1.19%

662,871
552,871

Global Products
DP Trad Global Mod

11,19'/E

ttistFI4sducs'rs

'l4.64%

6,69%

Faj(Iield SQi(try
Globhl

Means

FoF

Equltlee
Sig Global Eq
Nordsa

I

NA

Value

Yield Enhsncers
AEF Emer Mkt Debt
Permal FX Fin 6 Futures
structured Products

6 74'/E

52 25%
36.28%
15.99%

20.97%
4.69%
2 1'l%

Total

Caeh or Near Cash

!

Products

Amount (USD)

'I 00, 007E

'l4 17'/E

you

Investeble
Amount (USD)
1,0M,685
231,712
'I04,033

699,940
4,839,661

723,043
439,264I
283,759

2„680,686
'l,790,860
789,626!

EEEEIEEN

EEEEEEE

TB000707

tr8

"~'21WS "110rn

t or

Ltfe I

II

n

aal eta
Here's our recommendatlon including the products, investment percentages, and the amount
reference currency we propose to aliocate to each product and asset class.
Recommended
Products

lnvsstshle

4A

Assets

Recommended
Products

Amount (USD)

a/a

Assets

in

your

Investsble
Amount (U8D)

Cash or Near Cash

0.62'Yo

0.52%

26,648
25,648

Equltles
Sia Global Eq

36. 28%
36.28%

1 780 860

Money Market

Bonds

10.12%
10 12'Yo

600,000
500,000

Yistd Enhancefs
AEF Emer Mkt Osbl
Psfmal FX Fin 6 Futules

16,22'i'o

10 12%
8 tao/e

aaa,aaa
500,000
daa,oaa

Tote

100 00%

4,636,661

Glo Emera Mkl S.Term Bonds

Global Products

20.24c/n

DP Trad Global Mod

20.24%

1,000,000
1,000,000

14 64%
6,66%
5. 74%

4k,rhedtlafrfe
ykttstd Bet)lty
Qena FoF
obal MN 0

I

1,790,860

723,043
43&,2641

283,760'

R Ietu
nnpRaaa

la so l el r to Appartdin I sl Iha attd

sf Ibis

pre panel

for iniatmadan

oa ete tnco

pean

dates at prodrro(n

trlciud ed

Irl

sie

fa
por Ifnlto ns well

m ilia une oi hortchtnerh rfaio prior

lir

tiles

s incepsan

dates

tll

the performance chal

TB000708

'e

. k%~48~:&M~ws.AP~

@"4mRRMM

6

4

r"

Piik

„

&I

Querteriy Returns
12 21%

12'i'-

10 64'6

9 06%

e/-

7,15%

6!13%

6 ti1

"/

3 024

8 01%

207
5 19%
2

'I

7%

-e/,
'I

6.445%II'"Ig

e.en%I„

I 23

1,e4/
3 "/

IL.

'.jii'

6%

2 51%

7,ere',
T~ I'C

~T
05

f&0

0%
I

I

70

0&

05 60 00

0

&P

04

cape

oa

&+

Pml parforalanro

ra

7

I

oep 00 0 o 0 2
0++ &+ " 0P 66 &+a

00 55 00

S

&"

TP

of

rt'p
&3

I

0

00 00

3+6'~

17

nolan fndealor of fotnra parfonnanca

TB000709

a

o
tp d

DlSNIbUVIGM
Nemner

Gf MQA'this RB'OUI'MS

ef perl de

ss

l4'0k~~~*',
.tos

to.asr..a'r.to-sr

.em to ppr.

-oat

-n'..n'r

as

p
t

or

ov toom

r'k to 4%

em to

n

es

nrnnni

la

past parlormaroe

fe

not an Indtnalor of tutrrra performance

TB000710

'I'I

12,17%

71%

10%
7A7'/

7e'/

7%
Inn'%

4%

'I

I

s//7'7

IIA

/sl re%

2%-

6%

s. en,

p''4'

77

+ '%%7 ~S~YV'A

S~O

'~P&d &e™I%~"
A

~'Wo

"

'~d" W"
"'Cfd'ntow

rase rs(sr la Apparldix

I

st fhe ertd of Ihfs proposal lor Inldrrnstfan

alt the Inception dates ol

ardri acts

Included in the parsoflo

el

woe aa Ihr:

ass

of

bsnchmnrlr

dale ptlor lc !hone fncepdorl dotr e

Irl

Sle perromla neo clm

et

"0

p

.A

I
0

1

6

t

MMM~~iMk

II

0

,j

Distribution

of Monthly Returns

%smear of port ds

30-

lsdto-10% -I0%te-SA

.It%to.SA

.0%in-ao.

