Anwar et al v. Fairfield Greenwich Limited et al

Filing 977

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

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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)
PASHA ANWAR, et al.,
)
)
Plaintiffs,
)
v.
)
)
)
FAIRFIELD GREENWICH LIMITED, et al.,
)
)
Defendants.
)
This Document Relates To: Baymall Investments Ltd. v. )
Standard Chartered Bank International (Americas) Ltd., )
)
No. 11-cv-7649.
)
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Master File No. 09-CV-118 (VM)

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

ANSWER
Nature of the Action
1.

SCBI denies the allegations of paragraph 1, except admits that plaintiff invested

in Fairfield Sentry (“Sentry”) and Fairfield Sigma (“Sigma”). SCBI avers that, pursuant to the
Court’s September 12, 2012 Order, plaintiff’s claims for fraudulent concealment and negligence

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have been dismissed. (Dkt. No. 937.1) SCBI also avers that Standard Chartered PLC acquired
American Express Bank Ltd. (“AEBL”) from the American Express Company in or around
February 2008. SCBI avers that AEBL was renamed Standard Chartered International (USA)
Ltd. and that American Express Bank International (“AEBI”) was renamed SCBI.
2.

SCBI denies the allegations of paragraph 2, except admits that plaintiff purports

to describe events occurring in December 2008 regarding the fraud perpetrated by Bernard L.
Madoff and BLMIS.
3.

SCBI denies the allegations of paragraph 3.

4.

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

the allegations of paragraph 4 and therefore denies them.
5.

SCB denies the allegations of paragraph 5.

6.

SCBI denies the allegations of paragraph 6.

7.

SCBI denies the allegations of paragraph 7, except admits that plaintiff was

charged standard fees.
8.

SCBI denies the allegations of paragraph 8.
Parties, Jurisdiction and Venue

9.

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

the allegations of paragraph 9 and therefore denies them, except admits that plaintiff is organized
and exists under the laws of the British Virgin Islands.
10.

SCBI denies the allegations of paragraph 10, except admits that it is a corporation

authorized to do business in Florida with a place of business at 1111 Brickell Avenue, Miami,
Florida 33131.
1

All citations to docket entries refer to the master docket, No. 09-118, unless otherwise
noted.
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11.

SCBI admits that: (i) Standard Chartered PLC is the direct parent of Standard

Chartered Holdings Limited; (ii) Standard Chartered Holdings Limited is the direct parent of
Standard Chartered Bank; and (iii) Standard Chartered Bank is the direct parent of SCBI.
12.

SCBI admits the allegations of paragraph 12.

13.

SCBI denies the allegations of paragraph 13, except admits that: (i) plaintiff

purports to base venue for this action on 28 U.S.C. § 1391; and (ii) SCBI conducts business
within the Southern District of Florida.
14.

SCBI denies the allegations of paragraph 14, except admits that it conducts

business within the Southern District of Florida.
Factual Allegations
15.

SCBI admits: (i) plaintiff was a client of Schroder & Co. Trust Bank

(“Schroder”); and (ii) in or around 1993, Tirso Morales was an account manager at Schroder.
16.

SCBI denies the allegations of paragraph 16.

17.

SCBI admits: (i) the private banking division of Schroder was sold to AEBL; and

(ii) Tirso Morales was a relationship manager at AEBI.
18.

SCBI denies the allegations of paragraph 18, except admits: (i) Standard

Chartered PLC acquired AEBL from the American Express Company in or around February
2008; and (ii) Tirso Morales was a relationship manager at SCBI.
19.

SCBI denies the allegations of paragraph 19, except admits that plaintiff held

accounts at Schroder, AEBI and SCBI.
20.

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

the allegations of paragraph 20 and therefore denies them, except admits that Tirso Morales met
with representatives of plaintiff.
21.

SCBI denies the allegations of paragraph 21.
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22.

SCBI denies the allegations of paragraph 22.

23.

SCBI denies the allegations of paragraph 23.

24.

SCBI denies the allegations of paragraph 24, except admits that Sentry was

generally regarded as a safe investment.
25.

SCBI denies the allegations of paragraph 25, except admits that AEBI conducted

due diligence on Sentry.
26.

SCBI denies the allegations of paragraph 26, except admits that Sentry was

generally regarded as a safe investment.
27.

SCBI denies the allegations of paragraph 27.

28.

SCBI denies the allegations of paragraph 28, except admits that Sentry invested

substantially all of its assets with BLMIS.
29.

SCBI denies the allegations of paragraph 29.

30.

SCBI denies the allegations of paragraph 30, except admits in or around March

2006, plaintiff purchased approximately 88.1 shares of Sentry for approximately $100,000; and
(ii) plaintiff purchased additional shares of Sentry in or around 2008, and (iii) by 2008, plaintiff
had purchased approximately 243.72 total shares of Sentry.
31.

