Anwar et al v. Fairfield Greenwich Limited et al

Filing 768

ANSWER to Complaint. Document filed by Standard Chartered Bank International (Americas) Limited.(Nelles, Sharon)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
PASHA ANWAR, et al.,
Plaintiffs,

Master File No. 09-CV-118 (VM)

v.
FAIRFIELD GREENWICH LIMITED, et al.,
Defendants.
This Document Relates To: Ricardo Almiron v. Standard
Chartered Bank International (Americas) Ltd., et al.,
No. 10-CV-6186.

Standard Chartered Bank International (Americas) Limited’s
Answer and Defenses to the Complaint
Defendant Standard Chartered Bank International (Americas) Limited (“SCBI”)
(referred to herein as “Defendant”), through its undersigned counsel, hereby responds as follows
to the complaint (the “Complaint”), based on present knowledge. Defendant reserves the right to
supplement and amend this Answer and to add additional defenses of which it becomes aware
through discovery or other investigation.
I.

ANSWER
Nature of Proceeding
1.

Defendant denies the allegations of paragraph 1, except admits to the public

knowledge that Bernard Madoff perpetrated a massive Ponzi scheme. Defendant respectfully
refers the Court to Madoff’s plea allocution in the case captioned United States v. Madoff, No.

-1-

09-CR-00213 (S.D.N.Y. March 12, 2009) for a complete and accurate description of Bernard
Madoff’s role in the Ponzi scheme.
2.

Defendant denies the allegations of paragraph 2, except admits that: (i) plaintiff

invested $100,000 in Fairfield Sentry Ltd. (“Sentry”) through his account with Defendant, which
was formerly named American Express Bank International (Americas) Ltd. (“AEBI”); and
(ii) substantially all of the assets of Sentry were invested with Bernard L. Madoff Investment
Securities (“BLMIS”).
3.

Defendant denies the allegations of paragraph 3, except admits that Sentry had a

history of stable and steady returns.
4.

Defendant denies the allegations of paragraph 4.

5.

Defendant denies the allegations of paragraph 5.

6.

Defendant denies the allegations of paragraph 6.

7.

Defendant denies the allegations of paragraph 7.

8.

Defendant denies the allegations of paragraph 8.

9.

Defendant denies the allegations of paragraph 9.

10.

Defendant denies the allegations of paragraph 10.

11.

Defendant admits that plaintiff purports to characterize the allegations in Picard

v. Fairfield Sentry Limited, et al., No. 09-1239 (Bankr. S.D.N.Y.), an action brought by the
trustee of BLMIS and lacks knowledge or information sufficient to form a belief as to the truth
of the remaining allegations of paragraph 11 and therefore denies them.
Jurisdiction, Venue and Parties
12.

Defendant admits that plaintiff purports to seek damages but denies that plaintiff

suffered damages as a result of any conduct by Defendant.
13.

Defendant denies the allegations of paragraph 13.
-2-

14.

Defendant admits the allegations of paragraph 14.

15.

Defendant admits the allegations of paragraph 15.

16.

Defendant admits that: (i) on or about February 2008, AEBI was acquired by

Standard Chartered PLC; and (ii) AEBI was renamed SCBI.
17.

Defendant denies the allegations of paragraph 17, except admits that: (i) Antonio

Garcia-Adanez was a relationship manager employed by Defendant; (ii) Garcia-Adanez serviced
plaintiff’s account with Defendant.
18.

Defendant admits that plaintiff purports to characterize the contents of the

General Pledge Agreement and respectfully refers the Court to that agreement for a complete and
accurate description of its contents. Paragraph 18 of the complaint does not identify any of the
other “various agreements” plaintiff refers to and Defendant therefore lacks knowledge or
information sufficient to form a belief as to the truth of the remaining allegations of paragraph 18
and therefore denies them.
19.

Defendant denies the allegations of paragraph 19, except admits that:

(i) plaintiff’s account was opened at the Miami office of Defendant; (ii) the Miami office of
Defendant is located at 1111 Brickell Avenue, Miami, Florida 33131; (iii) plaintiff invested in
Sentry through Defendant’s Miami office; and (iv) plaintiff’s account was serviced through the
Miami office of Defendant.
20.

Defendant denies the allegations of paragraph 20, except admits that: (i) plaintiff

purports to base jurisdiction in this action on Fla. Stat. § 48.193; and (ii) Defendant conducts
business through an office in Miami, Florida. Defendant also admits that plaintiff purports to
characterize the contents of the General Pledge Agreement and respectfully refers the Court to
that agreement for a complete and accurate description of its contents.

