Picard Vs Katz Deposition of Noreen Harrington

Case 1:11-cv-03605-JSR Document 127 F i led 02/1 0/1 2 Page 1 of 3
UNITED STATES DISTRICT COURT SOUTH E R N DISTRICT OF NEW Y O R K

In re:
Adv. Pro. No. 08-01789 (BRL) SIPA LIQUIDATION
B ERNARD L. MADOFF INVESTMEN T SECURITIES LLC,

Debtor,
(Sub stantively Consolidated)

Adv. Pro. No. 10-05287 (BRL)
IRVING H. PICARD, Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC, Plaintiff,
11 Civ. 03605 (JSR) (HBP)

SAUL B. KATZ, et al., Defendants.
DECLARATION OF REGINA GRIFFIN IN OPPOSITION TO DEFENDANTS' M O T ION FOR SUM M A R Y JU D G M E N T
BAKER R HOSTETLER LLP 45 Rockefeller Plaza New York, New York 10111 Telephone: (212) 589-4200 Facsimile: (212) 589-4201
Attorneys for Irving H. Picard, Trustee for the Substantively Consolidated SIPA
Liquidation of Bernard L. Madoff

Investment Securities LLC and Bernard L.
Madoff
I, REGINA GRIFFIN, declare pursuant to 28 U.S.C. g 1746, that the following is true: 1. I am a n attorney with the firm of Baker & Hostetler LLP, counsel to Irving H.
Picard, Esq., Trustee (" Trustee" ) for the substantively consolidated liquidation of Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff ("Madoff'). I submit this declaration in Support of the Opposition to the Defendants' Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56. I am personally familiar with the facts set forth herein. 2. In m y r o le as counsel to the Trustee, I was involved in the Trustee's discovery
efforts pursuant to Rules 26, 30 and 45 of the Federal Rules of Civil Procedure. 3. On De c ember 30, 2011, Noreen Harrington, former Chief Investment Officer of
Sterling Stamos, testified that in 2003, she and her colleague Ashok Chachra performed due diligence analyses into Merkin's and Madoff's funds. Attached as Exhibit A is a true and correct copy of excerpts from the Deposition Transcript of Ms. Harrington, dated December 30, 2011. 4. T he T r u stee noticed the deposition of a Sterling Stamos corporate representative,
pursuant to Fed. R. Civ. P. 30(b)(6), to determine, among other things, the location, retention and/or destruction of Ms. Harrington's files, including the due diligence files on Merkin and Madoff referenced in Ms. Harrington's testimony. Attached as Exhibit B is a true and correct copy of the Rule 30(b)(6) Subpoena and Notice of Rule 30(b)(6) Deposition to Sterling Stamos, dated January 2, 2012. 5. On J a nuary 12, 2012, the Trustee deposed Sterling Stamos' designated corporate
witness, Chief Financial Officer Kevin Barcelona. Mr. Barcelona testified that Sterling Stamos kept "records literally going back to day one on all of our funds." Attached as Exhibit C is a true and correct copy of excerpts from the Deposition Transcript of Kevin Barcelona, dated
January 12, 2012. 6. Desp i te our repeated demands for the production of Sterling Stamos'
Merkin/Madoff files, and the analyses that both Ms. Harrington and Mr. Chachra described in their testimony, these documents have not been produced and appear to be missing. Attached as Exhibit D is a true and correct copy of a letter from Fernando A. Bohorquez, Jr. to Sterling Stamos' counsel Tammy Bieber, dated January 23, 2012, again requesting the Merkin/Madoff due diligence files. See also Exhibit C at 189- 97. 7. 2012. A tta c hed as Exhibit E is a response letter from Ms. Bieber, dated January 25,
Dated: N e w York, New York February 9, 2012
R egina Gr i n
Case 1:11-cv-03605-JSR Document 127-1 F i led 02/1 0/1 2 Page 1 of 17

P age 1
C 0 N F I U NITE D D E N T I A L
S T A T E S D IS T R I C T C O U R T DISTRICT OF NEW YORK
S OUT H E R N
1 1 CV 03605(JS R ) ( H B P )
IRVIN G
H.
P I C A R D , T r us t e e
f or
t he Liquid a t ion o f B e r n ar d L . M adoff In v e s tm en t S e c u r i t ie s L L C , V ideo t a p e d D eposition o f : P laintif f ,

N OREE N HARRINGTON
SAUL B .
KAT Z ,
et
al . ,
Defe n d a n t
s.
T RANSCRIPT o f t e s t i m on y a s t a ke n b y
N ANC Y C. BENDISH,
an d b e f o r e
C e r t i f i e d C o u r t R e p o r t e r , R M R , C RR
a nd Notary P u b li c o f th e
S t a t e s o f Ne w Y o r k an d N e w
J ersey, at th e o f f i ce s o f B a k e r & H o s t e t l er , 4 5 R ockefeller P l a za , Ne w Y o r k , Ne w Y o r k o n D ecember 30 , 2 0 11 , c o m m e n c in g a t Friday,
9 :34 a .m .
PICARD v. KATZ, et al.
CONFIDENTIAL NOREEN HARRINGTON 1 2/30/11

75
h ave t o remembe r
talk in g e n e ral te rms be c ause
I do not It ' s
th e e x ac t b a c k - a n d - forth q u e s t i o ns . to d e s c r ibe what I t h o u ght I h a d
e asier fo r m e
ascertained in that meeting .

w hat I t h o u g h t
S o l e t m e j ust finish
I a s c e rtained in the m e e t i ng, be cause
it's just easier for me

Q. Su r e . o n tha t front. out o f th e m e e t i ng . I
So, I w a l k e d 10 s aid to A s h o k , g oing t o g o 12 13 i nvestm en t 15
that didn't go well and i t 's not A nd I m ea n t a t S P C a p i t a l , t h i s
well .
i sn't going to go we ll .
P eter an d Saul want to m ak e th i s
and m y i m m e d i ate re action to th e m e e t i n g go fo rward . A nd t h e r e a s o n w e c a n n o t
i s, we c a n n o t
go forward is we have an obligation to our investors

17 18 19 20 21 22 23 l ooked l i k e t o do th e work . A s we ' ve t a l k e d a b o u t e a r l i e r , w e
charge a pretty hefty fee to our investors to do

w ork fo r them . W e te l l t h e m t h a t o u r i n v e s t m e n t s to th e i n v e stment team an d t h a t
a re t r a n s p a r e n t
we' re
e a r n i n g o ur
f e e b y do i n g wo r k .
Merkin's comments, it I mean that
S o, g i ve n
a n o n starter t o m e , a n d
u nless t h i n g s 25 w ay t hi s
were to r e v e rse themselves from th e
meeting we nt, it w o uld be v ery d i f f icult to
BENDISH REPORTING, INC. 877.404. 21 93
CONFIDENTIAL NOREEN HARRINGTON 12/30/11

76
make t h i s
in v e s tm ent . S o, I d i d t e l l A s h o k w e ' re go in g t o
h ave t o d o n egativ e
some w o rk, you kn ow, to sort of j u s t ify a An d s o I w a l k e d o u t o f t h e I w a lk e d o u t
recommendation .
m eetin g w i t h
a couple of other things .
o f the m e e t i n g of a q ua r t er .
kn owing they went to c ash at th e e n d
" Th e y "
b ei n g ? r e c o l lection is t h e r e
Y ou k n ow , m y 10 w as -- o n e w as to - 12 13
of the th ings we looked at be fore meeting you k n ow , we l o o ked if we c o uld g a rner an y th e f u nd , and I'm not t o t a lly -- I
i nform a t io n o n t hink w e a nswer - -
asked a 13 D q u e stion to h im , b e c a use th e I know the an swer, I know the an swer wa s cash at the end of the quarter . Do I
15 16 17 18
w e go t o
r emember specifically asking that question ?

b eliev e I d efin i t el y t he e nd o f did . Th at ' s m y b e s t r e c o l l e c t i o n .
I
But I
remember an an swer that we go to c ash at a q u ar t er .
20 21 22 23
Q
A.
" W " b e i ng ? e
M e rk in o r M ad o f f , a n d I h a v e t o t e l l
you, they were joined at the hip in this

c on v e r s a t i o n . T he q u e s t i o n -- the o t her th ing I
25
w alked ou t
of th e o f f ice r em emb ering is I h a d t r i e d
BENDISH REPORTING, INC. 877.404.21 93

86
S P Cap i t a l . A nd wa s i t I 'm s or r y .
your un d e r s tanding th at
t hat's w h a t
P e ter St amos and S aul K at z w a n t e d ? T hat wa s m y understanding.
Q.
a ddit i o na l
A ft er th i s m e e t ing, did you do any

wor k in c o n n e ction with t hi s t o j u s t i f y
your negative recommendation?

A. Ye s .
Q. 10
g enera l 12 A.
W h at d id y o u d o ?
You kn ow , a ga i n , I c a n o n l y t a l k i n
terms, because I don't remember ex actly what I w il l t ell you I th ought a g r eat d e a l and I a l s o -- an d I di d s om e w o r k . Th e re
I did, bu t about i t ,
13
14 15
w as a l i t t l e t erms , n o t b it o f
b i t - - w e l l , I ' ll put i t i n t h e s e
v er y p r o f e ssional, but t h ere wa s a l i t t l e
16
17
stink a r ound Ne rkin in a ma n n a med V i c t o r
Teichers (phonetic) or -- I'm slaughtering his last

n ame, bu t f ind t h a t p erson w h o there were a couple of th ings we could were a l i t tle bit ne g ative or - - a b out a worked with or for him that had a bi t o f
18 19
20 21 22 23 24 25
a checkered past, might be a way to put i t .

You kn ow , relied o n o ften l i e , c omfor t a b l e o n e o f t h e t h i n g s t h a t I ' ve
in my p a st, in my c a reer, is numb ers don' t people can . An d s o I ' m g e n e r a l l y m o r e So t h e o n e t h i n g I
with math anyway .
w ould s a y t his i s i n o ption s a t i ncrea se d t he i s su e r egul a t o r y Q
to you is I th ink I looked at -- a g a in , g e n e ra l t e rms, but I t h in k I l o o ke d a t the end of a m o n th, see if th ere was any volume . I th i n k - - I t h o u g h t a lot about
of why w o uld somebody go to c ash to a v o id authorities at the end o f a q u a r t e r , A re you re fer r i n g t o M e r k i n o r a r e to M a d off when you l o o ked into th i s ? I lo o ked in t o - - a t t h i s p o i n t , n o w
y ou r e f e r r i n g A.
10
I 'm trying to educate myself on both peop le .

Q. A nd w as it yo u r u n d e r s t a n d i n g t h a t to cash at the end of the m o n th ? T h at w a s m y u n d e r s t a n d i n g . I kn ew
12
M adof f w e n t A . t here w a s
13
s om e e x p l a n ation I ha d g a r n e red ab out c a sh of a qu a rter . So , n o t o n r e g u l a t o r y
15 16
17
a t the e n d f ilings , o ut o f
and i t i s m y r e c o l l e ction t ha t t h a t f e l l
the m e e t i ng , a l th ough I d o n ' t r e m e m be r a l l ve rb iage around it . Bu t I d o re m e m b e r
18
t he s p e c i f i c
specifically asking myself why somebody would, you

20 21 22 23 k now, d o Y ou c o u l d b elow th e that . I m e a n, I c a n g i v e y o u a r e a s o n . fly
say, you know, that they wa nted to radar .
Y ou kn o w , t h e y d o n ' t w a n t t o
r eally h a v e
re gu lators know who they a r e .
Q
25
W en y ou s ay a r ea s o n , a r e y ou h
talking about going to cash
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Case 1:11-cv-03605-JSR Document 127-1 F i led 02/1 0/1 2 Page 7 of 17 CONFIDENTIAL NOREEN HARRINGTON 12/30/11
88
Y eah . Q. a t the en d o f t he q u a r t e r ? S o tha t o n a regulatory i n a s t oc k . your name m i ght no t fall out
report, like a 13D, as to a h o l d ing
Could you explain what you mean by a

13D?
Well, it's just a regulatory filing

i f you ow n 10 o utsta n d i n g m ore than a c e r t ain percent of a n y company's stock that you f ile as a
s ignificant investor in that company .

