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 G

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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.
------------------------------------x

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VIDEOTAPED DEPOSITION OF SIMON KESSELL

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New York, New York

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July 22, 2011

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Reported by:

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

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JOB NO. 39764

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S. Kessell
A. It is possible that after December 11,
2008 she may have taken steps, and but prior to
that date, I'm not aware that she took
affirmative steps in the sense of initiating a
process. But I know at some point she was
thinking about it because she discussed it with
me.
Q. So before December 11, 2008, you have
no knowledge of any specific affirmative steps
that your wife took toward redeeming her entire
investment in Greenwich Sentry Partners, is that
accurate?
MR. VICKERY: Objection to form.
A. So by "affirmative" you mean putting
into place after a decision had been made as
opposed to simply thinking that she might do it
and wanted to get more information?
Q. Correct.
A. So the affirmative -- so I had no
knowledge, and I certainly don't recollect,
Natalie initiating the process of redeeming her
entire investment prior to December 11.
Q. Did she ever speak with an accountant
about redeeming her entire investment in

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Greenwich Sentry Partners?
A. I'm not aware if she spoke to her
accountant.
Q. Did she ever meet with an investment
advisor about redeeming her entire investment in
Greenwich Sentry Partners?
A. I'm not aware if she did or she
didn't.
Q. Mr. Kessell, did you ever seek any
investment advice directly from anyone at Citco
Fund Services (Europe) or Citco (Canada) Inc.
concerning your wife's investment in Greenwich
Sentry Partners?
A. So did I ever seek investment advice?
Q. Directly from anyone -So that the question is clear on the
record, I need to restate it.
A. Sure.
Q. Because otherwise it's too much of a
conversation between you and me.
A. Sure.
Q. Mr. Kessell, you never sought any
investment advice directly from anyone at Citco
Fund Services (Europe) or Citco (Canada) Inc.

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concerning your wife's investment in Greenwich
Sentry Partners, correct?
A. I don't recall seeing any investment
advice.
MS. McGOVERN: I have no further
questions.
MR. MIRRER-SINGER: Let's go off the
record.
THE VIDEOGRAPHER: The time is now
5:47 P.M. We are now off the record.
(Pause.)
THE VIDEOGRAPHER: The time is now
5:48 P.M. We are now back on the record.
EXAMINATION BY
MS. CRAWFORD:
Q. Mr. Kessell, my name is Amy Crawford
and my firm, Kirkland & Ellis, represents
PricewaterhouseCoopers (Canada). I may refer to
PricewaterhouseCoopers (Canada) as PwC (Canada),
okay?
A. Yes.
Q. And I may also refer to PwC -PricewaterhouseCoopers firms generally as PwC,
okay?

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A. Okay.
Q. Now, Mr. Kessell, I think you bent
over backwards today to state clearly that you
were not actually the investor here, right?
A. I hope I've made that clear.
Q. You were not the decider, you have
said?
A. I think that's correct.
Q. And to the extent that you were
advisor, you were simply a provider of
information, correct?
A. I think I said I tried to collect
information for Natalie, yes.
Q. And you didn't try to weigh the
information or filter it to her so that she
should give emphasis to certain things and not
other things, right?
A. There might have been times that I
tried, in response to something she asked, to -for she might have said, "How should I think
about that" and I might have given her an
explanation. I didn't knowingly attach any
weights to what I said because I tried very hard
to make her understand that her risk profile was

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mine and therefore whatever weights I would
attach to it wouldn't be the same as hers.
Q. At the end of the day, you can't say
precisely what information she gave credence to
or didn't; what she may have relied on in making
the decision to invest, right?
A. I don't know how she used the
information or and what weighting she give gave
it.
Q. So is it fair to say you don't know
what she relied on to invest?
A. I know she used the information I gave
her and the discussions that we had, so I can't
say I don't know what she relied on. She would
have relied on the conversations that we had.
She might have relied on the summary. She would
have relied on asking me questions at various
times. So...
Q. Well, you're saying what she would
have relied on and what she might have relied
on. I mean, you're saying that, in a general
sense, she relied on information you gave her,
but among that information, you don't know what
specific pieces of information were important to

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her or might not have been important to her,
right?
A. Yes.
Q. Could you take a look at Exhibit 7.
Let me know when you have it.
A. Yes.
Q. Could you turn to the second page of
your summary. It has the number Hatgis 3026 at
the bottom. Do you see that?
A. First -- yes.
Q. Looking at the first full paragraph at
the top of the page, and going to the very last
sentence of the paragraph, you're speaking about
statements that Philip Toub made to you, and the
sentence is -- the sentence says there, "He told
me that the Sentry Fund was audited by FGG's
auditor, and the manager, Bernard Madoff, was
also audited." Do you see that?
A. Yes, I do.
Q. Exactly what did Philip Toub tell you
with respect to FGG's auditors?
A. He told me that Pricewaterhouse -- and
I'm using the term because I don't recall
whether he specifically said Pricewaterhouse

