EFTA00299085

Page 1 1 2 JUDICIAL ARBITRATION AND MEDIATION SERVICE 3 NEW YORK, NEW YORK 4 5 FORTRESS VRF I LLC and ) FORTRESS VALUE RECOVERY ) 6 FUND I LLC, ) Claimants, ) 7 ) vs. ) Reference No. 8 ) 1425006537 JEEPERS, INC., ) 9 Respondents. ) ) 10 and ) ) 11 FINANCIAL TRUST COMPANY, ) INC., and JEEPERS, INC., ) 12 Counter-Claimants and ) Third-Party Claimants, ) 13 ) vs. ) 14 ) FORTRESS VALUE RECOVERY ) 15 FUND I LLC, ) Counter-Respondents, ) 16 ) vs. ) 17 ) D.B. ZWIRN PARTNERS, LLC, ) 18 D.B. ZWIRN & CO., L.P., ) DBZ GP, LLC, ZWIRN ) 19 HOLDINGS, LLC, and DANIEL ) ZWIRN, ) 20 Third-Party Respondents. ) ) 21 22 April 20, 2011 23 9:02 a.m. 24 25 Deposition of JEFFREY EPSTEIN. VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA00299085 Page 2 1 2 3 4 5 April 20, 2011 6 9:02 a.m. 7 8 Deposition of JEFFREY EPSTEIN, held at 9 the offices of Cooley Godwin Kronish, 1114 10 Avenue of the Americas, New York, New York, 11 before Laurie A. Collins, a Registered 12 Professional Reporter and Notary Public of the 13 State of New York. 14 15 16 17 18 19 20 21 22 23 24 25 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA00299086 Page 3 1 2 APPEARANCE S: 3 4 PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 5 Attorneys for Claimants 6 1285 Avenue of the Americas 7 New York, New York 10019-6064 8 BY: ALLAN J. ARFFA, ESQ. 9 HANNAH S. SHOLL, ESQ. 10 11 SUSMAN GODFREY 12 Attorneys for JEEPERS, 13 Financial Trust Company, and Witness 14 560 Lexington Avenue, 15th Floor 15 New York, New York 10022 16 BY: STEPHEN D. SUSMAN, ESQ. 17 18 COOLEY GODWARD KRONISH LLP 19 Attorneys for D.B. Zwirn Partners, LLC, 20 D.B. Zwirn Co. , L.P. , and DBZ GP, LLC 21 1114 Avenue of the Americas 22 New York, New York 10036-7798 23 BY: WILLIAM J. SCHWARTZ, ESQ. 24 WILLIAM O'BRIEN, ESQ. 25 ARASTU K. CHAUDHURY, ESQ. VERITEXT REPORTING COMPANY www.yeritext.com EFTA00299087 Page 4 1 2 APPEARANCES (continued): 3 4 LANKLER SIFFERT & WOHL LLP 5 Attorneys for Daniel Zwirn 6 500 Fifth Avenue, 7 New York, New York 10110-3398 8 BY: JOHN S. SIFFERT, ESQ. 9 DANIEL E. REYNOLDS, ESQ. 10 ANDREW S. LEE, ESQ. 11 12 ALSO PRESENT: 13 RICK NOBLE, ESQ. (Fortress) 14 ADAM DICOLA, Videographer 15 16 17 18 19 20 21 22 23 24 25 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299088 Page 5 1 Proceedings 2 THE VIDEOGRAPHER: Good morning. We 3 are now on the record. My name is Adam DiCola 4 of Veritext New York. The date today is April 5 20th, 2011, and the time is approximately 9:01 09:02:17 6 a.m. 7 This deposition is being held in the 8 office of Cooley Godward Kronish LLP, located 9 at 1114 Avenue of the Americas, New York, New 10 York. The caption of this case is Fortress 09:02:33 11 VRF LLC, et al., versus JEEPERS, Inc., et al., 12 in the Judicial Arbitration and Mediation 13 Service, New York, New York, Reference Number 14 1425006537. The name of the witness is 15 Jeffrey Epstein. 09:02:55 16 At this time will the attorneys please 17 identify themselves and the parties they 18 represent, after which our court reporter, 19 Laurie Collins, will swear in the witness and 20 we can proceed. 09:03:04 21 MR. SCHWARTZ: My name is William 22 Schwartz. I represent D.B. Zwirn Partners, 23 LLC; D.S. Zwirn & Co., L.P.; DBZ GP, LLC; and 24 Zwirn Holdings, LLC. 25 MR. CHAUDHURY: My name is Arastu 09:03:18 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299089 Page 6 1 Proceedings 2 Chaudhury, also from Cooley LLP. I also 3 represent D.B. Zwirn Partners, LLC; 4 D.B. Zwirn & Co., L.P.; DBZ GP, LLC; and Zwirn 5 Holdings, LLC. 09:03:16 6 MR. O'BRIEN: William O'Brien from 7 Cooley for the same parties. 8 MR. SIFFERT: John Siffert, Lankler 9 Siffert & Wohl, for Daniel Zwirn. 10 MR. REYNOLDS: Daniel Reynolds, Lankler 09:03:38 11 Siffert & Wohl, also for Daniel Zwirn. 12 MR. LEE: Andrew Lee, Lankler Siffert & 13 Wohl, also for Daniel Zwirn. 14 MR. ARFFA: I'm Allan Arffa from Paul, 15 Weiss, Rifkind, Wharton & Garrison, LLP. We 09:03:51 16 represent the two claimants, Fortress VRF I 17 LLC and Fortress Value Recovery Fund I LLC. 18 MS. SHOLL: I'm Hannah Sholl, here for 19 the same clients, also from Paul, Weiss, 20 Wharton & Garrison. 09:04:05 21 MR. NOBLE: Rick Noble from Fortress 22 for Fortress Value Recovery Fund. 23 MR. SUSMAN: Steve Susman on behalf of 24 FTC, JEEPERS, and the witness, Mr. Epstein. 25 Before we get going, before we swear 09:04:18 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299090 Page 7 1 Proceedings 2 him in, let's get some agreements on the 3 record; I think it's appropriate. We agree 4 that these depositions each side will get 5 seven hours of questioning time, exclusive of 09:04:29 6 breaks. 7 We have agreed, at least today -- I 8 think we have agreed that the depositions will 9 be taken in the office of the party taking the 10 deposition or at the location. 09:04:40 11 MR. SCHWARTZ: That's where this one 12 is. 13 MR. SUSMAN: Right. I'm just trying to 14 say the rules we set today, since it's the 15 first deposition, will be the rules of the 09:04:49 16 game, as far as I'm concerned. 17 We'll begin these depositions at 9. We 18 can make other agreements. But unless other 19 agreements are made, we start the depositions 20 at 9. When the seven hours are up, the seven 09:04:59 21 hours are up. 22 I thank you for accommodating me for 23 lunch today. We will break at 12:20 and be 24 back at 1:45. We can do -- an hour and a half 25 for lunch. We can do whatever schedule you 09:05:11 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299091 Page 8 1 Proceedings 2 want on that. But I would ask you give us 3 notice if you have any luncheon times so 4 people can make plans, such as we gave you. 5 Mr. Epstein needs to use the facility 09:05:21 6 more regularly than normally. So what I 7 proposed to him is that we are going to take a 8 break every hour on the hour for five minutes 9 for you to do what you need to do. 10 So you know coming to the hour he's 09:05:34 11 going to break and you'll not have any interim 12 breaks where he -- we can do the same thing 13 with your witnesses. I'm not talking about a 14 long break, because if we take long breaks we 15 will be here until 8 o'clock tonight and I 09:05:46 16 don't want to do that. We can take a very 17 short break to use the facility, but on the 18 hour. 19 MR. ARFFA: I hope we can finish it in 20 seven hours. There are multiple parties here 09:05:58 21 who don't have the same interests. Hopefully 22 we can do it all in seven, but I'm going to 23 reserve my right to seek or ask for additional 24 time, if necessary. Hopefully that won't be 25 necessary. 09:06:11 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299092 Page 9 1 Epstein 2 MR. SUSMAN: Just so our position is 3 understood, yes, anyone is free to seek any 4 time, obviously, but you're going to have to 5 get the judge's permission. 09:06:18 6 MR. ARFFA: That's your position. I 7 have a different position. 8 MR. SUSMAN: Exactly. Ready. 9 MR. SCHWARTZ: Good morning, 10 Mr. Epstein. 09:06:28 11 (Discussion off the record.) 12 JEFFREY EPSTEIN , 13 called as a witness, having been duly sworn 14 by the notary public, was examined and 15 testified as follows: 16 EXAMINATION BY 17 BY MR. SCHWARTZ: 18 Q. Good morning, Mr. Epstein. 19 A. Good morning. 20 Q. Now you can say it under oath. 09:06:39 21 I take it you are experienced in 22 investing in hedge funds; is that correct? 23 A. Yes. 24 Q. How long have you been an investor in 25 hedge funds? 09:06:54 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299093 Page 10 1 Epstein 2 A. More than 20 years. 3 Q. And how many hedge funds have you 4 invested in? 5 A. More than ten. 09:06:58 6 Q. And in the context of hedge funds, do 7 you have an understanding of what a lockup is? 8 A. Yes. 9 Q. What is a lockup? 10 A. It's a period of time where your 09:07:12 11 investment is restricted from being redeemed. 12 Q. In other words, you put your money 13 in -- correct? -- and then you can't take it out 14 until the lockup is over? 15 A. If that's what the lockup says. Many 09:07:29 16 lockups have partial withdrawal rights so... 17 Q. Is it fair to say that as an investor, 18 given a choice, you would prefer a shorter lockup 19 to a longer lockup of your funds? 20 A. No. 09:07:54 21 Q. And why would you not -- well, can you 22 explain that? 23 A. Different investments have different 24 periods of time to make investments as well as 25 redeem them. 09:08:09 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299094 Page 11 1 Epstein 2 Q. Is it fair to say that you would prefer 3 to have greater access to your money over time -- 4 strike that. Let me go back. 5 A. Have you asked a question? 09:08:34 6 Q. I'm trying to understand your last 7 answer. 8 A. Sorry. 9 Q. I'm not sure what you mean by why -- 10 why different -- the period of time over which you 09:08:49 11 can make an investment has an effect on your view 12 as to how long a lockup is. Can you explain? 13 MR. SUSMAN: Is that a question? I 14 didn't get question. 15 MR. SCHWARTZ: I asked him whether he 09:09:01 16 can explain his last answer. 17 A. In many instances if you are going to 18 take a large position in a security, you might 19 want to buy it over a longer period of time. So 20 if -- a lockup period sometimes reflects the fact 09:09:15 21 as well that you might have to accumulate a 22 position. 23 Q. And isn't it fair to say that you would 24 like to be able to get quicker access to your 25 money if you decide to change your investment? Is 09:09:30 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299095 Page 12 1 Epstein 2 it fair to say that during a lockup period you 3 cannot take your money out of an investment? 4 A. No. 5 Q. Is it fair to say that during a lockup 09:09:42 6 period -- 7 A. No, it's not fair to say that. 8 Q. Is it fair to say that if a lockup 9 applies to a particular tranche of an investment 10 for a period of time, restricting the amount of 09:09:52 11 time you cannot take it out, during that period of 12 time you cannot take out that tranche; is that 13 fair to say? 14 A. No, it's not. 15 Q. Explain that to me, please. 09:10:00 16 A. Lockups are very specific. So 17 sometimes -- you're using the general category of 18 lockups when in fact lockups, like menus, have 19 many different options. 20 Q. You made investments in the Zwirn fund; 09:10:19 21 is that correct? 22 A. You mean me -- you're referring to FTC? 23 Q. FTC, excuse me. 24 A. Yes. 25 Q. And when you made your initial 09:10:51 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299096 Page 13 1 Epstein 2 investment, what did you understand the lockup to 3 be? 4 A. I'm sorry, you'll have to rephrase the 5 question. This is -- the Zwirn fund, is this the 09:11:01 6 Highbridge/ Zwirn? I made many investments in 7 funds having to do with Dan Zwirn. 8 Q. It's the Highbridge/Zwirn? 9 A. Would you repeat your question? 10 Q. What did you understand lockup to be? 09:11:13 11 A. With Highbridge I? 12 Q. Yes. 13 A. My understanding was a two-year lockup. 14 Q. From when to when? 15 A. From 2002 until 2004. 09:11:31 16 Q. And when you made your second 17 investment in that fund, what did you understand 18 the lockup period to be for that investment? 19 A. I understood I had one capital account, 20 one capital account, and I could make my 09:11:46 21 redemption request any time after the first -- 22 between two thousand -- at the end of 2004 for the 23 2002 investment. 24 Q. And that was with respect to each 25 investment you made in the Highbridge fund, the 09:12:01 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299097 Page 14 1 Epstein 2 Highbridge/Zwirn fund? It was governed by a 3 single lockout -- a single lockup period? 4 A. Correct. 5 Q. Just so I'm clear, it is your testimony 09:12:27 6 that the lockup the period in which you could 7 withdraw your funds was governed by the date on 8 which you made your first investment into the 9 fund? 10 A. Which fund are we talking about? Which 09:12:51 11 investment are we talking about? 12 Q. We're talking about the Highbridge/ 13 Zwirn fund. 14 A. Which time? 15 Q. Well, how many investments did you make 09:13:02 16 in the Highbridge/Zwirn fund? 17 A. If you could refresh my recollection, I 18 would be happy to. 19 Q. Prior to 2005 does it refresh your 20 recollection that you made four investments? 09:13:10 21 A. If you say so. 22 Q. Well, does it refresh your recollection 23 that you made an investment on May 1, 2002; 24 September 1, 2002; December 1, 2002; and June 1, 25 2003? 09:13:28 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299098 Page 15 1 Epstein 2 A. That sounds right. 3 Q. When could you withdraw those 4 investments, each of them? 5 A. After the first 2002 investment, two 09:13:38 6 years after that. 7 Q. Do you recall that -- so after -- let 8 me see if I can be more specific. 9 Is it your testimony that you could 10 obtain a withdrawal of your funds at the 09:13:53 11 quarter -- at the end of the quarter in which you 12 invested two years after you made your original 13 investment; so that if you made a May 1, 2002, 14 investment, those funds could be withdrawn June 15 30, 2003, on proper notice -- 2004 on proper 09:14:13 16 notice? 17 A. That's my understanding. 18 Q. And for the investment you made on 19 September 1, 2002, it is your understanding -- it 20 was your understanding at the time you made that 09:14:28 21 investment that those funds could be withdrawn on 22 June 30, 2004, given proper notice? 23 A. I believe so, yes. 24 Q. And for the investment you made on 25 December 1, 2002, it was your understanding at the 09:14:47 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299099 Page 16 1 Epstein 2 time you made that investment that if you gave 3 proper notice you could withdraw that investment 4 on June 30, 2004? 5 A. That's correct. 09:15:01 6 Q. And for the investment that you made on 7 June 1, 2003, it was your understanding that you 8 could withdraw that investment, if you gave proper 9 notice, on June 30, 2004? 10 A. That's correct. 09:15:14 11 Q. And you understood that to be a rolling 12 lockup so that if you did not withdraw your money 13 on June 30, 2004, the next time you could withdraw 14 your money would be two years after that? 15 A. I don't recall what my understanding 09:15:41 16 was then. Sorry. 17 Q. Is that your understanding now? 18 A. Yes. 19 Q. And was that understanding based on? 20 A. My understanding is I had one capital 09:15:48 21 account with D.B. Zwirn, that I was the original 22 investor -- one of the original investors in 23 D.B. Zwirn, and the transaction that I structured 24 early on is that I could withdraw my money in two 25 years. 09:16:07 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299100 Page 17 1 Epstein 2 Q. And with whom did you structure that 3 transaction? 4 A. Glenn Dubin. 5 Q. I'm sorry? 09:16:16 6 A. Glenn Dubin. 7 Q. So -- 8 A. This was a Highbridge -- you're asking 9 me about Highbridge I; is that correct? 10 Q. Yes. 09:16:24 11 A. Okay. 12 (Pause.) 13 Q. Just so we're clear, your understanding 14 of the lockups came from conversations with Glenn 15 Dubin? 09:17:12 16 A. Yes. 17 Q. At the time you made your initial 18 investment? 19 A. Yes. 20 Q. And at the time you made your 09:17:23 21 subsequent investments, did you have conversations 22 with Glenn Dubin about the lockups for those? And 23 I'm referring only to the investments that I -- 24 the first four investments. 25 A. I don't recall. 09:17:37 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299101 Page 18 1 Epstein 2 Q. What did Mr. Dubin tell you -- well, 3 tell us your conversations with Mr. Dubin 4 concerning the lockups prior to your first 5 investment. How many were there? 09:17:47 6 A. You've asked two questions, I'm sorry. 7 Q. I'm sorry. How many conversations 8 prior to making your first investment did you have 9 with Mr. Dubin about the lockup period prior to 10 making your first investment? 09:18:00 11 A. Probably one 12 Q. And what did you say to him and what 13 did he say to you? 14 A. I would -- I would never lock up my 15 money for more than two years. So if you want me 09:18:10 16 to invest in Highbridge I, it will have to be a 17 two-year lockup, more than a two-year lockup. 18 Q. And what did he say? 19 A. Fine. 20 Q. And did you have a specific 09:18:22 21 conversation with him about subsequent investments 22 at that time that you might make in the fund? 23 A. Can you repeat the question? 24 Q. At the time you had that conversation 25 with him about not wanting to lock up your money 09:18:37 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299102 Page 19 1 Epstein 2 for more than two years, did you have a 3 conversation with him about subsequent investments 4 that you might make in the fund? 5 A. Yes. 09:18:48 6 Q. And what was that conversation? 7 A. That if the performance was attractive 8 I would increase my investments in the fund. 9 Q. And did you discuss what the lockup 10 would be for those increases? 09:19:07 11 A. I don't recall. 12 Q. Did Mr. Zwirn tell you that the lockup 13 for those -- did Mr. Dubin tell you that the 14 lockup for any subsequent investment would be on 15 the same calendar as the lockup for the first 09:19:21 16 investment? 17 A. No. 18 Q. Did anybody tell you that? 19 A. I don't recall. However, my 20 understanding was I was only putting money in for 09:19:43 21 my original investment. I would add to that 22 investment with the same two-year lockup. 23 Q. And with whom did you have that 24 conversation? 25 A. Mr. Dubin. 09:19:51 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299103 Page 20 1 Epstein 2 Q. So you said to Mr. Dubin that if I add 3 money it will be on the same lockup calendar as my 4 original investment? 5 A. Correct. 09:20:02 6 Q. Meaning I can withdraw any subsequent 7 investment at the same time I can withdraw my 8 original investment? 9 A. Correct. 10 Q. And Mr. Dubin confirmed for you that 09:20:14 11 that was indeed the way the fund was going to be 12 operated? 13 A. That was my understanding. 14 Q. Can you tell us when this conversation 15 was with respect to when you made your first 09:20:26 16 investment? 17 A. It would be prior to the May 2002 first 18 investment tranche. 19 Q. Did you have any conversations with 20 Mr. Zwirn about the lockup at that time? 09:20:39 21 A. I never spoke to Dan Zwirn until years 22 later. 23 Q. Is it fair to say that your only 24 understanding of what the lockup period was came 25 from that conversation with Mr. Dubin? 