SCBI denies the allegations of paragraph 31, except admits that in or around April

2008, plaintiff purchased approximately 529.27 shares of Sigma for approximately €100,000.27.
32.

SCBI denies the allegations of paragraph 32, except admits that Sigma placed

substantially all of its assets in BLMIS.
33.

SCBI denies the allegations of paragraph 33.

34.

SCBI denies the allegations of paragraph 34.

35.

SCBI denies the allegations of paragraph 35.

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36.

SCBI denies the allegations of paragraph 36.

37.

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

the allegations of paragraph 37 and therefore denies them.
38.

SCBI denies the allegations of paragraph 38.

39.

SCBI denies the allegations of paragraph 39, except admits that plaintiff invested

in Sentry and Sigma.
40.

SCBI denies the allegations of paragraph 40, except admits that plaintiff held

investments in Sentry and Sigma in or or around November 2008.
41.

SCBI denies the allegations of paragraph 41.

42.

The allegations of paragraph 42 contain a legal conclusion to which no response

is required. To the extent a response is deemed required, SCBI denies the allegations of
paragraph 42.
43.

The allegations of paragraph 43 contain a legal conclusion to which no response

is required. To the extent a response is deemed required, SCBI denies the allegations of
paragraph 43.
44.

The allegations of paragraph 44 contain a legal conclusion to which no response

is required. To the extent a response is deemed required, SCBI denies the allegations of
paragraph 44.
45.

SCBI denies the allegations of paragraph 45.

46.

SCBI denies the allegations of paragraph 46, except admits that plaintiff purports

to describe certain information reflected on a website entitled “STEP Wealth Directory.” SCBI
respectfully refers the Court to the unnamed portions of this website for a complete and accurate
description of their contents.

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47.

SCBI denies the allegations of paragraph 47, including paragraphs 47(a)-(e),

except admits that plaintiff purports to describe certain information reflected on Standard
Chartered Bank’s website. SCBI respectfully refers the Court to the unnamed portions of this
website for a complete and accurate description of their contents.
48.

SCBI denies the allegations of paragraph 48, except admits that plaintiff purports

to describe certain information reflected on Standard Chartered Bank’s website. SCBI
respectfully refers the Court to the unnamed portions of this website for a complete and accurate
description of their contents.
49.

SCBI denies the allegations of paragraph 49, except admits that plaintiff purports

to describe certain information reflected on Standard Chartered’s Bank’s website under a
heading entitled “Responsible Selling and Marketing.” SCBI respectfully refers the Court to this
website for a complete and accurate description of its contents.
50.

SCBI denies the allegations of paragraph 50.

51.

SCBI denies the allegations of paragraph 51.

52.

SCBI denies the allegations of paragraph 52.

53.

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

the allegations of paragraph 53, and therefore denies them, except admits that Sentry and Sigma
placed substantially all of their assets in BLMIS.
54.

SCBI denies the allegations of paragraph 54.

55.

SCBI denies the allegations of paragraph 55.

56.

SCBI denies the allegations of paragraph 56.

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AS AND FOR A FIRST CLAIM
(Breach of Fiduciary Duty)
57.

SCBI repeats and realleges its responses to paragraphs 1 through 56 as if fully set

forth herein.
58.

SCBI denies the allegations of paragraph 57.

59.

SCBI denies the allegations of paragraph 58.

60.

The allegations of paragraph 59 contain a legal conclusion to which no response

is required. To the extent a response is deemed required, SCBI denies the allegations of
paragraph 59.
61.

SCBI denies the allegations of paragraph 60.

62.

SCBI denies the allegations of paragraph 61.

63.

SCBI denies the allegations of paragraph 62.

64.

The allegations of paragraph 63, including paragraphs 63(a)-(i), contain a legal

conclusion to which no response is required. To the extent a response is deemed required, SCBI
denies the allegations of paragraph 63, including paragraphs 63(a)-(i).
65.

The allegations of paragraph 64 contain a legal conclusion to which no response

is required. To the extent a response is deemed required, SCBI denies the allegations of
paragraph 64, including by denying that plaintiff suffered any damages as a result of conduct by
SCBI.
AS AND FOR A SECOND CLAIM
(Fraudulent Concealment)
66.

SCBI repeats and realleges its responses to paragraphs 1 through 64 as if fully set

forth herein.
67.

The allegations of paragraph 65 contain a legal conclusion and relate to plaintiff’s

claim for fraudulent concealment, which the Court dismissed on September 12, 2012
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(Dkt. No. 937); therefore, no response is required. To the extent a response is deemed required,
SCBI denies the allegations of paragraph 65.
68.

