Anwar et al v. Fairfield Greenwich Limited et al

Filing 546

ANSWER to Amended Complaint. Document filed by Robert Blum. Related document: #116 Amended Complaint,,,,,,,,, filed by 20/20 Investments, Centro Inspection Agency, David I. Ferber, Omawa Investment Corporation, Harel Investment and Financial Services Ltd., AXA Private Management, Carmel Ventures Ltd., Bonaire Limited, Pasha S. Anwar, Inter-Amrerican Trust, Traconcorp, The Knight Services Holdings Limited, Shimon Laor, Carlos Gauch, Frank E. Pierce, El Prado Trading, Loana Ltd., St. Stephen's School, Kalandar International, Diversified Investments Associates Class A Units, Wall Street Securities, S.A., Pacific West Health Medical Center Inc. Employees Retirement Trust, ABR Capital Fixed Option/Income Strategic Fund LP, Frank E. Pierce Ira, Blythel Associated Corp., Landville Capital Management S.A., Julia Anwar, Harvest Dawn International Inc., Marrekesh Resources, Banco General, S.A., Elvira 1950 Trust.(RoumainOchoa, Claudio)

Anwar et al v. Fairfield Greenwich Limited et al

Doc. 546

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK -----------------------------------------------------------------x ANWAR, et al., Plaintiffs, v. FAIRFIELD GREENWICH LIMITED, et al., Defendants. This Document Relates To: All Actions -----------------------------------------------------------------x :: :: :: :: :: :: :: :: MASTER FILE NO. 09-CV-0118 (VM) :: :: :: :: :: ::

DEFENDANT ROBERT BLUM S ANSWER TO THE SECOND CONSOLIDATED AMENDED COMPLAINT Defendant Robert Blum ( Blum ), by his attorneys Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C., hereby answers or otherwise responds to the Second Consolidated Amended Complaint ( SCAC ). Blum reserves the right to supplement and amend this Answer and reserves the right to add additional defenses of which he becomes aware through discovery or other investigation. The filing of this Answer is without waiver of the arguments presented in Blum s Motion to Dismiss, which are expressly adopted herein and asserted against the SCAC. All allegations not specifically admitted are denied. To the extent that the contents of Plaintiffs Glossary of Defined Terms are

intended to allege a basis for liability on the part of Blum, Blum denies those allegations. To the extent that Plaintiffs utilize group pleading as a basis to impose liability on Blum, Blum denies those allegations.

Dockets.Justia.com

With respect to the numbered paragraphs of the SCAC, Blum responds as follows:1 NATURE OF THE ACTION 1. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 1, except avers that Fairfield Greenwich Group ( FGG ) is a marketing name used for certain businesses of a group of related entities and denies that FGG marketed and operated the referenced funds.2 2. The allegations in Paragraph 2 state legal conclusions to which no response is

required. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph 2. 3. The allegations in Paragraph 3 state legal conclusions to which no response is

required. To the extent that a response is required, Blum denies the allegations in Paragraph 3. 4. The allegations in Paragraph 4 state legal conclusions to which no response is

required. To the extent that a response is required, Blum denies the allegations in Paragraph 4. JURISDICT ION AND VENUE 5. The allegations in Paragraph 5 state legal conclusions to which no response is

required. To the extent that a response is required, Blum denies the allegations in Paragraph 5, except lacks knowledge or information sufficient to form a belief as to the truth of the allegations

1 2

Capitalized terms not defined herein shall have the meaning set forth in the SCAC. The SCAC characterizes Blum and certain other individuals as partners of FGG and refers to them collectively as the FGG partners. Blum avers that the term partner was sometimes used, but Blum and the other referenced individuals were not partners in the legal sense, but, rather, Blum and others were shareholders in Fairfield Greenwich Limited or its predecessor entities. 2

regarding whether at least one Plaintiff is a citizen of a foreign state, and avers that at least one Defendant is a citizen of New York. 6. The allegation in Paragraph 6 states a legal conclusion to which no response is

required. To the extent that a response is required, Blum denies the allegations in Paragraph 6. 7. The allegations in Paragraph 7 state legal conclusions to which no response is

required. To the extent that a response is required, Blum denies the allegations in Paragraph 7, except avers that one or more of the Defendants resides in this District and the principal place of business of one more Defendants is in this District. PARTIES 8. The allegations in Paragraph 8 state legal conclusions to which no response is

required. To the extent that a response is required, Blum denies the allegations in Paragraph 8. A. Plaintiffs 1. 1. Fairfield Sentry Limited Investors

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 1.3 2. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 2. 3. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 3. 4. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 4.