09:20:55 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299104 Page 21 1 Epstein 2 A. No. 3 Q. What else did you rely on? 4 A. I spoke to people in my office, my 5 in-house counsel. 09:21:08 6 Q. About what? 7 A. Everyone knows I am very disciplined 8 about not investing money basically with lockups 9 and especially for more than two years. 10 Q. And why is that? 09:21:20 11 A. Because with an -- with my history of 12 investing in hedge funds, sometimes they go wrong. 13 I believe liquidity, especially when there's a 14 problem, becomes important. Liquidity in hedge 15 funds, especially with hedge funds, is a primary 09:21:37 16 concern of mine. And anything more than a 17 two-year lockup is too risky. 18 Q. Have you ever made a hedge fund 19 investment where you invested multiple tranches 20 where each tranche was governed by a separate 09:21:55 21 lockout -- lockup period? 22 A. I don't recall. 23 Q. Have you made other investments in 24 hedge funds with multiple tranches where each 25 tranche lockup was governed by the lockup period 09:22:16 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299105 Page 22 1 Epstein 2 for the first investment? 3 A. I don't recall. 4 Q. You said you made how many other 5 investments in hedge funds? 09:22:26 6 A. More than ten. 7 Q. And were those single tranches or 8 multiple tranche investments? 9 A. I don't recall with specificity. 10 Q. And you don't recall, with respect to 09:22:35 11 any of those hedge funds, what the lockup terms 12 were with respect to multiple tranches? 13 A. I make my investments based on 14 recommendations and analysis of usually 15 performance. The details of the lockups are 09:22:49 16 usually left to others. My discipline is I don't 17 make investments. In fact, the reason I have a 18 side letter dated January '05 is that later on 19 when I was asked to have a three-year lockup I 20 said absolutely not, I will not invest money, I 09:23:06 21 only will have two-year money. 22 MR. SUSMAN: Mr. Epstein, I instruct 23 you try to be responsive to this lawyer and 24 answer "yes" or "no," if you can, and not give 25 a talk. We'll be here too long. He knows 09:23:19 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299106 Page 23 1 Epstein 2 what questions to ask. 3 THE WITNESS: Okay. 4 Q. So of the approximately ten hedge fund 5 investments you have made, the only one, as you 09:23:26 6 sit here today, that you remember the terms of the 7 lockup for is this one? 8 A. Yes. 9 Q. Is that because you recently reviewed 10 those terms or is that because you have an 09:23:47 11 independent memory of those terms? 12 A. Can you repeat the entire question? 13 Q. Why is it that you remember this one 14 and not others? 15 A. This is the only one I've had a problem 09:23:58 16 with. 17 Q. In November 2004 did you remember the 18 terms of the lockup? 19 A. I don't recall. 20 Q. Did you recall the terms of this lockup 09:24:21 21 only after you began to have a problem with this 22 hedge fund? 23 A. Did I recall? I'm sorry, you'll have 24 to repeat your question. 25 Q. Your testimony is that you remember 09:24:32 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299107 Page 24 1 Epstein 2 this lockup and not others because this is the 3 only one "I've had a problem with." 4 So my question to you is when did you 5 remember the terms of this lockup, when did you 09:24:43 6 first remember the terms of this lockup. 7 A. I was told initially when I signed up 8 in 2002 that I would have a two-year lockup. I 9 remember having an agreement in 2005 that all my 10 money would be subject only to a two-year lockup. 09:25:00 11 Q. Is it possible that you were told in 12 2002 that the lockup period would be two years 13 from the date of each separate tranche? 14 A. You're asking me is it possible? 15 Q. Yes. 09:25:15 16 A. I do not recall that. 17 Q. Are you certain that Mr. Dubin did not 18 tell you that? 19 A. Correct. 20 MR. ARFFA: Mr. Susman, it may be 09:25:27 21 involuntary, but I notice you tend to shake 22 your head up and down. 23 MR. SCHWARTZ: As I have noticed. 24 MR. ARFFA: I would prefer you didn't 25 do that when he asks a question. 09:25:38 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299108 Page 25 1 Epstein 2 THE WITNESS: I was 3 MR. ARFFA: I'm not talking to you, 4 Mr. Epstein. 5 THE WITNESS: I haven't seen anything, 09:25:44 6 I'm sorry. 7 MR. ARFFA: That's your counsel. You 8 can do whatever you like. 9 THE WITNESS: Not a problem. 10 Q. Let me just go back. 09:25:56 11 Are you certain that Mr. Dubin told you 12 that the lockup period for the initial tranche 13 would apply to each additional tranche that you 14 made, in other words, you'd be able to take them 15 all out at the same time? 09:26:29 16 A. Yes. 17 Q. What do you recall prompted your desire 18 to obtain a side letter in 2005? 19 A. My best recollection is that they were 20 asking investors to have their money locked up for 09:27:24 21 three years. They were taking in new money. They 22 asked investors to take their money -- lock it up 23 for three years. I said absolutely not. 24 Q. And with whom did you have that 25 conversation? 09:27:35 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299109 Page 26 1 Epstein 2 A. My best recollection is Glenn Dubin. 3 Q. Do you have that conversation with 4 Mr. Zwirn? 5 A. No, not to the best of my recollection. 09:27:48 6 Q. Did anybody else to your knowledge in 7 your office communicate about that to Mr. Zwirn or 8 anybody else at his fund? 9 A. You'll have to repeat the question. 10 Q. Did anybody else to your knowledge in 09:28:05 11 your office communicate about that desire not to 12 be locked up for three years to Mr. Zwirn or 13 anybody else at his fund? 14 A. I don't recall. 15 Q. What did Mr. Dubin say to you when you 09:28:52 16 expressed that concern to him? 17 A. He told me that they would -- Stan 18 would send me a letter confirming my 19 understanding. 20 Q. Anybody else participate in that 09:29:10 21 conversation? 22 A. I don't recall. 23 Q. By the way, did anybody else 24 participate in the conversation -- initial 25 conversation you had with Mr. Dubin concerning 09:29:20 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299110 Page 27 1 Epstein 2 lockups in 2002? 3 A. No. 4 Q. Was that conversation in person or on 5 the phone? 09:29:27 6 A. On the phone. 7 Q. Was the conversation in 2004 in person 8 or on the phone? 9 A. My best recollection would be on the 10 phone. 09:29:42 11 Q. What happened after that conversation? 12 A. What question is that? 13 Q. With respect to your desire not to have 14 a three-year lockup, what happened after that 15 conversation with Mr. Dubin? 09:29:56 16 A. Which conversation with Mr. Dubin? 17 Q. 2004. 18 A. Are you talking about the end of 2004? 19 Q. Yes. 20 A. We received a letter stating that, yes, 09:30:05 21 my one capital account would be subject to only a 22 two-year lockup, where everybody else's would be 23 three, or at least mine said a two-year lockup. 24 Q. And between the time you spoke to 25 Mr. Dubin and the time you received that letter, 09:30:21 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299111 Page 28 1 Epstein 2 do you recall having any conversations with 3 anybody about that topic? 4 A. Repeat the question? Sorry. 5 Q. Between the time you spoke to Mr. Dubin 09:30:44 6 in late 2004 and the time you received the letter 7 in early 2005, do you recall having any 8 conversations with anybody about that topic? 9 A. Yes. 10 Q. With whom? 09:30:58 11 A. My general counsel. 12 Q. Was anybody else present when you had 13 that conversation with your in-house counsel? 14 A. I don't believe so. 15 Q. I think you also testified that you had 09:31:10 16 conversations back in 2002 with your in-house 17 counsel about lockups; do you recall? Is that 18 correct? 19 A. I've spoken to -- most people who work 20 for me know I don't agree to investments basically 09:31:26 21 more than two years. 22 Q. Do you recall any conversations with 23 your in-house counsel in 2002 about that topic? 24 A. Not specifically. 25 Q. Do you recall any conversations with 09:31:34 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299112 Page 29 1 Epstein 2 anybody other than Mr. Dubin in 2002 about that 3 topic? 4 A. Yes. 5 Q. With whom? 09:31:43 6 A. Many people I have made investments 7 with. When I discuss investments, I say having 8 more than a two-year lockup makes no sense to many 9 people. 10 Q. If you invest money in May -- if you 09:31:56 11 would have invested money in May of 2002 and then 12 you invest additional monies in September 2002, it 13 would also be a two-year lockup if the monies in 14 September 2002 could be obtained in September 15 2006; is that correct -- 2004; is that correct? 09:32:13 16 A. Again? 17 Q. I want to be clear about what a 18 two-year lockup is. You can have a two-year 19 lockup with respect to each tranche where that 20 tranche is locked up for two years. That's a 09:32:29 21 possibility -- correct? -- in a fund? 22 A. Yes. 23 Q. You could also have a two-year lockup 24 where each tranche is governed by the date of the 25 initial lockup for the initial tranche; is that 09:32:42 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299113 Page 30 1 Epstein 2 correct? 3 A. I'm sure it is. 4 Q. I just want to be sure which one you're 5 saying this fund required. 09:32:50 6 A. I've repeatedly told you what my 7 understanding was. 8 Q. And you said that you have 9 conversations with many people about your desire 10 to have two-year lockups. In those 09:33:04 11 conversations -- 12 A. Less than two-year lockups. I have 13 many talks about the dangers of having anything 14 more than a two-year lockup. That's what I said. 15 Q. In those conversations are you talking 09:33:16 16 about two-year lockups generally or are you being 17 specific that each tranche needs to be governed by 18 the two-year lockup on the initial tranche? 19 A. Generally. 20 Q. So the only conversation in which you 09:33:34 21 discussed that each tranche of this of these 22 investments would be governed by the initial 23 two-year lockup was with Mr. Dubin prior to your 24 first investment; is that correct? 25 A. You'll have to repeat the question. 09:33:59 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299114 Page 31 1 Epstein 2 Q. So the only conversation in which you 3 discussed that each tranche of these investments 4 in the Highbridge/Zwirn fund would be governed by 5 the initial two-year lockup date was the 09:34:10 6 conversation with Mr. Dubin prior to your first 7 investment; is that correct? 8 A. Correct. 9 Q. It's your testimony that the purpose of 10 the side letter was to create -- was to assure you 09:34:46 11 a two-year lockup -- is that correct? -- for 12 additional investments? 13 A. It was to confirm my two-year lockup in 14 the face of Dan wanting to raise more money. I 15 was the largest investor. And this was a 09:35:02 16 confirmation that I had one capital account 17 subject to a two-year lockup. 18 Q. And was there any other purpose to the 19 side letter, to your recollection? 20 A. To encourage me to I think contribute 09:35:17 21 the additional money. 22 Q. By giving you the assurance it would be 23 a two-year lockup; correct? 24 A. He reconfirmed my initial -- I always 25 had a two-year lockup. The letter reconfirmed it, 09:35:33 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299115 Page 32 1 Epstein 2 since everyone else was now going to be subject to 3 a three-year lockup. 4 Q. So the way Mr. Zwirn encouraged you to 5 contribute additional money was by making that 09:35:46 6 confirmation; is that correct? 7 A. You'd have to ask Dan Zwirn that. 8 Q. It's your testimony that the purpose of 9 the letter was to encourage you to contribute 10 additional money. How did it do that? 09:35:56 11 A. It reconfirmed my understanding that 12 right from the beginning I only had a two-year 13 lockup on my additional monies, so other people 14 were going to be subject to a three-year lockup. 15 Nothing would change for me. 09:36:06 16 MR. SCHWARTZ: Can I have this marked 17 as I guess Defendants' 1. 18 (Discussion off the record.) 19 MR. SUSMAN: This can be on the record, 20 actually, because there will be an agreement 09:36:55 21 that will follow us. Let's just mark all 22 these exhibits 1, 2, 3, 4, 5, continue the 23 marking. We will try to avoid duplicates. 24 MR. SCHWARTZ: I'm with you. Fine. 25 MR. SUSMAN: And when we go to the 09:37:02 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299116 Page 33 1 Epstein 2 hearing, we don't have to re-mark anything. 3 So this will be Exhibit 1. 4 MR. SCHWARTZ: I'm with you. 5 MR. SUSMAN: I assume everyone else is. 09:37:08 6 (Discussion off the record.) 7 (Exhibit 1, letter, marked for 8 identification.) 9 Q. Before we discuss that, I just want 10 to -- you've been testifying about your 09:37:40 11 conversation with Mr. Dubin and the only 12 conversation from which you had an understanding 13 about the lockups going back to 2002. 14 Did you review the documents with 15 respect to the investment at the time you got 09:37:53 16 them? 17 A. No. 18 Q. So your entire understanding of the 19 lockups is based on the conversation with 20 Mr. Dubin as opposed to conversations with anybody 09:38:02 21 else or documents? 22 A. I believe I said I had conversations 23 with my counsel. 24 Q. I think you testified both ways about 25 that. When was the conversation with your 09:38:15 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299117 Page 34 1 Epstein 2 counsel? 3 A. Prior to -- as I said before, I 4 believe, prior to 2002 I talked to Glenn Dubin and 5 reconfirmed with my counsel that this investment 09:38:29 6 would be subject to a two-year lockup. 7 Q. In reconfirming with your counsel, is 8 that what you asked him: Can you confirm that 9 this is subject to a two-year lockup? 10 A. No. 09:38:43 11 Q. What did you ask him? 12 MR. SUSMAN: That is covered by a 13 privilege, so let's -- 14 MR. SCHWARTZ: I didn't volunteer the 15 conversation with counsel. 09:38:56 16 MR. SUSMAN: Yeah. 17 MR. SCHWARTZ: I think we've waived the 18 privilege. 19 MR. SUSMAN: Do not answer the question 20 about the subjects. It's never a waiver of 09:39:03 21 privilege to say you've talked to your lawyer. 22 And how much you want to bet on that? 23 MR. SCHWARTZ: Excuse me? It never 24 waives a privilege to say exactly what you 25 said to your lawyer? I think that's -- you 09:39:15 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299118 Page 35 1 Epstein 2 and I have a different understanding of the 3 attorney-client privilege. 4 MR. SUSMAN: Okay. 5 MR. SCHWARTZ: Once you testify as to 09:39:19 6 the conversation, you've waived the privilege. 7 MR. SUSMAN: Go ahead. 8 I've instructed him not to answer the 9 substance. 10 MR. SCHWARTZ: I heard your 09:39:30 11 instruction. 12 MR. SUSMAN: Go ahead. 13 MR. SCHWARTZ: I caught the 14 instruction. 15 Q. Who was your lawyer? 09:39:34 16 A. Darren Indyke. 17 Q. And what's his position? 18 A. In-house counsel. 19 Q. When did he start to work for you? 20 A. Fourteen years ago. 09:39:46 21 Q. And is he still working for you? 22 A. Yes. 23 Q. Do you employ other lawyers in-house? 24 A. No. 25 Q. Take a look at Exhibit 1. Do you 09:40:08 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299119 Page 36 1 Epstein 2 recall receiving that? 3 A. Not specifically. 4 Q. Did you read it when you received it? 5 A. I just said I don't remember 09:40:30 6 specifically receiving it. 7 Q. Do you remember ever reading it? 8 A. Yes. 9 Q. Prior to this litigation, do you 10 remember reading it? 09:40:37 11 A. Yes. 12 Q. When do you remember reading it? 13 A. Sometime prior to this litigation. 14 Q. Can you give me an approximate year? 15 A. I would think '06. 09:41:00 16 Q. Do you remember reading it prior or 17 after demanding withdrawal of funds? 18 A. Again? Can you repeat the question, 19 sorry? 20 Q. When you read it in '06, do you recall 09:41:15 21 that you made a demand to withdraw funds in '06? 22 A. Yes, I remember in fact -- yes, sorry. 23 Q. And did you review the letter before 24 making that demand or after? 25 A. Probably both. 09:41:28 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299120 Page 37 1 Epstein 2 Q. Going back to January 2005, do you 3 recall discussing the letter with anyone at about 4 the time it's dated? 5 A. Yes. 09:41:49 6 Q. With whom? 7 A. I think I've answered that question 8 before, with Glenn Dubin. 9 Q. I don't think I -- I don't think we 10 what was your conversation with Glenn Dubin about 09:41:57 11 the time you received the letter? 12 A. I would only be subject to a two-year 13 lockup, where everyone else would be subject to a 14 three-year lockup, and I would have one capital 15 account. 09:42:09 16 Q. Do you recall confirming with anybody 17 whether the letter actually accomplished that? 18 A. Yes. 19 Q. With whom? 20 A. Glenn Dubin. 09:42:25 21 Q. Was the fact that you have only one 22 capital account something that was different from 23 what happened -- what you had before the letter? 24 A. No, I always had one capital account. 25 Q. And what did you understand the letter 09:43:25 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299121 Page 38 1 Epstein 2 did with respect to your lockup date for that 3 capital account? 4 A. It reconfirmed that my position would 5 be different, as I was one of the largest 09:43:36 6 investors right from the beginning, that I would 7 not be subject to the new three-year lockup that 8 they were asking all the other investors now be 9 subject to a three-year lockup. 10 Q. And did you understand that this would 09:43:48 11 extend the date upon which you could take your 12 money out of lockup? 13 A. Again, I'm sorry? 14 Q. Did you understand that this letter 15 extended the date upon which you could withdraw 09:44:00 16 your funds? 17 A. I understood this letter to be, because 18 they wanted additional money, that the additional 19 money would be subject to the same lockup I always 20 had, which is the one capital account for two 09:44:13 21 years that other people would be subject to three. 22 Q. Did you understand that that lockup 23 would be -- would end two years from the date of 24 your initial investment in two thousand -- on the 25 two-year cycle from the date of initial investment 09:44:29 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299122 Page 39 1 Epstein 2 in 2002 or on some other date? 3 A. I don't recall. 