12 13 k now, t h e r e
A nd , you
were t h i ngs a r ound this in v e s tment th a t in m y ow n m i nd , and I k now I t r ied t o the time . I don ' t r e m e m b e r e x a c t l y
d idn't ad d u p d o re s e a r c h a t
15 16 17 18 19 20 21 22 23
w hat I
looked at .
We did prepare notes for this

i nvestm en t b e re a l l y meeting . helpful. I f I cou l d h a v e t h e m , i t w o u l d
Q.
f or thi s be?
W h en you s a y " w e " did prepare notes

meeting, could you tell me wh o t hat w o u l d
That w o u l d b e d on' t, I d o n ' t m eetin g o n
Ashok and m y s e lf .
think we w a l ked into any i n v e stment
a h e dge fund in my e n t ire time th ere th at pap e rw ork at tached to i t .
25
d idn't h a v e
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89
S o, in o t h e r words, there would be
t hese c h a r t s , f und, S h a r p e l ot of d a t a S o, th er e - r ecoll e c t i o n . y ears l a t e r t o Q*
I r e commended how it w o uld l ook in o u r Ratios . You kno w , t h e r e w a s a l w a y s a
that we would discuss in th ese meetings . if I could see that, it might help my Bu t w it h o u t i t , i t ' s d i f f i c u l t e i g h t tell you wh at W ou ld it h a ve r e s i d e d o n y o u r
computer or did you have hard copy files of this?

10 A. h ave b e e n 12 13 T h e an sw er t o t h a t q u e s t i o n w o u l d SP C a p ital was st ill in it s i n f ancy and we
did have a lot of paper .

t here wa s a files fo r lot of paper .
S o I ' m f u lly going to say

Bu t w e we r e c r e a t i n g O ka y , s o w e ' re
hedge file.
fund managers .
15
c reatin g a
So you'd have a portfolio file on the

17 c ompute r and t h e n yo u c o u l d h av e th e d r o p - d o wn s t o investments . It w ou l d i n c l u d e t h i n g s
18
19 20 21 22 23
t he in d i v i d u a l l ike n o t e s l etters t o w ould h a v e
from me et ings, it would in clude their investors, their returns . Y ou kn o w , i t
-- in my op inion, this file was meant to to our i n v estors as to th e d u e
b e ju s t i f i c a t i o n d ilige nc e w e i nvestm e n t .
did to m ake a r e commendation for th at
25
T hi s
woul d ha v e - -
y ou s a i d y ou h ad a
Case 1:11-cv-03605-JSR Document 127-1 Filed 02/1 0/1 2 Page 9 of 17

90
lot of paper .
it ? A. m eet in g w e
T h a t wa s a paper file .
D i d y o u k e ep
W e , in th e m e et i n g , i n t h e i n v e s t m e n t would have had, there would have been
h andouts normally or paper in those meetings .

C hachr a w o u l d I would
Ashok
have d r iven the ch a rts and th e d a t a .
have r e v i ewed it b e f ore the m e e t i n g . S o, a g a in , I'm not sure I c a n
d iffe r e n t i a t e
exactly how much o f t hat w o uld h a v e
10
been computerized at that point, but there is no way

w e walked into this m e eting with no th ing in o u r
12 13 14
h ands . Q.
No , no way . Did y ou co m m u n i c ate frequently with
people at SP Capital by email?

A. o rgan i z a t i o n w ere t a l k i n g p hone c a l l . n o, I a m It 's , ag a i n , i t ' s a s m a l l and i t 's re a lly me an d A s h ok . If we
15 16
17
to El len, it most li kely was em ail or a I f w e w e r e -- if it w ere Ashok and I ,
18 19
20 21 22 23
not a - - I am no t a p e r son who w r ites you I 'm s o r t o f o l d e r t h a n t h a t , I don ' t t w e e t o r - - b u t the pe rson
i f you' re next d o o r . m aybe ,
one wa y t o p u t i t .
t he t h i n g
is, I w o uld no rmally not be
s endin g A s h o k me.
em ail if he wa s a c r oss the h all fr om
I w ou l d h a v e j u s t g o t u p a n d w e n t t o t a l k t o
25
him personally.

94
that every quarter somebody owns Coca-Cola stock and they liquidate it before the end of the quarter because they want to avoid a regulatory report, you
k now, th e vo lume at th e end o f th e q u a r ter p r ob ab ly
would have gone up if they had, you know, if they w ere a reasonably sized player in the market . So, I was just trying to see if any
o f the things Ezra Me rkin had s aid d u r ing th e
meeting -- again, I rather like numbers, so if there

10 w as an y m e th a t . 12 13 way that I c o uld ma ybe T o n o av a i l . see numbers showing
So,
t h e s e w e r e ex e r c i s e s - -
you s ai d
w as I doing anything after the meeting .
I was
trying to think about this investment and trying to

15
see if there was any way that I could see somebody d oing -- liquidating at the end of a quarter . Q
m ean b y D id yo u that ?
16
17 18
Wh e n you s a y t o n o a v a il, what do you

Fi rs t o f a l l , l e t m e a s k y o u t h i s :
see a f o o t p r int in the m a r k e tp lace of a n y
20 21 22 23
surge in volume options?

No.
Did you look at anything else after

t his m e e t i n g A. with Me rkin? Th e an sw er t o t h a t i s y e s , I t h i n k w e -- we lo oked more closely at 13 D s .
25
l ooked a t

95
Q.
A. w hethe r i t t han t h i s , t hing s I
W en y ou s a y " we " ? h
You kn ow , I ' m n o t s u r e w h o d i d i t , A nd I kn o w I d i d m o r e
was Ashok or me .
but I a c t u a lly don't r em ember al l th e So , I - - I ' m s o r r y . T hat's al l D id yo u t r y right . at all to reverse
did .
engineer Merkin's strategy?

N o. 10 s trat e g y . i s I asked 12 13 him? 15 16 17 18 19 20 21 22 23 i s -- I a nd M a d o f f The The r e t ur ns . r e t ur ns . Wh o s e r et u r n s ? m ade s e n s e I th o u g h t a l o t a b o u t t h i s
I h ad a sk e d - - I b e l i e v e , m y r e c o l l e c t i o n A sh ok, who wa s my a n a l y st , to se e i f t h i s to him . Bu t I h a v e t o t e l l y o u say "t h is" m ad e s e nse to
W hen yo u
I beli ev e w e then.
looked at both Me rkin
B ut I d e f i n i t e l y
-- my r e collection I
have one s t rong recollection, wh ich
m ent i o n e d
in the me eting, that the numb ers were too
good.
The n u m b e r s me a n i n g ? were too f lat -- w e l l ,
T he r e t u rn s 25 g oing b a c k
to v o l a t i lity, not v er y v o l a t i le, an d

102
Tha t ' s c or r ec t .
Q
M erk i n ' s A. i t woul d
D id you ev e r l o o k into the growth of

organization? It w ou ld h a v e b e e n o n - - m o s t l i k e l y have b een on a p i tch b ook that I ha d s e e n , remember what that growth wa s .
b ut I d o n ' t
Q.
M ado f f ' s A. 10 Q. y ou h av e
D id you e v e r l oo k at the growth of

organization? I do n 't re co l l e c t . A ft er you r m ee t i n g w i t h M e r k i n , d i d the s e nse o f w h e t her or no t h e g a v e m o n e y th ird pa rt ies besides Mado f f ? I re col lec t t h a t h e h a d t h e a b i l i t y I do n ' t re c o l l e c t I a c t u a l l y I any ot her names m e n t ion ed .
t o any o t h e r 13 14 15 16 17 18 A. to do i t .
d on't r e c o l l e c t
And wh en y ou me a n - -
wh en y ou s ay
names, do you mean any other -- well, what do you

mean? A. o f an o t h e r u nder s t oo d We l l , Me r k i n di d n ' t g i v e me t h e n ame I
entity that he was g iving money to . that to be y our qu e stion . Ri g h t Was t h . er e - o k ay .
O ther t h a n O ther t h a n
Madoff? Madoff.

103
0 h istor y o f
D id you loo k i n t o t h e i n v e s t m e n t Madoff at that time, after the m e et ing
w ith M e r k i n ? A. remembe r A ga in , w ith o u t t h e d o c u m e n t s , I d o n ' t everything that we l o o ked at . Bu t I
definitely, I definitely looked at something or

t o hav e v olat il e the o p i n ion that th e i n v e s tm e nts w er e n o t and p o s i t i v ely s k ew e d . A nd w he n 10 Mado f f Mado f f 12 13 the t im e 15 16 17 18 19 20 21 22 23 t hat i t h aven ' t t ha t we d i d . Q. D o you re ca ll w h a t t h e r e s u l t s o f an a lyses we r e ? . . you sa y i n v e s tm e n ts , wh o
M adof f i n v e s t m e n t s .
Did you do a correlation analysis at

i n t o M e r kin ' s fund? Y ou kn ow , m y r e c o l le ction w o uld b e
t hat c o r r e l a t i o n
A.
Y ou kn ow , m y r e c o l lection probably is
I have ab solutely no -- I
was go od, but
looked at a n y th ing for e i ght y e a rs , so m y
recollection is that it was probably good, but it

w as - it's not a n u m ber I r em emb e r .
0
25 c ould yo u
An d when y o u s a y i t ' s p r ob ab l y goo d ,

exp lain what you mean by t h a t ?

104
A. e arli er ,
Th at
it -- s im i l a r t o w h a t
I said
that the S h a rpe R a t ios wo uld be h igh a n d would be low and th e refore the
t he v o l a t i l i t y p ort f o l i o ,
adding it to th e p o r t f o lio wo uld be m o r e
positive than negative .

A nd w h e n S harpe R a t i o s b e l ow , y o u ' re re f e r r i n g t o t h e
would be h igh an d th e v o l a t i l ity wou ld
wh ich in v e stment are you r e f e r r ing t o ? E it h e r p er s on .
10
E it h e r E ither M e r k i n or Madoff at that
12 13
p oi n t . Did you do a liquidity analysis of

Mer k i n ' s f u n d s ?
15 16 17 18
A. t he d a t a . m uch e a s i e r docum e n t s , someth in g
A ga in , it 's - - y o u k n o w , I d o n ' t h a v e If I h a d t h e s e d o c u m e n t s , i t w o u l d b e for me t o r e c o l lect, but w i t h out t h e
the o nl y t h ing I ca n t e l l yo u i s i t ' s that we a l w ays looked at . So I w ou ld
20 21 22 23
it would be, you know, my normal process, so I would

h ave - - I Q c ondu c t e d , d o A. b e l ieve I w o uld have d one i t . T he file s fo r t h e d i l i g e n c e t h a t y o u
you r e c all who m a i n t a ined th em ? Th e -A s h o k wo u l d h a v e h a d t h e d a t a A lt ho u g h - - t h e y w o u l d
25
c oming t o
him, more than me .

105
c ome t o
him
d i r e ctly and he w o ul d c o l l ate th em , bu t would have most of that d ata secondhand
T beli ev e T f rom h i m .
W ould yo u f iles - -
keep this da ta, these
would SP Capital keep these fi les with the
results of your diligence, while you were there?