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(Canada) or he actually referred to which branch
or subsidiary of Pricewaterhouse, but he
mentioned Pricewaterhouse being Fairfield
Greenwich's auditors, and by manager, Bernard
Madoff was -- and this is the person Bernard
Madoff -- was audited.
So that's what we discussed. I don't
think we separately discussed who audited
Bernard Madoff, the person, or his personal
investment group.
Q. So you're saying that the last phrase
of that sentence, "the manager, Bernard Madoff,
was also audited," that refers to his personal
auditor?
A. Meaning that it may not have been -it may have been a separate auditor to
PricewaterhouseCoopers and the fund itself and
Fairfield Greenwich.
Q. Well, what exactly did Philip Toub
tell you with respect to Bernard Madoff's
auditors?
A. He simply said that he was audited.
He had his own auditors, but the fund itself had
auditors, and that Fairfield Greenwich had its

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auditors. And my understanding -- and he
specifically mentioned PricewaterhouseCoopers as
being Fairfield Greenwich and Fairfield Sentry's
auditors.
Q. So you understood that
PricewaterhouseCoopers did not audit Bernard
Madoff or his investment company, right?
A. That's what I understood at that time
from Philip Toub.
Q. And did you even discuss Greenwich
Sentry fund with Philip Toub, the fund that your
wife ultimately invested in?
A. We did. We talked about the Limited
at some point. He talked about the domestic.
He talked about whether, because Natalie was a
Greek citizen as well as an American, whether it
was possible or even considerable for her to
invest either as an offshore or onshore
investor, and by the time we began discussing it
being an onshore investment, then talk changed
to the specific fund.
But he talked about the partnership
and I think there might have been another
domestic Fairfield Sentry Fund.

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Q. Do you have an understanding or did
Mr. Toub make a specific representation with
respect to who audited Greenwich Sentry Partners
specifically?
A. Yes, he told me that
PricewaterhouseCoopers did.
Q. Audited Greenwich Sentry Partners; is
that right?
A. That was my recollection.
Q. And what was the significance of the
statement that the Sentry Fund was audited by
FGG's auditors? What did that -- what
significance did that hold for you?
A. For me? Because we -- because we
discussed who they were and I knew who
PricewaterhouseCoopers was, I regarded that as a
positive element of any possible investment.
Q. Why?
A. Well, because having watched the Big
Eight go to the Big Six go to the Big Four, and
having watched the investment environment, I
realized how important that auditors are in the
process. Auditors had come into Melleos Capital
and audited and I had seen the process that they

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had gone through when they looked at various
things, and I had worked at Lehman Brothers when
we had done some equity offerings and we worked
with accountants, and though the auditors per se
were not part of the drafting process, the -the reference was made to the auditors.
And at some point I think
PricewaterhouseCoopers may have, and I say may
have, I don't recall specifically, been a part
of one of those equity underwritings and I
remember the detail in which they went through
when any issue of fact came up in one of the
offering documents. Stuff often had to be held
while we waited for the accountants to confirm
that they believed it was accurate.
And I have been following myself
equity investments and who the auditors are,
their letters at the end, and their involvement,
if there was any problems as to talking about
their process, was always important. So who the
auditors were mattered a lot.
Q. So your prior experience with
PricewaterhouseCoopers was that they conducted
very detailed audits; is that right?

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A. My recollection is if I hadn't worked
directly with PricewaterhouseCoopers, I had
definitely, and I may have, but my -- my
recollection is they were very detailed. They
were one of the top remaining firms.
And may I also add that at the time
that Sarbanes-Oxley came in, one of the comments
that management would always say was just how
thorough the accounting firms became.
Q. With respect, again, to Bernard
Madoff's auditor, you don't have any
recollection of specifically who that auditor
was, right?
A. No, at that -- at that time, I don't
even know if his name was raised or the firm's
name was raised.
Q. Going back to PricewaterhouseCoopers,
do you have a specific recollection of
communicating to your wife that
PricewaterhouseCoopers audited the Fairfield
funds?
A. Yes.
Q. When did you make that statement to
your wife?