The allegations of paragraph 66, including paragraphs 66(a)-(d), contain a legal

conclusion and relate to plaintiff’s claim for fraudulent concealment, which the Court dismissed
on September 12, 2012; therefore, no response is required. To the extent a response is deemed
required, SCBI denies the allegations of paragraph 66.
69.

The allegations of paragraph 67 contain a legal conclusion and relate to plaintiff’s

claim for fraudulent concealment, which the Court dismissed on September 12, 2012; therefore,
no response is required. To the extent a response is deemed required, SCBI denies the
allegations of paragraph 67.
70.

The allegations of paragraph 68 contain a legal conclusion and relate to plaintiff’s

claim for fraudulent concealment, which the Court dismissed on September 12, 2012; therefore,
no response is required. To the extent a response is deemed required, SCBI denies the
allegations of paragraph 68.
71.

The allegations of paragraph 69 contain a legal conclusion and relate to plaintiff’s

claim for fraudulent concealment, which the Court dismissed on September 12, 2012; therefore,
no response is required. To the extent a response is deemed required, SCBI denies the
allegations of paragraph 69, including by denying that plaintiff suffered damages as a result of
conduct by SCBI.
AS AND FOR A THIRD CLAIM
(Negligence)
72.

SCBI repeats and realleges its responses to paragraphs 1 through 69 as if fully set

forth herein.

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73.

The allegations of paragraph 70 contain a legal conclusion and relate to plaintiff’s

negligence claim, which the Court dismissed on September 12, 2012 (Dkt. No. 937); therefore,
no response is required. To the extent a response is deemed required, SCBI denies the
allegations of paragraph 70.
74.

The allegations of paragraph 71, including paragraphs 71(a)-(g), contain a legal

conclusion and relate to plaintiff’s negligence claim, which the Court dismissed on September
12, 2012; therefore, no response is required. To the extent a response is deemed required, SCBI
denies the allegations of paragraph 71, including paragraphs 71(a)-(g).
75.

The allegations of paragraph 72 contain a legal conclusion and relate to plaintiff’s

negligence claim, which the Court dismissed on September 12, 2012; therefore, no response is
required. To the extent a response is deemed required, SCBI denies the allegations of
paragraph 72.
Denial of Prayer for Relief
SCBI denies that plaintiff is entitled to any of the relief prayed for on pages 14-16 of the
Complaint.
Jury Trial Demand
Plaintiff’s demand for a trial by jury is subject to its account agreement(s) with SCBI.

II.

DEFENSES
First Defense
Plaintiff fails to state a claim upon which relief can be granted.

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Second Defense
Any damages allegedly suffered by plaintiff were caused by the intervening act(s) or
omission(s) of persons or entities other than SCBI, and said act(s) or omission(s) superseded any
act or omission by SCBI for which it might be considered liable.
Third Defense
Plaintiff’s claims are barred, in whole or in part, because SCBI’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
SCBI has not engaged in any conduct that would entitle plaintiff to an award of punitive
damages.
Sixth 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.
Seventh Defense
Plaintiff was contributorily and/or comparatively negligent.
Eighth Defense
Plaintiff’s claims are barred, in whole or in part, by the economic loss doctrine.
Ninth 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).
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Tenth Defense
Plaintiff did not justifiably or reasonably rely on any alleged representations, acts or
omissions by SCBI.
Eleventh Defense
Plaintiff’s claims are barred, in whole or in part, because SCBI, or any person or entity
acting or purporting to act on SCBI’s behalf, acted in good faith and with due care and diligence.
Twelfth Defense
Plaintiff’s claims are barred, in whole or in part, by virtue of its account agreement with
SCBI.
Thirteenth Defense
Plaintiff’s claims are barred, in whole or in part, by virtue of disclosures in the applicable
subscription agreement(s) and private placement memorandum applicable to plaintiff’s
purchase(s) of shares in Sentry and/or Sigma.
Fourteenth Defense
SCBI 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.
Fifteenth Defense
Any damages recoverable by plaintiff from SCBI are limited to the percentage of fault
attributable to SCBI, and thus would not include the percentage of fault attributable to at-fault
third parties, including but not limited to the defendants named in the Second Consolidated
Amended Complaint in Anwar v. Fairfield Greenwich Limited, No. 09-CV-0118.

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Sixteenth Defense
Any recovery by plaintiff against SCBI is to be offset, in whole or in part, by any and all
other recoveries (including, where applicable, redemptions) by plaintiff with respect to its
investments in Sentry.
Seventeenth Defense
SCBI is entitled to recover indemnity and/or contribution from others for any liability
they incur to plaintiff.
Eighteenth Defense
Any recovery by plaintiff against SCBI is to be offset by any and all debts, liabilities or
obligations owed by plaintiff to SCBI.

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

Respectfully submitted,
By: /s/ Sharon L. Nelles
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.

October 12, 2012

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