3

The SCAC contains two sets of allegations numbered 1 through 8. For the purposes of this Answer, Blum conforms his responses to the numbering system adopted by Plaintiffs in the SCAC. 3

5.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 5. 6. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 6. 7. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 7. 8. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 8. 9. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 9. 10. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 10. 11. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 11. 12. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 12. 13. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 13. 14. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 14. 15. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 15. 16. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 16. 4

17.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 17. 18. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 18. 19. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 19. 20. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 20. 21. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 21. 22. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 22. 23. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 23. 24. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 24. 25. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 25. 26. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 26. 27. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 27. 28. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 28. 5

29.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 29. 30. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 30. 31. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 31. 32. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 32. 33. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 33. 34. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 34. 35. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 35. 36. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 36. 37. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 37. 38. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 38. 39. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 39. 40. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 40. 6

41.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 41. 42. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 42. 43. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 43. 44. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 44. 45. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 45. 46. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 46. 47. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 47. 48. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 48. 49. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 49. 50. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 50. 51. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 51. 52. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 52. 7

53.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 53. 54. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 54. 55. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 55. 56. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 56. 57. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 57. 58. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 58. 59. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 59. 60. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 60. 61. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 61. 62. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 62. 63. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 63. 64. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 64. 8

65.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 65. 66. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 66. 67. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 67. 68. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 68. 69. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 69. 70. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 70. 71. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 71. 72. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 72. 73. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 73. 74. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 74. 75. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 75. 76. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 76. 9

77.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 77. 78. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 78. 2. 79. Fairfield Sigma Limited Investors

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 79. 80. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 80. 81. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 81. 82. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 82. 83. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 83. 84. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 84. 85. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 85. 86. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 86. 87. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 87.

10

88.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 88. 89. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 89. 90. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 90. 91. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 91. 92. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 92. 93. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 93. 94. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 94. 95. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 95. 96. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegation in Paragraph 96. 97. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 97. 98. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 98. 99. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 99. 11

100.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 100. 101. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 101. 102. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 102. 103. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 103. 104. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 104. 105. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 105. 106. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 106. 107. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 107. 108. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 108. 3. 109. Greenwich Sentry, L.P. Investors

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 109. 110. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 110.

12

111.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 111. 112. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 112. 113. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 113. 114. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 114. 115. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 115. 4. 116. Greenwich Sentry Partners, L.P. Investors

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 116.4 I. B. Defendants Defendants 1. 117. Fairfield Greenwich Defendants

The allegations in Paragraph 117 state legal conclusions to which no response is

required. To the extent that a response is required, Blum, subject to Footnote 2, denies the allegations in Paragraph 117. 118. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 118, except as follows: Blum, subject to Footnote 2, denies the
4

On October 1, 2010, the Plaintiffs filed with the Court a Notice and Order Adding Additional Named Plaintiffs ( Notice ), which seeks to add 24 additional named plaintiffs as parties to this Action to the same extent as if they had been named as plaintiffs in the SCAC. Blum lacks knowledge or information sufficient to form a belief as to the truth of the allegations in paragraphs 1 through 24 of the Notice. 13

allegations regarding FGG; and avers, on information and belief, that (i) FGL was a company incorporated under the laws of the Cayman Islands; and (ii) FGL served as the Investment Manager for Fairfield Sentry Limited for a period of time. 119. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 119, except as follows: Blum, subject to Footnote 2, denies the allegations regarding FGG; and avers, on information and belief, that FGBL was a corporation organized under the laws of Bermuda. 120. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 120, except as follows: Blum, subject to Footnote 2, denies the allegations regarding FGG; and avers, on information and belief, that FGA was a Delaware limited liability company. 121. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 121, except, subject to Footnote 2, denies the allegations regarding FGG. 122. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 122, except as follows: Blum, subject to Footnote 2, denies the allegations regarding FGG; and avers, on information and belief, that FHC (i) was registered with the SEC as a broker-dealer; (ii) was a member of the National Association of Securities Dealers; and (iii) was a member of the Securities Investor Protection Corporation. 123. Defendant Lion Fairfield Capital Management Ltd. was dismissed from this

action on March 22, 2010. No additional response is required. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph 123, except, subject to Footnote 2, denies the allegations regarding FGG. 14