-cato.cA

.3/t

or.

or toe%

astoc%

1%f 0%

a%ms%

...„..„a,,...„.J
haec refer I

0ppendrx

I

el the end ol this proposal lor

lnfnnn

stion nlt Ihe Inca ptim dales of products Inclmlad ln Iht! porff So ee wall

as

the um

al

henohmsrh

dsla error lo these Incepton dates

fit

the performance

ma

TB000712

4
0,11
0.08

6

8

0.16
0.'I 6

0,26
0,36

1,00
0.04

0.04

0.'l4

0.25

'l,00

(0.03)

0.14

0.16

0.16
1.00

0.26

(Q,Q3}

0.32

1.00

3

1.00

2
0.82

QA9

0,82

1.00

0.54

QA9

0,54

4 Fairtield Sentnj
5 Globial MN Cons FoF

0,11

0,08

0.16

8 Permal FX Fin 8 Futures

0 25

0.16
0 36

1
1

Sig Global Eq

2 DP Trad Global Mod

,3AEF ErtrerMt-Debt

l'I
Q,32

SEXI IIICMI

EXPRESS

78000710

.«Rja p

P@Fg
t

5 5 5

5

5

~

5

. 551 -

i 5

1

2

3

4

1 Sig Gobal Eq
2 II3P Trad Gobal IIAxl

1.00
0.82

0.82
1,00

OA9

0.1'I

0,54

0.08

3AEF Eggj;Wktoebt

OA9

0.54
0.11 0.08
0.'I5 0.16
0.25 0.36
0.38 0,39

1,0Q

0.25 0,80
1.00 0.'I5 (0.03) 0.12
0.15 1.00 0,32 0,09
(0.03) 0,32 'I.QO 0.22
Q."l2
0.09 0.22 1,00

a-4RNiirfield

Senby

...~

5GobaIIWConaFoF
6 PermaI FX Rn 8 Futurea
7 Go Ernerg Md S-Term Hoi

0,04

0.14
0.25
0.80

0,04

5
0,15
0.16

6

7

0.25
0.36

0.38
0.39

0.14

axpn555

«so

refer ta Appandk

I

at the end of lire proposal for infortnetion on the Inception

dales af protract s Inctndad n lite partfolo «s well ss ths «ae of hsnchnrark dale prior tn 1ltnaa rnceptlot chloe

22
In

Ills performance

cha

TB000794

CALL REPORT

DATE: 3/5/08

CLIENT/PROSPECT NAME: Teresa Earbacbano and Hector Uelazquez
DATE OF VISIT: 2/28/08

PI.ACE OP MEETINOt Restaurant

in

Mextco City

PERSONS PRESENT. Jennifer Sierra, Carla Eoregy and John Dutkowski

PIJRPOSE OP MEETING; To teview portfolio alter changes vrere msde/decided
January, Discuss market expectagons aud loan t'acilities,

in

CLIENT INPGRMATION: Teresa Barbachano is in the process of dividing the assets
inherited from her parents amongst her brothers and sister, A large percentage of the
assets inherited involve real estate properties located in Acapulco, Merida and Mexico
City, At this time, they are each deciding which ptoperty to keep and purchase the
Interest in the propetzy ftom their brothem and sister, Teresa commented that the one
property she is negotiattng to keep wgl cost her $ 1Mhf. She plans to finance the
purchase with a Icon from our Institution coUateragzed by her investments held with us
as weU, She will contact the undersigned sontetime in March/April to request the loan, In
the meantime we are preparing the documentation and the line of credit to have
everything ready.
During this meeting we took the oppornmity for her and her husband to sign the new
Platinum Cmd application as they have the domestic card. V/e discussed the possibility
of obtaining the Centurion Card which we wU1 explore later oo,

After reviewing the client" s background information in the client file, there are no
significant changes with regard to the cgent's source of wealth Information.
INVESTMENTS
,'he

IS provided a, surrunary of the marl&ets, positive and negatives„and realistic market
expeciationa The changes agreed on in January have not settled in the portfolio so we
musf', wait tmtil beginnrng oi'pril to analyze the impact of such changes, Neither onc
clients vrere nervous, however, they reminded us to be cautious tn the event thing
turned vvorse instead of better,

oi'he

FGLLOU/-IJP:
Meet with, clients again in April/May 2008.
RM NAME

Jemufer Sierra.

EXII IIIHIIT

E.