-3-

21.

Defendant denies the allegations of paragraph 21, except admits that: (i) plaintiff

purports to base venue in this action on Fla. Stat. §§ 47.011 and 47.051; and (ii) Defendant has
an office in Miami, Florida. Defendant also admits that plaintiff purports to characterize the
contents of the General Pledge Agreement and respectfully refers the Court to that agreement for
a complete and accurate description of its contents.
Factual Allegations
22.

Defendant admits the allegations of paragraph 22, except avers that plaintiff

opened his account with Defendant on June 27, 2006.
23.

Defendant denies the allegations of paragraph 23 and avers that plaintiff’s

accounts at AEBI were assigned Account Numbers ****3780 and ****3549.
24.

Defendant denies the allegations of paragraph 24.

25.

Defendant denies that plaintiff’s securities investment accounts were transferred

to StanChart Securities International, Inc. in November 2008 and lacks knowledge or
information sufficient to form a belief as to the truth of the remaining allegations of paragraph 25
and therefore denies them.
26.

Defendant denies the allegations of paragraph 26, except admits that: (i) Antonio

Garcia-Adanez was a relationship manager employed by Defendant; (ii) Garcia-Adanez serviced
plaintiff’s account with Defendant; and (iii) plaintiff’s account was serviced through Defendant’s
Miami office.
27.

Defendant denies the allegations of paragraph 27.

28.

Defendant denies the allegations of paragraph 28.

29.

Defendant denies the allegations of paragraph 29, except admits that Sentry had a

history of stable and steady returns.

-4-

30.

Defendant denies the allegations of paragraph 30, except admits that plaintiff

authorized and approved the purchase of shares in Sentry.
31.

Defendant denies that plaintiff invested $100,000 in Sentry in December 2008,

and respectfully refers the Court to plaintiff’s account statements for a complete and accurate
description of their contents.
32.

Defendant denies the allegations of paragraph 32.

33.

Defendant denies the allegations of paragraph 33.

34.

Defendant denies the allegations of paragraph 34, except admits that SCBI

charged certain account fees associated with investments in Sentry.
35.

Defendant denies the allegations of paragraph 35.

36.

Defendant denies the allegations of paragraph 36.

37.

Defendant denies the allegations of paragraph 37.

38.

Defendant lacks knowledge or information sufficient to form a belief as to the

truth of the allegations of paragraph 38 and therefore denies them.
39.

Defendant denies the allegations of paragraph 39.

40.

Defendant denies the allegations of paragraph 40.

41.

Defendant denies the allegations of paragraph 41, except admits that plaintiff

invested $100,000 in Sentry through his account at SCBI.
42.

Defendant denies the allegations of paragraph 42.

43.

Defendant denies the allegations of paragraph 43, except admits that Sentry

invested substantially all of its assets in BLMIS.

-5-

44.

Defendant denies the allegations of paragraph 44, except admits that Fairfield

provided copies of its Private Placement Memoranda (“PPMs”) to Defendant and that Sentry’s
investment strategies were disclosed in its PPMs.
45.

Defendant admits that plaintiff purports to characterize the contents of a PPM and

respectfully refers the Court to that PPM for a complete and accurate description of its contents.
46.

Defendant denies the allegations of paragraph 46, except admits that Sentry

invested substantially all of its assets in BLMIS.
47.

Defendant admits the allegations of paragraph 47.

48.

Defendant denies the allegations of paragraph 48.

49.

Defendant denies the allegations of paragraph 49.

50.

Defendant admits the allegations of paragraph 50.

51.

Defendant admits that plaintiff purports to characterize the contents of a criminal

complaint filed by the U.S. Attorney’s Office for the Southern District of New York and the
complaint filed by the SEC in SEC v. Bernard L. Madoff, No. 08-CV-10791 (S.D.N.Y. Dec. 11,
2008), and Defendant respectfully refers the Court to those complaints for a complete and
accurate description of their contents.
52.

Defendant admits that Madoff pleaded guilty to securities and wire fraud on

March 12, 2009, and that plaintiff purports to characterize the contents of a plea allocution by
Bernard L. Madoff. Defendant respectfully refers the Court to that plea allocution for a complete
and accurate description of its contents.
53.