124.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 124, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Walter M. Noel, Jr. was associated with certain entities that used the marketing name Fairfield Greenwich Group. 125. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 125, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Jeffrey H. Tucker was associated with certain entities that used the marketing name Fairfield Greenwich Group. 126. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 126, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Andres Piedrahita was associated with certain entities that used the marketing name Fairfield Greenwich Group. 127. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 127, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Amit Vijayvergiya was associated with certain entities that used the marketing name Fairfield Greenwich Group. 128. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 128, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Daniel E. Lipton was associated with certain entities that used the marketing name Fairfield Greenwich Group. 129. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 129, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Mark McKeefry was associated with certain entities that used the marketing name Fairfield Greenwich Group. 15

130.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 130, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Richard Landsberger was associated with certain entities that used the marketing name Fairfield Greenwich Group. 131. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 131, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Maria Teresa Pulido Mendoza was associated with certain entities that used the marketing name Fairfield Greenwich Group. 132. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 132, except, subject to Footnote 2, denies the allegations regarding FGG and avers that David Horn was associated with certain entities that used the marketing name Fairfield Greenwich Group. 133. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 133, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Andrew Smith was associated with certain entities that used the marketing name Fairfield Greenwich Group. 134. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 134, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Charles Murphy was associated with certain entities that used the marketing name Fairfield Greenwich Group. 135. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 135, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Yanko Della Schiava was associated with certain entities that used the marketing name Fairfield Greenwich Group. 16

136.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 136, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Philip Toub was associated with certain entities that used the marketing name Fairfield Greenwich Group. 137. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 137, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Lourdes Barreneche was associated with certain entities that used the marketing name Fairfield Greenwich Group. 138. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 138, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Cornelis Boele was associated with certain entities that used the marketing name Fairfield Greenwich Group. 139. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 139, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Vianney d Hendecourt was associated with certain entities that used the marketing name Fairfield Greenwich Group. 140. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 140, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Jacqueline Harary was associated with certain entities that used the marketing name Fairfield Greenwich Group. 141. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 141, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Santiago Reyes was associated with certain entities that used the marketing name Fairfield Greenwich Group. 17

142.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 142, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Julia Luongo was associated with certain entities that used the marketing name Fairfield Greenwich Group. 143. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 143, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Harold Greisman was associated with certain entities that used the marketing name Fairfield Greenwich Group. 144. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 144, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Corina Noel Piedrahita was associated with certain entities that used the marketing name Fairfield Greenwich Group. 145. Blum, subject to Footnote 2, denies the allegations in Paragraph 145, except avers

that (i) he holds a B.A. from the University of Pennsylvania and a J.D. from the University of Chicago Law School; and (ii) he was associated with certain entities that used the marketing name Fairfield Greenwich Group from December 2000 until early 2005. 146. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 146, except, subject to Footnote 2, denies the allegations regarding FGG and avers that Gregory Bowes was associated with certain entities that used the marketing name Fairfield Greenwich Group. 147. Blum admits that Paragraph 147 of the SCAC refers to the persons identified in

Paragraphs 124 through 146 collectively as the Individual Defendants.

18

148.

Blum denies the allegations in Paragraph 148, except respectfully refers the Court

to the referenced exhibit from the Massachusetts Proceeding for the true and complete contents thereof. 149. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 149. 150. Blum states that Paragraph 150 is a description of Plaintiffs claims to which no

response is required or otherwise alleges conclusions of law as to which no response is required. To the extent a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph 150, except admits that Paragraph 150 refers to the persons and entities identified in Paragraph 150 collectively as the Fairfield Defendants and Plaintiffs have asserted claims against them for alleged negligent misrepresentation, gross negligence, breach of fiduciary duty and breach of contract. 151. Blum states that Paragraph 151 is a description of Plaintiffs claims to which no

response is required or otherwise alleges conclusions of law as to which no response is required. To the extent a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph 151, except admits that Paragraph 151 refers to the persons identified in Paragraph 151 collectively as the Fairfield Fraud Claim Defendants and Plaintiffs have asserted alleged fraud claims against them. 152. Blum states that Paragraph 152 is a description of Plaintiffs claims to which no

response is required or otherwise alleges conclusions of law as to which no response is required. To the extent a response is required, Blum denies the allegations in Paragraph 152, except admits that Paragraph 152 refers to the persons identified in Paragraph 152 collectively as the Fairfield Fee Claim Defendants and Plaintiffs have asserted only alleged fee-related claims against them.

19

2. 153.