4 Q. Can you take a look at the letter, 5 please. 09:44:41 6 A. Okay. 7 Q. Have you reviewed this letter since the 8 litigation began? 9 A. I've seen it. 10 Q. Have you reviewed it in preparing for 09:44:55 11 your deposition today? 12 A. I've seen it. 13 Q. Have you read it? 14 A. I've read it. 15 Q. When was the last time before today 09:45:07 16 that you read it? 17 A. Sometime in the last two weeks. 18 Q. You see that it states that you shall 19 be permitted to withdraw its, Financial Trust 20 Inc.'s, capital account as of the last business 09:45:32 21 day of the calendar quarter ending at least two 22 years after the company initially purchases this 23 interest and as of the second anniversary of that 24 date. 25 "This interest" is the additional money 09:45:50 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299123 Page 40 1 Epstein 2 you were investing in January of 2005; is that 3 correct? 4 A. No. 5 Q. What is "this interest"? 09:45:56 6 A. This is in addition to my -- this 7 letter was meant for my entire capital account. 8 Q. So "this interest" refers to -- when it 9 refers to at least two years after the company 10 initially purchases this interest, it is referring 09:46:13 11 to the initial purchase of the initial interest in 12 May 2002; is that correct? 13 A. No. 14 Q. What is it referring to? 15 A. My one capital account being subject to 09:46:27 16 a two-year lockup. 17 Q. And when can you take it out, under 18 this letter? 19 A. Within two years. 20 Q. Within two years of when? 09:46:38 21 A. Subject to the original deal, a 22 two-year lockup. 23 Q. So within two years on the same cycle 24 that you could take the money out prior to 25 receiving this letter; is that correct? That was 09:46:50 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299124 Page 41 1 Epstein 2 your intention? 3 A. No. Is that a question? Is that -- 4 MR. ARFFA: That was the question. 5 Q. That was the question. 09:47:01 6 A. No. 7 Q. What is the date you can withdraw your 8 money under this letter? I understand it's a 9 single capital account in your mind. What date 10 can you withdraw it? 09:47:39 11 A. Prior to January of 2007. 12 Q. Meaning you can give notice prior to 13 January 2007 to withdraw it on March 31, 2007? 14 A. Yes. 15 Q. Did this letter change the schedule 09:48:13 16 upon which you could withdraw your funds? 17 MR. ARFFA: Mr. Susman, please. 18 THE WITNESS: Sorry? 19 MR. ARFFA: Nothing. Just speaking 20 with your counsel. 09:48:25 21 THE WITNESS: Okay. 22 Again? 23 Q. Did this letter change the schedule 24 upon which you could withdraw your funds? 25 A. No. It reconfirmed that I would be 09:48:40 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299125 Page 42 1 Epstein 2 treated differently than everybody else. This 3 letter was simply to state your agreement with Dan 4 Zwirn and the fund and Glenn Dubin is you were 5 treated differently, as you were the largest and 09:48:53 6 first investor and you would be subject only to 7 the original two-year lockup. So therefore, as we 8 were going out to raise additional money for three 9 years, you would only be subject to the original 10 two-year lockup. 09:49:05 11 Q. Let's be clear. The original 12 investment was May 1, 2002. Under the original 13 two-year lockup, you could withdraw money at the 14 end of June 2004; correct? 15 A. Correct. 09:49:33 16 Q. And you could withdraw money at the end 17 of June 2006; correct? 18 A. Correct. 19 Q. And you could withdraw money at the end 20 of June 2008; correct? 09:49:45 21 A. That sounds right. 22 Q. After receiving this letter, when could 23 you withdraw that money? What was the soonest 24 date you could withdraw that money? 25 A. 2007. That's what it says, my 09:50:04 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299126 Page 43 1 Epstein 2 understanding. Two years after this January '05 3 letter, two years from January '05 is January '07. 4 Sorry. 5 Q. So as of January -- as of December 31, 09:50:24 6 2004, you could withdraw your capital account on 7 June 30, 2006. But as of January 11, 2005, you 8 could not withdraw that capital account until the 9 end of March 2007; is that correct? 10 A. It appears so. 09:50:46 11 Q. So you were committing to keep all of 12 your money in the fund for an additional number of 13 months between June 30, 2006, and March 31, 2007; 14 is that correct? 15 A. This was simply to reconfirm that I had 09:50:59 16 a two-year lockup on new money and I would be 17 treated differently than other investors. 18 Q. So you were committing to keep all of 19 your money in the fund for an additional number of 20 months between June 30, 2006, and March 31, 2007; 09:51:16 21 is that correct? 22 A. No. This was -- this was -- sorry. 23 Q. Could you still withdraw your money on 24 June 30, 2006, from your initial investments? 25 A. I haven't considered it. This was to 09:51:53 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299127 Page 44 1 Epstein 2 simply make my position sorry. 3 Q. This was simply to make your position 4 what? 5 A. To confirm my position that I have 09:52:01 6 subject to the only two-year lockup, though the 7 other investors would be subject to a three-year 8 lockup. 9 Q. And you didn't consider whether you 10 were in fact committing to keep your money in the 09:52:13 11 fund for nine additional months? 12 A. No, I did not. 13 Q. That would have been important to you; 14 isn't that correct? 15 A. At that time I signed up for a new 09:52:24 16 tranche stock, I believe I'd be subject to a 17 two-year lockup. 18 Q. Mr. Epstein, I understand that, and you 19 don't have to keep saying that, because my 20 questions don't concern the time -- the amount of 09:52:38 21 time of the lockup; they concern the date on which 22 the lockup ends. I know that you wanted the 23 two-year lockup. It says that in the document 24 that you want a two-year lockup. 25 A. Okay. 09:52:51 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299128 Page 45 1 Epstein 2 Q. You wanted the two-year lockup on a 3 single capital account; correct? 4 A. That's correct. 5 Q. And under the letter it appears that 09:52:56 6 you have locked up your money for an additional 7 nine months; isn't that correct? 8 A. It appears that way. 9 Q. Or is it possible that this letter 10 permits you to take out your new investment on 09:53:16 11 June 30, 2006, and that remains the lockup date? 12 A. My understanding was for additional 13 money I would have one capital account subject to 14 a two-year lockup, that I could take out my money 15 during that period of time. 09:53:31 16 Q. Well, let's go back. You made your 17 first investment on May 1, 2002. You invested $10 18 million. Does that sound right? 19 A. That sounds correct. 20 Q. And then you made a second investment 09:53:43 21 on September 1, 2002, and that was for $10 22 million; is that correct? 23 A. Yes, $10 million, correct. 24 Q. And that was, in your understanding 25 from your conversation with Mr. Dubin, subject to 09:53:54 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299129 Page 46 1 Epstein 2 a single capital account; correct? 3 A. Correct. 4 Q. And subject to a single lockup date 5 from the first investment; is that correct? 09:54:03 6 A. Correct. 7 Q. Then you made an investment on December 8 1, 2002 is that right? of an additional $30 9 million? 10 A. Correct. 09:54:15 11 Q. And in your mind that was subject to a 12 single capital account; correct? 13 A. Correct. 14 Q. And a single lockup date dating from 15 the first investment; correct? 09:54:26 16 A. Correct. 17 Q. And then you made a fourth investment 18 on June 1, 2003, of $10 million. Does that sound 19 accurate? 20 A. It does. 09:54:38 21 Q. And that was your understanding was for 22 a single capital account; correct? 23 A. Correct. 24 Q. Subject to a single lockup date dating 25 from the initial investment; is that correct? 09:54:49 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299130 Page 47 1 Epstein 2 A. That's correct. 3 Q. And what you wanted to accomplish with 4 the letter of January 2005 was to assure that you 5 continued to have a single account and a single 09:54:56 6 lockup period of two years; is that correct? 7 A. Starting from 2005. 8 Q. So then you were in fact committing to 9 keep your money in the fund for an additional nine 10 months; is that correct? 09:55:12 11 A. It seems so. 12 Q. And that's something that you didn't 13 think about at the time; is that correct? 14 A. Absolutely, correct. 15 Q. Because it doesn't make a lot of sense; 09:55:23 16 right? 17 A. It makes plenty of sense. 18 Q. Tell me why. 19 A. Because they want additional money. 20 They were going out to raise additional three-year 09:55:33 21 money. In fact, it's almost a reup, so subject my 22 monies to a two-year lockup basically starting 23 from scratch. 24 Q. But it's your testimony that with all 25 the additional money you had put into the fund 09:55:47 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299131 Page 48 1 Epstein 2 before that, none of it had a new lockup starting 3 from scratch; correct? 4 A. Correct. 5 Q. It's only this investment that has a 09:55:54 6 new lockup starting from scratch? 7 A. Correct. 8 MR. SCHWARTZ: I think it's -- 9 A. All the other investors were going -- 10 were going to get a three-year lockup, and I was 09:56:07 11 going to have to two-year lockup, though I've said 12 that before. 13 Q. But now you were going to have -- you 14 were going to be extending your entire 15 investment -- correct? -- subject to the new 09:56:16 16 lockup? 17 A. That's correct. 18 MR. SCHWARTZ: This would be -- well. 19 Q. You understood, did you not, that with 20 respect to the other investments the three-year 09:56:40 21 period applied only to new money; correct. 22 A. No. 23 Q. What did you understand? 24 A. At the risk of having you once again 25 tell me I've told you before, I had one capital 09:57:01 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299132 Page 49 1 Epstein 2 account subject to a two-year lockup in 2005, 3 where everyone else was going to be subject to a 4 three-year lockup. 5 Q. For only new money, the three-year 09:57:11 6 lockup? 7 A. No. 8 Q. You understood that -- 9 A. Sorry, sorry, for other investors. 10 Q. Yes. 09:57:18 11 A. I don't know. 12 MR. SCHWARTZ: Let me mark this as 13 Exhibit 2. 14 (Exhibit 2, memorandum dated 9/17/04 15 from Zwirn to limited partners of D.S. Zwirn 16 special opportunities fund, marked for 17 identification.) 18 Q. Have you seen this document before? 19 A. No. 20 Q. This appears to be a memorandum to the 09:57:55 21 limited partners of D.B. Zwirn Special 22 Opportunities Fund; correct? 23 A. It appears to be. 24 Q. And you were one of those limited 25 partners; correct? 09:58:05 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299133 Page 50 1 Epstein 2 A. Correct. 3 Q. And it's from Dan Zwirn dated September 4 17, 2004; is that correct? 5 A. Correct. 09:58:10 6 Q. Can you read the paragraph under 7 three-year lockup to yourself, please. 8 A. Just the first page? 9 Q. Yeah, just the first paragraph under 10 three-year lockup. 09:58:32 11 A. I'm done. Yes. 12 Q. So according to Mr. Zwirn, in his 13 memorandum to the limited partners in November 14 on November 17th, 2004, the only money that would 15 be subject to the three-year lockup would be new 09:58:46 16 money; correct? 17 A. No. 18 Q. What other money is subject to the 19 three-year lockup? 20 A. It says any interest purchased will be 09:59:15 21 subject to its current lockup. 22 Q. Which was two years at that time; 23 right? 24 A. I don't know. 25 Q. You had a two-year lockup in November 09:59:23 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299134 Page 51 1 Epstein 2 2004; correct? 3 A. I was treated differently than everyone 4 else. I don't know what everyone else had. Yes. 5 Q. Were you treated initially from the 09:59:38 6 initial investment? 7 A. From? 8 Q. From the time of the initial 9 investment, were you treated differently or just 10 starting in January 2005? 09:59:46 11 A. I believe -- I don't know. 12 Q. Well -- 13 A. I don't know what anybody else had. I 14 don't know if anybody else had a side letter. 15 Q. Will you assume that you were subject 09:59:55 16 to the same limited partnership agreement as 17 everyone else was through the end of January 18 2004 -- through the end of December 2004 and that 19 everyone was subject to a two-year lockup until 20 that period? Will you assume that for a second, 10:00:13 21 please? 22 A. You want me to assume it? 23 Q. Excuse me? 24 A. You're asking me to assume? 25 Q. Yes, I'm asking you to assume that. 10:00:19 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299135 Page 52 1 Epstein 2 A. Okay. 3 Q. If that is in fact true, then the only 4 money that's going to be subject to a three-year 5 lockup for the other investors is money they 10:00:26 6 invest after January 2005 -- is that correct? 7 after January 1, 2005? 8 A. Whatever other investors had is not 9 very -- was not very material to me. 10 Q. But it's material to my question, sir, 10:00:38 11 and I'm asking you to answer your question. 12 A. I shall try again. 13 Q. If it is in fact true that everyone was 14 subject to the same two-year lockup that you were 15 subject to prior to January 2005, then the only 10:00:50 16 money of other investors that is going to be 17 subject to a three-year lockup, according to this 18 memorandum, is money they invest after January 1, 19 2005; correct? 20 A. That's what this authored memorandum 10:01:07 21 says. 22 Q. And all the money they invested before 23 January 1, 2005, will be subject to the old 24 lockup; correct? 25 A. You've asked me to assume that. 10:01:15 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299136 Page 53 1 Epstein 2 Q. Yes. Assuming that the lockup is two 3 years. 4 A. If you ask me to assume it, I'd assume 5 it. 10:01:22 6 Q. Well, it says it will remain 7 indefinitely subject to its current lockup. If 8 it's two years, that's what it will be; correct? 9 A. Will indefinitely remain subject to its 10 current lockup. 10:01:32 11 Q. And if its current lockup is two years, 12 then any money before that time remains subject to 13 the two-year lockup it was under on December 31, 14 2004; correct? 15 A. That's what this says. 10:01:44 16 Q. So if everyone else was subject to the 17 same two-year lockup that you were, the only 18 person being asked to extend the lockup on money 19 invested prior to January 2005, to your knowledge, 20 is you; correct? 10:01:59 21 A. No. 22 Q. Who else is being asked to change their 23 old lockup? 24 A. Any new interest anybody who 25 purchases a new interest. 10:02:21 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299137 Page 54 1 Epstein 2 Q. The question was if everyone else was 3 subject to the same two-year lockup that you were, 4 the only person being asked to extend the lockup 5 on money he invested prior to January 2005, 10:02:33 6 according to this memorandum, is you; correct? 7 A. No. 8 Q. Who else is being asked to extend the 9 lockup period for money invested before 2005, 10 according to this memorandum? 10:02:52 11 A. Repeat the question. 12 Q. Who else, according to this memorandum, 13 is being asked to extend the lockup period for 14 money invested prior to 2005? 15 A. No one. 10:03:14 16 Q. But you were being asked to do that 17 correct? -- in the letter of January 11? 18 A. When you say "extend the lockup," I'm 19 sorry, so we're clear, to me it means extend 20 lockup from two to three years. 10:03:30 21 Q. I mean to extend the date on which you 22 can take it out. That's what I mean. 23 A. You'll have to rephrase your question, 24 sorry. 25 Q. Okay. You were being asked to extend 10:03:40 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299138 Page 55 1 Epstein 2 the date on which you could take out the money 3 that you had invested prior to January 1, 2005; 4 correct? 5 A. I was being asked to give Dan Zwirn 10:03:50 6 additional capital. I only decided to give Dan 7 Zwirn capital if my one capital account would only 8 be subject to a two-year lockup. 9 Q. And under this letter, as you have 10 testified already, you were being asked to extend 10:04:02 11 the date on which you could take out that money 12 from June 30, 2006, to March 31, 2007, the money 13 you had put in before January 1, 2005; correct? 14 A. No. 15 Q. Could you still withdraw your money on 10:04:23 16 June 30, 2006, that you had placed into the 17 investment prior to January 1, 2005? 18 A. I don't recall. Sorry. 19 Q. Would you read the agreement sitting 20 here today? 10:04:41 21 A. Again? Full question, please? 22 Can we have a break? 23 MR. SUSMAN: Just let him get the 24 question. 25 THE WITNESS: Sorry. 10:04:57 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299139 Page 56 1 Epstein 2 Q. Under this letter it was your testimony 3 that the date you could now take out your capital 4 account was May 31 -- March 31, 2007; is that 5 correct? 10:05:49 6 A. Yes. 7 Q. So you could no longer take out your 8 money that you had invested prior to January 1, 9 2005, on June 30, 2006; correct? 10 A. It seems so. 10:06:02 11 Q. And under this memorandum which 12 Mr. Zwirn sent out, anybody who accepted the terms 13 of the new agreement was going to remain subject 14 to the current lockup that they had for money they 15 invested prior to January 20, 2005; correct? 10:06:24 16 A. This is an offering memorandum. I 17 don't know what the documents say. 18 Q. Assume the documents say the same 19 thing. 20 A. What's your question? 10:06:34 21 Q. Under the memorandum -- sorry. Under 22 the memorandum, anybody who accepted the terms of 23 the new agreement, assuming they remained the 24 same, was going to remain subject to the same 25 lockup period that they had for the money that 10:06:54 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299140 Page 57 1 Epstein 2 they had invested prior to January 1, 2005; 3 correct? 4 A. It seemed so for other investors, yes. 5 Q. But for you the period on which you 10:07:03 6 could withdraw your funds was extended by nine 7 months; correct? 8 A. I was subjected to a one capital 9 account withdrawal starting for two years from 10 January of '05. 10:07:13 11 Q. So effectively your lockup date for old 12 money had been extended by nine months; is that 13 correct? 14 A. It appears so. 15 MR. SCHWARTZ: Okay. Let's take a 10:07:22 16 break. 