EXHIBIT

CQNFIDENTIAL

SCB T BarbaCttaiqo 00000055

Cllentt

Cgsnt Number - Portfolio 4662.1

Exhibit 10

1of3

Asset Allocation analysis:

June 2008:
Position
Cash

Cash

1,336,088

calyon Fin Produots (Guernsey) Ltd

Bonds

202,219

202,219

70,357

70,357

319,456

3'l9,458

Amer Express Emerging

Mkt Debt

Amer Express GL EM Mkt Short TM Bonds

1,336,066

Signature portfolios - Global Equities

Porlfogo

1,744,723

Discretionary

Portfolio

969,984

All

295,378

295,378

All

4Q4,377

404,377

Alt

454 010

~454 Q10

Amer Express

Traditional
All Inv

Global Moderate

Fund

- Global

Psrmsl FX Fmsnclsls 8 Futures

Mkt Neutral

Ltd

Falrflsld Sentry Ltd

Totals

5,796,572

Asset Allocation percentages

~

June 2Q06

1,744,723

387,994

1,338,068

581,990

980,027

2,326,714

1,153,788

23%
40'/

December 200'7:

Position

Cash

Cash

Cash

Discretionary

Dynamic Global Asset Allocation

Bonds

~Euitlss

2,985

Portfolio

276,896

Signature Portfolios - Global Equltlss

Portfolw

2,721,945

Drscretlonary

Portfolio

1,316,979

TrsdlBonal Global Moderate

Alt

2,769

74,762

185,520

13,845

2,721,945
526,792

790,188

Parmal Fixed Income Holdings

Alt

280,248

280,246

Permal Fixed Income Special Opportunitlss

Alt

530,887

830,887

Psrmal FX Frnancisls & Futures Ltd

Alt

458,814

458,814

Feirfisld Sentry Ltd

Alt

965,802

95b,802

6,544,565
Asset ABocation percentages

~

December 2007

3~

5,754

601,554

9%

3,697,653

57'.~

I

2,239,595

91%

EXHIBIT

!
Prepared by; Coglsr Consulting,

Inc,

['ra~e~Wa

Cllentt

Client Number

~

Portfolio 4852.1

2of3

Exhibit 10

J tins 2008:
Trios

Position

Amount

Eaultlss

148,752

74,376

Portfolio

2,706,216

2,705,216

Portfolio

411,322

Portfolio

1,271,677

Amer Express GL EM Mkt Absolute Return

Signature Portfolios - Global Equities
Discretionary

Dynamic Global Asset Agocstlon

Discretionary

Traditional

Global Moderate

Alt

25,215

25,215

111,057

275,586

608,671

4,113

763,006

20,666

Alt

Ltd

Fairfield Sentry Ltd

279,686

482,860

482,880

Alt

8 Futures

279,686

Ait

Psrmal Fixed Income Holdings
Permai FX Flnanolals

Bands

Cash

983~300

~963 300
29,329

6,308,028

Totals

Asset Allocation percentages - June 2006

894,104

11%

0%

11%

3,818,184

C

~l

1,766,412
89%

September 2008'I
Cash

Amount

Position
Cash

Cash

16,281

Portfogc

Discretionary

Dynamic Global Asset ABocation

Discretionary

I'radltlonal

Global Moderate

Portfolio

57,772

Alt

57,772

2,418,745

2,418,745

370,694

Porlfolio

Signature Portfolios - Global Equities

Equities

15,281

115,644

Amer Express GL EM Mkt Absolute Return

Bands

1,150,489

100,087

248,365

460,196

3,707

690,293

18,535

Permsl Fixed Income Holdings

Alt

268,672

268,672

Psrmal Macro l.loldlngs Ltd

Alt

454,693

454,693

F airfield Sentry

Alt

Ltd

5,790,913

Totals

Asset Agocstion percentages - September 2008

Prepared by: Collier Consulting,

~998 798

Inc,

15,968

0

618,055

11%

3,415,175

1,738,698

Client: Client Number

~

Portfalla 4862.1

Exhibit 10

3of3

Deoember 2008:

Position

T

Cash

e

Cash

World Express GL EM Mkt Absolute

Signature Portfolios
Dlscretlanary

Return

- Glabal Equities

Amount

1,011,691

Portfatio

302,243

Eauities

Alt

1,011,691
21,288

1,874,904

Porlfolro

Discretionary Traditional Global Moderate

Bonds

42,511
Portfolio

Dynamia Global Asset Allocation

Cash

7,963

21,256
1,874,904

3,022

81,605

202,503

15,1'l2

4,778

Permsl Fixed income Holdings

Ail

229,010

229,010

Perrnal IVlacra Holdings Ltd

All

435,468

435,468

Sentry t td

All

F

airfield

Totals

3,903,796

Asset Allocation percentages - December 2008

1,014,713

105,046

26%

2,103,440

679,M7

54%

29%

17%

71%

September 2009:

~Te

Position
Cash

Cash

Amer Express GL EM Mkt Absolute Return
Srgneturo Portfolios

~

Global Fquities

Signature Portfolias - US
Discretmnary

Multi

Amount

510,369

Cash

Bonds

510,359

5,269

2,635

PortfoOc

Dynamic Global Asset Allocation

Totals
Asset AOacstlon percentages - September 2009

2,396,803

Portfolio

1,078,399

Portfolio

638,430

6 364

148 379

483 687

4,624,760

Seator Fixed inc

516,724

1,225,913

2,882,124

2,398,803
1,078,899

11%

27%

38%

Prepared by: Collier Caneultlng,

2,635

inc,

82%

0%

67%

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Important Information
Standard Chartered Bank International (Americas) Limited ("SCBI*') and StanChart Secunties International, Inc.,
{"Stanchart") are wholly owned subsidiaries of The Standard Chartered Bank: The Standard Chartered Private Bank is the
private banking division of Standard Chartered Bank. Securities products offered through Stanchart: Bank products and/or
services are offered through SCBI and other bank and non-bank affiliates, or strategic partners. Not all products and
services available to clients of SCBI or StanChart.
Standard Chartered Signature and Dynamic Portfolios are discretionary asset mahagernent services made available to you
Bank, together with its affiliates or subsidiaiies and are advised by its affiliates and selected sub
advisers. Subscriptions can only be made through the respective Fund's discretionary account agreement, which can be
obtained through your Relationship Manager. In relation to the products and services detailed in this presentation,
additional Terms and Conditions may apply. You should obtain details of these Te'rms and Conditions contained in the
subscription agreement, prospectus or offering documents, before proceeding.
by Standard Chartered

additional Terms and Conditions may apply. You
In relation to the products and services detailed in this presentation,
should obtain details of these Terms and Conditions contained in the prospectu's or offering documents, before
proceeding. Mutual funds are offered through prospectus/offering documents. Please consider the risks; charges,
expenses and investment objectives prior to investing in mutual funds, The prospectus/offering documents which contain
this and other important information can be obtained by contacting your Relationship Manager. Please read-these
documents carefully, before investing.

Wedge funds are speculative investments and are not suitable for alf investors, nor do they represent a complete investment
program. Hedge funds are not subject to the same regulatory requirements'as mutual funds. An investment in a hedge fun
involves the risk inherent in an investment in securities, as well as specific risks associated with limited liquidity, the use of
There can be.no
leverage, short saies, options, futures, derivative instruments, "junk" bonds and illiquid investments
assurances that a manager's strategy, hedging or otherwise, will be successful or that a manager will use this strategy with
respect to all or a portion of the portfolio. For a more complete description of the risks associated with any hedge fund
investment, please read the Offering Document which can be obtained by contacting your Relationship Manager.

Important Information

{Continuation)

Investments in this presentation may concentrate on certain economic sectors, lhereby increasing its vulnerabiilty to
any single economic, political or regulatory development. This may result in greater price volatility. Additionally,
investments may focus on certain geographical regions, thereby increasing its vulnerability to developments in that
region. This may result in greater price volatility. Investing in foreign securities presents certain risks not associated
with domestic investments, such as currency fluctuation, political and economic instability, and different accounting
standards. This may result in greater price volatility. Non-diversiTied investments involve greater risk than diversified
investments, because a loss resulhng from a particular security or sector's poor performance will have a greater impact
on the investments'verall
return. Investments in fixed income securities will fluctuate in price.and yield depending on
market conditions and funds invested may be worth more or less than their original cost.

the value may fall as well as rise and in some circumstances you may not get back the full amount
invested. You are not certain to make a profit, and may lose money. Changes in rates may cause the value of
investments to go up or down. If your base crirrency is other than the base currency of the underlying assets, changes
in rates of exchange may have an adverse effect on the value of your investments. Past performance should not be
seen as an indication of future performance. The level, rates and bases of, and relief from, taxation are those currently
available and may change in the future. This presentation does not purport to disclose all of the risks associated with
investment products.
With anv investment

You should make your own legal and tax determination (including any applicable exchange control regulations) on
investment products, and should consider carefully whether the investment products are suitable for you in light. of your
personal risk appetite, liquidity requirement and return objectives (including the legal and tax regimes in your countnes
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residents.