W ould w e Q k ept , 10 i t. 12 13 keep them ? Ye s . wou l d b e
An d d o y ou
kn o w wh e r e t h e y
wh e n y o u we r e t h e r e ? A. W ou ld h av e h a d a d r a w e r w i t h f i l e s i n
Th e r e w o u l d h a v e b e e n f i l e s o n t h e h e d g e f u n d s would have been a lso on th e c o mp ut e r .
a nd the y
A nd wh en y o u s a y on th e computer, do
y ou mea n y o u r c o m p u t e r?
A. 16 17 18 Zt w ou ld h a v e b e e n o n m y c o m p u t e r ,
Ashok's computer .
A g a i n , the organization was in
its infancy and we were working out exactly how we were going to keep these files, but it is my
r ecol l e c t i o n that we had c r e ated th ese fi les already
20 21
f or th e
hedge fund managers, that we c o uld d raw down any one of the i n v e stments we had
t he i n f o r m a t i o n o n
22 23
in the portfolio. Q
y ou r c om p u t e r ? D ocume nt s from ou r ow n f u n d ,
What kind o f f i l es would you keep on

106
d ocum e nt s
from the h e dge
funds, again, although I m ig h t n o t h a v e a l l
A shok w o u l d o f th e
have all of th at .
individual documents, but we w o uld k e ep the h edge fund s ent us on a m o n t h l y W e wo u l d
l etter s t h a t b asis ,
returns, we would have r e tu rns . on our own c l i ents .
k eep d o c u m e n t s n otes .
W e w ou l d p o s t
I m e a n, t h e r e w o u l d b e W hen yo u say post n o t es , what do yo u
mean? 10 w e, i f w e 12 13 w ith a n O ur c l i f f notes from m e e t ings or if a p h one conversation
-- even if you had
inv e stor and he s a id , t hi s is wh y o u r was X at th e en d o f th e m o n th , th ere be some record to a f ile or if I h a d I probably would have posted Ashok file. B ut w e w ou l d h a v e ,
p erfo r m a n c e w ould e i t h e r
15
t he c o n v e r s a t i o n , a nd he m a y
have posted a
17 18
i f we ha d f unds , w e
a t t r ibution or c o n v e r s at ions w ith h e d g e would normally keep th at, some of th a t
i nform a t i o n . 20
Q
w ould t h a t A.
W he n you s a y y o u w o uld post them, how

ph y s ically wo r k ? A ga in , yo u ca n , y o u c a n w r i t e t h e m
21 22
23
down on a piece of paper and put them in paper file .

O r, a s I be l ieve we w ere in th e s t a ges of m a k ing al l when I wa s th e re, so we c o uld ju st
25
t his e l e c t r o n i c

107
pull down a file on a hedge fund and make some

n otes . B ut th a t w a s s o r t o f a w o r k i n p r o g r e s s a t
the time, and I'm more of a paper person, so most

l ikely I w ritt en . w o uld h av e I probably w o uld h av e h a n d T h e id e a w a s t h a t t h i s w a s s u p p o s e d t o b e
all automated at some point .

Q. w ere th e W as w hen y o u w e r e a t S P C a p i t a l , computers on a n e tw ork ?
Now you' re getting really, really

10 o ver m e . Q. 12 13 e mail a d d r e s s e s 15 16 Q. c ould y o u 2 n etw o r k , y o u m e a n l i k e M i c r o s o f t ? W er e you con ne c t e d t o o n e a n o t h e r , em ail one another? O h, y e ah , w e could ema il, we all had
at SP Capital . C ou ld you ac ce s s d o c u m e n t s t h a t A s h o k
was working on on his computer from your computer?

Y es . W e had -- that was what we were So
18 19 20 21 22
w orkin g t ha t wa s Q. m eet in g
on , sh a red f i les and t h i ng s l ike t h at . a wo r k i n p r o gr e s s . Th e w o rk th a t y o u d i d a f t e r t h e
with M e r k in , and th ose d o c um e nts t hat y o u
keep referring to that you'd like to see, where

w ould t h e y w orked a t have been located at the t ime that you SP Capital? W e wo ul d have had th e p i tch b o o k s ,
23
25
OAO 88 lRev. I/94) Subpoena in a Civil Case
Issued by the
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK In re:
Adv. Pro. No. 08-01789 (BRL) SIPA LIQUIDATION (Substantively Consolidated)
BERNARD L. MADOFF INVESTMENT SECURITIES LLC,

Debtor,
IRVING H. PICARD, Trustee for the Liquidation of Bernard L.

Madoff Investment Securities LLC, Plaintiff,
SUBPOENA IN A CIVIL CASE

Case Number Adv. Pro. No. 10-5287(BRL) 11-CV-03605 (JSR) (HBP)
SAUL B. KA TZ, et al., Defendants.
TO: Sterling Stamos Capital Management, L.P. and

Sterling Stamos Associates G.P. Attn:
Tammy Beiber Tannenbaum Helpern Syracuse k, Hirschtritt, LLP 900 Third Avenue New York, New York 10022
YOU ARE COM M A N D E D to appear in the United States District court at the place, date, and time specified below to testify in the above case,
PLACE OF TESTIMONY
COURTROOM
DATE AND TIME
H Y OU ARE COMMANDED to appear at the place, date, and time specified below to testify at the taking of a deposition in the above case on the topics identified in the attached Notice of Deposition under Fed. R. Civ. P. 30(b)(6)
PLACE OF DEPOSITION
DATE AND TIME
Baker & Hostetler, LLP, 45 Rockefeller Plaza, New York, New York 10111
01/12/2012 at 9:30 am
YOU ARE COMMANDED to produce and permit inspection and copying of the following documents or objects at the place, date, and time specified below (list documents or objects):
PLACE
DATE AND TIME
American LegaiNet, inc.
www. U Cu Forms.cor S ort n
YOU ARE COMMANDED to permit inspection of the following premises at the date and time specified below.
PREMISES
DATE AND TIME
Any organization not a party to this suit that is subpoenaed for the taking of a deposition shall designate one or more officers, directors, or managing agents, or other persons who consent to testify on its behalf, and may set forth, for each person designated, the matters on which the person will testify, Federal Rules of Civil Procedure, 30(b)(6).
ISSUING OFFICER'S SIGNATURE AND TITLE (INDICATE IF ATTORNEY FOR PLAINTIFF OR DEFENDANT) D A TE
Fernando A. Bohorquez, Jr., Esq., Attorney for Plaintiff /s/Fernando A. Bohorquez, Jr. 01/02/2012
ISSUING OFFICER'S NAME, ADDRESS AND PHONE NUMBER
Fernando A, Bohorquez, Jr., Esq.

Baker A Hostetler LLP
45 Rockefeller Plaza New York, NY 10111 (212) 589-4200

(See Rule 45, Federal Rules of Civil Procedure, Parts C & D on next page)
'lf action is pending in district other than district of issuance, state district under case number.
AO 88 (Rev I/94 Sub oenain a Civil Case
PROOF OF SERVICE
DATE
PLACE
SERVED:
SERVED ON (PRINT NAME)
MANNER OF SERVICE
SERVED BY (PRINT NAME)
TITLE
DECLARATION OF SERVER
I declare under penalty of perjury under the laws of the United States of America that the foregoing information contained
in the Proof of Service is true and correct. Executed on
SIGNATURE OF SERVER
ADDRESS OF SERVER
American LegalNet, Inc.

www.USCourtForms.corn
Rule 45, Federal Rules of Civil Procedure, Parts C k, D;

(c) PROTECTION OF PERSONS SUBJECT TO SUBPOENAS.
(I) A party or an attorney responsible for the issuance and service of a subpoena
shall take reasonable steps to avoid imposing undue burden or expense on a person subject to that subpoena. The court on behalf of which the subpoena was issued shall enforce this duty and impose upon the party or attorney in breach of this duty
trial be commanded to travel from any such place within the state in which the trial is held, or
an appropriate sanction which may include, but is not limited to, lost earnings and
reasonable attorney's fee.
(iii) requires disclosure of privileged or other protected matter and no exception or waiver applies, or (iv) subjects a person to undue burden.
(2) (A) A person commanded to produce and permit inspection and copying ol designated books, papers, documents or tangible things, or inspection of premises need not appear in person at the place of production or inspection unless commanded to appear for deposition, hearing or trial.
(B) If a subpoena
(i) requires disclosure of a trade secret or other confidential research, development, or commercial information, or (ii) requires disclosure of an unretained expert's opinion or information not describing specific events or occurrences in dispute and resulting from the expert's study made not at the request of any party, or (iii) requires a person who is not a party or an officer of a party to incur substantial expense to travel more than 100 miles to attend trial, the court may, to protect a person subject to or affected by the subpoena, quash or modify the subpoena, or, if the party in who behalf the subpoena is issued shows a substantial need for the testimony or material that cannot be otherwise met without undue hardship and assures that the person to whom the subpoena is addressed will be reasonably compensated, the court may order appearance or production only upon specified conditions.
(B) Subject to paragraph (d) (2) of this rule, a person commanded to produce and permit inspection and copying may, within 14 days after service of subpoena or before the time specified for compliance if such time is less than 14 days atter service, serve upon the party or attorney designated in the subpoena written objection to inspection or copying of any or all of the designated materials or of the premises, If objection is made, the party serving the subpoena shall not be entitled to inspect and copy materials or inspect the premises except pursuant to an order of the court by which the subpoena was issued. If objection has been made, the party serving the subpoena may, upon notice to the person commanded to produce, move at any time for an order to compel the production. Such an order to comply production shall protect any person who is not a party or an officer of a party Irom significant expense resulting Irom the inspection and copying commanded.
(3) (A) On timely motion, the court by which a subpoena was issued shall quash or modify the subpoena if it
(d) DUTIES IN RESPONDING TO SUBPOENA. (I) A person responding to a subpoena to produce documents shall produce them as they are kept in the usual course of business or shall organize and label them to correspond with the categories in the demand.
(2) When information subject to a subpoena is withheld on a claim that it is privileged or subject to protection as trial preparation materials, the claim shall be made expressly and shall be supported by a description of the nature of the documents, communications, or things not produced that is sufficient to enable the demanding party to contest the claim.
(i) fails to allow reasonable time for compliance, (ii) requires a person who is not a party or an officer of a party to travel to a place more than 100 miles from the place where that person resides, is employed or regularly transacts business in person, except that, subject to the provisions of clause (c) (3) (B) (iii) of this rule, such a person may in order to attend
300192572.1
American LegalNet, inc www. USCourtForms.corn
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

In re:
SIPA LIQUIDATION
BERNARD L. MADOFF,
Adv. Pro, No. 08-01789 (BRL)
Debtor.
Adv. Pro, No. 10-05287 (BRL)
IRVING H. PICARD, Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC,
Case No, 11-cv-03605 (JSR)

ECF Case
Plaintiff,
SAUL B. KATZ, et al.,

Defendants.
To: Tammy Bieber Tannenbaum Helpern Syracuse & Hirschtritt, LLP
900 Third Avenue

New York, New York 10022
Attorney for Sterling Stamos
300192566

NOTICE OF RULE 30 b 6 D E P O S I T I O N TO S TE R L I NG STAM O S
PLEASE TAKE NOTICE that, pursuant to Fed. R. Civ. P. 30(b)(6), Plaintiff, Irving H.
Picard, by and through his counsel Baker k Hostetler LLP, will take the deposition(s) upon oral examination, before a notary public or other person authorized to administer oaths at the offices of Baker k Hostetler LLP, 45 Rockefeller Plaza, New York, NY 10111, about information known or reasonably available to Sterling Stamos regarding the topics in attached Exhibit A. Rule 30(b)(6) requires Sterling Stamos to designate one or more officers, directors, or managing agents, or designate other persons who consent to testify on its behalf, regarding these topics. Said deposition will be taken by stenographic and videographic means by a certified court reporter and videographer, The deposition(s) will commence at 9:30 a.m. January 12, 2012. If necessary, each deposition will be adjourned until completed.
Date: January 2, 2012 New York, New York
BAKER A H O S T E T L ER L L P By: /s/' Fernando A. Bohor uez Jr David J. Sheehan
E-mai I: dsheehan@bakerlaw.corn
Fernando A. Bohorquez, Jr.
E-mail:fbohorquez@bakerlaw.corn
Attorneys for Irving H, Picard, Trustee for the Substantively Consolidated SIPA Liquidationof Bernard L. Madoff Investment Securities LLC and Bernard L, Madoff
300192566
EXHIBIT A 1. For t h e period between 2002 and 2008, the system(s) used to create, transmit,
store, retrieve, and delete e-mail including, but not limited to, name and version, installation dates, number of users, and location of users' mail files. 2. For t h e period between 2002 and 2008, how electronic documents are maintained,
archived, indexed, including descriptions of hardware and software used, and where this is
p a l l ae hysic y oc t d. l
3. For t h e period between 2002 and 2008, how hard-copy documents are maintained,
archived, indexed, 4, For t h e period between 2002 and 2008, corporate policies regarding the retention
and destruction of documents. 5. T he s e paration of Sterling Stamos' IT infrastructure from Sterling Equities
infrastructure in 2004, including which Sterling Stamos data, if any, was transferred to a new server and/or remains available on back up tapes. 6. The c o l l ection of documents responsive to the Trustee's Fed. R, Civ. P. 45
subpoena dated October 11, 2011. 7. The c o l l ection of documents responsive to the Trustee's Bankruptcy Rule 2004
subpoena dated May 18, 2010,

