Anwar et al v. Fairfield Greenwich Limited et al
Filing
981
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.,
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Plaintiffs,
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v.
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FAIRFIELD GREENWICH LIMITED, et al.,
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Defendants.
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This Document Relates To: Mailand Investment, Inc. v. )
Standard Chartered Bank International (Americas) Ltd., )
)
No. 11-cv-5732.
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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”). SCBI avers that, pursuant to the Court’s September 12, 2012
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Order, plaintiff’s claims for fraudulent concealment and negligence have been dismissed.
(Dkt. No. 937.1)
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 Bernard L. Madoff Investment Securities (“BLMIS”).
3.
SCBI denies the allegations of paragraph 3.
4.
SCBI denies knowledge or information sufficient to form a belief as to the truth of
the allegations of paragraph 4 and therefore denies them.
5.
SCBI 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 denies knowledge or information 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 authorized to
do business in Florida with a place of business at 1111 Brickell Avenue, Miami, Florida 33131.
11.
SCBI admits: (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.
1
All citations to docket entries refer to the master docket, No. 09-118, unless otherwise
noted.
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12.
SCBI admits the allegations of paragraph 12.
13.
SCBI denies the allegations of paragraph 13, except admits: (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 denies the allegations of paragraph 15, except admits: (i) plaintiff was a
client of American Express Bank Limited (“AEBL”); and (ii) in or around 1998, Orlando
Lescano was an account manager at Schroder.
16.
SCBI denies the allegations of paragraph 16.
17.
SCBI denies the allegations of paragraph 17, except admits: (i) Standard
Chartered PLC acquired AEBL from the American Express Company in February 2008; and
(ii) Orlando Lescano was a relationship manager at SCBI. SCBI avers that AEBL was renamed
Standard Chartered International (USA) Ltd. and that American Express Bank International
(“AEBI”) was renamed SCBI.
18.
SCBI denies the allegations of paragraph 18, except admits that plaintiff held
accounts at AEBI and SCBI.
19.
SCBI denies the allegations of paragraph 19, except admits that Orlando Lescano
from time to time conducted phone calls and meetings with plaintiff and/or its representatives.
20.
SCBI denies the allegations of paragraph 20.
21.
SCBI denies the allegations of paragraph 21.
22.
SCBI denies the allegations of paragraph 22, except admits that Sentry was
generally regarded as a safe investment.
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23.
SCBI denies the allegations of paragraph 23, except admits that AEBI conducted
due diligence on Sentry.
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.
26.
SCBI denies the allegations of paragraph 26, except admits that Sentry invested
substantially all of its assets in BLMIS.
27.
SCBI denies the allegations of paragraph 27.
28.
SCBI denies the allegations of paragraph 28, except admits that in or around 2008
plaintiff purchased approximately 75.43 shares of Sentry for approximately a $100,000.
29.
SCBI denies the allegations of paragraph 29.
30.
SCBI denies the allegations of paragraph 30.
31.
SCBI denies the allegations of paragraph 31.
32.
SCBI denies the allegations of paragraph 32.
33.
SCBI denies knowledge or information sufficient to form a belief as to the truth of
the allegations of paragraph 33 and therefore denies them.
34.
SCBI denies the allegations of paragraph 34.
35.
SCBI denies the allegations of paragraph 35, except admits that plaintiff invested
in Sentry.
36.
SCBI denies the allegations of paragraph 36, except admits that plaintiff held
investments in Sentry as of December 2008.
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37.
The allegations of paragraph 37 contain a legal conclusion to which no response
is required. To the extent a response is deemed required, SCBI denies the allegations of
paragraph 37.
38.
The allegations of paragraph 38 contain a legal conclusion to which no response
is required. To the extent a response is deemed required, SCBI denies the allegations of
paragraph 38.
39.
The allegations of paragraph 39 contain a legal conclusion to which no response
is required. To the extent a response is deemed required, SCBI denies the allegations of
paragraph 39.
40.
SCBI denies the allegations of paragraph 40.
41.
SCBI denies the allegations of paragraph 41, except admits that plaintiff purports
to describe certain information referenced 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.
