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

Filing 167

DECLARATION of Regina Griffin in Support re: 162 FIFTH MOTION in Limine To Deem Statements By Sterling Stamos Employees In The Course Of And In Connection With Their Employment By Sterling Stamos As Admissions of The Sterling Defendants.. Document filed by Irving H. Picard. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2 - Filed Under Seal Pursuant to Protective Order, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15 -1, # 16 Exhibit 15 - 2)(Sheehan, David)

Exhibit 3

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CONFIDENTIAL
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
ADV. PRO. NO. 08-01789 (BRL)

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SECURITIES INVESTOR PROTECTION
CORPORATION,

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Plaintiff-Applicant,
v.

Rule 2004
Examination of:

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BERNARD L. MADOFF INVESTMENT
SECURITIES, LLC,
Defendant.
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In Re:

ASHOK CHACHRA

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BERNARD L. MADOFF,
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Debtor.
-------------------------------x

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TRANSCRIPT of testimony as taken by and before

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MONIQUE VOUTHOURIS, Certified Court Reporter, RPR,

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CRR and Notary Public of the States of New York and

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New Jersey, at the offices of Baker & Hostetler, 45

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Rockefeller Plaza, New York, New York, on Friday,

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October 8, 2010, commencing at 10:16 a.m.

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BENDISH REPORTING, INC.
Litigation Support Services
877.404.2193
www.bendish.com

ASHOK CHACHRA 10/8/10

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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: FERNANDO A. BOHORQUEZ, JR., ESQ.
KATHRYN M. ZUNNO, ESQ.
For Irving Picard, Trustee

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SHEARMAN & STERLING, LLP
599 Lexington Avenue
New York, New York 10022-6069
BY: TAMMY P. BIEBER, ESQ.
KYLA STEWART, ESQ.
For Ashok Chachra

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advisor was discussed at Sterling Stamos?

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A.

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responsibilities.

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It was not part of my

Q.

Let's talk about those

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responsibilities for a second.

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'02, in June of '02 what were your responsibilities?

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A.

When you started in

I think I already may have mentioned

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it was a fund analysis, and, you know, due diligence

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of fund manager and meeting those managers and, you

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know, documenting those meetings.
Q.

And did those responsibilities change

over time?
A.

I would say -- I mean -- in a sense,

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yes, in a sense, no, and Peter always was chief

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investment officer, he retained -- except for when

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Noreen was, but Peter even then maintained final

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decision-making authority over all investment

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decisions.

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it went from doing all the due diligence to

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overseeing a team that was doing the due diligence.

So my responsibilities changed by which

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Q.

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Stamos, again?

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A.
Q.

And when did you leave Sterling

March of 2010.
So between June of '02 and March

2010, did your title change?

I think you said you

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basically started as an associate.

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A.
Q.

Is that right?

Yeah.
Did your title change over that time

period?
A.
Q.

It did.
Can you walk me through what your

title changes were?
A.

I don't remember.

I mean, it would

be an associate to portfolio manager.

Between there

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and where it ended up, I don't remember the titles.

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I didn't focus so much on it, but it ended up as

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chief investment strategist.

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Q.

And I think you said when you started

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as an associate you had several responsibilities,

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due diligence, analyzing funds and so forth.

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think then you said at some point you started

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managing or overseeing teams that were doing that.

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Is that right?

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A.
Q.

And I

That's correct, yeah.
Did that change when you became a

portfolio manager?
A.
Q.

Did what change?
Your transition from doing the work

to managing people who were doing the work.
A.

No.

I mean, I don't remember exactly
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that that's correlated to the time that I got that

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promotion.

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evolution, it evolved in that nature.

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frame, the titles, I don't remember exactly.

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would have to look back at the time frames.

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Q.

I mean, that evolved -- that was an
What the time
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And the last title that you had,

chief investment strategist, is that what it was?

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A.

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Q.

Yeah.
Did that come with any additional

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responsibilities other than the ones that you

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previously identified?

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A.

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Q.

Not really.
Were you at any time the chief

investment officer?

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A.

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Q.

No.
During your tenure at Sterling Stamos

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from June of '02 to March 2010, you identified that

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Noreen Harrington was the CIO, and you also said

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that Peter Stamos was the CIO?

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A.

What I said specifically there was a

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period where Noreen Harrington held the title of

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chief investment officer.

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decision-making responsibilities even during that

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time.

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Q.

Peter retained all of

So let's just clear that up for a
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Q.

If you go down to item 16, July 1,

2002, do you see that?

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A.

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Q.

Yeah.
If you go to the right to the event,

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it mentions "Sterling Stamos inherits numerous

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legacy positions from Sterling Equities."

