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

Filing 173

DECLARATION of DANA M. SESHENS in Support re: 164 Memorandum of Law in Opposition to Motion,,,,,,,,,. Document filed by Charles 15 Associates, Charles 15 LLC, Charles Sterling LLC, Charles Sterling Sub LLC, College Place Enterprises LLC, Coney Island Baseball Holding Company LLC, Estate of Leonard Schreier, FFB Aviation LLC, FS Company LLC, Fred Wilpon Family Trust, Arthur Friedman, Ruth Friedman, Iris J. Katz and Saul B. Katz Family Foundation, Inc., Judy and Fred Wilpon Family Foundation, Inc., Amy Beth Katz, David Katz, Dayle Katz, Gregory Katz, Howard Katz, Iris Katz, 157 J.E.S. LLC, Air Sterling LLC, BAS Aircraft LLC, Jason Bacher, Bon Mick Family Partners LP, Bon-Mick, Inc., Brooklyn Baseball Company LLC, C.D.S. Corp., Michael Katz, Saul B. Katz, Todd Katz, Katz 2002 Descendants' Trust, Heather Katz Knopf, Natalie Katz O'Brien, Mets II LLC, Mets Limited Partnership, Mets One LLC, Mets Partners, Inc., Minor 1 (REDACTED), Minor 2 (REDACTED), L. Thomas Osterman, Phyllis Rebell Osterman, Realty Associates Madoff II, Red Valley Partners, Robbinsville Park LLC, Ruskin Garden Apartments LLC, Saul B. Katz Family Trust, Michael Schreier, Deyva Schreier Arthur, See Holdco LLC, See Holdings I, See Holdings II, Sterling 10 LLC, Sterling 15C LLC, Sterling 20 LLC, Sterling Acquisitions LLC, Sterling American Advisors II LP, Sterling American Property III LP, Sterling American Property IV LP, Sterling American Property V LP, Sterling Brunswick Corporation, Sterling Brunswick Seven LLC, Sterling Dist Properties LLC, Sterling Equities, Sterling Equities Associates, Sterling Equities Investors, Sterling Heritage LLC, Sterling Internal V LLC, Sterling Jet II Ltd., Sterling Jet Ltd., Sterling Mets Associates, Sterling Mets Associates II, Sterling Mets LP, Sterling Pathogenesis Company, Sterling Third Associates, Sterling Thirty Venture LLC, Sterling Tracing LLC, Sterling Twenty Five LLC, Sterling VC IV LLC, Sterling VC V LLC, Edward M. Tepper, Elise C. Tepper, Jacqueline G. Tepper, Marvin B. Tepper, Valley Harbor Associates, Kimberly Wachtler, Philip Wachtler, Bruce N. Wilpon, Daniel Wilpon, Debra Wilpon, Fred Wilpon, Jeffrey Wilpon, Jessica Wilpon, Judith Wilpon, Richard Wilpon, Scott Wilpon, Valerie Wilpon, Wilpon 2002 Descendants' Trust, Robin Wilpon Wachtler. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G)(Seshens, Dana)

EXHIBIT A

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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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v.

Plaintiff,

Videotaped
Deposition of:
SAUL B. KATZ

SAUL B. KATZ, et al.,
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
78

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A.

I think it's a reach, because, you

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know, describing hedge funds, we have a real estate

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fund.

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and V.

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look at that as a hedge fund or alternative

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investment.

Actually, five of them.

SAP I, II, III, IV

And we get the same fees -- and people would

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So we're partners in our own real

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estate fund.

We're partners in the LBO fund.

And

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so, would we be experts in investing in hedge funds?

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We've done very well with them.

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reach, because someone may think of a hedge fund as

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something different than I think of it as.

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Q.

But this may be a

Do you think of Mr. -- when

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Mr. Madoff was in business, did you view him as a

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hedge fund?

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A.

Absolutely not.

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Q.

What did you view Mr. Madoff's

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business to be?

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A.

A relationship between myself and

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Merrill Lynch or my relationship between me and a

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broker-dealer, a regulated broker-dealer.

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Q.

Okay.

Did you see him as anything

beyond being a broker-dealer?
A.

Absolutely not.

Well, I'm sorry, I

thought he had other businesses.

I thought his sons

BENDISH REPORTING, INC.
877.404.2193

PICARD v. KATZ, et al.

CONFIDENTIAL

SAUL B. KATZ 1/13/12
79

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ran a proprietary business.

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Q.

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Right.

A.

Trading for his monies.

And I

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thought that he had a market business, market-making

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business where he bought volume and traded for other

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people in the market-making business on the

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Cincinnati Exchange.

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far as my relationship with him, or our relationship

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with him, it was strictly broker/dealer.

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Q.

Okay.

That's what I thought.

Okay.

But as

You used the term -- I

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want to go back for a minute to LBO fund as a hedge

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fund.

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that statement.

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hedge fund?

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Just if you can explain to me your basis for

A.

Why would you call an LBO fund a

Because I think of a hedge fund is a

fund that raises money in a partnership form.
Q.
A.

Um-hum.
And buys and trades different assets.

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It could be stocks, it could be commodities, it

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could be businesses, it could be real estate.

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that group of people in that partnership, the

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general partners get a fee.

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they get a manage -- they manage.

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management fee and a promote for doing well for that

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partnership.

And

They get a promote,
They get a

That's, to me, what a hedge fund is.
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observations?
A.

No, I don't recall.

Q.

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.

No.

Q.

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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PICARD v. KATZ, et al.

CONFIDENTIAL

SAUL B. KATZ 1/13/12
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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.

And they

Um-hum.

A.

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.
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