17 THE WITNESS: Thank you. 18 THE VIDEOGRAPHER: Stand by. We are 19 going off the record. The time is 10:06 a.m. 20 This is the end of Tape Number 1. 10:07:28 21 (Recess taken from 10:06 to 10:14.) 22 THE VIDEOGRAPHER: We are back on the 23 record. The time is 10:14 a.m. This is 24 beginning of Tape Number 2. 25 Q. Mr. Epstein, starting with college can 10:15:40 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299141 Page 58 1 Epstein 2 you tell us your educational background? 3 A. I went to Cooper Union for two years. 4 Q. Any education after that? 5 A. No, sir. 10:15:49 6 Q. When did you leave Cooper Union? 7 A. '71. 8 Q. You're an artist? 9 A. Physics. Sorry. 10 Q. And what did you do after you left 10:16:07 11 Cooper Union? 12 A. I became -- I was a teacher at the 13 Dalton Schools in mathematics and physics. 14 Q. From when to when? 15 A. From '74 to '76. 10:16:19 16 Q. And after leaving Dalton, what did you 17 do? 18 A. I joined Bear Stearns in 1976 until 19 1981. 20 Q. And what jobs did you hold at Bear 10:16:29 21 Stearns? 22 A. I held many jobs at Bear Stearns, 23 starting with -- I worked on the floor of the 24 American Stock Exchange. I worked on the option 25 trading desk. I worked as head of what was called 10:16:40 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299142 Page 59 1 Epstein 2 sophisticated financial instruments. I worked as 3 retail option trainer. Sorry. 4 Q. A retail option trainer or trader? 5 A. Both, trainer and trader. 10:16:57 6 Q. The positions you just gave me, did you 7 give them to me in the chronological order in 8 which you did them? 9 A. No, sir. 10 Q. Can we just redo it and tell us from 10:17:08 11 the beginning at Bear Stearns to end what 12 positions you held? 13 A. To the best of my recollection, I 14 started on the American Stock Exchange floor in 15 the option trading area. I moved up to the option 10:17:20 16 trading desk. I then moved up to the block 17 trading desk. I then moved up to -- I became a 18 retail broker. I then moved to head of the 19 options training department. And I became head of 20 what was called sophisticated financial 10:17:43 21 instruments. 22 Q. And what are sophisticated financial 23 instruments, or what were they at Bear Stearns? 24 A. It's what commonly referred to today as 25 derivatives. 10:17:56 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299143 Page 60 1 Epstein 2 Q. And what were your responsibilities as 3 head of sophisticated financial instruments? 4 A. To help -- both train brokers in the 5 products that the firm was selling as well as 10:18:05 6 craft new types of financial instruments. 7 Q. And when did you leave Bear Stearns? 8 A. 1981. 9 Q. And what prompted you to leave? 10 A. I thought it would be more lucrative 10:18:20 11 for me to be out on my own. 12 Q. To be out on your own doing what? 13 A. Advising wealthy individuals about how 14 to invest their money. 15 Q. At the time you left in 1981, did you 10:18:32 16 have wealthy individuals who were interested in 17 obtaining your advice? 18 A. Yes. 19 Q. And did you create -- did you set up a 20 business? 10:18:42 21 A. Yes. 22 Q. And what was the name of that business? 23 A. To the best of my recollection, the 24 first business was called Intercontinental Assets. 25 Q. And were you the sole proprietor or 10:18:54 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299144 Page 61 1 Epstein 2 were there other individuals with an interest in 3 the business? 4 A. Sole proprietor. 5 Q. And how long did you work in that 10:19:01 6 business? 7 A. Up until today. 8 Q. Has the business changed its name? 9 A. Yes. 10 Q. What is it now called? 10:19:11 11 A. Financial Trust Company. 12 Q. And is Financial Trust Company 13 essentially the same business that you created 14 when you left Bear Stearns? 15 A. Essentially. 10:19:26 16 Q. It's just a different corporate 17 structure? 18 A. It's essentially the same business. 19 Q. And are you still the sole proprietor? 20 A. Yes. 10:19:39 21 Q. How many people work for you? 22 A. In-house? I'm sorry. 23 Q. How many people are employed by 24 Financial Trust Company? 25 A. Less than 30. 10:19:53 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299145 Page 62 1 Epstein 2 Q. And where is it located? 3 A. In the Virgin Islands. 4 Q. And where does it do business? 5 A. In the Virgin Islands. 10:19:58 6 Q. It's only business is in the Virgin 7 Islands? 8 A. Yes, sir. 9 Q. So all the employees of the company are 10 located in the Virgin Islands? 10:20:04 11 A. Yes, sir. 12 Q. Is that for tax reasons? 13 A. That's where they live. 14 Q. Is the reason you have the business in 15 the Virgin Islands for tax reasons? 10:20:19 16 A. I'm a resident of the Virgin Islands. 17 That's where my business is. 18 Q. When did it move to well, did it 19 start in New York? 20 A. Financial Trust Company started in the 10:20:30 21 Virgin Islands. 22 Q. And its predecessor businesses, where 23 were they? 24 A. In New York. 25 Q. And in what year did you move to the 10:20:39 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299146 Page 63 1 Epstein 2 Virgin Islands? 3 A. In the late nineties. 4 Q. And is that the point at which 5 Financial Trust Company became the entity that ran 10:20:47 6 the business? 7 A. Yes. 8 Q. And what is the business of Financial 9 Trust Company? 10 A. Advising on financial transactions, 10:21:00 11 advising wealthy individuals. 12 Q. Do you have discretion to invest the 13 money of wealthy individuals as part of the work 14 you do at Financial Trust Company? 15 A. In some instances, yes. 10:21:16 16 Q. Was the investment that you made that 17 we have been talking about in the Highbridge/Zwirn 18 funds an investment of your own money, an 19 investment of clients' money or both? 20 A. Only my own money. 10:21:54 21 Q. And do you invest clients' money in 22 hedge funds? 23 A. Yes. 24 Q. And do you invest your own money in 25 other hedge funds? 10:22:05 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299147 Page 64 1 Epstein 2 A. Yes. 3 Q. And when you said that you had made 4 approximately ten hedge fund investments, were 5 they investments -- did you mean to include both 10:22:14 6 your money and clients' money in that number ten? 7 A. Yes. 8 Q. Did there come a time when you had a 9 criminal conviction? 10 A. Yes. 10:22:44 11 Q. When was that? 12 A. In July of 2006. 13 Q. And where was that? 14 A. In Palm Beach, Florida. 15 Q. And it was conviction obtained by 10:22:57 16 guilty plea or by trial? 17 A. By plea. 18 Q. And to how many counts did you plead 19 guilty? 20 A. Two. 10:23:10 21 Q. And to what counts did you plead? 22 A. Solicitation of prostitution and 23 procuring a minor for prostitution. 24 Q. What sentence did you receive on each 25 of those counts? 10:23:27 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299148 Page 65 1 Epstein 2 A. A total of 30 months to be spent 18 3 months in incarceration and one year in community 4 control. 5 Q. And were you incarcerated? 10:23:47 6 A. Yes. 7 Q. Where? 8 A. In Palm Beach. 9 Q. In what facility? 10 A. The Palm Beach stockade. 10:23:53 11 Q. From what period of time to what period 12 of time? 13 A. From July '06 until July '07. No, sir, 14 excuse me, from July '08 until July '09. 15 Q. And when did you start serving your 10:24:12 16 sentence of community control? 17 A. Directly following that period. 18 Q. And what does that mean? 19 A. It was an enhanced form of probation. 20 Q. Can you explain what that means? 10:24:25 21 A. You must report to a probation officer 22 and give a schedule about where you're going to 23 be. 24 Q. Was your travel restricted? 25 A. Yes. 10:24:44 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299149 Page 66 1 Epstein 2 Q. To what restrictions? 3 A. Travel had to be approved by the 4 probation officer. 5 Q. During the period that -- have you -- 10:24:57 6 you've completed the period of enhanced probation? 7 A. Yes. 8 Q. Did you travel outside the country 9 during that period? 10 A. No. 10:25:07 11 Q. When did you meet Glenn Dubin? 12 A. Best recollection is roughly 18 years 13 ago. 14 Q. How did you meet Glenn Dubin? 15 A. He was the fiancé of a former 10:25:31 16 girlfriend. 17 Q. And who was the former girlfriend? 18 A. Eva Anderson. 19 Q. And he was introduced to you by Eva 20 Anderson? 10:25:44 21 A. Correct. 22 Q. And did you develop a relationship with 23 Mr. Dubin starting 18 years ago? 24 A. I met him 18 years ago. 25 Q. Did you become friends? 10:25:55 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299150 Page 67 1 Epstein 2 A. Yes. 3 Q. When did you become friends? 4 A. That's a characterization. 5 Q. Well, as you characterize friends. 10:26:03 6 A. Probably the year 2000. 7 Q. Did you become -- ever have become 8 business associates with him in any way? 9 A. You'll have to better define the term 10 "friend," I'm sorry. 10:26:24 11 Q. You've had business transactions with 12 Mr. Dubin; correct? 13 A. Yes. 14 Q. Has he given you business advice? 15 A. Yes. 10:26:33 16 Q. Have you given him business advice? 17 A. I want to be clear, investment -- when 18 you say "business advice." So I've invested money 19 with Highbridge from around the year 2000. 20 Q. That's around the same time you would 10:26:47 21 have considered Mr. Dubin to have become your 22 friend? 23 A. "Friend" is a difficult word, so I 24 started to invest with Glenn Dubin in 2000. 25 Q. Well, why don't you describe the 10:26:57 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299151 Page 68 1 Epstein 2 relationship starting in 2000 that you had with 3 Mr. Dubin. 4 A. I thought -- I knew that Glenn's track 5 records with Highbridge was substantial, and he 10:27:06 6 had a tremendous reputation. So I had wanted to 7 invest with -- I decided to give Glenn Dubin some 8 money to invest. 9 Q. And how would you describe your 10 relationship with him starting in 2000? 10:27:17 11 A. Professional. 12 Q. Not personal? 13 A. Less personal more professional. 14 Q. Did there come a time when it became 15 more personal? 10:27:29 16 A. Yes. 17 Q. When did that happen? 18 A. A number of years later. 19 Q. Approximately how many? 20 A. Two. 10:27:38 21 Q. So from approximately 2002 on how would 22 you describe your relationship with Mr. Dubin? 23 A. Professional, good friend. He's the 24 husband of my former girlfriend. 25 Q. He was the husband of your former 10:28:02 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299152 Page 69 1 Epstein 2 girlfriend before 2002 also; correct? 3 A. Yes. 4 Q. What changed about your relationship in 5 approximately 2002? 10:28:10 6 A. I had become I started to invest 7 I decided to invest money with Glenn, with 8 Highbridge. 9 Q. You said that you did that around 2000 10 and that you became -- the relationship became 10:28:22 11 more personal around 2002; is that correct? 12 A. Yes. 13 Q. Are you the godfather of one of his 14 children? 15 A. Yes. 10:28:32 16 Q. When was that child born? 17 A. Seventeen years ago. 18 Q. So in 1994 you became the godfather of 19 one of his children? 20 A. You use the term "godfather," so I 10:28:48 21 don't know -- there's no official godfather in the 22 Jewish religion. I'm sorry, I'm not -- I'm sorry? 23 Q. Were you the sondock [phonetic]? 24 A. I don't know what that means. 25 Q. The godfather. 10:28:58 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299153 Page 70 1 Epstein 2 A. I'm sorry. 3 Q. What is your relationship to the child? 4 A. I'm friends with the mother and father. 5 Q. Well, I asked the question whether you 10:29:09 6 became the godfather. You answered the question 7 yes. And then you said you're not really the 8 godfather. What are you? 9 A. I'm a friend of the family, and I have 10 a relationship with the children of great cordial 10:29:21 11 respect. 12 Q. And in conversations with you and the 13 Dubins, has the word "godfather" been used to 14 describe your relationship with the child? 15 A. Yes. 10:29:38 16 Q. And in 1994 were you asked, even though 17 it's not official in the Jewish religion, to be 18 the godfather of the child? 19 A. No. 20 Q. When did that word start being used? 10:29:44 21 A. I don't recall. 22 23 24 25 10:29:55 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299154 Page 71 1 Epstein 2 3 4 5 10:30:07 6 7 8 9 10 10:30:21 11 12 When you say your relationship with 13 them is close, what does that mean? 14 A. It was close. 15 Q. How often did you see them? 10:30:31 16 A. "Them" being, sorry? 17 Q. 18 19 A. Once a month. 20 Q. And has it been once a month basically 10:30:41 21 throughout their lives? 22 A. No set schedule. 23 Q. On average? 24 A. Once -- on average once every two 25 months. 10:30:53 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299155 Page 72 1 Epstein 2 Q. Would you describe yourself as close to 3 Mr. Dubin's wife? 4 A. I want to be -- she is a friend. 5 Q. I'm not suggesting anything other than 10:31:07 6 that, sir. 7 A. She's a very good friend. 8 Q. As is Mr. Dubin; correct? 9 A. He is a friend. 10 Q. So you make the distinction when 10:31:19 11 describing Mrs. Dubin as a very good friend? 12 A. She's my ex-girlfriend. That's 13 probably a little different relationship. 14 Q. I have ex-girlfriends I would not 15 describe as very good friends. 10:31:31 16 A. I'm sorry to hear that, but I'm not 17 surprised. 18 Q. When were they married, the Dubins? 19 A. Around 18 years ago. 20 Q. Did you attend the wedding? 10:32:01 21 A. Yes. 22 Q. And the first time you did business 23 with Mr. Dubin was approximately 2000? 24 A. My best recollection, yes. 25 Q. And what happened? What was the 10:32:17 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299156 Page 73 1 Epstein 2 business? How did it come about? 3 A. My best recollection is I called him 4 and said I had some money to invest, I thought I 5 should become a invest in Highbridge, what did 10:32:30 6 he think, and how would he allocate some of the 7 money. 8 Q. And you made the investment? 9 A. Yes, sir. 10 Q. Was it a personal investment or 10:32:41 11 investment for clients? 12 A. Personal. 13 Q. And how much did you invest? 14 A. I don't recall. 15 Q. Can you give me a range? 10:32:46 16 A. Probably between 50 and 100 million. 17 Q. Did you invest additional money with 18 him over the years in Highbridge? 19 A. Yes, sir. 20 Q. How many times did you make additional 10:32:58 21 investments? 22 A. I would say more than 10, less than 30. 23 Q. Between what period -- in what period 24 starting 2000? 25 A. Between 2000 and two thousand and 10:33:13 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299157 Page 74 1 Epstein 2 today. 3 Q. And how much have you invested in total 4 in Highbridge? 5 A. More than 300 million. 10:33:21 6 Q. And how much do you have in Highbridge 7 now? 8 MR. SUSMAN: What? I didn't hear that. 9 Q. How much do you have in Highbridge now? 10 A. Less than a hundred million. 10:33:33 11 Q. And it's all your funds? 12 A. Yes, sir. 13 Q. Did Mr. Dubin provide advice to you 14 with respect to other investments? 15 A. Can you define "other investments"? 10:33:54 16 Q. Do you have an understanding of the 17 word "investment"? 18 A. Other than what? 19 Q. Other than the investment in 20 Highbridge. 10:34:09 21 A. No. 22 Q. Well, did there come a time when he 23 talked to you about Dan Zwirn? 24 A. Dan Zwirn was a -- worked yes. 25 Q. When was that? 10:34:23 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299158 Page 75 1 Epstein 2 A. My best recollection is 2002. 3 Q. And what do you recall the 4 conversations with Mr. Dubin in approximately 2002 5 about Dan Zwirn? What do you recall about them? 10:34:31 6 A. Highbridge was a fund of funds, to be 7 clear. So one of the conversations was Glenn 8 thought I should give some money to a young, 9 bright person that worked in one of the Highbridge 10 divisions, which I believe was referred to as 10:34:59 11 Highbridge/Zwirn. 12 Q. And you did? 13 A. Yes, sir. 14 Q. And was that based upon Mr. Dubin's 15 recommendation? 10:35:49 16 A. Solely. 17 Q. Did you meet Dan Zwirn before you 18 invested with him? 19 A. No. 20 Q. When was the first time you met Dan 10:36:00 21 Zwirn? 22 A. To the best of my recollection, two or 23 three years later. 24 Q. In what connection? 25 A. Glenn Dubin said I should meet Dan 10:36:11 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299159 Page 76 1 Epstein 2 Zwirn; he's been managing the money since 2002. I 3 said I have no interest in meeting Dan Zwirn; he's 4 an employee of Highbridge. Dubin asked me to meet 5 Dan Zwirn. I said fine. 10:36:28 6 Q. And where did you meet him? 7 A. He came to my office. 8 Q. With anybody else? 9 A. Not to the best of my recollection. 10 Q. Was anybody else present at the 10:36:42 11 meeting? 12 A. Not to the best of my recollection. 13 Q. How long was the meeting? 14 A. Less than five minutes. 15 Q. What do you recall taking place? 10:36:47 16 A. I said hello, now I know what you look 17 like, you can go back home. 18 Q. Do you recall those being the words you 19 spoke? 20 A. Yes. 10:36:56 21 Q. Did you meet Mr. Zwirn again? 22 A. No. 23 Q. So you've met Dan Zwirn once? 24 A. Yes. 25 Q. Prior to having met him in the meeting 10:37:06 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299160 Page 77 1 Epstein 2 that you just described, had you ever spoken to 3 him? 4 A. Not to the best of my recollection. 5 Q. Has there been a cooling off in your 10:37:14 6 friendship with Glenn Dubin over the years? 7 A. No. 8 Q. Are you as close to him today as you 9 were, let's say, in 2002? 10 A. I don't know how to characterize that. 10:37:35 11 Q. Is the relationship of the same nature 12 as it was in 2002? 13 A. He is my friend, yes. 14 Q. How often do you see him? 15 A. Once every two months. 10:37:52 16 Q. Was there ever a period where you saw 17 him more often than that? 18 A. On average, no. 19 Q. Have you been on vacations with him? 20 A. I don't think so, no. 10:38:05 21 Q. Has he visited you in the Virgin 22 Islands? 23 A. Yes. 24 Q. When? 25 A. I would say five years ago. 10:38:15 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299161 Page 78 1 Epstein 2 Q. Just once? 3 A. Yes, once or twice. I can't recall. 4 Q. Do you recall approximately how long he 5 stayed? 10:38:28 6 A. Either -- I'm not sure he stayed. I 7 think they maybe just came to visit. It could 8 have been overnight. I can't recall. 9 Q. How often do you speak to him? 10 A. Again? 