8. The r e t ention and/or destruction of Ms. Noreen Harrington's electronic and/or
hard copy files.
300192566
CONFIDENTIAL
KEV IN B A R CELONA 1/12/12

P age 1
C 0
N F I
D E N T
A L
U NITED ST A TE S
SOUT H E R N
DI STRICT COURT
YORK
DISTR ICT O F NEW
1 1 CU 03605(J S R ) ( H B P )
I RVING H . P I C A R D , T r u s te e f o r t he Li q u i d a t io n o f B e r n a r d L . M adoff I n v e s t m en t S e c u r i t ie s L L C , P laintif f ,
V ide o t a p e d D eposition o f :
K EVI N B AR C E L ONA
SAUL B .
KA T Z ,
et
al . , Defe n d a n t s.
T RANSCRIPT o f
t e s t i m on y a s t a k e n b y a n d b e f o r e Reporter, RPR ,
M ONIQUE U O U T H O U R IS , C e r t i f ie d C o u r t C RR ans1 Notary Pu b li c o f N ew Je r s ey , a t
the S t a tes of New Y or k an d
th e o f f i c e s o f B a k e r & H o s t e t l e r , 4 5 Yo rk, New Y o rk , on Th u r sday ,
R ockefe l le r P l a za , Ne w J anuary 12 ,
2 0 1 2 , c o m m e n c in g a t 9 : 5 1 a . m .
BENDISH REPORTING, INC. 877.404.2193

P ICAR D v. KATZ, et al . CON F ID EN T IA L K EV IN BA R CE L O N A 1 / 12 / 1 2
P age 1 4 3
0 1: 3 6 : 4 8 1 d o cu me n t s ? No, QI ' m not
0 1: 3 6 : 4 8 0 1: 3 6 : 5 0
0 1:3 6 :5 3
2 3
4
Do you know j u s t a s a p r a c t i ca l m a t t e r
wh ether h a r d c o p y d o c u m e nt s h av e b e e n d e s t r o y e d ? A. No , I 'm n o t a w a r e a n d I d o n ' t b e l i e v e We h a v e r e c o r d s l i t e r a lly g o i n g
0 1: 3 6 : 5 5
Q 1:3 6 : 5 8 Q 1:3 7 : 0 1 0 1:3 7 : 0 5
5
6 7 8
that we w o u l d h a v e .
b ac k to d a y o n e o n a l l o f o u r f u n d s , e ve n t h o ug h o u r p olicy s a y s w e d o n ' t h av e t o r e t a i n t h e m fo r t h a t
01: 3 7 : 0 7 01: 3 7 : 1 5
0 1:3 7 : 1 6 Q 1:3 7 : 1 9 0 1:3 7 :2 3 0 1:3 7 : 27
9 10
11 12 13 14
I ong .
A nd with r e s p ec t t o th e hard copy
docum e n t s t h a t y o u r e f e r red t o a s b e i n g i n a n ind iv i d u a l e m p l o y e e ' s o f f i ce , w ha t w o u l d h a p pe n t o th ose f i l e s s h o u l d t ha t e m p l o ye e l e av e S t e r l i n g St amo s ? W ell, if fo r w h a t e ve r r e a so n i f a n e mployee h ad , yo u k n ow , w o r k in g f i l e s , b u s i n es s f i l e s i n their o f f i ce , yo u k n ow , p e r h ap s t h e y w e r e - - t h e y w ere wor k ing on , yo u k n ow , d i l i g e nc e o n a m a n a ge r a n d t hose fi le s w er e s t il l t h e re , w e w o u l d - their
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0 1:3 7 : 4 8 0 1:3 7 :5 1
15 16 17 18 19 20
21 22
o ffice wo ul d b e r e v i e we d fo r an y m a t e r i al s an d t h e n they w ou l d b e b r o u gh t b a c k t o t h e i r a p p r o p r i a t e fil in g p l a c e . A nd who w o ul d r e v ie w t h o s e d o c u m e n t s ? I t depended on th e individual . If i t
01 37:5 2 0 1: 3 7 : 5 4
0 1:3 7 : 5 6
23 24
25
w as a por t f o l i o t eam m e m be r t h a t w a s n o l o n g e r w i t h
B EN D I S H
REPORTING,
I NC .
8 77 . 4 0 4 . 2 1 9 3

P ICAR D v. KATZ, et al . C ON F ID EN T IA L K EV IN BA R CE L O N A 1 /1 2 / 1 2
P age 1 8 9
02: 4 6: 45 1 re cord , t h e t i m e i s 2: 46.
0 2: 4 6 : 5 1 0 3: 4 4 : 0 2
0 3:44 :0 7
2 3
4 r ecord .
( Recess . ) T HE VIDEOGRA PH ER : The t i m e i s 3 : 4 4 . M S. FEIN : B arcelo n a . W e a r e b ack on the
Th i s i s d i s k n u m b e r 4 .
0 3: 4 4 : 1 2
0 3:44 :1 4 Q3 : 4 4 : 1 7 0 3: 4 4 : 2 0
5
6 7 8
Wel c o m e b a c k , M r .
I wa n t t o t h a n k y o u f o r y o u r t im e t o d a y .
Th e 30 ( b ) (6) deposition w il l r e m ai n o p en , bu t y ou' re ex cused f o r t o d a y . So t h a n k y o u v e r y m u c h . I'm going
0 3: 4 4 : 2 3
I have a few m a t t er s t h a t
Q 3: 44; 26 1 0 0 3: 44: 29 1 1 0 3: 44: 34 1 2
t o p ut o n t h e r e c o r d w it h c o u n se l p r e s e nt , b u t , p leas e , y o u c a n e i t he r go b a c k t o 1 1 4 8 o r w a i t i n th e lob b y , w h a t e ve r you p r e f e r . T HE WITNE SS : I w i l l ex cuse myself
0 3: 4 4 : 3 6 0 3: 4 4 : 3 7
13 14 15 16 an d go .
MS. F E I N :
Th an k y o u .
(The witness l e a ve s th e d e p o s i t i on
0 3: 44 : 4 7 0 3: 4 4 : 4 7 0 3: 4 4 : 5 1
0 3:44 :5 3
17 18 19
20
r oom. )
( Comments off th e r e c o r d . ) T HE VIDEOGRA P H ER : record , t h e t i m e i s 3 : 4 4 . ( The following t a ke s p l a c e o f f t h e v i deo r ec or d . ) M S. FEIN : S o, j u s t to summarize what Goi n g o f f t h e v i d e o
21
0 3: 44 : 5 7 22
03: 4 4 : 5 7
Q 3: 4 4 : 5 9 Q 3: 4 5 : Q 4
23
24 25
w e discu s s e d o f f th e r e c o rd , th e 3 0 ( b ) (6 ) w i t n ess y o u p rovid e d t o d a y wa s u n a bl e t o s p e a k o n b e h a l f o f t h e
BEN D I S H
REPORTING,
I NC .
8 77 . 4 0 4 . 2 1 9 3

P I CAR D v . KA T Z , et al .
CONFIDENTIA L
KEV I N BARC E L ONA. 1 / 1 2 / 1 2 P age 1 9 0
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corp orat i o n w i t h r e s p ec t t o t h re e i s s ue s w e iden tif i e d t o y o u : T h e r e t e n t io n o f N o r e e n
H arring t o n ' s f i l e d at a an d th e d a t a c o l l e c t ion a n d p reserva t i o n t h a t t oo k p l ac e p r e - 2 0 0 4 b e f or e h i s arrival , a s w e l l a s th e d o c u m en t c o l l e c t ion p r o c e s s w ith re sp e c t t o e i t h e r th e 2 0 0 4 s u b p o en a o r th e R u l e 4 5 s u b p o en a . J ust to summ a r ize w h a t w e discussed
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off the re c o r d , w e t a l ke d a b ou t w a y s t h a t w e c o u l d contin u e t o w o r k ou t t h e s e i s s ue s w i t h yo u s i n c e t h e y w ere n o t c l e a r e d u p d u r in g t hi s 3 0 (b) (6) depositi on . Y ou in fo r m e d u s t h a t yo u r e c e n tl y d i s c o v e red t ha t t w o b oxes o f d u e d i l i g e nce m a t e r i al s r e l a t in g t o E z r a M er kin ' s A s c o t an d G a b r ie l F u nd s w e r e r e m o ve d f r o m Iron M ou n t a i n s t o r ag e b y J e n n i fe r O' Neill, a S t e r l in g Stam o s a n a l y s t , o n D e c e m be r 2 2 nd , 2 0 0 8 . Y ou also in f o rmed u s that these boxes You i n f o r m e d
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0 3:4 6:03 1 9 0 3:4 6 : 0 7 20
us that y o u h a v e l o o ke d fo r th e b o x e s an d t h a t a t thi s p oi n t t h e y h a v e no t b ee n l o c a t e d . You h a v e a l s o a g r e e d t o p r ov i d e u s
0 3: 4 6 : 1 0
21
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with a l o g o f h a r d c op y d o c u m e nt s t h a t t r a c k s a desc ri p t i o n o f t h e s e d o c u m e nt s t ha t ar e m a i n t a i ned a t Iron M o u n t a i n , a s w el l a s a l o g t h a t r e f l e ct s w h e n cert a i n b o x e s w e r e r e m o v ed . So w h e t h e r b o x e s w e r e
B END I S H
REPORTING,
INC .
8 77 . 4 0 4 . 2 1 9 3