Defendant denies the allegations of paragraph 53, except admits that Bernard L.

Madoff and BLMIS perpetrated a fraud and concealed it from Defendant and lacks knowledge or
information sufficient to form a belief as to the truth of the remaining allegations of paragraph 53

-6-

and therefore denies them. Defendant respectfully refers the Court to Madoff’s Plea Allocution
in the case captioned United States v. Madoff, No. 09-CR-00213 (S.D.N.Y. Mar. 12, 2009) for a
description of Madoff’s role in the Ponzi scheme and his admissions regarding the role.
54.

Defendant denies the allegations of paragraph 54.

55.

Defendant denies the allegations of paragraph 55, except admits that BLMIS

functioned as an investment manager and custodian of securities.
56.

Defendant denies the allegations of paragraph 56.

57.

Defendant denies the allegations of paragraph 57.

58.

Defendant denies the allegations of paragraph 58, except admits that plaintiff

purports to characterize the contents of complaints in civil actions, including Anwar v. Fairfield
Greenwich Limited, No. 09-CV-118 (S.D.N.Y.), and Tradewaves Ltd., et al. v. Standard
Chartered International (USA) Ltd., et al., No. 09-CV-9423 (S.D.N.Y.). Defendant respectfully
refers the Court to the complaints in those actions for a complete and accurate description of
their contents.
59.

Defendant denies the allegations of paragraph 59.

60.

Defendant denies the allegations of paragraph 60.
Count One
Violations of Section 517.301, et seq., of the Florida Statutes
(As Against All Defendants)

61.

Defendant incorporates its responses to paragraphs 1 through 60 as if fully set

forth herein.
62.

The allegations of paragraph 62 relate to plaintiff’s claim for a violation of Fla.

Stat. § 517.301, which was dismissed by the Court; therefore, no response is required.
63.

The allegations of paragraph 63 relate to plaintiff’s claim for a violation of Fla.

Stat. § 517.301, which was dismissed by the Court; therefore, no response is required.
-7-

64.

The allegations of paragraph 64 relate to plaintiff’s claim for a violation of Fla.

Stat. § 517.301, which was dismissed by the Court; therefore, no response is required.
65.

The allegations of paragraph 65 relate to plaintiff’s claim for a violation of Fla.

Stat. § 517.301, which was dismissed by the Court; therefore, no response is required.
66.

The allegations of paragraph 66 relate to plaintiff’s claim for a violation of Fla.

Stat. § 517.301, which was dismissed by the Court; therefore, no response is required.
67.

The allegations of paragraph 67 relate to plaintiff’s claim for a violation of Fla.

Stat. § 517.301, which was dismissed by the Court; therefore, no response is required.
68.

The allegations of paragraph 68 relate to plaintiff’s claim for a violation of Fla.

Stat. § 517.301, which was dismissed by the Court; therefore, no response is required.
69.

The allegations of paragraph 69 relate to plaintiff’s claim for a violation of Fla.

Stat. § 517.301, which was dismissed by the Court; therefore, no response is required.
Count Two
Breach of Fiduciary Duty
(As Against All Defendants)
70.

Defendant incorporates its responses to paragraphs 1 through 69 as if fully set

forth herein.
71.

To the extent that the allegations of paragraph 71 relate to plaintiff’s claim for

breach of fiduciary duty based on a failure to monitor, which was dismissed by the Court, no
response is required. To the extent that a response is deemed required, Defendant denies the
allegations of paragraph 71.
72.

To the extent that the allegations of paragraph 72 relate to plaintiff’s claim for

breach of fiduciary duty based on a failure to monitor, which was dismissed by the Court, no
response is required. To the extent that a response is deemed required, Defendant denies the
allegations of paragraph 72.
-8-

73.

To the extent that the allegations of paragraph 73 relate to plaintiff’s claim for

breach of fiduciary duty based on a failure to monitor, which was dismissed by the Court, no
response is required. To the extent that a response is deemed required, Defendant denies the
allegations of paragraph 73.
74.

To the extent that the allegations of paragraph 74 relate to plaintiff’s claim for

breach of fiduciary duty based on a failure to monitor, which was dismissed by the Court, no
response is required. To the extent that a response is deemed required, Defendant denies the
allegations of paragraph 74.
75.

To the extent that the allegations of paragraph 75 relate to plaintiff’s claim for

breach of fiduciary duty based on a failure to monitor, which was dismissed by the Court, no
response is required. To the extent that a response is deemed required, Defendant denies the
allegations of paragraph 75.
76.

