Anwar et al v. Fairfield Greenwich Limited et al

Filing 787

DECLARATION of Savvas A. Foukas in Opposition re: #775 FIRST MOTION to Certify Class.. Document filed by PricewaterhouseCoopers Accountants Netherlands N.V., Pricewaterhousecoopers L.L.P.. (Attachments: #1 Exhibit A, #2 Exhibit B, #3 Exhibit C, #4 Exhibit D, #5 Exhibit E, #6 Exhibit F, #7 Exhibit G, #8 Exhibit H, #9 Exhibit I, #10 Exhibit J, #11 Exhibit K, #12 Exhibit L, #13 Exhibit M, #14 Exhibit N, #15 Exhibit O, #16 Exhibit P, #17 Exhibit Q, #18 Certificate of Service)(Maguire, William)

Exhibit J

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF NEW YORK
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PASHA S. ANWAR, et al.,

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Plaintiffs,
Civil Action No.
09-CV-0118(VM)

vs.

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FAIRFIELD GREENWICH LIMITED, et al.,

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Defendants.
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VIDEOTAPED DEPOSITION OF AMIR HESSEL

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New York, New York

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October 4, 2011

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Reported by:

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KATHY S. KLEPFER, RMR, RPR, CRR, CLR

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JOB NO. 42786

TSG Reporting - Worldwide

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A. Hessel
contact anyone at PricewaterhouseCoopers
(Netherlands), either in oral form or in
writing, to discuss Harel's investment in
Fairfield Sentry?
A. I don't know about such direct
connection.
Q. Do you know if anyone at Harel had any
meetings with anyone at PricewaterhouseCoopers
(Netherlands) concerning Harel's investment at
any time during the course of its investment in
Fairfield Sentry?
A. No, we -- our policy or due diligence
process never showed any reason why we should
talk with the accountants.
By the way, I don't know if -- if they
would answer if I called them. Usually the way
accounting connect with investor is through
their review, not -- I really don't think that
they can answer if I tried to make the contact
with. It's very uncommon.
Q. Going back to Exhibit 7, the e-mail
from Cristina Morales at Fairfield to Pontus
Aldell at Credit Suisse, I believe based on the
testimony earlier it was your understanding that

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A. Hessel
Pontus Aldell provided this information to Alon
Kaufman; is that correct?
A. I think that's correct.
Q. And but you believe that Alon received
the information from Credit Suisse?
A. I don't know exactly who gave. I
think that it was mentioned by somebody, yes,
but I don't remember exactly. Okay? Sorry.
Probably, probably yes, but I'm not sure.
Q. And as you just said, it would be
highly unlikely that Harel would have received
audited financial statements for Fairfield
Sentry directly from the auditor; is that right?
MR. VICKERY: Objection. Objection to
form.
A. Usually there's no direct connection
with the auditors.
Q. Generally, does Harel expect to
receive audited financial statements and audit
opinions for the hedge funds in which it
invests?
A. To receive, to actually receive the
audit? What -Q. I'll -- I'll rephrase the question.

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A. Hessel
Is it -- is it common practice for Harel's
investments in other funds that you receive the
audited financial statements for those funds?
A. It's common to get the information and
know that it was reviewed by the accountants or
the Big -- one of the Big Four, but getting it
directly is -- is not so common.
Q. I'm more asking now about just kind of
a general practice of Harel's investments in
other funds, Fairfield Sentry or other funds.
You -- you expect -- would you expect
to receive these types of audit documents for
the funds in which you invest on an annual
basis?
A. It's not -- not so common, I must say.
Sometimes you get it, it's important, but what's
important for us to know is the numbers we are
seeing were audited. So it's not that, as far
as I know, that these numbers are the audited
numbers. I don't usually care so much about
getting the original stamp or reviewed document.
What's important for us to know is what they get
was reviewed.
Q. And it's important that it was

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A. Hessel
reviewed by any one of the Big Four auditing
firms?
A. Yes. Yes.
Q. Did Harel have a formal policy for
what it would do when it would receive these
audited financial statements for the funds in
which it invested?
A. No.
Q. Are you aware, was there a particular
person at Harel who would have been the person
to receive these types of documents on a regular
basis?
A. Not that I know. It's, for every kind
of investment, the right department should get
it, and also, in other departments that want to
get it, it's what we call the back office or the
one that's doing our return. And so it is
important that the information would arrive to
both the Investment Division and the back office
in order that we wouldn't give wrong information
in order to improve our returns, okay? So
that's from our control.
Q. Did Harel have a practice of
circulating these types of reports among the

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A. Hessel
Investment Department, for example, when they
were received?
A. No.
Q. Were there -- did Harel have meetings
to discuss specifically the financial statements
for Fairfield Sentry when it received the
financial statements and the audit opinion for
Fairfield Sentry?
A. No. We -- we were very quiet or sure
that what we -- the numbers we see, either it's
in the Website of Citco or whatever number we
get, we're quite sure that these are the right
numbers because they were audited before. So
the formal act of getting the -- the report were
not that significant for in our point of view.
Q. So once you obtained the information
from the report, would Harel keep the reports in
your files for the fund, for example?
A. I don't -- we didn't have any policy
about what we keep or what we don't keep.
Usually, today probably we keep everything that
we get on file, but unfortunately, if you're
talking just 2003 or so, we weren't that in good
order so we didn't have a policy of where you