P ICAR D v. K AT Z , et al . CON F ID EN T IA L K E V IN BA R C E LO N A 1 / 12 / 1 2
P age
0 3: 46: 25 0 3:4 6 : 2 9 1 2 chec ke d o u t o r h o w e ve r t h a t p r o c e s s e x i s ts , y o u agreed t o p r o v i d e t ha t t o u s . W e would l ik e t o know at whose
191
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Q 3:4 6 : 3 5 Q 3:4 6:4Q Q 3:4 6:45 0 3:4 6:4 8
3
4 5 6 7
dire ct i o n M s . O' Neill removed t h es e b o x e s , an d i n acco rd a n c e w i t h t o d a y ' s 3 0 ( b ) (6 ) te s t im ony an d i t s de fici e n c i e s , we' ve agreed tha t - - t h a t yo u w i l l l o o k for th e s e i t e m s f o r u s . W e also ar e c u r i ou s t o know in
0 3: 4 6 : 5 2
03:4 6:5 4
8
9
add iti o n t o a t w h o s e d i r e c t ion M s . O' Neill remove d the box e s , w h o y o u s p o k e t o t o i n f o r m y o u r s el f a b o u t the se i s s u e s , w h er e th e d o c u m e nt s w e r e l o o ke d f o r , wh at d oc u m e n t s w e r e l o o ke d fo r an d a n y d i s c u s s i o n s you h ad w i t h S t e r l in g E q u i t ie s o n t h e s e i s s u e s . B ased on th e d e f i c i e n c ie s t o d ay , w e reser v e a l l r i g ht s t o c o n t i nu e th e 30 (b) (6) d ep osi t i o n a t a l a t e r t i m e . M R. GOUDI SS : d isagre e . T ha n k y o u . W e r e s p ectfully
0 3:4 6:58 1 0 0 3:4 7 : 0 1 0 3:4 7 : 0 4 0 3:4 7 : 0 7 11 12 13
0 3: 4 7 : 1 1
14
03: 47: 13 1 5 0 3: 47: 16 1 6
0 3: 4 7 : 2 1
0 3:4 7 : 2 3
17
18
W e t h i n k t h a t th e w i t n e s s wa s m o r e t h a n
Q 3:4 7 :2 6 1 9 0 3:4 7 :2 9 2 0 0 3:4 7 : 3 2 0 3:4 7 : 3 5 21 22
adequa t e f o r p u r p o se s o f th e 3 0 ( b ) (6 ) and a d d r e s s e d all o f t h e a r e a s c o v e re d b y th e 3 0 ( b ) (6 ) no t i c e , in cludi n g t h e t h r e e a r ea s j u s t i d e n t i f i ed . reser v e a l l o f o u r r i g h t s . W ith re sp ect t o th e 2 0 0 2 - 2 00 4 p e r i o d W e, t o o ,
03: 4 7 : 3 7
0 3:4 7 : 4 0 0 3:4 7 : 4 3
23
24 25
in p arti c u l a r , w e t h in k i n c o n t e xt , p a r t i c u l a r l y given t h a t t h i s w a s a s m a l l f a m il y o f f ic e a s t h e
B END IS H
REPORTING,
I NC .
8 77 . 4 0 4 . 2 1 9 3

P ICAR D v . KA T Z , et al . CON F I DENT I A L K E V I N BA RCE L O N A 1 / 1 2 / 1 2
P age 1 9 2
0 3: 47: 46 0 3: 4 7 : 5 1 0 3: 4 7 : 5 3 0 3: 4 7 : 5 8 Q 3: 4 8 : 0 2 Q 3: 4 8 : 0 7 0 3: 4 8 : 1 0 0 3: 4 8 : 1 3 0 3: 4 8 : 1 8 Q 3: 4 8 : 2 Q 0 3: 4 8 : 2 4 0 3: 4 8 ; 2 7 Q 3: 4 8 : 2 9 0 3: 4 8 : 3 3 1 2 3 4 5 6 7 8 9 1Q 11 12 13 14 w itn ess t e s t i f i ed , a no t t e r r i bl y s a vv y o r soph isti c a t e d o r g a n i z at ion a t th e t i m e , i n i t s in fan cy , w e b e l i ev e t ha t an y p u r p o r te d o r a l l e g e d g ap s in pr o d u c t i o n m i s s t ate b ot h th e r e c o rd , t h e e fforts t h a t w e w e n t t o l o c at e r e s p o n s iv e d o c u m e n t s , and the i n h e r e n t l i m i t a t i o ns , g i ve n th e f a c t t h a t d uring t h a t p e r i o d o f t im e th e r e c or d w e l l e stab lis h e s t h a t th e h o s t s y s tem w a s , i n f a c t , S terli n g E q u i t i e s ' h ost s y s t em , an d t h a t th e b e s t ev iden c e o f t h a t t e c h n o l ogy an d r e t e n t ion w o ul d b e from Ste r l i n g E q u i t i es . A n d w e p r e sume, without
kn ow in g , t h a t t h a t i s - - t h o s e a r e m a t t er s t ha t h a v e b een ful l y c o v e r e d in th e e x p a n s iv e d i s c o v er y in t h i s ma t t e r . W here we do a g r e e i s t h a t w e will
0 3: 4 8 : 3 4
0 3: 4 8 : 3 6 0 3: 4 8 : 4 0 0 3: 4 8 : 4 3 Q 3: 4 8 ; 4 6 Q 3; 4 8 : 5 1 0 3: 4 8 : 5 4
15
16 17 18 19 2Q 21
c on tin u e t o w o r k w it h yo u t o t r y t o r e s o lv e a n y l egiti m a t e d i s p u te s t hat w e h a v e s o t h a t y o u h a v e a l l th e info r m a t io n t ha t w e h av e i n o u r p o s s e s s i on , or a t l east r e a s o n a b l e an d u n d e r s t a n d a bl e a n s w er s a s t o t h e e ffor t s w e t o o k t o l o c at e d o c u m e nt s t ha t n o l o n g e r e xist o r m a y b e n e v e r e x i s t e d . W ith that , I' ll turn it o ve r t o Ms.
0 3:4 8 : 5 6
Q 3: 4 8 : 5 9 0 3:4 9 : 0 2
22
23 24
B ieb er , b e c a u s e I t h in k w e d o h a v e a n u p d a t e o n t h e b ox es . M S. BIEBER : So d u r i n g t h e b r e a k w e
0 3: 4 9 : 0 2
25
BEN D I S H
REPORTING,
I NC .
8 77 . 4 0 4 . 2 1 9 3

P ICAR D v. KATZ, et al . C ON F IDE N T IA L K EV IN BA R C E LO N A 1 /1 2 / 1 2
P age 1 9 3
Q 3: 49: 04 Q 3: 49: Q9 Q 3;4 9;15 0 3:4 9:18 Q 3:4 9:2Q Q 3:4 9:23 Q 3;4 9:26 Q 3:4 9:29 1 2 3 4 5 6 7 8 9 h av e lo c a t e d a b o x t h a t ha s th e apparently t h e d iligen c e f i l e s an d f iv e n o t e b o o k s w h ic h l oo k l i k e A sho k 's n o t e s t h a t ar e a c t u a ll y t a g g ed , s o I b e l i e v e th o se w e r e t h e n o t e s t ha t w e r e p r e v i o u sly p r o v i d e d . W e be lie v e t h a t e v e r y t h in g i n t h a t b o x h a s p r o b a b l y b een p rod u c e d b a s e d o n th e d e s c r i p t i on , bu t I w i l l g o ov er th e r e t h i s a f t e r n o on , o r s o m e b od y w i l l g o o v e r , an d ch ec k a n d m a k e s u r e t ha t t h a t ' s th e c a s e , an d i f so , w e w i l l g e t w h a t wa s i n t h e b o x . M S. GRIFF IN : M S. BIEBER : w hat happ e ned w it h th e b o x M S. GRIFF IN : MS. B I E B ER : Yo u ' re saying on e b o x ? Ye a h , one box . On e b o x . A n d j ust to be clear If y o u w a n t t o u n d e r s t a n d
10 0 3: 4 9 : 3 3 0 3: 4 9 : 3 4 0 3: 4 9 : 3 7 0 3: 4 9 : 3 9 0 3: 4 9 : 4 0 0 3: 4 9 : 4 2 0 3: 4 9 : 4 6 11 12 13 14 15 16 17
I t looks like w ha t wa s i n th e c onsolidat ed .
two b o xes wa s
T h e t w o I r o n M o u n t ai n b o x e s t ha t w e
d iscussed, one ha d th e A s co t f i l e s a s w e l l a s o t h e r m an age r s , t h e o t h e r ha d th e G a b r i e l f i l e , G a b r i e l A riel, as w el l a s o t he r m a n a g e r s , b e c a us e t he y ar e i n alph ab e t i c a l o r d e r . S o i t l o ok s like what happened box, as well as with from meetings .
Q 3: 49: 49 1 8
0 3: 4 9 : 5 2
19
0 3:4 9:54 2 Q
0 3: 49 : 5 7 0 3: 5 0 : 0 2 0 3: 5 0 : 0 7 0 3: 5 0 : 0 8 0 3: 5 0 : 0 9
21 22 23 24 25
w as they w er e al l pu t i nt o on e A shok's not eb o ok s of hi s n o t e s M S. GRIFF IN : f ound ? M S. BIEBER :
A n d w h e r e was the box
T h e b o x wa s found in the
BEND I SH REPORT ING,
INC .
8 77 . 4 0 4 . 2 1 9 3

P ICAR D v . KAT Z , et al . CON F I DE NT I A L K EV I N BA RCEL O N A 1 / 1 2 / 1 2
P age 1 9 4
Q 3:5 Q : 1 Q Q 3:5 Q ; 1 3 Q3: 5Q: 17 Q3:5 Q : 1 9 Q 3:5 Q : 2 3 Q 3:5 Q : 2 6 1 2 3 4 5 6 7 0 3:5 0 : 2 9 8 b asem en t , w h i c h w e w e n t t h r o ug h th e o t h e r da y w h e n , as you kn o w , w e l e a r ne d a b ou t th e o f f - s it e s t o r age i n Ch ris St a m o s ' d e p o s i t i on , we p u l le d th e d o c u m e nts . W e then le a r n e d t h er e wa s b a s e m en t s t o r a ge . I
ph ysica l l y w e n t d ow n t o th e b a s e m en t w it h C a r o l in e Qu irke f r o m S t e r l in g S t a mo s an d w e w e n t t h r o ugh a b o u t 80 b ox e s d o w n t h e re , in a d d i t io n t o th e I r o n M o u n t a i n b oxes , i n w h i c h w e d i d n ' t f in d a n y t h i n g . W hen this i s su e c am e u p t h e s e we r e a b se n t , later that
03: 5 0 : 3 1
03: 5 0 : 3 3 0 3:5 0 : 3 6
9
10 11
s h e a g r e e d t o g o b a c k d o w n an d
l ook to m a k e s u r e w e h a d n ' t m i s se d a n y t h in g d o w n th ere , t h a t t h e y w e r e n 't m i xe d i n w i t h s om e o t h e r file o r t h a t w e m i s se d s o m e t h in g i n o n e o f t h o s e b ox e s . M R. BOHDRQU EZ : i s M r . B o h o rquez . F o r t h e r e cord, this
0 3:5 0 :4 0 1 2 13 14
15
Q 3:5 Q :4 6 1 6 0 3:5 0 : 4 7 17
I u n d e r s t an d t h a t yo u h av e a l o g
and ind e x f o r t h e I r o n M o u n t ai n d o c u m e n t s .
MS. B I EBE R : Yes .
0 3: 5 0 : 5 2 0 3: 5 0 : 5 2
0 3:5 0 : 5 5
18 19
20
M R. BOHDRQU EZ :
Do y o u h a v e a l o g o r
ind ex f o r t h e d o c u m e nt s in th e b a s e m e n t ? M S. BIEBER : ind ex f o r t h o s e d o c u m e n ts . N o , t h ere is no log or Th e y s e e m t o b e m o s t l y My u n d e r s t a n d in g i s
0 3: 5 0 : 5 6
0 3:5 0 : 5 8 Q 3:5 Q : 5 9 0 3:5 1 : 0 2 0 3:5 1 : 0 5
21
22 23 24 25
inv oic e s a n d t h a t t yp e o f t h i n g .
the y a r e d o c u m e nt s t ha t t he y ma y n e e d m o r e fo r a u d i t wo rk ; i t ' s n o t r e a ll y i n v e s t m en t d o c u m e nt s so m u c h .
B END I SH REPORT ING f
INC
8 77 . 4 0 4 . 2 1 9 3