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A. It would have been part -- I don't
remember whether it was in the very first
conversation I had, but it would have been as
part of the initial post-meeting conversations
or debriefings, if you like, that I had where
all the aspects, all the information that I had
gathered, and I wanted to make her understand
this is the whole process.
So I definitely mentioned
PricewaterhouseCoopers and I made sure that she
understood what that meant, and by that I mean
in terms of my understanding of the quality of
the firm.
Q. Okay. Earlier in the paragraph that
we've been discussing there's a sentence that
reads, "He," and again that's Mr. Toub, "said
that they had several layers of monitoring. He
said that their analysts regularly visited
managers, reviewed trades, audited accounts, and
applied analytic tools that identified possible
aberrations or irregularities." Do you see
that?
A. Yes, I do.
Q. Now, when you used the phrase "audited

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accounts" there, you're not referring to
anything that PricewaterhouseCoopers did, right?
A. In that sentence, I think I'm
referring to their, Fairfield Greenwich's,
analysts. So that sentence I don't think
applies to PricewaterhouseCoopers.
Q. Okay. And then in the third full
paragraph on the page, I'm looking at the second
sentence, it reads, "I told PT that what would
allow me to overcome any objections was PT's
description of FGG's institutional safeguards
and risk management, the due diligence and
auditing process, the Sentry funds vetting
process, its liquidity and a quick process of
redemption that PT was confident, and PT was
confident that FGG knew the fund well, was
satisfied that it was a stable, well run liquid
fund, and would advise us immediately if there
was any change in these fundamentals." Do you
see that?
A. Yes, I do.
Q. And again, with respect to the phrase
"auditing process" in that sentence, you're not
referring to anything that an external auditor

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would do, right?
A. I think I was. I was inclusive there,
because I regarded that as part of the
institutional safeguards and risk management,
the due diligence and auditing process. So I
definitely meant both the internal Fairfield
Greenwich auditing and the external process.
Q. Okay. But stepping back, you're
referring to Mr. Toub's description of the
auditing process and those other elements in
that sentence, right? You said you told -A. Yes.
Q. -- Philip Toub what would allow you to
overcome objections were Mr. Toub's description,
right?
A. So it says here "PT's description," so
if -- if that's what I'm referring to, I must be
referring to his description.
Q. And you never actually saw any audit
reports of PricewaterhouseCoopers before your
wife made her investment in Greenwich Sentry
Partners, did you?
MR. VICKERY: Objection to form.
A. I'm -- I'm not sure that's true.

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It -- I may have seen, as part of any online
information that they had where they might have
included, for example, the prior year's
financial statement from the fund, and I don't
recall specifically, but it may have been
included in that.
Q. Okay. Again, I just want to know if
you have any specific recollection of reviewing
a PricewaterhouseCoopers audit report or audited
financial statements for Greenwich Sentry
Partners Fund before your wife made her decision
to invest?
A. Yes, I recollect looking at audited
financial statements for -Q. For the -A. For which fund?
Q. The Greenwich Sentry Partners Fund.
A. Well, the partner's fund, as I recall,
was only opened in that particular year, but
Philip had indicated that the Sentry Funds were
essentially, I don't want to say identical, but
they were, in all the functional aspects, from
an investment perspective, identical.
So I can't say that the partners I saw

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because I don't think it had -- it had audited
funds at those -- audited statements, but I
definitely saw and would have drawn conclusions
that the other audited statements for the other
Fairfield Sentry funds were in all other
respects equivalent to what one might expect
from PricewaterhouseCoopers as auditor.
Q. You never received any materials,
documents, directly from PricewaterhouseCoopers
before your wife made her investment, right?
A. If the question is did
PricewaterhouseCoopers send me directly
information about the Fairfield Sentry Partners
fund from their own e-mail or Website, I don't
recall that I ever received anything directly
from them.
Q. And that's actually true before and
after your wife made her investment in Greenwich
Sentry Partners, right?
A. It -- the question being related to
directly? So -Q. Correct.
A. -- having been e-mailed or sent
directly?

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Q. Correct.
A. I don't recall anything directly
coming from PricewaterhouseCoopers.
Q. And you had no direct communications
with anyone from PricewaterhouseCoopers,
correct?
A. With respect to this investment or
ever?
Q. I'm speaking about the context of this
investment.
MR. VICKERY: Object to the form.
A. I don't recall having any direct
contact with respect to this investment with
anyone who worked directly for
PricewaterhouseCoopers.
Q. Now, Mr. Kessell, there are several
different PricewaterhouseCoopers firms in a
number of different countries around the world.
Are you aware of that?
A. I think I have subsequently become
aware of it. Today I'm aware of it.
Q. But you weren't at the time, is that
fair to say, at the time of your wife's decision
to invest?