10:38:37 11 Q. How often do you speak to him? 12 A. Currently? Or -- 13 Q. Currently? 14 A. Not very often. 15 Q. Did you speak to him more frequently in 10:38:54 16 the early 2000s than you do now? 17 A. No. 18 Q. Has the frequency during your 19 relationship with him of speaking to him changed 20 at all? 10:39:05 21 A. Yes. 22 Q. How did it change and when did it 23 change? 24 A. Some years it was more, if there was a 25 party for the family. Some years it was less. 10:39:17 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299162 Page 79 1 Epstein 2 Q. Do you speak to his children more often 3 than you speak to him? 4 A. Yes. 5 Q. Do you speak to his wife more often 10:39:27 6 than you speak to him? 7 A. Yes. 8 Q. How often do you speak to her? 9 A. Once a week. 10 Q. By phone? 10:39:43 11 A. Yes. 12 Q. How often do you see her? 13 A. Once every two months. 14 Q. Do you have social engagements with her 15 apart from engagements with Mr. Dubin? 10:39:51 16 A. I don't understand the question. 17 Q. Well, would you go to lunch with her 18 without Mr. Dubin? 19 A. No. 20 Q. How often do you speak to the children 10:40:00 21 as opposed to see them? 22 A. Once every two weeks. 23 Q. Do you pick up the phone and call them? 24 A. No. 25 Q. Do they pick up the phone and call you? 10:40:15 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299163 Page 80 1 Epstein 2 A. No. I'd be talking to the mother, and 3 she would transfer to the child. 4 Q. Is it fair to say that you've reduced 5 your investment in Highbridge over time? 10:40:58 6 A. Yes. 7 Q. When? 8 A. Over time. 9 Q. Why? 10 A. I make different allocations to 10:41:08 11 different investments all the time. 12 Q. Has your reduction in your investment 13 in Highbridge have anything to do with your 14 relationship with Mr. Dubin? 15 A. No. 10:41:34 16 Q. So purely for business reasons? 17 A. Yes. 18 Q. Other than investing in Mr. Dubin's 19 fund, what, if any, other business relationship 20 have you had with him? 10:42:01 21 A. I helped organize the sale of 22 Highbridge to JPMorgan. 23 Q. When? 24 A. In I believe it was 2004, late 2004. 25 Q. How did that come about? 10:42:19 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299164 Page 81 1 Epstein 2 A. I was I knew JPMorgan very well; I 3 knew Glenn Dubin very well. I thought that a 4 joint -- I initially was going to purchase -- I 5 was attempting to purchase Highbridge myself and 10:42:33 6 decided that it would be a better deal for a joint 7 venture to be done between Highbridge and 8 JPMorgan. 9 Q. You considered buying Highbridge 10 yourself? 10:42:55 11 A. Yes, sir. 12 Q. When did you start considering doing 13 that? 14 A. I would say 2003. 15 Q. Did you have conversations with 10:43:02 16 Mr. Dubin about that? 17 A. Not specifically, no. 18 Q. Generally? 19 A. I don't recall. 20 Q. What efforts did you make, if any, with 10:43:11 21 respect to purchasing Highbridge yourself? 22 A. I had gone to JPMorgan to ask if they 23 would finance the purchase of Highbridge for me. 24 Q. What did they say? 25 A. Let's find -- let's look into -- we'll 10:43:25 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299165 Page 82 1 Epstein 2 consider it. 3 Q. What happened next? 4 A. Highbridge and JPMorgan met, and it was 5 decided that it would be a better transaction for 10:43:39 6 both JPMorgan and Highbridge for there to be some 7 type of joint venture or purchase of Highbridge by 8 JPMorgan. 9 Q. When you say Highbridge and JPMorgan 10 met, who at Highbridge met with JPMorgan? 10:43:54 11 A. I don't know. 12 Q. Glenn Dubin? 13 A. Yes. 14 Q. And with whom at JPMorgan did he meet? 15 A. Jes Staley. 10:44:06 16 Q. And was that the person to whom you had 17 gone to discuss financing your acquisition of 18 Highbridge? 19 A. Yes. 20 Q. So let me just make sure I have this 10:44:17 21 right. You considered purchasing Highbridge; 22 correct? 23 A. Correct. 24 Q. You consulted with JPMorgan, 25 Mr. Staley, about possible financing; correct? 10:44:27 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299166 Page 83 1 Epstein 2 A. Correct. 3 Q. Mr. Staley asked to meet with 4 Highbridge; correct? 5 A. Correct. 10:44:40 6 Q. Highbridge met with Mr. Staley; 7 correct? 8 A. You're saying Highbridge. I just want 9 to be clear. 10 Q. Mr. Dubin, Mr. Dubin. 10:44:51 11 A. Yes. 12 Q. And out of that meeting or meetings 13 came a different business plan to make a joint 14 venture; is that correct? 15 A. Or a purchase, yes, sir. 10:45:05 16 Q. And you abandoned your thought of 17 purchasing Highbridge? 18 A. Correct. 19 Q. Did you have an interest in the new 20 business arrangement that was being discussed? 10:45:23 21 A. No. 22 Q. And what did that business arrangement 23 end up being, to your knowledge? 24 A. A purchase of Highbridge by JPMorgan. 25 Q. And do you know what portion of 10:45:39 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299167 Page 84 1 Epstein 2 Highbridge was owned by Mr. Dubin? 3 A. You'd have to be more specific with 4 your time frame, sir. 5 Q. At the time that JPMorgan purchased 10:45:49 6 Highbridge. 7 A. I believe 50 percent. 8 Q. And who owned the other 50 percent? 9 A. I believe it was Henry Swieca. 10 Q. Did he also meet with JPMorgan, to your 10:46:00 11 knowledge? 12 A. I don't know. 13 Q. Was he an active partner in Highbridge? 14 A. I don't know. 15 Q. Do you know him? 10:46:10 16 A. No. 17 Q. Did you attend the meeting or meetings 18 between Mr. Dubin and Mr. Staley? 19 A. I don't recall. I don't think so. 20 Q. How many meetings did you have with 10:46:26 21 Mr. Staley in connection with this transaction or 22 your contemplated transaction? 23 A. Less than ten. 24 Q. And at any of them was Mr. Dubin 25 present? 10:46:41 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299168 Page 85 1 Epstein 2 A. Not to the best of my recollection. 3 Q. Did you continue to meet with 4 Mr. Staley once he had met with Mr. Dubin? 5 A. Yes. 10:46:50 6 Q. Concerning what? 7 A. I met with Mr. Staley often. 8 Q. How do you know him? 9 A. I know him for 12 years. 10 Q. How? 10:47:03 11 A. He was a party of JP -- he was a 12 younger associate of JPMorgan when I became a 13 client of JPMorgan's. 14 Q. At the time of the transaction with 15 Highbridge, what was his position? 10:47:15 16 A. I don't know. 17 Q. Did you meet with others at JPMorgan 18 besides Mr. Staley? 19 A. Yes. 20 Q. With whom? 10:47:27 21 A. Over what period of time? 22 Q. Over the period of time that you were 23 considering a transaction with them. 24 A. No. 25 Q. It was only Mr. Staley? 10:47:36 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299169 Page 86 1 Epstein 2 A. The best of my recollection. 3 Q. And with respect to the transaction you 4 were considering, you met with him approximately 5 ten times? 10:47:45 6 A. Less than ten times. 7 Q. Less than ten times? 8 A. Yes, sir. 9 Q. Less than five times? 10 A. I don't recall. 10:47:51 11 Q. How did you learn that JPMorgan was 12 interested in either entering a joint venture or 13 acquiring Highbridge? 14 A. The best of my recollection is 15 Mr. Staley told me that. 10:48:06 16 Q. In person or on the phone? 17 A. I don't recall. 18 Q. And what did you say when he told you 19 that? 20 A. I thought it would be a great 10:48:13 21 investment. 22 Q. You were going to lose your opportunity 23 to invest -- correct? -- to buy Highbridge? 24 A. Correct. 25 Q. And why were you prepared to do that? 10:48:23 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299170 Page 87 1 Epstein 2 A. Because I thought I would end up with a 3 piece of the joint venture. 4 Q. It did not end up being a joint 5 venture; correct? 10:48:33 6 A. I don't know. 7 Q. Do you have a piece of any interest 8 do you have a piece of JPMorgan's interest in 9 Highbridge? 10 A. No, sir. 10:48:42 11 Q. Do you have any interest in Highbridge 12 other than your investment? 13 A. No, sir. 14 Q. I mean other than they manage some of 15 your funds. 10:48:49 16 A. No, sir. 17 Q. Did that bother you, that you lost that 18 opportunity? 19 A. No, sir. 20 Q. Why? 10:48:58 21 A. Because I was compensated for it. 22 Q. You were compensated for what? 23 A. For the introduction of JPMorgan to 24 Highbridge. 25 Q. And who compensated you for that? 10:49:09 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299171 Page 88 1 Epstein 2 A. Highbridge. 3 Q. And how much did they give you? 4 A. $20 million. 5 Q. Did Highbridge give you $20 million 10:49:14 6 personally or did they give it to some -- through 7 some entity? 8 A. To my entity, Financial Trust Company. 9 Q. August $20 million went to Financial 10 Trust Company? 10:49:31 11 A. No, 15 million went to Financial Trust 12 Company, and 5 million went to Financial Strategy 13 Group. 14 Q. And who owns Financial Strategy Group? 15 A. I'm not sure. 10:49:41 16 Q. Not you; correct? 17 A. I don't recall if I have an interest in 18 it. 19 Q. Did you think of that 5 million as your 20 5 million? 10:49:52 21 A. Yes, sir. 22 Q. Even though you're not sure whether you 23 have an interest? 24 A. Yes. 25 Q. Can you explain that, please? 10:49:56 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299172 Page 89 1 Epstein 2 A. The people who work at Financial 3 Strategy basically work for me, work for my 4 company, work exclusively for my company. The 5 ownership is unclear to me today. 10:50:07 6 Q. Who received the beneficial the 7 benefit of that $5 million? 8 A. I did. 9 Q. How? 10 A. Because I would either pay the expenses 10:50:14 11 of the Financial Strategy Group myself or 12 Financial Trust Company would, or the money would 13 be paid directly to them. 14 Q. What is the business of Financial 15 Strategy Group? 10:50:41 16 A. It provides accounting services and 17 legal services. 18 Q. For whom? 19 A. For me. 20 Q. For anyone else? 10:50:45 21 A. Some of my clients. 22 Q. Who is the president? 23 A. I don't know. 24 Q. They work out of the Virgin Islands? 25 A. No, they work out of New York. 10:51:02 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299173 Page 90 1 Epstein 2 Q. How many employees do they have? 3 A. Less than ten. 4 Q. Who runs the office? 5 A. Darren Indyke. 10:51:09 6 Q. What's his position? 7 A. I don't recall. 8 Q. He's a lawyer; correct? 9 A. Yes, sir. 10 Q. He's the guy you referred to as your 10:51:15 11 general counsel -- in-house counsel; correct? 12 A. Correct. 13 Q. And he performs that service through 14 the strategy group? 15 A. Again? 10:51:25 16 Q. He performs that service of being your 17 general counsel through Financial Strategy Group? 18 They provide legal advice? 19 A. Yes. 20 Q. Is that the only entity through which 10:51:34 21 he's paid? 22 A. No. 23 Q. He's also paid by Financial Trust 24 Company? 25 A. Yes. 10:51:41 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299174 Page 91 1 Epstein 2 Q. Anybody else? 3 A. I don't know. 4 Q. Did he get any of the benefit of the $5 5 million that was paid to Financial Strategy Group? 10:51:58 6 A. Yes. 7 Q. What did he receive? 8 A. The same amount of money he would have 9 received if I paid it directly. 10 Q. And how much is that? 10:52:09 11 A. Are you asking me for his salary? 12 Q. In other words, he just received his 13 salary? 14 A. Yes. 15 Q. So the $5 million that was paid to 10:52:19 16 Financial Strategy Group you perceived as a way to 17 capitalize the company, essentially? 18 A. Correct. 19 Q. How much did JPMorgan pay for 20 Highbridge? 10:52:37 21 A. I don't know. 22 Q. Did you ever have any conversations 23 with Mr. Dubin about how much they paid? 24 A. No. 25 Q. Do you have any guess as to how much 10:52:47 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299175 Page 92 1 Epstein 2 they paid? 3 A. My -- my best understanding -- you're 4 asking me for a guess? 5 Q. Yes, a guess. 10:52:59 6 A. It was north of a billion dollars. 7 Q. North of a billion? 8 A. Correct. 9 Q. Of which Mr. Dubin would have a 50 10 percent interest, in your understanding? 10:53:08 11 A. My understanding. 12 Q. What's your guess of north of a billion 13 based on? 14 A. It had assets under management at that 15 time of somewhere between 4 and 7 billion dollars, 10:53:19 16 I think. 17 Q. So do you use a multiple or how do you 18 come up with north of a billion? 19 A. Because what I was -- I knew what I was 20 willing to pay. 10:53:35 21 Q. How much were you being to pay? 22 A. North of a billion. 23 Q. How much is that? 24 A. The best of my recollection is 2.5 to 3 25 billion. 10:53:44 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299176 Page 93 1 Epstein 2 Q. Is it your guess JPMorgan paid more 3 than 2 or 3 billion dollars for it? 4 A. You're asking me to guess, I'm sorry. 5 Q. You valued it between 2 and 3 billion 10:53:51 6 dollars? 7 A. Yes, I know I did. 8 Q. Did you ever have a conversation with 9 Mr. Dubin about your valuation of his company? 10 A. I don't recall. 10:53:59 11 Q. Did you ever have a conversation with 12 Mr. Dubin in which you told him you might be 13 interested in buying the company? 14 A. Yes. 15 Q. When was that conversation? 10:54:05 16 A. Early 2003/2004. 17 Q. Before you introduced him to 18 Mr. Staley? 19 A. Yes. 20 Q. And can you tell us what that 10:54:11 21 conversation was? 22 A. I thought Highbridge was a tremendous 23 platform from which you could build a great 24 business. He had great people working for him. 25 And I thought it would be a great purchase for me. 10:54:23 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299177 Page 94 1 Epstein 2 Q. And what did he say? 3 A. I don't recall. 4 Q. Was he interested in selling? 5 A. He was interested in exploring his 10:54:30 6 opportunities. 7 Q. Did you understand Highbridge to be his 8 most significant asset? 9 A. Yes. 10 Q. His interest in Highbridge. 10:54:44 11 A. Yes, sir. 12 Q. Do you recall if you and Mr. Dubin 13 discussed valuation at all? 14 A. I don't recall. 15 Q. How did it come about that you arranged 10:55:22 16 a fee for the introduction? 17 A. I'm sorry, you'll have to repeat the 18 question. 19 Q. How did it come about that you received 20 a fee for the introduction? 10:55:34 21 A. Glenn Dubin came to my house, and he 22 said, You should get a fee for the introduction. 23 And I said, Pay me what you think is fair. I will 24 not negotiate. 25 Q. At what stage in the transaction did 10:55:52 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299178 Page 95 1 Epstein 2 Glenn Dubin come to you? After he had sold or 3 after he had reached an agreement; do you know? 4 A. It was after he reached an agreement. 5 That is my best recollection. 10:56:06 6 Q. And he said, I think $20 million was 7 fair? 8 A. Correct. 9 Q. Or how did he respond? 10 A. He said, I think the number is $20 10:56:13 11 million. 12 Q. Did you understand what that number was 13 based on? 14 A. He said, I think the number is $20 15 million. 10:56:22 16 Q. Did you understand it to be essentially 17 a finder's fee? 18 A. Yes, sir. 19 Q. Did you have any understanding of 20 what how finder's fees are generally based in 10:56:37 21 the sale of financial institutions? 22 A. I have -- yes. 23 Q. What's your understanding? 24 A. It varies quite a bit. 25 Q. Between what and what? 10:56:46 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299179 Page 96 1 Epstein 2 A. Between zero and the formula that I 3 think Paul, Weiss put together four years ago. 4 Q. Have you ever acted as a finder in a 5 transaction like this before? 10:57:03 6 A. I don't recall. 7 Q. Is it possible? 8 A. A transaction like what? Someone 9 buying something else? 10 Q. The sale of a fund like Highbridge. 10:57:13 11 A. No. 12 Q. Since? 13 A. No. 14 Q. Did you enter any kind of agreement 15 with Highbridge after the fee was paid? 10:57:40 16 A. Yes. 17 Q. And what was that? 18 A. To invest money, as you know. 19 Q. For them to invest your money? 20 A. Yes. 10:57:56 21 Q. Did you ever enter a consulting 22 agreement? 23 A. No. 24 Q. Did you ever discuss a consulting 25 agreement? 10:58:14 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299180 Page 97 1 Epstein 2 A. I believe so. 3 Q. First when was the Highbridge 4 transaction? 5 A. My best recollection is in late '04. 10:58:18 6 Q. Let's just see if we can pin it down. 7 MR. SCHWARTZ: Can we mark this, 8 please, as Exhibit 3. 9 (Discussion off the record.) 10 (Exhibit 3, invoice from FTC to 11 Resnick, marked for identification.) 12 Q. Exhibit 3 appears to be an invoice from 13 Financial Trust Company to Mr. Ron Resnick at 14 Highbridge for mergers and acquisitions advice, 15 amount $15 million. 10:59:36 16 Do you recognize it? 17 A. Yes, sir. 18 Q. Is that the invoice for the $15 million 19 portion of the fee? 20 A. Yes, sir. 10:59:45 21 Q. And that invoice was after the deal 22 with JPMorgan or about the time of the deal with 23 JPMorgan? 24 A. About the time. 25 Q. So late 2004 would be about that time? 10:59:53 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299181 Page 98 1 Epstein 2 A. I believe so. 3 Q. What conversations did you have with 4 Mr. Dubin about a consulting arrangement? 5 A. My best recollection was subsequent to 11:00:04 6 this. 7 Q. And what were the conversations? 8 A. Whether -- I believe whether they 9 should consider having me as a consultant moving 10 forward. 11:00:20 11 Q. Who raised that issue? 12 A. I don't remember. 13 Q. And what happened? 14 A. Nothing. 15 Q. Was there a draft agreement? 11:00:31 16 A. I believe so. 17 Q. And what were you going to consult 18 about? 19 A. I don't recall. 20 Q. Let me show you a document which we'll 11:00:50 21 mark as Exhibit 4. 22 (Exhibit 4, draft consulting agreement 23 with fax cover sheet, marked for 24 identification.) 25 Q. I've placed in front of you Exhibit 4, 11:01:04 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299182 Page 99 1 Epstein 2 which is on the letterhead of Highbridge. It 3 appears to be a fax -- a fax consulting sheet -- a 4 fax cover sheet and what appears to be a draft 5 consulting agreement attached, although there's no 11:01:19 6 fax stamp. 7 Do you recognize this? 8 A. Not specifically, no. 9 Q. You did not end up being a consultant 10 for Highbridge; correct? 11:01:40 11 A. No, sir. 12 Q. What happened to those discussions? 13 A. Nothing happened. I don't remember. 14 Q. Do you remember it had gone far enough 15 that somebody drafted a consulting agreement? 