P ICAR D v. KATZ, et al . C ON F I DEN T IA L KE V IN B A R CE L O N A 1 / 12 / 1 2
P age 1 9 5
Q3:5 1 : Q 8 0 3:5 1 : 1 2 0 3:5 1 : 1 4 1 2 3 There we r e 1 3 b o x e s r e l a t in g t o i n v e s t m e n ts , as I recall , b u t w e d i d n ' t f in d a n y t h in g r e l e v ant t o a n y m atter s i n t h i s c a s e i n t h o s e b o x e s . M R. BOHORQU EZ : A n d w h o wa s the person
0 3: 5 1 : 1 8
0 3:5 1 : 1 9
4
5
that iden t i f i e d th e b a s e m en t b o x e s ? M S. BIEBER : Car o l i n e - - C a r o l i n e
0 3: 5 1 : 2 2
0 3:5 1 : 2 5
6
7
Q uirke , s h e ' s th e h e a d o f th e N e w Y o r k o f f ic e a s M R. GOUDI SS : M S. BIEBER : T h e o f fice manager. T h e o f fice manager. A nd y o u s aid there
03: 5 1 : 2 7
03: 5 1 : 2 8
Q 3:5 1 : 2 9
10
11
M R. BOHORQU EZ :
w ere 13 b o x e s r e l a te d t o i n v e s t m en t m a n a g e r s ? M S. BIEBER : Gen e r a l l y . Cou l d y o u i d e n t if y f o r
03: 5 1 : 3 1 03: 5 1 : 3 2
0 3:5 1 : 3 3
12 13
14
M R. BOHORQU EZ :
u s wh o th o s e i n v e s t m ent m a n a g er s w e r e ? M S. BIEBER : t op of my h e a d . M R. BOHORQU EZ : l et t er MS. BIEBER : I ' m h a p p y t o g i v e yo u a If w e a s k y o u i n a I don ' t r e m e m be r of f t h e
0 3: 5 1 : 3 4
0 3: 5 1 : 3 6
15
16
17
18
0 3: 5 1 : 3 7
Q 3:5 1 : 3 8 0 3:5 1 : 4 0 0 3: 5 1 : 4 6
19
20 21 22
list o f t h e m , a n d w e ca n g o b a c k t o t h e b a s e m ent a n d p ull th e m a g a i n . f ar as I k n ow . M S. GRIFF IN : Ta m m y , w o u l d yo u b e Th e y a r e u n r e l a te d t o t h i s c a se , a s
03: 5 1 : 4 6
23
0 3: 51: 48 2 4 25
accept a b l e t o u s c o m in g t o s e e t h e b o x e s r i gh t n ow , I m ean , n o t r i g h t t h i s s e c o nd , bu t s e e in g i t th e wa y i t
B ENDI SH RE P O R T ING f
INC
8 77 . 4 0 4 . 2 1 9 3

P I C AR D v . KA T Z , et a.l . CON F I DE NT I A L KE V I N B A RCE L O N A 1 / 1 2 / 1 2
P age 1 9 6
0 3: 51: 53 1 exists m i g h t b e e a s i e r M S. BIEBER : I th i n k w e n e e d t o
03: 5 1 : 5 3
0 3: 51: 54 0 3: 51: 55
2
3 4
di scu s s t h a t f i r st , bu t w e' re certainly w e l c ome t o talk abo u t i t . M S. GRIFF IN : I wo u l d r a t h e r se e t h e
0 3: 5 1 : 5 5
Q 3: 5 1 : 5 6
5
6
way they w e r e k e p t i n th e o r d i n ar y c o u r se , b ut , o k a y . M R. GOUDI SS : a d v i seme n t . M S. BIEBER : A n d i n t e rms of this one W e ' ll take t ha t u n d e r
0 3: 5 2 : 0 0
0 3: 5 2 : 0 1
7
8
0 3: 5 2 : 0 2
03: 5 2 : 0 3 0 3: 5 2 : 0 6 0 3: 5 2 : 0 8 0 3: 5 2 : 1 1 0 3: 5 2 : 1 4 0 3: 5 2 : 1 6
9
10 11 12 13 14 15
box we ' re talking ab o ut , I d o n ' t t h in k w e' re talking ab out h o w i t w a s k e p t i n t h e o r d i n ar y c o u r se . As I
sa id , i t w a s p u l l e d D e c e m be r 2 2 n d , t h es e tw o b o x e s , and it l o o k s l i k e t h e y w e r e k ep t fo r th e p u r p os e o f th e M erk i n m e e t in g an d t h i n g s r e l a t in g t o M e r k in , s o I w on 't w a n t t h a t d e e me d th e o r d i n ar y c o u r s e . M S. GRIFF IN : W el l , h o w e v e r t he y a r e
0 3: 5 2 : 2 0
Q 3: 5 2 : 2 1 0 3: 5 2 : 2 4 0 3: 5 2 : 2 5 0 3: 5 2 : 3 0 Q3: 5 2 : 3 1
16
17 18 19 20 21
b ein g k e p t i n t h e o r d i n ar y c o u rs e r i gh t n ow , I w o u l d l ike to s e e t h e d e s c r i p t ion o f th e l o g o f t h e t w o b oxes , a n d t h e n I w o u l d l i k e t o s e e th e b o x e s t h a t are b ei n g k e p t n o w . A nd I w o u l d l i k e t o d o t h a t
m yself , i f t h a t ' s p o s s i b le , bu t I u n d e r s t an d y ou' re going t o t a k e i t u n d e r a d v i s e m e n t . MR. BOHORQU EZ : T h e l a s t q u e s t io n I
0 3; 52: 33 2 2
0 3: 5 2 : 3 5
0 3: 5 2 : 3 6 Q 3: 5 2 : 3 8
23
24 25
h ave w i t h r e s p e c t t o th e d o c u m e n ts , th e b o x e s f o u n d in the b a s e m e n t , di d yo u i d e n t if y an y b o x e s t ha t w e r e
B ENDI SH
R E P ORT I NG f
I NC
8 77 . 4 0 4 . 2 1 9 3

P ICAR D v. KATZ, et al . CON F ID EN T IA L K EV IN BA R C E LO N A . 1 / 1 2 / 1 2
P age 1 9 7 0 3:52:4 2 03: 5 2 : 4 5 03: 5 2 : 4 6 03: 5 2 : 5 1 0 3:52:5 2 03: 5 2 : 5 5 1 2 3 4 5 6 r e l at e d t o M s . H a r r i n g to n i n t h o s e b o x e s i n t h e b a s eme n t ?

M S. B I E B E R : No , w e did not .
M S. FEIN :
A l l r i ght .
Tha n k you .
W e 'r e g o i n g o f f th e r e c o r d . ( Endi n g t i me : 3 : 52 p . m . )
10
12 13
15 16 17 18 19 20 21 22 23
25
BENDI SH RE P O R T I NG ~ I NC
8 77 . 4 0 4 . 2 1 9 3
l,.l.I';L i ! ir ';ZrCA.(.
Bakel S.HOStetiei. LLP
45 Rockefeller Plaza New York, NY 10111
T 212,589.4200 F 212.5B9.420 1 www.bakerlaw.corn
Fernando A, Bohorquez direct dial: 212.889.4242 FBohorquez@bakeriaw.corn
January 23, 2012
VIIA E-IIAIL
Tammy Bieber
Tannenbaum Helpern Syracuse 8 Hirschtritt, LLP

900 Third Avenue New York, New York 10022 beiber@thsh.corn Re: Pi c a rd Katz et al., 11-CV-03605 (JSR) v.
Dear Tammy: I write to memorialize our numerous meet-and-confers regarding Sterling Stamos' due diligence files on Ascot Fund, LP, Gabriel Capital, LP, and other funds managed by Ezra Merkin that tnvested all or some portion of their funds in Bernard L. Madoff !nvestment Securities (the "Merkin Funds" ). The Trustee has repeatedly requested the Merkin Funds' due diligence files in this proceeding, first identified in the Trustee's October 11, 201'I subpoena to Sterling Stamos (the "Subpoena" ), and reiterated throughout the meet-and-confer process through numerous teleconferences, in-person meetings, depositions, letters and e-mails. See, e.g,, Subpoena Request No. 20. The significance of the documents requested by the Trustee was demonstrated during the deposition of Sterling Stamos' former Chief Investment Officer Noreen Harrington on December 30, 2011. Ms. Harrington, who served as CIO of Sterling Stamos (then known as SP Capital) from October 2002 to August 2003, testified that after meeting with Merkin to conduct ongoing due diligence into his funds in which Sterling Stamos first invested in July 2002 she advised her Sterling Stamos partners Saul Katz, David Katz and Peter Starnos, that Ezra Merkin was feeding investments in his fund to Madoff, and that it was her view that Madoff's investment returns were either the product of illegal front-running or were a "fiction." (N. Harrington Tr. at 67-68, 72-73, 78, 111-'l8,) Ms. Harrington testified that while acting as CIO, she and Ashok Chachra her then associate at Sterling Stamos conducted due diligence analyses into the Merkin and Madoff funds that led her to the conclusion that Madoff was engaging in illegal activity, Ms. Harrington testified that she and/or Mr. Chachra prepared materials for a meeting with Sterling Equities partners Saul Katz and David Katz at which she provided her negative recommendation about investing in the Merkin Funds. (N. Harrington Tr, at
Denver
Chicago Ci n c i nnati Cle v eland Col u mLios Cos t a Mesa Ho u s to n t os A ngeles Ne w Yort< O r l anclo V a shtngton, DC v
'I/IA E-IIAIL
Tammy Bieber
January 23, 2012
Page 2 86-88, 92-96.) Ms. Harrington further testified that her recollection of the events in question would be aided if she were able to review the documents she and Mr. Chachra had prepared in connection with the Merkin and Madoff funds, (N. Harrington Tr. 88:6-89:24; see a/so 1/2/2012 Ltr, from F. Bohorquez to T. Bieber.) Mr. Chachra also testified that he performed due diligence analyses of the Merkin Funds and provided them to Ms. Harrington, including a review of "the monthly performance of the fund, the annualized volatility of the fund, the correlation of the fund to the broader equity markets, looked at the distribution of returns." (A, Chachra Rule 2004 Tr. at 32-33). In addition, Peter Stamos testified that as of 2002, Sterling Starnos, and specifically Mr. Chachra, performed many different types of diligence analyses an its investment managers such as Merkin's Ascot and Gabriel funds, including evaluations of the funds' historical performance, portfolio exposure, volatility analysis, leverage, diversification and correlation with various market and portfolio factors. (P. Stamos Rule 45 Tr, 148-150). As of January 2, 2012, despite the Trustee's repeated requests, Sterling Stamos had not produced the due diligence materials to which Ms. Harrington and Mr. Chachra referred in their testimony. We then specifically requested the above-referenced documents and issued a subpoena and notice of a Sterling Stamos Fed, R, Civ. P. 30(b)(6) deposition to determine, among other things, the location, retention and/or destruction of Sterling Starnos' diligence files for Merkin's Ascot and Gabriel Funds, as well as Ms. Harrington's files. See 1/2/2012 Ltr. from F, Bohorquez to T. Bieber. You and your co-counsel, Alan Goudiss, agreed to provide a Rule 30(b)(6) witness who would be able to testify as to these topics and assured that any gaps or deficiencies in Sterling Stamos' production would be resolved prior to or at the Rule 30(b)(6) deposition, (See P, Stamos Rule 45 Tr. 312:4-315;15), Sterling Stamos designated Chief Financial Officer Kevin Barcelona as its Rule 30(b)(6) witness, but Mr. Barcelona was unable to testify concerning the whereabouts of Ms. Harrington's files. In fact, on January 12, 2012, Mr. Barcelona testified that he had no knowledge of what happened to her files and did nothing In advance of the deposition to educate himself on the topics specifically identified in the notice of deposition. (Sterling Stamos Rule 30(b)(6) Tr, 'l52:7-153:21). During a break in the Rule 30(b)(6) deposition, we explained our position that Sterling Stamos had failed to comply with its obligations pursuant to Rule 30(b)(6) because Mr. Barcelona had no knowledge about many topics identified in the notice, and admittedly had not educated himself on those topics in accordance with the requirements of a Rule 30(b)(6) witness. (Sterling Stamos Rule 30(b)(6) Tr. 189:23-191:16). We then questionedyou about what you and your cocounsel, Al Goudiss, knew about an Sterling Stamos' due diligence files and noted that it appeared that Sterling Starnos had essentially produced no diligence materials at all for the Merkin Funds which pre-dated 2005. /d, It was only then that you informed us that you had learned that two boxes of hard copy materials relating to Merkin's Ascot and Gabriel Funds had essentially gone missing three years ago on December 22, 2008- just a little more than one week after the revelation of Madoff's fraud, and at a time when Sterling Stamos was contemplating

