Irving H. Picard v. Saul B. Katz et al

Filing 151

DECLARATION of David J. Sheehan in Support re: 150 SECOND MOTION in Limine To Exclude All Evidence And Arguments Relating To The Inaction And/Or Failures Of The United States Securities And Exchange Commission.. Document filed by Irving H. Picard. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2)(Sheehan, David)

Exhibit 1

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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.

SAUL B. KATZ

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SAUL B. KATZ, et al.,
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Defendants.
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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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January 13, 2012, commencing at

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9:32 a.m.

PICARD v. KATZ, et al.

CONFIDENTIAL

SAUL B. KATZ 1/13/12
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A P P E A R A N C E S:

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BAKER & HOSTETLER, LLP
45 Rockefeller Plaza
New York, New York 10111
BY: DAVID J. SHEEHAN, ESQ.
KATHRYN M. ZUNNO, ESQ.
For Plaintiff, Irving Picard, Trustee

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DAVIS POLK & WARDWELL, LLP
450 Lexington Avenue
New York, NY 10017
BY: ROBERT F. WISE, JR., ESQ.
KAREN E. WAGNER, ESQ.
DANA M. SESHENS, ESQ.
ROBERT B. FISKE, JR., ESQ.
For Sterling Equities, certain
affiliated entities, and the Witness

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ALSO PRESENT:
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GREGORY P. NERO, ESQ., Sterling Equities
DANIEL McCLUTCHY, Videographer

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BENDISH REPORTING, INC.
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PICARD v. KATZ, et al.

CONFIDENTIAL

SAUL B. KATZ 1/13/12
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observations?
A.
Q.

No, I don't recall.
Do you recall any -- particularly

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with regard to any discussion of expected volatility

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changes over time?

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A.
Q.

No.
Do you recall anyone ever suggesting

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to you that given Mr. Madoff's strategy, you should

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expect volatility changes?

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A.
Q.

I don't recall that.
Okay.

All right.

I want to go to a

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different topic and this one is going to be SEC

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investigations, okay, of Mr. Madoff.

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A.

SEC investigations.

Okay, through

with this.
Q.

First of all, do you have any

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recollection of any SEC investigations of

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Mr. Madoff?

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A.

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heard secondhand.

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Q.

Only what I've seen in the papers or

When you say -- let's do first what

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you'd seen in the papers.

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his confession?

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A.

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Q.

Was that before or after

Before.
Okay.

And what did you see in the

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CONFIDENTIAL

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papers before his confession?

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A.

That there was an issue with some

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accountants in Florida who were running some sort of

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a fund that the SEC wasn't happy with.

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came in and they investigated, as I recall, closed

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up the fund and required Madoff, who appears to have

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been managing that fund, to send back all the money

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to those people.

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Q.

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And they

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Um-hum.
And as I recall, Ike Sorkin, who was

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a friend of ours, through the law firm that he had

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been with before, Howard Squadron's firm, was

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representing, as I recall, he was representing

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Bernie, and said that the SEC closed one, no problem

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with Bernie after their -- whatever their

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investigation was, and Bernie quickly sent back the

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money to the fund and it was redistributed to the

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people.

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people tried to get right back into Bernie directly,

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as opposed to through the accounting firm.

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And as Ike had told me, that most of those

Q.

Other than the SEC investigation you

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just described for us, are you aware of any other

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SEC investigations of Mr. Madoff?

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A.

Not before this whole thing broke,

when I read in the papers that there were five or
BENDISH REPORTING, INC.
877.404.2193

PICARD v. KATZ, et al.

CONFIDENTIAL

SAUL B. KATZ 1/13/12
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six or seven.

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Q.

Okay.

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All right.

(Exhibit Trustee 358, Memo 7/29/99,
Bates SE_T954409-10, marked for identification.)

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Q.

Mr. Katz, I show you what has been

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marked by the reporter as Exhibit 358.

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a -- first of all, do you have any recollection of

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this document?

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A.

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Q.

Do you have

No, sir.
Was this to -- have you seen it prior

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to today?

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seen it prior to today?

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A.

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Q.

Do you have any recollection that you've

I don't remember.

I don't remember.

What it purports to be is a memo from

AF, who I'm assuming is Arthur --

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A.

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Q.

Arthur Friedman.
-- Friedman.

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partners.

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think.

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And it's to all

Partners being Sterling Equities, I

why don't I stop doing that.

All right.

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But I'm only guessing here, so

In other words, do you have any --

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why don't you read the document and tell me what

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your understanding of it is, and if after reading it

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you have any recollection of it.

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A.

Yes, sir.
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