11:01:51 16 A. No. 17 Q. Who is Mark Roberts; do you know? He's 18 one of the cc's? 19 A. No, sir. 20 Q. Do you know who Bill Shepherd is? 11:02:04 21 A. No, sir. 22 Q. Do you know who Rob Caruso is? 23 A. No, sir. 24 Q. Do you know who Yul Tobaly is? 25 A. No, sir. 11:02:16 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299183 Page 100 1 Epstein 2 Q. Bill Bulmer? 3 A. No, sir. 4 Q. Ron Resnick? 5 A. It's only because it says Ron Resnick 11:02:20 6 on the invoice. The answer is no, I never met 7 him. 8 Q. Let's go back to your conversations 9 with Mr. Dubin about investing in the Zwirn fund. 10 What did he tell you about the fund at that time, 11:02:46 11 2002, before you invested? 12 A. Highbridge was a fund of funds. And as 13 we allocated money, he thought that Dan Zwirn 14 showed great promise and I should give Dan 15 Zwirn Highbridge/Zwirn. Highbridge had 11:03:06 16 different pockets, and one of the pockets was the 17 Zwirn fund -- the Highbridge/Zwirn fund, to the 18 best of my recollection. 19 Q. Let's call it the Zwirn fund so we 20 can -- so we can keep that pocket, call it the 11:03:19 21 Zwirn fund so that we can distinguish it from 22 Highbridge equity? 23 A. I would prefer to call it Highbridge/ 24 Zwirn because later on there's a change, I think. 25 Q. Okay. So let's call it Highbridge/ 11:03:30 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299184 Page 101 1 Epstein 2 Zwirn. 3 He told you that one of the pockets in 4 which they invested was the Highbridge/Zwirn fund? 5 A. Yes, sir. 11:03:38 6 Q. And he told you it was managed by Dan 7 Zwirn? 8 A. I doubt it. 9 Q. What did he tell you about Dan Zwirn? 10 A. He said the Zwirn fund was a fund that 11:03:44 11 I should put some money in. 12 Q. Did he tell you why? 13 A. They were going to be doing PIPE 14 investments. 15 Q. And what did you understand PIPE 11:03:54 16 investments to be? 17 A. Private investments in private -- in 18 public equities. 19 Q. Did he tell you that they were going to 20 be investing in anything else? 11:04:09 21 A. "They," please? 22 Q. The Highbridge/Zwirn fund. 23 A. He thought it was a good investment. 24 That's the full extent of the discussion. 25 Q. Did he tell you anything about their 11:04:19 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299185 Page 102 1 Epstein 2 investment strategy? 3 A. No, sir. 4 Q. Did you have any understanding as to 5 the investment strategy? 11:04:24 6 A. No, sir. 7 Q. Your decision to place the first $20 8 million was based solely on that conversation? 9 A. Yes, sir. 10 Q. And your decision to make the next $20 11:04:41 11 million investment was based on what? 12 A. My best recollection is I was 13 allocating additional monies and I said what 14 else where should I put the additional 20 or 30 15 million dollars, and he said put 20 million with 11:05:06 16 Zwirn. 17 Q. You were allocating additional monies 18 for what? 19 A. My own personal investments. 20 Q. And so you asked Mr. Dubin where should 11:05:13 21 you put it? 22 A. Yes. 23 Q. You asked for his advice? 24 A. Yes. 25 Q. And he said put it with Zwirn? 11:05:17 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299186 Page 103 1 Epstein 2 A. Some of it with Zwirn, yes. 3 Q. That investment was made, I think we 4 agreed, in about September 2002, so this would 5 have been prior to that? 11:05:25 6 A. Yes. 7 Q. And did he tell you anything else about 8 the fund at that time? 9 A. Not to the best of my recollection. 10 Q. Anything else about the investments the 11:05:38 11 fund made? 12 A. No. 13 Q. Did you know anything else about the 14 investments the fund made at that time? 15 A. No. 11:05:44 16 Q. You invested an additional $30 million 17 in the fund in December 2002; correct? 18 A. Correct. 19 Q. How did that come about? 20 A. The same. 11:05:58 21 Q. You had a conversation with Mr. Dubin? 22 A. Yes, sir. 23 Q. You wanted to allocate -- you wanted to 24 make new investments; correct? 25 A. Correct. 11:06:06 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299187 Page 104 1 Epstein 2 Q. Do you have any ideas -- correct? 3 and he said Zwirn? 4 A. Zwirn probably is one of three or four 5 different pockets. 11:06:13 6 Q. When you say "allocate," were you 7 allocating to pockets of the Highbridge funds? 8 A. As well as other hedge funds. 9 Q. And you were asking his general advice 10 on what he thought might be a good place to put 11:06:25 11 some money? 12 A. Yes. 13 Q. When you went to him to discuss that, 14 did you tell him how much you were going to be 15 investing in total? 11:06:35 16 A. No. 17 Q. Did you discuss the number that you 18 would invest in any of the things that he 19 discussed with you? 20 A. Yes. 11:06:46 21 Q. What did you tell him about that, or 22 what did he say about that? 23 A. My best recollection is I would say I 24 have 60 or 80 million dollars and how do you think 25 I should allocate it. 11:06:57 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299188 Page 105 1 Epstein 2 Q. So let's go back to the original 3 conversation prior to the May 2002 investment. 4 A. Yes, sir. 5 Q. You weren't coming to talk to him about 11:07:06 6 $10 million; you were coming to talk to him about 7 more than $10 million? 8 A. I don't recall. 9 Q. In September 2002 do you recall how 10 much you were discussing? 11:07:17 11 A. No, sir. 12 Q. But the 10 in each of those instances 13 was not the full amount that you were looking to 14 invest; right? 15 A. I don't recall specifically. 11:07:25 16 Q. Did he give you any other advice with 17 respect to where other monies should go? 18 A. I don't recall. 19 Q. I'm going to read you an answer you 20 gave me a minute ago. "My best recollection is I 11:07:44 21 would say I have 60 or 80 million dollars and how 22 do you think I should allocate it." 23 What did that recollection concern? 24 A. A period of time over two years or 25 three years of investing in Highbridge. 11:08:00 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299189 Page 106 1 Epstein 2 Q. And did he give you any other 3 recommendations other than the Highbridge/Zwirn 4 funds during that period of time? 5 A. Yes, sir. 11:08:11 6 Q. And did you follow those 7 recommendations? 8 A. Sometimes. 9 Q. Can you tell us which recommendations 10 that he gave you which you followed? 11:08:21 11 A. Highbridge had many pockets. There was 12 a long short fund, there was a convertible 13 arbitrage fund, there was a long equity fund. 14 There were a number of different pockets. 15 Q. And which of those recommendations did 11:08:36 16 you follow; do you recall? 17 A. Not with specificity. 18 Q. And do you recall why you would follow 19 some and not follow others? 20 A. It was at that moment I made the 11:08:45 21 decision. 22 Q. Based on what? 23 A. What I decided at that moment. 24 Q. Based on what? 25 A. My view of the markets, my view of the 11:08:53 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299190 Page 107 1 Epstein 2 products, my view of the people, my view of 3 Highbridge, my view of risk/reward, my view of 4 liquidity needs. 5 Q. So at the moments in May, September, 11:09:05 6 and December 2002 that you invested in the 7 Highbridge/Zwirn fund -- 8 A. Again, sorry? I want to be precise. 9 Sorry. 10 MR. ARFFA: Speaking of being precise, 11:09:27 11 I want to make sure at the end of one of the 12 answers -- I think it was a couple answers 13 ago -- it said -- you were listing the 14 factors. You said, My view of risk/reward, my 15 view of -- I thought it was liquidity needs. 11:09:39 16 THE WITNESS: Liquidity needs, yes, 17 sir. 18 Q. It didn't come out. Not your fault. 19 Not even her fault. 20 When you invested in the Highbridge/ 11:09:52 21 Zwirn fund in 2002 -- well, let's start in May 22 2002 -- which of those factors played a role: 23 your view of the products, your view of the 24 people, your view of Highbridge, your view of 25 risk/reward, or your view of liquidity? 11:10:22 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299191 Page 108 1 Epstein 2 A. I take into account all those factors, 3 and I make a decision. If you ask me what 4 happened eight years ago, it would be hard for me 5 to pin down exactly which one caused that 11:10:35 6 decision. 7 Q. The only thing you knew about the fund 8 is you were being told by Mr. Dubin that it was a 9 good investment and he told you it did PIPE 10 investing; correct? 11:10:44 11 A. That's the best of my recollection. 12 Q. So you made the decision based on that 13 information alone? 14 A. That's correct. 15 Q. Did you have any other information 11:10:51 16 available to you in September 2002 when he 17 suggested that you invest with it again? 18 A. No, sir. 19 Q. Did you have any other information 20 about the fund in December 2002 when he 11:11:00 21 recommended that you invest in it again? 22 A. I don't -- I wouldn't recall, sitting 23 here today. 24 Q. How about in June 2003? 25 A. Ask the question again. 11:11:13 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299192 Page 109 1 Epstein 2 Q. Did you have any other information 3 other than the fact that he was recommending it 4 and that it did PIPE investing? 5 A. It's possible. 11:11:20 6 Q. And what do you think you had? 7 A. He might have said they're doing very 8 well. 9 Q. And did you know anything more about 10 the investments they were making at that time? 11:11:32 11 A. No, sir. 12 Q. We discussed earlier your investment in 13 January 2005. 14 A. Yes, sir. 15 Q. Putting aside the lockup, how did it 11:11:44 16 come about that you decided to make an investment 17 in 2005? 18 A. Glenn Dubin called me and said that 19 Zwirn had been doing very well, and he recommended 20 that I up my investment. 11:12:00 21 Q. And did you have any other information 22 about the fund at that time than you had at the 23 time of your earlier investments other than what 24 he told you in that conversation? 25 A. Sitting here today I couldn't recall. 11:12:09 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299193 Page 110 1 Epstein 2 Q. Did you know anything more about its 3 investment strategy? 4 A. Just if I was going to reup, it was 5 probably -- he had been doing well. 11:12:20 6 Q. Did you know anything more about its 7 investment strategy? 8 A. Sorry? 9 Q. Did you know anything more 10 A. No, I'm sorry. 11:12:29 11 Q. No; is that correct? 12 A. No, that was the answer. 13 Q. Is it fair to say that the only thing 14 during the period you were an investor in the fund 15 that you knew about its investment strategy was 11:12:36 16 that it invested in PIPEs? 17 A. That it had grown substantially to -- 18 as a big part of Highbridge and had taken other 19 money, it was very successful, that the returns 20 were solid, and that there was plenty -- plenty of 11:12:51 21 money and things to buy. 22 Q. Is it fair to say that the only thing 23 during that period that you knew about its 24 investment strategy is that it invested in PIPEs? 25 A. No. 11:13:07 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299194 Page 111 1 Epstein 2 Q. What else did you know? 3 A. Again, when you're talking about 4 strategy, that it had decent returns. It was 5 to me it was a pocket of Highbridge's money, 11:13:15 6 initially. Dan Zwirn was a successful investor. 7 The returns were solid. The fund was on solid 8 footing. And it had Highbridge's money under 9 management. 10 So one of the great -- the biggest 11:13:30 11 pieces was the fact that it already had 500 or so 12 or 600 million of Highbridge's money being managed 13 by Dan. 14 Q. Let me be clear about what I'm asking. 15 I'm -- 11:13:42 16 A. You're asking about investment 17 strategy. 18 Q. I'm asking you about -- by "investment 19 strategy" what I mean is how it makes its 20 decisions to invest and what it invests in. 11:13:51 21 A. No. 22 Q. So the only thing that you knew 23 during -- about its investment strategy at the 24 time that you made each of these investments, 25 defining investment strategy as I just have, is 11:14:02 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299195 Page 112 1 Epstein 2 that it invested in PIPEs? 3 A. No, it had a wide range of investment 4 opportunities. It was not limited to PIPEs. 5 It -- you asked me initially. So the answer is I 11:14:15 6 thought I had additional information that they 7 were making money in investment strategy. 8 Q. What else did it invest in? 9 A. I don't know. 10 Q. When did you learn it invested in 11:14:25 11 things other than PIPEs? 12 A. I never learned what it invested in at 13 all. 14 Q. Just that it had PIPEs and other 15 investments? 11:14:33 16 A. Correct. 17 Q. But you didn't know what those other 18 investments were? 19 A. That's correct. 20 MR. SCHWARTZ: Let's take the break. 11:14:40 21 It's time. 22 THE VIDEOGRAPHER: Stand by. We are 23 going off the record. The time is 11:13 a.m. 24 This is the end of Tape Number 2. 25 (Recess taken from 11:13 to 11:28.) 11:14:49 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299196 Page 113 1 Epstein 2 THE VIDEOGRAPHER: We are back on the 3 record. The time is 11:28 a.m. This is the 4 beginning of Tape Number 3. 5 Q. Did you have an understanding as to the 11:29:41 6 liquidity of the investments in which Highbridge/ 7 Zwirn was investing? 8 A. When? 9 Q. At any time? 10 A. I would always assume that any fund I 11:29:58 11 had my money in had ample liquidity. 12 Q. What do you mean by "ample liquidity"? 13 A. Any business has to run itself, 14 especially in the hedge fund business that has 15 liquidity both for redemption purposes and for 11:30:12 16 making more investments. 17 Q. Did you understand it was making 18 illiquid investments long term? 19 A. "It"? 20 Q. Highbridge/Zwirn. 11:30:38 21 A. I don't understand. I told you what I 22 understood before. 23 Q. And so you assumed it had ample 24 liquidity? 25 A. I assume every investment I make, every 11:30:47 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299197 Page 114 1 Epstein 2 responsibly traded hedge fund, always has ample 3 liquidity. 4 Q. And what does ample liquidity mean? 5 A. It means liquidity sufficient to make 11:30:59 6 redemptions, liquidity sufficient to make 7 additional investments, liquidity to pay 8 management fees, liquidity to run its operation, 9 liquidity to maintain its position to take 10 advantage of opportunities that may present 11:31:17 11 itself. 12 Sorry, are you going to interrupt me? 13 Okay. 14 Liquidity so that in general terms of 15 investing it's usually not a good idea to have to 11:31:28 16 have a fire sale. 17 Q. During the time that you were investing 18 with them, did you understand the lockup periods 19 to be in any way related to the liquidity of the 20 investments they were making? 11:31:45 21 A. No. 22 Q. What was the purpose of locking up 23 funds, in that case? 24 A. Many times the manager simply wants to 25 make sure that if he's going to take office space 11:31:55 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299198 Page 115 1 Epstein 2 and commit himself to long-term employees he 3 doesn't want to have all his money pulled out at 4 the last minute. 5 Q. Did you ever have any conversations 11:32:05 6 with Glenn Dubin about the liquidity of the 7 investments in the Highbridge/Zwirn fund prior -- 8 during the period -- prior to your investing or 9 during the period you were invested? 10 A. Yes. 11:32:22 11 Q. When? 12 A. Best recollection is 2007. 13 Q. Do you recall making a redemption 14 request in February 2007? 15 A. Yes. 11:32:50 16 Q. Was it before or after that request? 17 A. It was after that request when Glenn 18 told me that Zwirn was a lying scumbag, that in 19 fact had mis -- misled him, misled the auditors, 20 misled everyone, and in fact had been running the 11:33:13 21 operation with almost zero liquidity, borrowing 22 from Peter to pay Paul. 23 Later he told me they in fact had no 24 liquidity in the fund, in the onshore fund, so 25 they were forced to borrow money from the offshore 11:33:28 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299199 Page 116 1 Epstein 2 fund, borrowing from the right hand to pay the 3 left hand, not being totally aware of the tax 4 implications of that horrendous decision. 5 He told me in fact at one point that he 11:33:40 6 thought that even though Dan Zwirn had told me and 7 told Zwirn that the reason he didn't want to make 8 my redemption is because I would have a run on the 9 bank. 10 It turned out that Dan Zwirn and the 11:33:52 11 Zwirn funds had no liquidity; in fact, had in fact 12 turned out had no liquidity to pay their 13 management fees; in fact had no liquidity to fund 14 his own airplane. So he decided to take money 15 from the Highbridge account. 11:34:07 16 Three, he told me in fact that many of 17 the operations and things in the pipeline to buy 18 things had to be funded by the offshore account so 19 that there were monies moving back and forth and 20 that Dan Zwirn was a bad guy. 11:34:20 21 Q. That conversation took place after the 22 redemption request; correct? 23 A. Yes. 24 Q. Did he tell you anything about the 25 actual investments the fund was making at that 11:34:37 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299200 Page 117 1 Epstein 2 time that you did not know before? 3 A. He had advised me that what I initially 4 found out in late September/early October 2006 5 that Dan Zwirn was firing Perry Gruss for 11:34:53 6 supposedly some immaterial bookkeeping entry; that 7 in fact they had misled me -- this was 8 afterwards -- and in fact it was not immaterial 9 but very material; that money had been taken 10 amazingly so to fund Dan Zwirn's personal airplane 11:35:10 11 out of the Highbridge managed account. 12 He told me monies in fact had been 13 taken from the management company and for Dan's 14 own personal tax purposes he had deferred his fees 15 to an offshore -- kept in an offshore entity so 11:35:30 16 that they were having trouble actually keeping the 17 lights running -- lights on because they had no 18 money. 19 So in fact the fund had been totally 20 illiquid. And that was certainly not the 11:35:42 21 representation that they had made to either Glenn 22 or myself. 23 Q. When did he tell you this? 24 A. Since '07. 25 Q. This is, again, after February of '07? 11:35:53 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299201 Page 118 1 Epstein 2 A. Best recollection, sir. 3 Q. The last sentence of your answer let 4 me just read it back to you. 5 A. Sure. 11:36:27 6 Q. "And that was certainly not the 7 representation that they had made to either Glenn 8 or myself." 