VIA E-IIAIL
Tammy Bieber January 23, 2012 Page 3 litigation arising out of the Merkin Funds which had invested in Madoff. Id. You stated that Sterling Stamos had been unable to locate these boxes in the three years since (the "Missing Boxes" ). /d. Just minutes after you informed us that Ascot and Gabriel documents had gone missing for nearly three years, you then informed us that Sterling Stamos believed it may have located materials from the Missing Boxes in Sterling Stamos' New York office basement. Without having reviewed these materials yourself, you then suggested that the two Missing Boxes of Merkin Fund materials may have been consolidated into the one box you identified (the "Discovered Box"). (Sterling Stamos Rule 30(b)(6) Tr.
192;25-194:14).
The next day, January 13, 2012, Regina Griffin and Stacey Bell of our offices inspected the Discovered Box. The Discovered Box contained two file folders for Ascot and Gabriel entitled "Diligence," but they did not contain the due diligence analyses referenced by Ms. Harrington or Mr. Chachra in their testimony. Indeed, the Discovered Box did not contain any Sterling Stamos due diligence materials for the Ascot and Gabriel funds which pre-dated late 2004, You represented to us that in the days following the Rule 30(b)(6) deposition, you spoke to many Sterling Stamos former and current employees Peter Stamos, Spiro Stamos, Ashok Chachra, and Kevin Okirnoto, former consultant Tim Dick, and counsel for Sterling partner David Katz but you indicated that none of them knew anything about the retention of Ms. Harrington's files, nor about the due diligence analyses she referenced in her testimony. See 1/18/2012 E-mail from T. Bieber to K, Jenson. During Mr. Barcelona's 30(b)(6) deposition, he testified to a September 2008 office wide scanning project in which all hard copy documents in Sterling Starnos' New York office were scanned to the firm's electronic database, (Sterling Stamos Rule 30(b)(6) Tr. 30:17-31:11). Based on this representation, we requested a copy of the September 2008 scanned documents contained in the Missing Boxes (the "September 2008 Scan" ). You represented that you searched for a September 2008 Scan and did not locate it, During your search, however, you located and produced on January 13, 2012, a December 2008 scanned copy of t Discovered Box." he On January 18, 2012 you advised that you had located an electronic directory containing the Sterling Stamos Investment Team's hard copy working files scanned starting as of 2005, which you believed contained Merkin Funds' due diligence documents, The parties held a meet-and-confer conference on Jan, 19, 2012 during which you agreed to produce the recently located additional scanned copies of Merkin Fund documents. Our review of those files has uncovered no documents from prior to
" While we appreciate your production of the December 2008 Scan, you have represented that this file was created after the Missing Boxes were removed from Sterling Starnos' off-site storage,
VIIA E-MAllL Tammy Bieber January 23, 2012 Page 4
late 2004 resembling the due diiigence analyses referred to by Ms, Harrington or Mr. Chachra in their testimony.' Nlith your production to us on January 19, 2012 of those scanned materials, you represented that you have now produced all hard copy and electronic copies of documents pertaining to Merkin Funds which invested in Madoff, However, despite the testimony of two former Sterling Stamos' employees concerning the existence of 2002 2003 Merkin Fund due diligence materials, we cannot find among the documents produced any such due diligence materials from prior to late 2004. This is also despite the fact that Mr. Barcelona testified that Sterling Stamos has "records literally going
back to day one on all of our funds, even though our policy says we don't have to retain
them for that long," (Sterling Stamos Rule 30(b)(6) Tr. 142:24-143:9).' Please confirm that you have already checked for all of the foregoing documents demanded by the Trustee with the law firms that have represented Sterling Stamos directly or indirectly since 2003, including Shearman Sterling and Davis Polk 8 Wardwell, as well as any other agents of Sterling Stamos. Finally, if you believe that l have misstated any of the foregoing, please advise, Thank you, Sincerely,
Fernando A. Bohorquez
cc:
Da n a Seshens, Esq.
' In fact, in the thousands of documents produced by Sterling Starnos, only a single one-page document resembles the due diiigence described by Ms. Harrington and Mr. Chachra. See SSKVV00007066 "Ascot Partners, L.P." Mr. Barcelona also testified that in "very early January" 2009, following Bernie Madoff's arrest, then-Sterling Stamos General Counsel Jared Kanover issued a written litigation hold to all employees of Sterling Stamos that explicitly instructed all employees to preserve all records relating to the Merkin Funds, (Sterling Starnos Rule 30(b)(6) Tr. 145.'17-146'.2),
TANNENBAUM HELPERN SYRACUSE & HIRSCHTRITT LLP

900 THIRD AVENUE NEW YORK, NEW YORK 10022-4775
(2121 508-6700
FACSIMILE: (212) 371-1084
Writer's Direct Dial: (212) 508-6716 E-mail: bieberthsh.corn
January 25, 2012 VIA K-MAIL Fernando A. Bohorquez, Jr., Esq. Baker 4 Hostetler, LLP 45 Rockefeller aza, Pl New York, New York 10111 Re; Pic a rd v, Katz, et al. 11 Civ 3605 (JSR)
Dear Fernando: I write on behalf of Sterling Stamos Capital Management, L.P. (" Sterling Stamos") in response to your letter dated January 23, 2012, As a preliminary matter, we note that the Trustee's implication that Sterling Stamos has been withholding, or continues to withhold documents relating to any due diligence performed from 2002 through 2004 on the Ascot Partners, L.P, (" Ascot" ), Gabriel Capital L.P. (" Gabriel" ), and Ariel Fund Limited (" Ariel" ) managed by Ezra Merkin's Gabriel Capital Corporation (the "Merkin Fund documents"), is a gross mischaracterization of the record and Sterling Stamos' good faith efforts to comply with the Rule 45 subpoena. Indeed, your letter flatly ignores that Sterling Stamos, a third-party to this action, has produced over 2,38 million pages of documents to date, which include hundreds, if not thousands, of pages relating to the Merkin Fund documents. Your continued insistence on the existence of documents that, if created at all, were created over nine years ago at the infancy of the firm when diligence procedures were informal and largely hard copy,' no document retention policy existed, no archival system was in place, and the
' As Ms. Harrington explained when asked whether documents would have resided on her computer or in hard copy files: "The answer to that question would have been SP Capital was still in its infancy and we did have a lot of paper. But we were creating files for hedge fund inanagers," Harrington Tr. at 89. See also r'd, at 90 (" So, again, I'm not sure I can differentiate exactly how much of that would have been computerized at that point...,"); id. at 104 (" Again, the organization was in its infancy and we were working out exactly how we were going to keep these files")'id. at 107 (" [electronic meeting notes were] sort of a work in progress at the time, and I'm more of a paper person, so most likeIy I would have I probably would have handwritten, The idea was that this was supposed to be all automated at some point,"),
[954334-4]
Fernando A, Bohorquez, Jr., Esq, January 25, 2012 Page 2 computer server used by Sterling Stamos was not its own, ignores the realities of a small but growing business. That your doggedness is grounded solely in the wholly speculative testimony of Noreen Harrington as to what she believed "would" have been created for an introductory meetin~ with a fund manager in whose funds Sterling Stamos had already invested (Harrington Tr. at 89), approaches the bounds of responsible advocacy. Insinuating that there must be some nefarious reason for the absence of those documents years later is well beyond those bounds. Quite simply, there is no institutional memory as to what would have been in the files about which Ms. Harrington tesfified including, whether such files existed, where those files would have been located at the
time, and what might have happened to them in the years since her departure,
In response to the Trustee's Rule 45 subpoena, we have met and conferred with the Trustee in good faith on numerous occasions for several months now. Whenever you have sought to follow-up as to the existence of certain documents, no matter how tangential to this litigationwe have gone back and ascertained whether the requested documents exist and whether they have been
To the extent you are relying on Mr. Chachra's testimony, his recollection went generally to the type of analyses he would have conducted on the Merkin funds at the time. Like Ms, Harrington, he had no recollection of specific documents that might have existed or been prepared for the meeting with Merkin to which Ms, Harrington testified. Chachra Tr, at 33;11-17. Nor did he testify as to the existence of any specific documents or their continued existence. ' Ms. Harrington's testimony outlines her usual practices for speaking with managers but provides no specific recollection as to what documents, if any, she had prepared for her meeting with Merkin or for the subsequent internal meeting, See Harrington Tr. at 88 (" I don' t, I don't think we walked into any investment meeting on a hedge fund in
my entire time there that didn't have paperwork attached to it,");id. at 90 (" [I]n the investment meeting we would have
had, there would have been handouts normally or paper in those meetings); id. at 104 ("[a liquidity analysis] would be, you know, my normal process, so I would have I believe I would have done it"); id, at 107-08 (" We would have had the pitch books [for Gabriel and Ascot], and they would have most of the time you have pitch books that are electronic, and we would have had hard copies as well.'*). The speculative nature of Ms. Harrington's testimony is best illustrated by the following exchange:
Q.
A,
Q
A.
Q
A.
Q
A,
Did you take any notes at that meeting, Ms. Harrington? You know, I most likely did. And do you recall taking notes at that meeting? I don' t. I don't recall specifically. And do you know whether Mr. Chachra took notes at that meeting? He generally took notes. And do you remember him doing so at that particular ineeting? It was his generally speaking, Ashok took notes. I really I mean, do I
remember a notebook that he had? You know, I really don't remember.