PricewaterhouseCoope rs Defendants

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 153. 154. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 154. 155. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 155. 3. 156. Citco Defendants

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegation in Paragraph 156. 157. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 157. 158. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegation in Paragraph 158. 159. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 159. 160. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 160. 161. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 161. 162. Blum states that Paragraph 162 is a description of Plaintiffs claims to which no

response is required. To the extent a response is required, Blum admits that Paragraph 162 refers to the entities identified in Paragraph 162 collectively as Citco.

20

163.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 163. 164. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 164. 4. 165. GlobeOp Defendant

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 165. ALLEGATIONS OF FACT A. 166. Bernard Madoff s Massive Ponzi Scheme Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 166, except avers, on information and belief, that BMIS and Bernard L. Madoff (collectively with BMIS, Madoff ) perpetrated a fraudulent scheme and that Blum had no knowledge of the fraud prior to December 11, 2008. 167. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 167, except avers, on information and belief, that Madoff was arrested, charged and is currently serving a prison sentence, and respectfully refers the Court to the referenced criminal complaint and relevant sentencing documents for the true and complete contents thereof. B. 168. Fairfield Greenwich Group s Relationship with Madoff Blum, subject to Footnote 2, lacks knowledge or information sufficient to form a

belief as to the truth of the allegations in Paragraph 168. 169. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 169, except avers, on information and belief, that Madoff purported to execute a split-strike conversion strategy on behalf of certain of the Funds and that Madoff 21

purported to serve as a custodian or sub-custodian for a substantial portion of certain of the Funds assets. 170. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 170, except avers, on information and belief, that (i) Fairfield Sentry Limited was incorporated in the Territory of the British Virgin Islands ( BVI ); (ii) Madoff purported to execute a split-strike conversion strategy on behalf of Fairfield Sentry Limited; (iii) Madoff purported to serve as a custodian or sub-custodian for a substantial portion of Fairfield Sentry Limited s assets; (iv) Fairfield Sentry Limited was primarily for foreign investors; and (v) on July 21, 2009, the BVI Court ordered that Fairfield Sentry Limited be liquidated. 171. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 171, except avers, on information and belief, that (i) Fairfield Sigma Limited was a company organized under the laws of the BVI, (ii) Fairfield Sigma invested in Fairfield Sentry Limited and, during the period of such investment, Madoff purportedly served as sub-custodian for a substantial portion of Fairfield Sentry Limited s assets; (iii) Fairfield Sigma was for foreign investors; and (iv) on July 21, 2009, the BVI Court ordered the Fairfield Sigma Limited fund to be liquidated, and respectfully refers the Court to the referenced Private Placement Memorandum ( PPM ) for the true and complete terms thereof. 172. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 172. 173. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 173. 174. Blum states that Paragraph 174 is a description of Plaintiffs claims to which no

response is required. To the extent a response is required, Blum admits that Paragraph 174 refers to the funds identified in Paragraphs 169 through 173 collectively as the Funds. 22

175.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 175, except respectfully refers the Court to the referenced SEC complaint for the true and complete contents thereof. C. 176. Nature and Structure of the Fairfield Greenwich Group The allegations in Paragraph 176 state legal conclusions to which no response is

required. To the extent that a response is required, Blum denies the allegations in Paragraph 176. 177. The allegations in Paragraph 177 state legal conclusions to which no response is

required. To the extent that a response is required, Blum denies the allegations in Paragraph 177. 178. The allegations in Paragraph 178 state legal conclusions to which no response is

required. To the extent that a response is required, Blum denies the allegations in Paragraph 178. 179. Blum denies the allegations in Paragraph 179, except respectfully refers the Court

to the referenced brochure for the true and complete contents thereof. 180. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 180, except denies the allegations as they relate to FGG. D. 181. Fairfield Defendants False Representations and Omissions in Marketing the Funds and Their Breaches of Fiduciary Duties to Investors The allegations in Paragraph 181 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 182. The allegations in Paragraph 182 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 183. The allegations in Paragraph 183 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum denies those

23

allegations, except respectfully refers the Court to the referenced documents and marketing material for the true and complete contents thereof. 1. 184. Defendants False Representations and Omissions Regarding the Split-Strike Conversion Strategy

The allegations in Paragraph 184 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except avers that the strategy of the Funds was described as including a split-strike conversion strategy and respectfully refers the Court to the referenced PPMs and Confidential Offering Memoranda ( COM ) for the true and complete terms thereof. 185. The allegations in Paragraph 185 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except avers, on information and belief, that Madoff perpetrated a fraud and avers that Blum had no knowledge of the fraudulent scheme prior to December 11, 2008. 186. The allegations in Paragraph 186 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 2. 187. Defendants False Representations and Omissions Regarding the Funds Track Record of Profitability

The allegations in Paragraph 187 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced PPMs and update reports for the true and complete contents thereof. 24

188.