To the extent that the allegations of paragraph 76 relate to plaintiff’s claim for

breach of fiduciary duty based on a failure to monitor, which was dismissed by the Court, no
response is required. To the extent that a response is deemed required, Defendant denies the
allegations of paragraph 76.
77.

To the extent that the allegations of paragraph 77 relate to plaintiff’s claim for

breach of fiduciary duty based on a failure to monitor, which was dismissed by the Court, no
response is required. To the extent that a response is deemed required, Defendant denies the
allegations of paragraph 77.
78.

To the extent that the allegations of paragraph 78 relate to plaintiff’s claim for

breach of fiduciary duty based on a failure to monitor, which was dismissed by the Court, no

-9-

response is required. To the extent that a response is deemed required, Defendant denies the
allegations of paragraph 78.
79.

To the extent that the allegations of paragraph 79 relate to plaintiff’s claim for

breach of fiduciary duty based on a failure to monitor, which was dismissed by the Court, no
response is required; the allegations of paragraph 79 also contain a legal conclusion to which no
response is required. To the extent that a response is deemed required, Defendant denies the
allegations of paragraph 79.
80.

To the extent that the allegations of paragraph 80 relate to plaintiff’s claim for

breach of fiduciary duty based on a failure to monitor, which was dismissed by the Court, no
response is required. To the extent that a response is deemed required, Defendant denies the
allegations of paragraph 80.
Count Three
Negligence
(As Against All Defendants)
81.

Defendant incorporates its responses to paragraphs 1 through 80 as if fully set

forth herein.
82.

The allegations of paragraph 82 relate to plaintiff’s claim for negligence, which

was dismissed by the Court; therefore, no response is required.
83.

The allegations of paragraph 83 relate to plaintiff’s claim for negligence, which

was dismissed by the Court; therefore, no response is required.
84.

The allegations of paragraph 84 relate to plaintiff’s claim for negligence, which

was dismissed by the Court; therefore, no response is required.
85.

The allegations of paragraph 85 relate to plaintiff’s claim for negligence, which

was dismissed by the Court; therefore, no response is required.

- 10 -

86.

The allegations of paragraph 86 relate to plaintiff’s claim for negligence, which

was dismissed by the Court; therefore, no response is required.
87.

The allegations of paragraph 87 relate to plaintiff’s claim for negligence, which

was dismissed by the Court; therefore, no response is required.
88.

The allegations of paragraph 88 relate to plaintiff’s claim for negligence, which

was dismissed by the Court; therefore, no response is required.
89.

The allegations of paragraph 89 relate to plaintiff’s claim for negligence, which

was dismissed by the Court; therefore, no response is required.
90.

The allegations of paragraph 90 relate to plaintiff’s claim for negligence, which

was dismissed by the Court; therefore, no response is required.
Count Four
Negligent Misrepresentation
(As Against All Defendants)
91.

Defendant incorporates its responses to paragraphs 1 through 90 as if fully set

forth herein.
92.

The allegations of paragraph 92 relate to plaintiff’s claim for negligent

misrepresentation, which was dismissed by the Court; therefore, no response is required.
93.

The allegations of paragraph 93 relate to plaintiff’s claim for negligent

misrepresentation, which was dismissed by the Court; therefore, no response is required.
94.

The allegations of paragraph 94 relate to plaintiff’s claim for negligent

misrepresentation, which was dismissed by the Court; therefore, no response is required.
95.

The allegations of paragraph 95 relate to plaintiff’s claim for negligent

misrepresentation, which was dismissed by the Court; therefore, no response is required.

- 11 -

96.

The allegations of paragraph 96 relate to plaintiff’s claim for negligent

misrepresentation, which was dismissed by the Court; therefore, no response is required.
97.

The allegations of paragraph 97 relate to plaintiff’s claim for negligent

misrepresentation, which was dismissed by the Court; therefore, no response is required.
98.

The allegations of paragraph 98 relate to plaintiff’s claim for negligent

misrepresentation, which was dismissed by the Court; therefore, no response is required.
Count Five
Unjust Enrichment and Constructive Trust
(As Against All Defendants)
99.

Defendant incorporates its responses to paragraphs 1 through 98 as if fully set

forth herein.
100.