9 A. Yes. 10 Q. Who is "they"? 11:36:33 11 A. The Zwirn, Harry Davis, Dan Zwirn -- 12 Harry Davis specifically to me, that the book -- 13 what had been represented to me initially as mere 14 bookkeeping entry irregularities was in fact not 15 the case. In fact, there were material problems 11:36:55 16 with the fund and the fact that they never 17 represented the idea that when they agreed to my 18 redemption request that they in fact had no 19 liquidity. 20 Q. And who told you that? 11:37:05 21 A. Glenn Dubin. 22 Q. And did he tell you he was unaware of 23 what kind of investments they were making before 24 that time? 25 A. No. 11:37:17 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299202 Page 119 1 Epstein 2 Q. Did he tell you that he was aware of 3 the kind of investments they were making? 4 A. I don't recall. 5 Q. My question to you earlier was did he 11:37:21 6 tell you anything about the actual investments the 7 fund was making when he spoke to you after 8 February 2007 that you did not know before. 9 A. You have to repeat again. 10 Q. When you had this conversation with 11:37:34 11 him -- 12 A. Yes, sir. 13 Q. -- after February 2007, did Mr. Dubin 14 tell you anything about the actual investments the 15 fund was making that you did not know before? 11:37:44 16 A. Yes. He told me that the -- one of the 17 accounting firms had been called in to in fact 18 make sure that the NAV was solid and that the 19 first initial report was that the NAV was in fact 20 as represented. 11:38:03 21 Q. So the NAV report was accurate? 22 A. I don't know that. 23 Q. He told you that it was accurate? 24 A. No. 25 Q. You said one of the accounting firms 11:38:32 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299203 Page 120 1 Epstein 2 had been called in to in fact make sure the NAV 3 was solid and that the first initial report was 4 that the NAV was in fact as represented. 5 So he was telling you the NAV was in 11:38:54 6 fact as represented? That had been the conclusion 7 of the accounting firm? 8 A. Yes. 9 Q. Did he tell you he was unaware of the 10 investment strategy of the Zwirn funds? 11:39:07 11 A. No. 12 Q. What exactly did he tell you at that 13 time that he had been unaware of? 14 A. At what time? 15 Q. When he spoke to you in February 2007 11:39:30 16 or right after February 2007. What are the things 17 that he said I, Glenn Dubin, did not know? 18 A. I don't recall with specificity. I 19 remember he being outraged that Glenn -- that Dan 20 Zwirn had lied on at least four major areas of 11:39:45 21 representations to Glenn, his words, which was, 22 one, the fact that his airplane which was 23 purchased in September of '05 was purchased with 24 funds from Highbridge. 25 Q. He said he had been lied to about that 11:40:01 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299204 Page 121 1 Epstein 2 by Dan Zwirn? 3 A. That he said Dan Zwirn was a lying 4 scumbag. 5 Q. Okay. 11:40:08 6 A. He said -- I apologize to the lady, 7 sorry, and you. But I've been told my best 8 recollection of exactly what the conversation was. 9 Q. So that's one area, the airplane. What 10 else? 11:40:23 11 A. The airplane was worse than that, 12 because in fact what he had said was what was 13 represented as immaterial was mischaracterized 14 because it was immaterial in terms of its dollar 15 values in a $7 billion fund. 11:40:38 16 So the idea that immateriality was in 17 fact maybe $50 or $100 or $50,000 in a $7 billion 18 fund was in fact mischaracterized as if someone 19 who had only stolen a thousand dollars was any 20 less liable than someone who stole a million 11:40:54 21 dollars. 22 So the immateriality that was expressed 23 to us, to me, which was in its dollar-diminished 24 value was mischaracterized strictly as immaterial 25 fact, was in fact the fact that there was a gross 11:41:06 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299205 Page 122 1 Epstein 2 negligence and a fiduciary obligation of Perry 3 Gruss, Dan Zwirn, Mr. Kahn, whoever I'm 4 unfamiliar with his first name -- that no one made 5 disclosure to me at any relevant time so that each 11:41:21 6 one had breached their fiduciary duties, knowing 7 in fact -- this was sometime in February '07 -- 8 that sometime in '06 all of these in fact were 9 known. 10 Let me finish. 11:41:38 11 That in fact the liquidity of the fund 12 was badly stressed so that the demand that they 13 had asked me to reduce from my full withdrawal 14 request to only an $80 million request was 15 mischaracterized as merely being -- avoiding a run 11:41:51 16 on the bank when in fact it turned out there was 17 no liquidity; and basically there had been very 18 little accounting procedures followed. Sorry. 19 Q. Did he tell you that he had been lied 20 to about materiality or is that your conclusion, 11:42:05 21 that you had been lied to about materiality? 22 A. I don't recall specifically. 23 Q. You don't recall whether he said he had 24 been lied to about that? 25 A. He said he knew I had been lied to 11:42:19 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299206 Page 123 1 Epstein 2 about it. 3 Q• And the materiality being that there 4 was a thief, which was something that you would 5 have considered to be material? 11:42:30 6 A. I would considered the fact -- separate 7 from a thief, the mere fact that someone was 8 paying for his airplane from client funds is worst 9 than a thief in my business. 10 Excuse me, let me finish. 11:42:40 11 The idea that that would have set off 12 bells and whistles had I known at that period of 13 time, when Schulte Roth was called in in May of 14 '06 to investigate already wrongdoing and no 15 fiduciary in that firm, made me aware -- I was the 11:42:53 16 largest investor in that fund -- that there had 17 already been some serious wrongdoing, it was 18 merely represented to me -- and Glenn confirmed it 19 was misrepresented -- as immaterial items. 20 There had been many things going on at 11:43:09 21 the fund. It was not a run on the bank; it was a 22 liquidity. The airplane had been paid for out of 23 clients' funds. There had been no money to pay 24 management, so they were borrowing and prepaying 25 management fees based on the fact that Dan Zwirn 11:43:23 VERITEXT REPORTING COMPANY EFTA00299207 Page 124 1 Epstein 2 had decided to have his own money kept offshore 3 for deferral purposes. And there was -- sorry. 4 Q. Of those things -- 5 A. Yes. 11:43:35 6 Q. which, if any, did he tell you he 7 did not know prior to this phone call in February 8 2007? 9 A. I don't recall. 10 Q. Did he tell you that Dan Zwirn had lied 11:43:57 11 to him? 12 A. He told me Daniel Zwirn in fact lies to 13 everyone, that Dan Zwirn was a micromanager, that 14 Dan Zwirn wanted to interview -- 15 MR. SUSMAN: Just answer the question. 11:44:10 16 THE WITNESS: Okay. 17 Yes. 18 Q. So I assume your answer is yes. 19 A. I said yes, sorry. 20 Q. But you don't recall specifically what 11:44:23 21 he said Dan Zwirn had lied to him about as opposed 22 to you? 23 A. Do I recall. Yes, he said that Dan 24 Zwirn had said it was only Perry Gruss that had 25 done something improper, is my best recollection. 11:44:45 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299208 Page 125 1 Epstein 2 Q. And did he say that was a lie? 3 A. He thought there were more people 4 involved in the wrongdoing and that Dan was -- 5 yes. 11:44:54 6 Q. Did he say, Dan lied to me about that? 7 A. Yes. 8 Q. Now, on the other issues that you 9 raised that you concluded that Dan had lied, did 10 he tell you that Dan had lied to you or did he 11:45:02 11 just tell you the facts and you concluded that Dan 12 had lied to you? 13 A. Both. 14 Q. What did he tell you Dan had lied to 15 you about? I want to be specific here. What 11:45:14 16 did -- what did Mr. Dubin tell you: Dan lied to 17 you about this? What did he say? And what issues 18 did you conclude, after hearing Mr. Dubin, that 19 Dan had lied to you about? 20 A. Again, the term "lie," so if you -- Dan 11:45:27 21 did not tell me about the airplane and its -- the 22 problems with the funds being taken from a managed 23 account. So I considered that a lie. Sorry. 24 Q. Did Dubin use that word, that Dan lied 25 to you about this? 11:45:51 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299209 Page 126 1 Epstein 2 A. Yes. 3 Q. He lied to you about the airplane? 4 A. He lied that the things that he 5 represented were the reasons that Gruss were fired 11:45:55 6 were strictly immaterial. He said the phrase that 7 it was immaterial was a lie. 8 Q. Anything else you recall him using the 9 word "lie" about? 10 A. The fact that Dan Zwirn had misled me 11:46:12 11 to believe that there was no issue regarding 12 liquidity and an eventual -- and a redemption of 13 my money when in fact there was no liquidity in 14 the fund. 15 Q. And he told you that Dan Zwirn had lied 11:46:33 16 to you about that? 17 A. He told me that Dan Zwirn had lied to 18 me and others. 19 Q. Anything else? Anything else that he 20 told you Dan had lied to you or to you and others 11:46:46 21 about? 22 A. Over this period of time, there was 23 quite a number of lies, so I'm sorry. 24 Q. I'm focusing on this conversation in 25 which you told us Mr. Dubin told you Dan lied. 11:46:58 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299210 Page 127 1 Epstein 2 And I want to know exactly the things he actually 3 used the words "lied about" as opposed to you drew 4 conclusions from things he was saying that you had 5 been lied to. Anything else? 11:47:12 6 A. Not that I recall. 7 Q. I think we got into this by discussing 8 whether he had ever in any conversation told you 9 anything more about the investment strategy and 10 what was actually being invested in by the fund. 11:47:40 11 And I take it the answer to that is he did not, 12 Mr. Dubin. 13 A. You'll have to repeat that question for 14 me. 15 Would you repeat the question for me, 11:47:53 16 ma'am? 17 Q. Let me rephrase the question. I'm 18 going to withdraw the question and rephrase it. 19 A. Okay. 20 Q. Other than telling you that the 11:48:06 21 Highbridge/Zwirn fund invested in PIPEs and other 22 investments, which he told you at some point, 23 according to your testimony -- 24 A. Yes. 25 Q. -- Mr. Dubin never told you anything 11:48:21 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299211 Page 128 1 Epstein 2 more about the kinds of investments the fund made; 3 correct? 4 A. Correct. 5 Q. Prior to October 2006 -- 11:48:45 6 A. Yes. 7 Q. -- you had met Mr. Zwirn once; correct? 8 A. Yes. 9 Q. And you had never spoken to him on the 10 phone; correct? 11:48:56 11 A. To the best -- 12 Q. That you recall. 13 A. I might have talked to him once about 14 something else. 15 Q. Do you remember a series of phone 11:49:03 16 conversations with him beginning in approximately 17 October 2006? 18 A. Yes. 19 Q. How many separate conversations do you 20 remember with him? 11:49:18 21 A. I would say it's less than six. 22 Q. During what period are these less than 23 six? 24 A. From late September through November, 25 mid-November. 11:49:35 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299212 Page 129 1 Epstein 2 Q. Let's start with the first one. Do you 3 recall the first one distinctly? 4 A. Distinctly. 5 Q. Do you recall approximately when that 11:49:45 6 was? 7 A. Late September. 8 Q. Who called whom? 9 A. Dan Zwirn called me in my office. 10 Q. Was there anybody else on the 11:49:57 11 telephone? 12 A. He called through my secretary. 13 Q. Was she on the phone when you spoke to 14 him? 15 A. No. 11:50:05 16 Q. What did he say to you and what did you 17 say to him? 18 A. He told me he was calling me to alert 19 me to the fact that he was going to fire his CFO 20 and I would probably read about it in the 11:50:23 21 newspaper. 22 I said, Why are you calling me to tell 23 me you're firing the CFO? I have not spoken to 24 you in years. He said, Well, there was some 25 reasons I have to -- he's going to get fired, but 11:50:40 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299213 Page 130 1 Epstein 2 the reasons he's being fired are immaterial. 3 Somewhat shocked, I said, Well, I've 4 not spoken to you ever except for the one time you 5 were in my office. You are now calling me out of 11:50:55 6 the blue to tell me you're going to fire your CFO 7 for something that was immaterial. I said, Well, 8 why don't you tell me exactly what you consider 9 immaterial. He said, Sorry, I can't. 10 I am not a patient person. My 11:51:19 11 reputation for being impatient is somewhat 12 well-known. I said, Are you crazy? What do you 13 mean you can't tell me what is immaterial? He 14 said, I cannot tell you. I said, Based on what? 15 He said, Based on advice of counsel. 11:51:35 16 I said -- which gave me more pause 17 because I said, Whose counsel? He said, Harry 18 Davis of Davis Polk. I said, Are they the fund's 19 counsel, the CFO's counsel, or your personal 20 counsel, now that I had my antenna up that there 11:51:53 21 was a problem. He said they were the fund's 22 counsel. 23 I said, If that's the case, I am the 24 largest limited partner in the fund. Those 25 attorneys are being paid by me. I want to know 11:52:07 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299214 Page 131 1 Epstein 2 what was immaterial. He said, I cannot tell you. 3 I said, This is crazy, using some other 4 expletives. I want all my money out of that fund 5 now. He said, Calm down, let me get back to you. 11:52:25 6 I hung up the phone. 7 Q. Anything else you remember from the 8 call? 9 A. Not that first call. 10 Q. Based on what did you believe you were 11:52:41 11 the largest limited partner in the fund? 12 A. That's what Mr. Dubin had told me. If 13 not the largest, I was the first investor. 14 Q. Did you use the word "largest" when you 15 spoke with Mr. Zwirn? 11:53:03 16 A. I believe I said, I was your first 17 investor. 18 Q. And you knew that from Mr. Dubin? 19 A. Yes, sir. 20 Q. What did you do after the phone call 11:53:16 21 with respect to this? 22 A. I immediately called Glenn Dubin. 23 Q. Was anybody else on the phone? 24 A. No, sir. 25 Q. And by "immediate," as soon as you hung 11:53:24 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299215 Page 132 1 Epstein 2 up? 3 A. As immediate as my fingers could dial. 4 Q. Was Mr. Dubin on speed dial, by any 5 chance? 11:53:37 6 A. No. 7 Q. What did you say to him and what did he 8 say to you? 9 A. I said, I just got a call from Dan 10 Zwirn, who I have not spoken to since that time 11:53:46 11 you sent him to my office so I could see his face. 12 He told me he was firing his CFO for something 13 that was immaterial, and he wouldn't tell me what 14 it was. I want my money out. This is nuts. 15 He said, Relax, relax, let me find out 11:54:00 16 what's going on. 17 Q. Did he tell you whether he was aware of 18 what was going on? 19 A. I just relayed the conversation. 20 Q. What happened next? 11:54:14 21 A. He called me back, Glenn did. 22 Q. When? 23 A. Probably 20 minutes later -- and said, 24 Dan Zwirn will call you again. I said, When? And 25 he said, Tomorrow. This was probably at 4 o'clock 11:54:33 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299216 Page 133 1 Epstein 2 in the afternoon. 3 Tomorrow came and went -- 4 Q. Did Mr. -- 5 A. Sorry. 11:54:44 6 Q. Did Mr. Dubin say anything else in that 7 phone call about what had happened or what the 8 substance of what you had been told? 9 A. In that phone -- my best recollection 10 is at the first that Dan will call me the next 11:54:54 11 day. 12 Q. I think you were about to tell us that 13 you were not called the next day; correct? 14 A. Correct. 15 Q. Did you speak to Mr. Dubin that day? 11:55:03 16 A. I did. 17 Q. When? 18 A. My guess is around 12 o'clock. 19 Q. Noon? 20 A. Yes, sir. 11:55:14 21 Q. You called him? 22 A. Yes. 23 Q. What did you say to him and what did he 24 say to you? 25 A. I said, Dan Zwirn has not called me. 11:55:20 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299217 Page 134 1 Epstein 2 You promised me he was going to call me. 3 Q. What did Mr. Dubin say? 4 A. I'll get -- he said something to the 5 effect that it will happen, I'll get right back to 11:55:35 6 you. 7 Q. Did he say anything else in that call 8 that you remember? 9 A. No, sir. 10 Q. What happened next? 11:55:40 11 A. Dan Zwirn called me. 12 Q. When? 13 A. Probably a half hour to 45 minutes 14 later. 15 Q. Were you the only person on the phone 11:55:49 16 with him? 17 A. Yes, sir. 18 Q. What did he say to you and what did you 19 say to him? 20 A. He said, I understand -- I understand 11:55:56 21 you're upset. Let me explain what's happened. 22 There's been some accounting irregularities, and I 23 had to fire my CFO. I said, You already told me 24 that. What did he do? He said, Well, the amount 25 of money that's involved only is -- is less than a 11:56:20 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299218 Page 135 1 Epstein 2 couple hundred thousand dollars, a couple of basis 3 points, in accounting irregularities. 4 I said, Well, why did you fire him? I 5 at that point thought it was simply journal 11:56:38 6 entries being made back and forth, my 7 interpretation. He said, Well, we're going to 8 he has to be fired. I said, Fine. I want my 9 money out. This makes no sense to me. How -- 10 He said, Why do you want your money 11:56:55 11 out? I said, Because this makes no sense. You 12 can't tell me that attorneys who are attorneys for 13 the fund are not allowing you to tell me the 14 details of what's actually happened. 15 He said, Well, it's immaterial. I 11:57:09 16 said, Not to me. I want my money out. My 17 discipline's always been at the first smell of 18 trouble to get my money out. That's what I told 19 him. He said, Let me talk to Glenn. 20 Q. Anything else you recall from the 11:57:30 21 conversation? 22 A. I believe I said I want to speak to the 23 attorney. 24 Q. Anything else you recall from the 25 conversation? 11:57:46 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299219 Page 136 1 Epstein 2 A. Not sitting here today. 3 Q. So you stated that you thought it was 4 journal entries. What do you mean? 5 A. Well, it was the CFO -- it had been 11:58:06 6 portrayed to me as basically mere bookkeeping 7 inaccuracies, which happens quite often in funds 8 where you might -- especially if there's an 9 onshore and offshore fund where if you buy -- with 10 many clients it's not uncommon for an allocation 11:58:22 11 to be made after the fact of purchases or sales 12 and then reallocated. 