The allegations in Paragraph 188 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except avers, on information and belief, that information Madoff reported on returns was false. 189. The allegations in Paragraph 189 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 190. The allegations in Paragraph 190 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced reports for the true and complete contents thereof. 191. The allegations in Paragraph 191 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced Semi-Annual Reports and Monthly Strategy Reviews for the true and complete contents thereof. 192. The allegations in Paragraph 192 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 4. 193. Defendants False Representations and Omissions Concerning Due Diligence and Oversight of Madoff

The allegations in Paragraph 193 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations.

25

194.

The allegations in Paragraph 194 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced PPMs for the true and complete terms thereof. 195. The allegations in Paragraph 195 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced PPMs for the true and complete terms thereof. 196. The allegations in Paragraph 196 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced documents for the true and complete terms thereof. 197. The allegations in Paragraph 197 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced document for the true and complete terms thereof. 198. The allegations in Paragraph 198 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced document for the true and complete contents thereof. 199. The allegations in Paragraph 199 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced document for the true and complete contents thereof. 26

200.

The allegations in Paragraph 200 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced documents for the true and complete contents thereof. 201. The allegations in Paragraph 201 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced document for the true and complete contents thereof. 202. The allegations in Paragraph 202 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced documents for the true and complete contents thereof. 203. The allegations in Paragraph 203 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced document for the true and complete contents thereof. 204. The allegations in Paragraph 204 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced document for the true and complete contents thereof. 205. The allegations in Paragraph 205 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations.

27

206.

The allegations in Paragraph 206 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 207. The allegations in Paragraph 207 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 208. The allegations in Paragraph 208 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced email for the true and complete contents thereof. 209. The allegations in Paragraph 209 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced email for the true and complete contents thereof. 210. The allegations in Paragraph 210 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 211. The allegations in Paragraph 211 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 212. The allegations in Paragraph 212 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations.

28

213.

The allegations in Paragraph 213 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 214. The allegations in Paragraph 214 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced Consent Order for the true and complete contents thereof. 215. The allegations in Paragraph 215 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 216. The allegations in Paragraph 216 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. E. 217. The Fairfield Defendants Ignored Red Flags of Madoff s Fraud

The allegations in Paragraph 217 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 1. 218. Madoff s Secretive Operations

The allegations in Paragraph 218 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced memorandum for the true and complete contents thereof.

29

219.

The allegations in Paragraph 219 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 2. 220. Key Positions Held by Madoff Family Members

The allegations in Paragraph 220 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 3. 221. Madoff s Custody of Assets

The allegations in Paragraph 221 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except avers that Madoff purported to serve as a custodian or sub-custodian for a substantial portion of certain of the Funds assets. 4. 222. Madoff s Unknown Auditing Firm

The allegations in Paragraph 222 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 5. 223. Madoff s Paper Trading Records

The allegations in Paragraph 223 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations.

30

6.

Madoff s Consistent Investment Returns

224(a).5 The allegations in Paragraph 224(a) are not directed to Blum, who, accordingly, has no obligation to respond. To the extent that a response is required, Blum denies those allegations, except lacks knowledge or information sufficient to form a belief as to Madoff s full reporting of his results and claims, and the results that others were able to achieve. 224. The allegations in Paragraph 224 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. F. 225. The Fairfield Defendants Falsely Reassured Investors Who Made Inquiries

The allegations in Paragraph 225 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced emails for the true and complete contents thereof. 226. The allegations in Paragraph 226 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced email for the true and complete contents thereof. 227. The allegations in Paragraph 227 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced document for the true and complete contents thereof.

5

Blum numbers this paragraph 224(a) since Plaintiffs did not provide a number for the allegations between paragraphs 223 and 224 of the SCAC. 31

228.

The allegations in Paragraph 228 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced email for the true and complete contents thereof. 229. The allegations in Paragraph 229 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced emails for the true and complete contents thereof. 230. The allegations in Paragraph 230 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 231. The allegations in Paragraph 231 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced email for the true and complete contents thereof. 232. The allegations in Paragraph 232 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. 233. The allegations in Paragraph 233 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced email and documents for the true and complete contents thereof.