The allegations of paragraph 100 relate to plaintiff’s claim for unjust enrichment

and constructive trust, which was dismissed by the Court; therefore, no response is required.
101.

The allegations of paragraph 101 relate to plaintiff’s claim for unjust enrichment

and constructive trust, which was dismissed by the Court; therefore, no response is required.
102.

The allegations of paragraph 102 relate to plaintiff’s claim for unjust enrichment

and constructive trust, which was dismissed by the Court; therefore, no response is required.
103.

The allegations of paragraph 103 relate to plaintiff’s claim for unjust enrichment

and constructive trust, which was dismissed by the Court; therefore, no response is required.
104.

The allegations of paragraph 104 relate to plaintiff’s claim for unjust enrichment

and constructive trust, which was dismissed by the Court; therefore, no response is required.
Denial of Prayer for Relief
Defendant denies that plaintiff is entitled to any of the relief prayed for on pages
25 and 26 of the Complaint.

- 12 -

Jury Trial Demand
Plaintiffs’ demand for a trial by jury is subject to his account agreements with
Defendant.

II.

DEFENSES
First Defense
Plaintiff fails to state a claim upon which relief can be granted.
Second Defense
Any damages allegedly suffered by plaintiff were caused by the intervening act(s)

or omission(s) of persons or entities other than Defendant, and said act(s) or omission(s)
superseded any act or omission by Defendant for which they might be considered liable.
Third Defense
Plaintiff’s claims are barred, in whole or in part, because Defendant’s alleged
conduct was not the cause of plaintiff’s injuries.
Fourth Defense
The claims asserted in the Complaint are barred by the equitable doctrines of
laches, waiver, estoppel, unclean hands, and other equitable defenses that may appear upon
further discovery and investigation.
Fifth Defense
Plaintiff’s claims are barred, in whole or in part, because plaintiff knowingly and
voluntarily assumed the risks inherent in the investments at issue.
Sixth Defense
Plaintiff’s claims are barred, in whole or in part, by the economic loss doctrine.

- 13 -

Seventh Defense
Plaintiff’s claims are barred, in whole or in part, because they are preempted by
the Securities Litigation Uniform Standards Act, 15 U.S.C. § 78bb(f)(1).
Eighth Defense
Plaintiff did not justifiably or reasonably rely on any alleged representations, acts
or omissions by Defendant.
Ninth Defense
Plaintiff’s claims are barred, in whole or in part, because Defendant, or any
person or entity acting or purporting to act on its behalf, acted in good faith and with due care
and diligence.
Tenth Defense
Plaintiff’s claims are barred, in whole or in part, by virtue of his account
agreements with Defendant.
Eleventh Defense
Plaintiff’s claims are barred, in whole or in part, by virtue of disclosures in the
applicable Subscription Agreements and the PPM.
Twelfth Defense
Defendant was entitled to and did, reasonably and in good faith, rely on the acts
and representations of other third parties with respect to the transactions and events that are the
subject of plaintiff’s claims.
Thirteenth Defense
Any damages recoverable by plaintiff from Defendant are limited to the
percentage of fault attributable to Defendant, and thus would not include the percentage of fault
attributable to plaintiff or third parties, including but not limited to the defendants named in the
- 14 -

Second Consolidated Amended Complaint in Anwar v. Fairfield Greenwich Limited, No. 09CV-0118.
Fourteenth Defense
Any recovery by plaintiff against Defendants is to be offset, in whole or in part,
by any and all other recoveries by plaintiff with respect to his investments in Sentry.
Fifteenth Defense
Defendant is entitled to recover contribution from others for any liability it incurs
to plaintiff.
Sixteenth Defense
Any recovery by plaintiff against Defendant is to be offset by any and all debts,
liabilities or obligations owed by plaintiff to Defendant.

- 15 -

WHEREFORE, Defendant respectfully demands judgment dismissing this action
with prejudice together with its costs and disbursements.

Respectfully submitted,
By: /s/ Diane L. McGimsey
Sharon L. Nelles
Bradley P. Smith
Patrick B. Berarducci
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, New York 10004
Telephone: [phone]
Facsimile: [phone]
E-mail: [e-mail]
Diane L. McGimsey
SULLIVAN & CROMWELL LLP
1888 Century Park East
Los Angeles, California 90067
Telephone: [phone]
Facsimile: [phone]
Attorneys for Defendant
Standard Chartered Bank
International (Americas) Ltd.

December 27, 2011

- 16 -