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know what that's in reference to?

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A.

Yeah.

Do you

So, the initial capital into

the limited partnerships of SP-1 and 2 was a

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combination of in kind limited partnerships and

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cash.

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Q.

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partnerships?

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A.

What do you mean by in kind limited

They had -- they had a -- I don't

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remember exactly what, who the LP was, but at

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Sterling they had a limited partnership investment

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into a fund called Winfield, as an example.

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instead of giving 100 percent cash to fund these

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limited partnerships, they contributed Winfield as

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an investment.

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Q.

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So

And by "they" you're referencing the

Sterling Partners?
A.
Q.

The Sterling Partners.
And if you see the rest of that

entry, it says, "Has difficult conversations with
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managers about redeeming --"

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A.

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Q.

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A.

Yeah.
What was that in reference to?
One of the in-kind contributions was

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a long-only equity investment in the fund, fund or

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managed account, I don't remember the structure,

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with W.P. Stewart.

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the person who effectively got the Sterling Partners

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into that investment was the guy by the name of Bob

That investment was -- you know,

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Rosenthal.

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he was a very close friend of the Wilpons and the

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Katzes and that's -- you know, so we redeemed from

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someone -- we took back capital from someone that

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was a good friend of theirs.

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Q.

So we redeemed from Bob Rosenthal, and

Was there any difficulty in doing

that?

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A.

He was the -- you know, he was upset

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about it, felt like we were selling at the wrong

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time.

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Q.
A.
Q.

I see.
But that was the extent of it.
Do you see the rest of the entry,

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"Pushing fiduciary duties and diversification of

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relationships that managers had with the Katz and

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Wilpon families"?
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A.
Q.

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A.

Yup.
What is that in reference to?
This is referring to like a very --

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what happened, actually, we had this meeting, we

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decided because we were now manager, they

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contributed as capital to the fund, we decided to

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redeem or sell the assets and take the cash.

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believe what happened Fred Wilpon was in the office

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and something -- I remember him walking by and

I

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saying to Peter something to the effect of:

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you talked to Bob Rosenthal.

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We're pursuing our fiduciary responsibility on

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behalf of your family.

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that's why we hired you.

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Q.

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A.
Q.

I heard

And Peter said:

And Fred said:

Yeah.

Oh, well,

And that's it.
Yeah.
Just below that, the entry number 17

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dated October 1, 2003, it notes that "Derek and

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Noreen leave," that's in reference to Derek Daley

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and Noreen Harrington, I believe?

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A.
Q.

I believe so.
So does that refresh your

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recollection as to when Ms. Harrington left Sterling

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Stamos?

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A.

I would just like to say for the
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A.

Or a potential, more likely a

potential limited partner.

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Q.

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thought.

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A potential, okay, that's what I

So, then, if you could turn to page

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18, which ends in 045, Bates number 045, if you can

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just review that quickly and tell me whether or not

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that accurately summarizes Sterling Stamos' due

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diligence processes at that time in February '05.

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A.

I mean, look, I can't say exactly

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what it was in 2005, so I would have to go back and

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look at notes and try to figure it out, but it seems

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reasonable.

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Q.
A.
Q.

So, generally accurate, more or less?
I believe so.
Okay.

Was -- the due diligence

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process is one of the five or six key components of

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your investment strategy.

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A.
Q.

Yeah.

Right?

I would assume so, yeah.

Was the due diligence process, do you

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know if it was ever shared or communicated to the

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general partners or the limited partners?

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A.

So we actually made a rule by which

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it would not be shared, because whatever we thought

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I guess when I was told by our compliance -- head of
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compliance was whatever you share with one investor,

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you have to be willing to share it with everyone.

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Q.
A.

Whether they are a GP or LP?
Yeah, exactly, and also because every

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GP was an LP and it could be misinterpreted, so we

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pretty much tried not to share anything.

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Q.
A.

Other than what's in this document?
Yeah.

But whatever we sent out,

especially after registration, was don't try -- try

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not to share a lot of details unless you want to

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share with every single limited partner.

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Q.

So that, just so I understand, that

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rule, if you call it, that was implemented

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post-registration as an investment advisor?

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A.

I think it became more explicit

post-registration.
Q.
A.
Q.

Because of compliance reasons?
Because of compliance reasons.
Okay.

If you can turn to page 23,

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which ends in Bates number 050, this page identifies

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the senior investment team, and at that time in

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February 2005 who did you understand to be the

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senior investment team for Sterling Stamos?

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A.

I mean, day-to-day it was --

day-to-day was Peter and myself.
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