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A. I don't think I was aware of any
significant difference myself.
Q. And so sitting here today do you know
which of the PricewaterhouseCoopers firms invest
their -- excuse me, audited the year-end
financial statements of any of the Fairfield
funds at any particular time?
A. Shall I refresh my memory by looking
at the -Q. No. I'm asking you about what you
understand. Do you have any understanding -- do
you know now any distinction between -withdrawn.
Do you know which
PricewaterhouseCoopers firms audited any of the
Fairfield funds at any given time?
A. Am I allowed to look at the documents
to refresh my memory to make sure that I don't
speak inaccurately?
Q. No, because I'm only asking about your
knowledge sitting here right now.
A. My understanding was that it was
PricewaterhouseCoopers (Europe) and it got
transferred to PricewaterhouseCoopers (Canada),

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but that's my understanding without looking at
the documents to make sure I'm not misspeaking.
Q. And given that you weren't aware
before this litigation that there were multiple
PricewaterhouseCoopers firms, that's an
understanding that you came to after Bernard
Madoff's fraud was discovered, is that fair to
say?
A. I was familiar with the concept of
different entities in different countries.
Lehman Brothers, when I worked there, had a
different UK entity, so it -- I don't think I
was unfamiliar with the idea that
Pricewaterhouse might have different entities,
but when I talked about PricewaterhouseCoopers
and when I understood Philip referring to them,
it was, any distinction was -Q. Okay. Which PricewaterhouseCoopers
firm audited the Greenwich Sentry Partners Fund,
to your knowledge?
A. Off the top of my head, as I said, I
thought it began with Europe but at some point
it became Pricewaterhouse (Canada), but I'm not
sure I recollect correctly which particular

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entity it was. And you're saying I can't check
by looking?
Q. Well, it's the accuracy -- I just want
to get your recollection, so you have provided
that.
A. As I sit here today. I mean now.
Q. Understand. Got it.
And do you have any specific
recollection of providing PricewaterhouseCoopers
(Canada)'s audit reports to your wife?
A. Specifically my providing them to her?
I don't recall if I provided them to her or Lina
may have sent them directly to her or I may have
forwarded them to her at the same time Lina sent
anything to me. I don't recall specifically
sending her that.
Q. Do you recall reviewing PwC (Canada)
audit reports of the Greenwich Sentry Partners
funds -- partners fund?
A. Yes, I think in the subsequent years I
would have looked -- I did look at the audited
reports when they became available.
Q. And did you discuss the year-end
financial statements and audit reports with your

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Q. And what was your role with respect to
Mark Kessell's prospective investment in a
Fairfield Fund and eventual investment?
A. It was primarily to introduce him to
Philip Toub because he was interested in
investing money, and at that point he asked me
who I might know who could help him. Philip
Toub was a name that I gave him, and I think I
might have asked Philip to meet with him.
That -- that was my role. I didn't attend any
meeting with him.
Q. Okay. Did you receive any materials
in connection with his prospective investment
from Fairfield?
A. It's possible that Mark forwarded to
me stuff that he had received. I don't recall
specifically, but it's quite possible that he
forwarded me stuff to -Q. Did you go onto the Website to look at
any documents in connection with his potential
investment or after his investment?
A. I think it's quite likely that I
looked if he had asked me to look specifically
at something.

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Q. Mr. Kessell, what e-mail accounts do
you currently have?
A. Do I currently have? I have
[e-mail].
Q. Has that e-mail been searched for
documents relating to Fairfield?
A. I've been told it has. I provided it
to Boies Schiller.
Q. Okay. And what other e-mail accounts
do you currently have?
A. I think I have one started in the last
six months called [e-mail].
Q. What other e-mail accounts do you
have?
A. I'm trying to think at this point in
time if I have any. Well, at work I have
[e-mail].
Q. Okay. And what about previous
e-mails? Do you have any previous e-mail
accounts at -A. At some point, I had
[e-mail].
Q. Did you give that e-mail account over
to counsel?

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A. I don't believe I did. I think I was
given a date range, and I certainly didn't
recall having that e-mail account at the -Q. When did that e-mail account end?
A. At some point -- I think at some point
early 2000s I simply switched to G-mail. It is
possible that I had left with AT&T a forwarding
thing, but I don't recall. Certainly since any
discussion of Fairfield came up,
knowingly using -- I mean, I don't recall using
that account. I tried very hard to stay to
G-mail.
Q. In the interest of time, do you
have -A. I also had a Bloomberg account.
Q. Is there any e-mail account that you
had that you used to correspond about Fairfield
that you have not turned over to Boies Schiller?
(Continued on the next page to include
the jurat.)

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S. Kessell
A. Not that I'm aware of, no.
MR. MIRRER-SINGER: Thank you very
much.
THE VIDEOGRAPHER: That concludes the
video record for today. The time is now
6:42 P.M. We are now off the record.
oOo

____________________
SIMON KESSELL
Subscribed and sworn to
before me this day
of
2011.
_______________________

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86 (Pages 338 to 341)
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