It's eight years ago. But it would be out of character if Ashok didn't take some notes f'rom a meeting,
Harrington at 187-88, As you are aware, we have produced Mr. Chachra's notes from the meetings with Merkin during that time period.
[954334-4]
Fernando A, Bohorquez, Jr., Esq. January 25, 2012 Page 3 produced. When necessary, have made additi we onal pr oductions. Your repeated r equests f t or he Merkin Fund documents are no exception. Iron Mountain Files Contrary to your intimations, we have fully explained the issue with the Iron Mountain boxes to you and your colleagues on several occasions, Your selective recitation of those events,
however, necessitates that I once again set forth the circumstances surrounding those files.
On Wednesday, January 4, 2012, we learned during Chris Stamos' deposition in California of a possible off-site storage at "Blue Mountain." Consistent with Sterling Stamos' good faith efforts to comply with the Rule 45 subpoena, we followed-up and inquired into whether Sterling Stamos had a "Blue Mountain" storage facility and, if so, whether those files had been searched for responsive documents, We learned of the existence of storage at an "Iron" Mountain facility as well
as in the basement of 450 Park Avenue, Sterling Stamos' office, and understood that most of the
contents of those facilities had been scanned onto the computer system. Nevertheless, the NY office manager reviewed the basement storage and pulled several boxes for us to review upon our return from the depositions in California. On Monday, January 9, I reviewed those boxes and did not find any Merkin Fund documents, The NY Office manager and I went to the basement and again looked through the storage area, unsuccessfully. On January 10, we received and reviewed the boxes from Iron Mountain. Again, we did not locate any Merkin Fund documents, We noted, however, that the Iron Mountain directory listed two boxes of fund manager files that the index suggested should contain files for Ariel, Gabriel and Ascot, Those boxeshad been checked out on December 22, 2008 (the "Iron Mountain Merkin files" ), We immediately undertook to locate those boxes and were able to locate the box that was listed as containing Gabriel/Ariel files, which had been one of the boxes pulled from the basement for review, On closer examination, the only files in that box were for funds that were alphabetical neighbors to Gabriel, The search of Sterling Stamos' office continued, During a break in the 30(b)(6) testimony on Thursday, January 12, I reached out to the client to ensure that the California office was being searched. I was told that having conducted a third search of the basement that morning, they had located a box containing the Ascot, Gabriel, and
" Indeed, on January 2, 2012, the Trustee sought Noreen Harrington's personnel file for the first time, Notwithstanding that we believe such documents to be completely irrelevant to the present action, we conducted a thorough search of Sterling Stamos' files and produced the requested documents on January 12, 2012. Moreover, as early as November 10, 2011, the Trustee knew that Sterling Equities had back-up tapes Rom the time that Sterling Stamos' files resided on Sterling Equities' computer systems, Nevertheless, the Trustee waited until two days before the discovery cutoff to ask that Ms. Harrmgton's e-mail be uploaded and reviewed for production, In response to the Trustee's last minute request, Sterling Stamos reviewed Ms, Harrington's electronic files and produced an additional 2,000 documents by January 17, 2012. The record is abundantly clear that in compliance with Sterling Stamos' obligations pursuant to the Rule 45 subpoena, we have supplemented our production on multiple occasions upon locating the requested documents, which has come at a great expense to our client. ' As we previously informed you, our review of the files and documents at Sterling Stamos' office revealed that the Merkin Funds files that were retrieved from Iron Mountain in December 2008 had been consolidated in one box, I954334-4I
Fernando A. Bohorquez, Jr., Esq. January 25, 2012 Page 4 Ariel files together with several notebooks containing Mr. Chachra's handwritten notes of his meetings with investment managers. We immediately provided you unfettered access to those files and notebooks. Ms. Griffin and Ms, Bell came to Sterling Stamos' offices the morning of January 13 and reviewed the files, including photographing documents without permission. They also were given the opportunity to read the notebooks in their entirety with the exception of a handful of pages marked privileged, Again, a review of the documents confirmed that the majority, if not all, the materials contained in what you have coined the "Discovered Box," had previously been produced by Sterling Stamos, including, inter alia, all of Mr. Chachra's handwritten notes from meetings with Mr. Merkin in 2002 and 2003. Therefore, your characterization of these documents as newly found documents, perhaps in an attempt to imply that the Trustee has experienced undue prejudice, is plainly unfounded.
The Checked-Out Files
We then set about understanding the reasons the Iron Mountain Merkin files were pulled in December 2008, As we explained to you in my e-mail of January 18, the Gabriel, Ariel, and Ascot files were requested on December 19, 2008 by the communications team in the Menlo Park office so that they could determine what they could tell investors about the firm's potential exposure to Madoff. As a result of Menlo Park's request, a New York investment professional asked that the files be pulled. Once received by the NY office they were sent to California, where they were again scanned and stored on the P:/Portfolio Team Filing System(Library(1-Scanned Files drive, It is not at all surprising that your letter is silent on this point, given that it provides a logical explanation to why those documents were pulled at the time as opposed to the nefarious purpose you seem to seek. Indeed, we provided you with the e-mail chain in which the Iron Mountain Merkin files are requested, located, and shipped. Notwithstanding the explanation provided, the Trustee still sought the files as scanned in December 2008/January 2009. That same day, we made those documents available for your inspection at our office on a flash drive or alternatively, offered to endorse and upload them to your FTP site once the documents had been processed. See Bieber 1.18.12 email to F. Bohorquez et al, On January 19, 2012, after we did not hear back from you as to whether you intended to inspect the documents at our office or wanted the documents endorsed and uploaded, we proceeded to endorse and produce those documents to you. See Bieber 1.19,12 email to F, Bohorquez et al, In addition to those documents, Ms, Jenson wanted the scans of the Iron Mountain Merkin files that pre-dated December 11, 2008. Specifically, because Mr. Kevin Barcelona, who was designated as Sterling Stamos' 30(b)(6) witness, testified that in 2008 Sterling Stamos had implemented an office-wide scan of hard copy documents in its New York office, Ms, Jenson
' As we discussed, some of the details are explained in an otherwise privileged communication. You were offered that document subject to your agreement that it would not constitute a waiver of the privilege; Ms. Griffin, however, used t agreement, ref hat
[954334-4]
Fernando A. Bohorquez, Jr,, Esq, January 25, 2012 Page 5 demanded those scans of the Iron Mountain Merkin files, In searching for documents scanned pre December 11, 2008, we learned that the early investment management files were scanned into an "Existing Manager" directory when Sterling Stamos moved offices in late-2005/early 2006. That Existing Manager directory, which was subdivided by fund name and then by types of documents, was the working directory for each fund and therefore contained documents created after the original scans, We produced the contents of that directory as well. As we explained to you, there is no single file that contains a scan of the Iron Mountain Merkin files. Rather, scanned files were done document-by-document and each document was then filed in an appropriate directory. Thus, for example, a subscription agreement would be filed under a Legal Documents folder in a particular manager's directory under the Existing Manager directory. We have not identified a 2008 scan of the Iron Mountain Merkin file, but it seems likely such a scan would have been redundant of the scanning that took place in the wake of the office move. You now tell us that "while we appreciate your production of the December 2008 Scan, you have represented that this file was created after the Missing Boxes were removed from Sterling Stamos's off-site storage." Trustee's 1.23,12 letter n,1. Putting aside that you knew the timing of the scan when you insisted on having those documents, there is absolutely no basis on this record to suggest the Sterling Stamos has intentionally withheld a single document or that that scan varies in any way from the original files. Moreover, despite your characterization that Sterling Stamos only just recently produced documents relating to the Merkin Fund documents, most, if not all, of the documents referenced in your letter that were inspected by your colleagues on January 13, 2012 or were subsequently produced by Sterling Stamos in the past two weeks, are not new documents; these documents are simply a reproduction of documents already produced by Sterling Stamos since 2010 albeit in a different format. Therefore, your suggestion that we have failed to timely produce responsive documents or have just recently produced documents related to the Merkin Funds is both inappropriate and unfounded. That those files do not contain the documents you believe might have existed in 2003 does not lay the groundwork for baseless insinuations and accusations,
Con chision
To the extent that you have not been able to locate the Merkin Fund documents, we reiterate t hat wehave conducted a good fait search and have produced everything that we are aware of i h n Sterling Stamos' possession, custody and control relating to the Merkin Funds. A s you are undoubtedly aware by now, the firm was in its infancy stages during the short period of time Ms. Harrington was employed by Sterling Stamos between October 2002 and August 2003, and shared its office space and its computer servers with Sterling Equities, We also note for the record that despite having been notified by the Defendants by at least November 10, 2011 that Sterling Equities maintained back-up tapes containing Sterling Stamos' ESI prior to 2005, the Trustee failed to explore during the discovery timeframe whether those back-up tapes contained any other diligence
' I have also represented that we are not aware of any Merkin Fund documents having been intentionally destroyed,That r epresentation you have apparently chosen to i gnore,
1954334-4]
Fernando A. Bohorquez, Jr., Esq, January 25, 2012 Page 6 explore during the discovery timeframe whether those back-up tapes contained any other diligence materials relating to the Merkin Funds, other than having us review Ms. Harrington's e-mails at the eleventh hour. Accordingly, with this letter, we once again confirm, and reiterate that, subject to Sterling Stamos' objections to the requests in the Rule 45 subpoena and pursuant to the numerous meet-and confers between the parties to-date, Sterling Stamos, and its agents, have produced all responsive non-privileged docinnents relating to the Merkin Fund documents or, otherwise responsive to the requests, Very l y y ours,
T cc: Dana Seshens, Esq,
y Bi e b er
[954334-4]

Picard Vs Katz Deposition of Noreen Harrington

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Case 1:11-cv-03605-JSR Document 127 F i led 02/1 0/1 2 Page 1 of 3

UNITED STATES DISTRICT COURT SOUTH E R N DISTRICT OF NEW Y O R K

Adv. Pro. No. 08-01789 (BRL) SIPA LIQUIDATION

B ERNARD L. MADOFF INVESTMEN T SECURITIES LLC,

(Sub stantively Consolidated)

11 Civ. 03605 (JSR) (HBP)

DECLARATION OF REGINA GRIFFIN IN OPPOSITION TO DEFENDANTS' M O T ION FOR SUM M A R Y JU D G M E N T

Liquidation of Bernard L. Madoff

Case 1:11-cv-03605-JSR Document 127 F i led 02/1 0/1 2 Page 2 of 3

Case 1:11-cv-03605-JSR Document 127 F i led 02/1 0/1 2 Page 3 of 3

Dated: N e w York, New York February 9, 2012

Case 1:11-cv-03605-JSR Document 127-1 F i led 02/1 0/1 2 Page 1 of 17

Case 1:11-cv-03605-JSR Document 127-1 F i led 02/1 0/1 2 Page 2 of 17

S T A T E S D IS T R I C T C O U R T DISTRICT OF NEW YORK

t he Liquid a t ion o f B e r n ar d L . M adoff In v e s tm en t S e c u r i t ie s L L C , V ideo t a p e d D eposition o f : P laintif f ,

J ersey, at th e o f f i ce s o f B a k e r & H o s t e t l er , 4 5 R ockefeller P l a za , Ne w Y o r k , Ne w Y o r k o n D ecember 30 , 2 0 11 , c o m m e n c in g a t Friday,

Case 1:11-cv-03605-JSR Document 127-1 F i led 02/1 0/1 2 Page 3 of 17

PICARD v. KATZ, et al.

CONFIDENTIAL NOREEN HARRINGTON 1 2/30/11

talk in g e n e ral te rms be c ause

th e e x ac t b a c k - a n d - forth q u e s t i o ns . to d e s c r ibe what I t h o u ght I h a d

ascertained in that meeting .

I a s c e rtained in the m e e t i ng, be cause

it's just easier for me

So, I w a l k e d 10 s aid to A s h o k , g oing t o g o 12 13 i nvestm en t 15

that didn't go well and i t 's not A nd I m ea n t a t S P C a p i t a l , t h i s

and m y i m m e d i ate re action to th e m e e t i n g go fo rward . A nd t h e r e a s o n w e c a n n o t

go forward is we have an obligation to our investors

charge a pretty hefty fee to our investors to do

were to r e v e rse themselves from th e

meeting we nt, it w o uld be v ery d i f f icult to

BENDISH REPORTING, INC. 877.404. 21 93

Case 1:11-cv-03605-JSR Document 127-1 F i led 02/1 0/1 2 Page 4 of 17

PICARD v. KATZ, et al.

CONFIDENTIAL NOREEN HARRINGTON 12/30/11

some w o rk, you kn ow, to sort of j u s t ify a An d s o I w a l k e d o u t o f t h e I w a lk e d o u t

a couple of other things .

kn owing they went to c ash at th e e n d

i nform a t io n o n t hink w e a nswer - -

r emember specifically asking that question ?

remember an an swer that we go to c ash at a q u ar t er .

you, they were joined at the hip in this

of th e o f f ice r em emb ering is I h a d t r i e d

BENDISH REPORTING, INC. 877.404.21 93

Case 1:11-cv-03605-JSR Document 127-1 F i led 02/1 0/1 2 Page 5 of 17

PICARD v. KATZ, et al.

CONFIDENTIAL NOREEN HARRINGTON 1 2/30/11

P e ter St amos and S aul K at z w a n t e d ? T hat wa s m y understanding.

A ft er th i s m e e t ing, did you do any

your negative recommendation?

v er y p r o f e ssional, but t h ere wa s a l i t t l e

stink a r ound Ne rkin in a ma n n a med V i c t o r

Teichers (phonetic) or -- I'm slaughtering his last

a checkered past, might be a way to put i t .

in my p a st, in my c a reer, is numb ers don' t people can . An d s o I ' m g e n e r a l l y m o r e So t h e o n e t h i n g I

with math anyway .

BENDISH REPORTING, INC. 877.404.21 93

Case 1:11-cv-03605-JSR Document 127-1 F i led 02/1 0/1 2 Page 6 of 17

PICARD v. KATZ, et al.

CONFIDENTIAL NOREEN HARRINGTON 12/30/11

w ould s a y t his i s i n o ption s a t i ncrea se d t he i s su e r egul a t o r y Q

I 'm trying to educate myself on both peop le .

s om e e x p l a n ation I ha d g a r n e red ab out c a sh of a qu a rter . So , n o t o n r e g u l a t o r y