Irving H. Picard v. Saul B. Katz et al
Filing
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FILING ERROR - DEFICIENT DOCKET ENTRY (SEE DOCUMENT #116) - DECLARATION of David J. Sheehan in Opposition re: 80 MOTION to Strike THE EXPERT REPORTS AND TESTIMONY OF STEVE POMERANTZ AND HARRISON J. GOLDIN.. Document filed by Irving H. Picard. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4)(Sheehan, David) Modified on 2/10/2012 (ldi).
Exhibit 3
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C O N F I D E N T I A L
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
11-CV-03605(JSR)(HBP)
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IRVING H. PICARD, Trustee for
the Liquidation of Bernard L.
Madoff Investment Securities LLC,
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Videotaped
Deposition of:
Plaintiff,
v.
MICHAEL KATZ
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SAUL B. KATZ, et al.,
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Defendants.
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--------------------------------x
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TRANSCRIPT of testimony as taken by and before
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NANCY C. BENDISH, Certified Court Reporter, RMR, CRR
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and Notary Public of the States of New York and New
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Jersey, at the offices of Baker & Hostetler, 45
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Rockefeller Plaza, New York, New York on Friday,
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December 9, 2011, commencing at 9:38 a.m.
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PICARD v. KATZ, et al.
CONFIDENTIAL
MICHAEL KATZ 12/9/11
227
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Q.
Did you offer other opportunities for
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your employees to invest in Madoff other than the
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401(k) plan?
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A.
Say that again, please.
Offer
employees?
Q.
Did you offer your employees any
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other opportunities to invest in Madoff beside the
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401(k) plan?
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A.
I think there was some senior people
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who were able to open up accounts in Bernie Madoff.
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I don't recall who, but I think there were a couple
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people.
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Q.
And why were those senior people
allowed to open accounts with Madoff?
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A.
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able to put in.
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Q.
They had a minimum that they were
Did any employees invest in Madoff
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through any of the double-up accounts; do you
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recall?
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A.
I believe there might have been one
or two.
Q.
And what was your understanding as to
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your responsibilities as a trustee when you created
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the 401(k) plan?
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A.
My responsibility as a trustee was to
BENDISH REPORTING, INC.
877.404.2193
PICARD v. KATZ, et al.
CONFIDENTIAL
MICHAEL KATZ 12/9/11
228
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make sure that their monies were protected as
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well -- protected in a manner that as if it was my
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money, or better.
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Q.
Do you have any other understanding
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as to any other responsibilities that you had as a
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trustee?
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A.
Q.
No.
And to what extent was Madoff
involved in the creation of the plan?
A.
Q.
A.
Q.
In the creation of the plan?
Um-hum.
I don't believe anything.
Was Madoff involved in the drafting
of the description of the Madoff option of the plan?
A.
Q.
I don't know that.
Did you have any discussions with
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Madoff concerning offering the Madoff investment as
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an option in the 401(k) plan?
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A.
Q.
A.
Q.
A.
Q.
I did not.
Did Arthur?
I don't know.
Did Saul?
I do not know.
Did Sterling receive in any way any
benefit by opening a retirement plan with -- by
BENDISH REPORTING, INC.
877.404.2193
PICARD v. KATZ, et al.
CONFIDENTIAL
MICHAEL KATZ 12/9/11
230
1
Q.
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A.
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Q.
And how do you know that?
Because the returns were very
similar.
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Okay.
And when you said that your
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understanding is -- that your knowledge is that he
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did not charge any fees, what is that understanding
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based on?
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something.
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Actually, let me back up, let me clarify
When we were discussing earlier the
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fees that Madoff charges with handling your
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accounts, is it your understanding that the fees
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that he charges is limited to commissions?
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A.
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Q.
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A.
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Q.
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A.
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Q.
That's it.
Period?
Period.
Okay, all right.
Thank you.
All right, thank you.
I think that cleared it up.
All
right.
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So, with respect to the 401(k)
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account it was treated -- he treated it just like
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any other account that you had with him?
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A.
Q.
That's correct.
What steps did you and Mr. Friedman
take in the creation of the plan?
The first steps.
BENDISH REPORTING, INC.
877.404.2193
PICARD v. KATZ, et al.
CONFIDENTIAL
MICHAEL KATZ 12/9/11
244
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A.
Not if Arthur Friedman took the
responsibility, no.
Q.
And do you know if Arthur insured
that the description was accurate?
A.
I believe he did.
But I'm not -- I
have no direct knowledge of that.
Q.
When you opened -- when you created
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the 401(k) plan with Arthur in 1997, did you or
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Arthur conduct any diligence with respect to the
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Madoff investment option?
A.
Our due diligence for that was 15 or
20 years of experience dealing with Madoff.
Q.
So did you -- did you do anything or
did you just rely on your prior experience?
A.
We relied on our prior 15 years'
experience.
Q.
But you took no independent action
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after creation of the 401(k) plan with respect to
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the Madoff option?
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A.
Q.
No new initiative, no.
Okay.
And what initiatives had you
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taken up until that point concerning the Madoff
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investment options?
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A.
Well, we had done quite a few things,
some of which, if you'd like me to mention, I will.
BENDISH REPORTING, INC.
877.404.2193
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