32

G. 234.

The Fairfield Defendants Assisted Madoff in Thwarting an SEC Investigation

The allegations in Paragraph 234 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations. H. 235. The Fairfield Defendants Attempted to Raise Money to Keep Madoff Afloat in Late 2008

The allegations in Paragraph 235 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except avers that Madoff s fraud was not revealed until December 11, 2008. I. 236. The Fairfield Defendants and Fairfield Fee Claim Defendants Earned Massive Fees from Funneling Plaintiffs Assets into the Madoff Fraud

Blum denies the allegations in Paragraph 236, except avers, on information and

belief, that profits and asset values reported by Madoff were false, and avers that certain fees were based on reported asset values. 237. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 237, except respectfully refers the Court to the referenced PPMs for the full and complete terms thereof. 238. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 238, except avers that FGL and FGBL were entitled to and did receive certain fees and respectfully refers the Court to the referenced PPMs and to audited financial statements for the true and complete contents thereof. 239. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 239, except avers that FGL and FGBL were entitled to and did

33

receive certain fees and respectfully refers the Court to the referenced PPMs and to audited financial statements for the true and complete contents thereof. 240. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 240, except respectfully refers the Court to the referenced PPM and Investment Management Agreement for the true and complete contents thereof. 241. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 241, except avers, on information and belief, that financial information reported by Madoff has, after Madoff s arrest in December 2008, been found to be fraudulent. 242. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 242, except avers that assets of Fairfield Sigma Limited were invested in Fairfield Sentry Limited, and respectfully refers the Court to the referenced PPMs for the true and complete terms thereof. 243. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 243, except avers, on information and belief, that data reported by Madoff has, after Madoff s arrest in December 2008, been found to be fraudulent, and avers that Fairfield Sigma Limited earned fees, and respectfully refers the Court to the referenced financial statements for the true and complete terms thereof. 244. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 244, except avers, on information and belief, that financial information reported by Madoff has, after Madoff s arrest in December 2008, been found to be fraudulent.

34

245.

Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 245, except respectfully refers the Court to the referenced COMs for the true and complete terms thereof. 246. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 246, except respectfully refers the Court to the referenced COMs and to audited financial statements for the true and complete contents thereof. 247. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 247, except respectfully refers the Court to the referenced COMs for the true and complete contents thereof. 248. Blum lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 248, except avers, on information and belief, that financial information reported by Madoff has, after Madoff s arrest in December 2008, been found to be fraudulent. 249. Blum denies the allegations in Paragraph 249, except avers that Blum had no

knowledge of Madoff s fraud prior to December 11, 2008. J. 250. Fairfield Defendants Agreed to Provide Full Restitution to Massachusetts Investors in the Funds

The allegations in Paragraph 250 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced Administrative Complaint for the true and complete contents thereof. 251. The allegations in Paragraph 251 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or

35

information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced Administrative Complaint for the true and complete contents thereof. 252. The allegations in Paragraph 252 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced Administrative Complaint for the true and complete contents thereof. 253. The allegations in Paragraph 253 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced Administrative Complaint for the true and complete contents thereof. 254. The allegations in Paragraph 254 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced Administrative Complaint for the true and complete contents thereof. 255. The allegations in Paragraph 255 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced Administrative Complaint for the true and complete contents thereof.

36

256.

The allegations in Paragraph 256 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the Pre-Hearing Memorandum for the true and complete contents thereof. 257. The allegations in Paragraph 257 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced order for the true and complete contents thereof. 258. The allegations in Paragraph 258 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced order for the true and complete terms thereof. K. PricewaterhouseCoope rs Failed to Audit the Funds According to U.S. and International Standards and Misrepresented the Financial Condition of the Funds

259.

The allegations in Paragraph 259 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except avers, on information and belief, that one or more PwC entity conducted independent audits of the financial statements of Fairfield Sentry Limited and Fairfield Sigma Limited for certain years and respectfully refers the Court to the referenced engagement letter for the true and complete contents thereof. 260. The allegations in Paragraph 260 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or

37

information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the relevant documents for the scope of services provided. 1. 261. PwC Issued Clean Audit Opinions for the Funds

The allegations in Paragraph 261 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks knowledge or information sufficient to form a belief as to the truth of those allegations, except respectfully refers the Court to the referenced audit opinion and audited financial statements for the true and complete contents thereof. 262. The allegations in Paragraph 262 are not directed to Blum, who, accordingly, has

no obligation to respond. To the extent that a response is required, Blum lacks kno