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A. Hessel
keep the numbers, et cetera.
Q. So, to your knowledge, there wasn't a
central file where audited financial statements
for Fairfield -A. No.
Q. -- Sentry Fund would have been
collected?
A. No.
Q. If you had collected the audited
financial statements for Fairfield Sentry, would
you have turned them over to your attorney as a
part of this litigation?
A. Yes.
MS. PIERCE: I think that those are
all the questions that I have.
Unfortunately, I'm not the last attorney to
have questions for you, so I'm going to pass
the mic. Thank you.
EXAMINATION BY
MR. RUSE:
Q. Good afternoon, Mr. Hessel. My name
is Luke Ruse and I'm with the firm of Kirkland &
Ellis, LLP and we represent
PricewaterhouseCoopers (Canada).

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A. Hessel
If I refer to PricewaterhouseCoopers
as "PwC," will you understand what I mean?
A. Yes.
Q. And if I refer to the firm
PricewaterhouseCoopers (Canada) as "PwC
(Canada)," you'll understand what I mean?
A. Yes.
Q. Okay. I'll be asking you some similar
questions to the ones you just heard, but I need
to be able to ask them about my client.
Before Harel's first investment in
Fairfield Sentry, Harel did not have any direct
contact with PwC (Canada); is that right?
A. Not that I know, yes.
Q. And Harel did not meet with anyone
from PwC (Canada); is that right?
A. As far as I know, yes.
Q. And Harel did not speak with anyone at
PwC (Canada); is that right?
A. Yes. As I said, we didn't -- in our
process, there was no need, and even today I
don't think that we need to talk with the
accountant; just get their review or get the
fact that they reviewed the number we are

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A. Hessel
getting.
Q. You just wanted to know that the fund
is audited?
A. Yes.
Q. And so Harel never requested -contacted PwC (Canada) to request any materials
before Harel invested in 2003; is that right?
A. It's right.
Q. And Harel did not receive any
documents from PwC before it invested in 2003?
A. Directly, we didn't get, yes.
Q. Directly -A. Direct connection with PwC (Canada),
as far as I know, there was no, so that answers
your question.
Q. Okay. And are the answers to those
questions the same if we talk about the period
after the first investment, after Harel's first
investment in Fairfield Sentry all the way up
through December 2008 when Madoff's fraud was
disclosed?
A. Yes. As I said, what -- what was
important for us that it was audited, and we
didn't see any reason to have a direct connect

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A. Hessel
A. He is a manager of another hedge fund
called RP Fund, which hedge fund which we are
invested.
Q. And what did the meeting with Raffi
Berber have to do with -- with Bernard Madoff?
A. One of our -- of our conclusions after
it is that we should keep a record of all
meetings with hedge fund managers which we have,
which we didn't do in the Fairfield case or
others.
Q. And were there any other Madoff
conclusions that were drawn after December 11,
2008 by Harel?
A. I said what I remember. Having
questionnaire, formal questions that we should
send to every investment, checking who is the
accountant in the sub-investment, keeping
records of meetings. I'm -- that's what I
remember for the moment, and actually maybe, as
I said, actually, we didn't invest any more in
hedge funds since that.
MR. MIRRER-SINGER: Mr. Hessel, I have
no more questions for you. Before we go off
the record, I want to remind Mr. Vickery

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A. Hessel
that defendants' position is that a fact
witness who is also designated as a 30(b)(6)
should only sit for one deposition lasting
no more than seven hours.
MR. VICKERY: And responding, the
plaintiffs' position is that we have Mr.
Hessel here, he was called for two days, one
as an individual witness, one as a 30(b)(6),
and he's ready and prepared to show up
tomorrow for the individual deposition, and
our position is that, you know, if we're
going to notice a 30(b)(6) deposition, you
can call anybody to be a witness, but you're
entitled to depose whoever you call as an
individual witness for the full seven hours.
(Continued on the next page to include
the jurat.)

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A. Hessel
MR. MIRRER-SINGER: This deposition is
closed.
THE VIDEOGRAPHER: The time is 7:24.
That's the end of today's deposition. We're
going off the record.
oOo

____________________
AMIR HESSEL
Subscribed and sworn to
before me this day
of
2011.

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_______________________
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A. Hessel
CERTIFICATE
STATE OF NEW YORK )
: ss
COUNTY OF NEW YORK)
I, Kathy S. Klepfer, a Registered
Merit Reporter and Notary Public within and
for the State of New York, do hereby
certify:
That Amir Hessel, the witness whose
deposition is herein before set forth, was
duly sworn by me and that such deposition is
a true record of the testimony given by such
witness.
I further certify that I am not
related to any of the parties to this action
by blood or marriage and that I am in no way
interested in the outcome of this matter.
In witness whereof, I have hereunto
set my hand this 10th day of October 2011.
------------------------------KATHY S. KLEPFER, RPR, RMR, CRR, CLR

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