42.
SCBI denies the allegations of paragraph 42, including paragraphs 42(a)-(e),
except admits that plaintiff purports to describe certain information referenced 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.
43.
SCBI denies the allegations of paragraph 43, except admits that plaintiff purports
to describe certain information referenced 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.
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44.
SCBI denies the allegations of paragraph 44, except admits that plaintiff purports
to describe certain information referenced on Standard Chartered 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.
45.
SCBI denies the allegations of paragraph 45.
46.
SCBI denies the allegations of paragraph 46.
47.
SCBI denies the allegations of paragraph 47.
48.
SCBI denies knowledge or information sufficient to form a belief as to the truth of
the allegations of paragraph 48 and therefore denies them, except admits that Sentry placed
substantially all of its assets in BLMIS.
49.
SCBI denies the allegations of paragraph 49.
50.
SCBI denies the allegations of paragraph 50.
51.
SCBI denies the allegations of paragraph 51.
AS AND FOR A FIRST CLAIM
(Breach of Fiduciary Duty)
SCBI repeats and realleges its responses to paragraphs 1 through 51 as if fully set
forth herein.
52.
SCBI denies the allegations of paragraph 52.
53.
SCBI denies the allegations of paragraph 53.
54.
The allegations of paragraph 54 contain a legal conclusion to which no response
is required. To the extent a response is deemed required, 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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57.
SCBI denies the allegations of paragraph 57.
58.
The allegations of paragraph 58, including paragraphs 58(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 58, including paragraphs 58(a)-(i).
59.
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, including by denying that plaintiff suffered any damages as a result of conduct by
SCBI.
AS AND FOR A SECOND CLAIM
(Fraudulent Concealment)
SCBI repeats and realleges its responses to paragraphs 1 through 64 as if fully set
forth herein.
60.
The allegations of paragraph 60 contain a legal conclusion and relate to plaintiff’s
claims for fraud, 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 60.
61.
The allegations of paragraph 61, including paragraphs 61(a)-(d), contain a legal
conclusion and relate to plaintiff’s claims for fraud, 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 61, including paragraphs 61(a)-(d).
62.
The allegations of paragraph 62 contain a legal conclusion and relate to plaintiff’s
claims for fraud, 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 62.
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63.
The allegations of paragraph 63 contain a legal conclusion and relate to plaintiff’s
claims for fraud, 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 63.
64.
The allegations of paragraph 64 contain a legal conclusion and relate to plaintiff’s
claims for fraud, 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 64, including by denying that plaintiff suffered damages as a result of conduct by
SCBI.
AS AND FOR A THIRD CLAIM
(Negligence)
SCBI repeats and realleges its responses to paragraphs 1 through 64 as if fully set
forth herein.
65.
The allegations of paragraph 65 contain a legal conclusion and relate to plaintiff’s
claims for negligence, 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 65.
66.
The allegations of paragraph 66, including paragraphs 66(a)-(g), contain a legal
conclusion and relate to plaintiff’s claims for negligence, 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, including paragraphs 66(a)-(g).
67.
The allegations of paragraph 67 contain a legal conclusion and relate to plaintiff’s
claims for negligence, 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
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paragraph 67, including by denying that plaintiff suffered any damages as a result of conduct by
SCBI..
Denial of Prayer for Relief
SCBI denies that plaintiff is entitled to any of the relief prayed for on pages 13-16
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.
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.
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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).
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(s) with SCBI.
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Thirteenth Defense
Plaintiff’s claims are barred, in whole or in part, by virtue of disclosures in the
applicable subscription agreement(s) and private purchase memorandum applicable to plaintiff’s
purchase(s) of shares of Sentry.
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 atfault 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.
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: (212) 558-4000
Facsimile: (212) 558-3588
E-mail: nelless@sullcrom.com
Diane L. McGimsey
SULLIVAN & CROMWELL LLP
1888 Century Park East
Los Angeles, California 90067
Telephone: (310) 712-6600
Facsimile: (310) 712-8800
Attorneys for Defendant
Standard Chartered Bank
International (Americas) Ltd.
October 12, 2012
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