13 Q. So from the phrase "accounting 14 irregularities" you assumed these were bookkeeping 15 inaccuracies? 11:58:38 16 A. Mere -- yes, sir. 17 Q. And when he refused to tell you what 18 they were, did you conclude they might be 19 something more? 20 A. I said I wanted to talk to the 11:58:48 21 attorney. Yes. 22 Q. He told you that it was only a couple 23 of basis points in terms of money? 24 A. Yes, sir. 25 Q. And when he used the phrase 11:59:01 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299220 Page 137 1 Epstein 2 "immaterial," didn't you understand that to mean 3 with respect to the amount of money involved? 4 A. Exactly -- I thought in fact both, the 5 fact that it was immaterial in terms of the 11:59:12 6 overall process, the overall honesty, the overall 7 integrity of what's been going on. "Immaterial" 8 had the double connotation of being both 9 immaterial to the operation of the fund that had 10 gone on and immaterial to the size of the number. 11:59:27 11 Q. And that's how you understood Mr. Zwirn 12 to be using the word? 13 A. I -- yes, sir. 14 Q. What happened after this call? 15 A. My best recollection is some days later 11:59:38 16 Harry Davis called me. 17 Q. Did talk to Mr. Dubin after the phone 18 call? 19 A. Yes, I did. 20 Q. Before you talk to Harry Davis? 11:59:55 21 A. My best recollection. 22 Q. How soon after this second phone call 23 with Mr. Zwirn did you speak to Mr. Dubin? 24 A. Right away. 25 Q. So you got off the phone, you picked up 12:00:06 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299221 Page 138 1 Epstein 2 the phone and called Mr. Dubin again? 3 A. Yes. 4 Q. As you had done a couple days earlier? 5 A. Yes, sir. 12:00:11 6 Q. In that phone call what did you say to 7 Mr. Dubin and what did he say to you? 8 A. I said, This is crazy. I am not 9 getting answers. I have 140-50 million dollars 10 with this person, and I'm not getting answers to 12:00:25 11 something that is supposedly immaterial. I need 12 and want answers. 13 Q. You said "supposedly immaterial"? 14 A. Yes. 15 Q. And what did Mr. Dubin say to you? 12:00:34 16 A. Relax, calm down, let me talk to Dan. 17 Q. Anything else you remember from the 18 call? 19 A. Not for that call, sir. 20 Q. Prior to your talking to the lawyer, 12:00:51 21 did you talk again to Mr. Dubin? 22 A. I might have. 23 Q. What do you recall? 24 A. I was pretty agitated. I don't 25 remember. 12:01:01 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299222 Page 139 1 Epstein 2 Q. Did you talk to anybody else about 3 these events before talking to the lawyer, Harry 4 Davis? 5 A. Well, again, since you've cautioned, 12:01:12 6 yes, I spoke to my in-house counsel. 7 Q. Was anybody else present when you spoke 8 to them? 9 A. Not to the best of my recollection. 10 Q. Did you speak to anybody other than 12:01:26 11 Mr. Indyke? 12 A. I could have. 13 Q. And who could you have spoken to? 14 A. Possibly Harry Beller. 15 Q. Who is Harry Beller? 12:01:37 16 A. He's an accountant. 17 Q. What's his position at your firm? 18 A. He's an accountant. 19 Q. Does he have a title? 20 A. No, we don't have titles. 12:01:44 21 Q. What are his responsibilities? 22 A. He's an accountant. 23 Q. I understand what his profession is. 24 What are his responsibilities? 25 A. He follows the numbers, the 12:01:55 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299223 Page 140 1 Epstein 2 investments. 3 Q. So he's in charge of tracking the 4 investments numerically, essentially? 5 A. Only numerically. 12:02:09 6 Q. Only numerically? 7 You don't recall whether you spoke to 8 him or not? 9 A. My best recollection, no. 10 Q. Did there come a time that you spoke to 12:02:27 11 the lawyer? Did there come a time when you spoke 12 to the lawyer, meaning Mr. Zwirn's lawyer, the 13 fund's lawyer? 14 A. Yes. 15 Q. When was that with respect to the 12:02:38 16 second phone call? 17 MALE SPEAKER: I'm sorry, this was not 18 Mr. Zwirn's lawyers; the fund's lawyer. 19 MR. SCHWARTZ: The fund's lawyer, 20 correct. 12:02:47 21 A. This was Harry Davis. 22 Q. When did you speak to Mr. Davis? 23 A. Sometime I would guess early October, 24 first or second week of October. 25 Q. By phone? 12:02:56 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299224 Page 141 1 Epstein 2 A. Yes, sir. 3 Q. Did you call him or did he call you? 4 A. I think he called me, and I returned 5 the call. 12:03:05 6 Q. Was anybody else on the call? 7 A. No, to the best of my recollection, on 8 my side. 9 Q. To the best of your recollection, what 10 did he say to you and what did you say to him? 12:03:11 11 A. He said, I'm calling to straighten out 12 the idea that Dan Zwirn told you that things were 13 immaterial at my direction. We don't really know 14 what's -- the full extent of what's gone on. 15 I don't think I let him finish the rest 12:03:33 16 of that sentence. I said, I was told that it was 17 immaterial. Now if you're telling me something 18 different, that was a lie. Are you suggesting 19 that you told -- and you know it. Are you 20 suggesting that you told Dan Zwirn to lie? 12:03:47 21 He said, I wouldn't characterize it 22 that way. I said, Yes, I know you're a lawyer 23 However, did you tell Dan Zwirn to lie to me? He 24 said, Well, before we know all the facts, I 25 represent all the limited partners, not just you. 12:04:04 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299225 Page 142 1 Epstein 2 Q. He told you he represents the limited 3 partners? 4 A. Yes, that he had to make a decision -- 5 he represented the fund, not just me as a limited 12:04:15 6 partner. 7 Q. He confirmed for you that he had 8 advised Mr. Zwirn to characterize what had 9 happened as immaterial; correct? 10 A. Correct. 12:04:31 11 Q. And he told you that they did not know 12 the full extent of what's going on; correct? 13 A. Correct. 14 Q. So is it fair to say that you concluded 15 from that that there might be more going on than 12:04:47 16 they were aware of at the time; correct? 17 A. With respect to accounting 18 irregularities only. 19 Q. Did you ask him that question? 20 A. No, I did not. 12:05:00 21 Q. Did he say that to you, that this is 22 only with respect to accounting irregularities? 23 A. He said the irregularities were 24 immaterial. 25 Q. He used the phrase also for himself? 12:05:09 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299226 Page 143 1 Epstein 2 A. Yes, he did. In fact, I think he 3 responded to the exact number -- my best 4 recollection is a couple hundred thousand dollars 5 in a several billion dollar fund. 12:05:21 6 Q. So when he used the phrase 7 "immaterial," it was in the context of giving you 8 a number; correct? 9 A. It was strictly in the concept -- 10 context of a numerical immateriality, not a legal, 12:05:30 11 ethical, or professional materiality, yes. 12 Q. Did he tell you what, if anything, was 13 being done to determine the full extent of what's 14 going on? 15 A. I don't believe on that call. 12:05:46 16 Q. Did you ever have another call with 17 him? 18 A. No. 19 Q. Anything else you remember from the 20 call that you haven't testified to yet? 12:05:55 21 A. Not sitting here at the moment. 22 Q. What did you do after that call with 23 respect to this? 24 A. I called Glenn Dubin. 25 Q. Again immediately, I take it? 12:06:10 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299227 Page 144 1 Epstein 2 A. Probably -- no, I think I went to 3 lunch. 4 Q. When you got back from lunch, you spoke 5 to Mr. Dubin? 12:06:21 6 A. Yes. 7 Q. What did you say to him and what did he 8 say to you? 9 A. I said, This is ridiculous. I want all 10 my money out. I can't have somebody I distrust 12:06:33 11 manage money for me. He is your guy. Make -- you 12 have to make sure this happens. 13 Q. What did Mr. Dubin say? 14 A. Let me get back to you, I'll find 15 out -- let me get back to you. 12:06:56 16 Q. So you told Mr. Dubin in that call that 17 you distrusted Mr. Zwirn; is that correct? 18 A. I told him that I was uncomfortable 19 with the situation, that I wasn't getting straight 20 answers, and I wanted all my money -- I was 12:07:14 21 focused on getting my money out. 22 Q. And one of the reasons you were 23 focusing on getting your money out is that you 24 were afraid this was material in a way that was 25 not just numerical; correct? 12:07:28 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299228 Page 145 1 Epstein 2 A. No, I decided that I was not being told 3 the full story. It doesn't need to rise to any 4 great level of mis -- of misappropriation. I 5 decided that if I'm not being told the full story 12:07:40 6 and they have $150 million of my money, I want my 7 money. 8 Q. And what did Mr. Dubin say to you? 9 A. Let me -- let me see what I can do, 10 something to the effect of let's -- just relax, 12:07:53 11 calm down, I'll get back to you. 12 Q. What's the next thing you recall? 13 A. The next thing is that he said -- Glenn 14 Dubin called me. 15 Q. When? 12:08:08 16 A. Sometime between October 1st and the 17 15th would be my best -- I'm giving you a series 18 of calls. I can't tell you exactly the right 19 sequence -- to say that he understood that I 20 wanted all my money. He told -- and Dan 12:08:23 21 understood I wanted all my money. 22 However, Dan suggested that I as the 23 initial investor as well as a very large investor, 24 if I demanded all my money, would cause a run on 25 the bank and that other investors might follow and 12:08:40 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299229 Page 146 1 Epstein 2 it would sort of destroy the fund. 3 Q. What else was said? 4 A. He said, I talked to Dan, and he asked 5 if you could reduce your full demand of your 134 12:08:59 6 million to half of that number. I said, Half the 7 number is 67 million. I want more out, on a 8 couple of conditions. I need to know is 9 Highbridge staying in. 10 I understood from Glenn that Highbridge 12:09:23 11 had more than $600 million or more than 500 -- 12 between 500 and I think 750 in, and I said, If 13 you're going to leave Highbridge's money in, I 14 will leave half my money in. 15 He said, Highbridge is staying in. 12:09:39 16 They're calling in an accounting firm to make sure 17 that the assets -- the NAV is as represented. And 18 I spoke to Dan, and we've agreed -- he agreed to 19 have you only take out the $80 million, and I 20 appreciate it. 12:09:58 21 Q. Is this one phone call or more than one 22 phone call with Mr. Dubin? 23 A. It could be more. The conversations 24 with Glenn could be two phone calls. The subject 25 was the same. 12:10:17 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299230 Page 147 1 Epstein 2 Q. When he first mentions a number to you, 3 it's half of how much? 4 A. Of my capital account, my single 5 capital account, of 134 million. 12:10:24 6 Q. So you understood -- 7 A. He was proposing a redemption of 67 8 million. 9 Q. And then you told him that's not 10 sufficient? 12:10:35 11 A. That's correct. I said I would take -- 12 I would take 80. 13 Q. You said you would take 80 right in 14 that phone call? 15 A. That's correct. 12:10:41 16 Q. And 80 representing what you had 17 actually put in? 18 A. No, nothing to do with what I put in. 19 It was more than half, somewhat more than half. 20 It was a round number. 12:10:50 21 Q. And did he tell you in that 22 conversation that that's okay? 23 A. He said he would talk to Dan. 24 Q. And what happened? He called you back? 25 A. He then -- yes, he called me back. He 12:10:58 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299231 Page 148 1 Epstein 2 mode the proposal that I take out only half, 67. 3 I said, Fine, how about 80. He said, Let me see, 4 and he'll get back to me. 5 He called me back with Dan on the phone 12:11:13 6 and said yes, the 80 -- I've told Dan you're doing 7 him a favor, you're leaving half -- more than -- 8 almost half your money in, and you have your 9 redemption request for $80 million. 10 Q. Let's take this one step at a time. 12:11:26 11 A. Sure. 12 Q. He calls you. He asks you take out 13 that Dan's agreed to let you take out half; 14 correct? 15 A. I want to be precise. I wanted all my 12:11:39 16 money. 17 Q. You wanted -- yes. And he said Dan 18 will let you take out half or there's a run on the 19 bank? 20 A. No, he said Dan will ask you as a 12:11:49 21 favor, not to take out -- as a favor, not to take 22 out all your money. Take out half the money 23 because if you request all of it you could trigger 24 a run on the bank. 25 Q. You said the least you would be willing 12:12:03 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299232 Page 149 1 Epstein 2 to take out was $80 million? 3 A. Correct. 4 Q. And you asked him in that phone call 5 whether Highbridge was staying in the fund? 12:12:10 6 A. Correct. 7 Q. And he told you they were? 8 A. Yes. I was concerned that since I 9 would have an additional 53 million-54 million 10 dollars in there that I wanted to make sure that 12:12:19 11 the balance of my money was also safe. 12 Q. And you considered that to be a 13 material condition for your leaving in the balance 14 of your money? 15 A. It was not a condition; it was a 12:12:27 16 decision. 17 Q. A material fact for you to decide to 18 leave in -- 19 A. Yes, sir. 20 Q. -- the rest of your money? 12:12:37 21 A. Yes. 22 Q. And you said to him, If you leave in 23 your money, I will leave in mine? 24 A. I did not say that. 25 (Pause.) 12:13:39 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299233 Page 150 1 Epstein 2 Q. You said that if he left in 3 Highbridge's money you would leave -- strike that. 4 Here is your testimony. 5 A. Sure. 12:13:53 6 Q. I understand from -- that he's saying 7 to you, "I understand from Glenn that Highbridge 8 had more" -- no, this is -- "I understand from 9 Glenn that Highbridge had more than $600 million 10 or more than 500 -- between 500 and I think 750 12:14:04 11 in. And I said if you're going to leave 12 Highbridge's money in, I'll leave half my money 13 in." 14 A. Yes. 15 Q. "And I said if you're going to leave 12:14:08 16 Highbridge's money in, I will leave half my money 17 in." Did you say that? 18 A. I misspoke, then. It was not a 19 condition. I said for my decision process, since 20 Highbridge was leaving some of its money in, I 12:14:19 21 would be more -- I was comfortable leaving my 53 22 additional in. 23 Q. That was an important fact to you? 24 A. Very. 25 Q. After he tells you he's going to get 12:14:34 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299234 Page 151 1 Epstein 2 back to you; correct? 3 A. Which? There's a couple of times. 4 Q. On this phone call -- 5 A. Yes, sir. 12:14:42 6 Q. -- where you said 67 isn't going to do 7 it -- 8 A. Correct. 9 Q. -- he says I'll get back to you. 10 A. Yes. 12:14:47 11 Q. Did you have any conversations before 12 he got back with you about anybody else about this 13 matter? 14 A. Potentially my in-house counsel, just 15 the people who work with me. 12:14:56 16 Q. Do you remember whether you actually 17 had conversations with him? 18 A. I do not recall with specificity, but I 19 probably -- I do not recall. 20 Q. Did you talk to anybody about the 12:15:04 21 lockup at that point? 22 A. No. 23 Q. When was the next time you spoke to 24 Mr. Dubin? 25 A. He called me back with Dan Zwirn on the 12:15:28 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299235 Page 152 1 Epstein 2 phone. 3 Q. How much after this last conversation 4 was that? 5 A. Either -- I don't recall specifically 12:15:36 6 if it was the same day or the next day, but it was 7 very soon afterwards. 8 Q. And he calls you? 9 A. Yes. 10 Q. And he announces, I have Dan on the 12:15:45 11 phone? 12 A. I will get Dan on the phone. 13 Q. And so while you're on the phone, he 14 conferences Dan in? 15 A. Yes. 12:15:53 16 Q. Anybody else on the phone that you knew 17 of other than the three of you? 18 A. Not to the best of my knowledge, no. 19 Q. Tell us the conversation that ensued 20 and who said what. 12:16:03 21 A. Glenn said, Jeffrey, Dan's on the 22 phone, and he's agreed. He thinks -- there's a 23 thank you -- I think Dan said, Thank you for 24 basically reducing your demand to only the $80 25 million, and we're doing what we can to find out 12:16:22 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299236 Page 153 1 Epstein 2 sort of all the details of what's going on. We've 3 called in a firm to make sure that the NAV, so 4 your other $53 million is safe, so you shouldn't 5 be concerned. And if you would like, we can set 12:16:35 6 up a meeting with Harry and you, and we can go 7 through every position we have so that you can 8 make sure it's okay. 9 Q. And that was Glenn Dubin speaking? 10 A. No, Dan Zwirn. You asked me -- they 12:16:53 11 were both on the phone. 12 Q. Yes, I did. I just want to be -- 13 A. Yeah, right. 14 Q. Can we go back to the conversation 15 again, because I may have missed it, and be 12:17:03 16 specific as to who said what. 17 A. Sure. Dan said, Thank you for reducing 18 the demand to $80 million. That will help. It 19 will avoid the run on the bank. And with respect 20 to making sure that you feel comfortable with 12:17:16 21 respect to the balance of your money there, your 22 additional 53 or 54 million dollars, we can set up 23 a meeting if you'd like with Harry Beller, my 24 accountant, and you and Glenn and the accountants 25 to give you some comfort that the balance of the 12:17:32 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299237 Page 154 1 Epstein 2 NAV is represented has been sort of well 3 thought through. 4 Q. Did Mr. Zwirn in that conversation use 5 the phrase "run on the bank"? 12:17:44 6 A. Yes, my best recollection. 7 Q. What did he say about that? 8 A. Thank you for reducing your demand to 9 the $80 million; otherwise there could have been a 10 run -- as you know -- I think as of Glenn -- my 12:17:56 11 best recollection would be as of Glenn mentioned 12 to you, that could have caused a run on the bank. 13 It was sort of a thank-you call, I agreed to the 14 80 million. 15 Q. Did Glenn say anything on the call? 12:18:06 16 A. No. 17 Q. Did Mr. Zwirn say anything else that 18 you recall as you sit here? 19 A. To set up a meeting so my staff can go 20 through with the accounting firm all the positions 12:18:16 21 one by one. 22 Q. Anything else that you recall? 23 A. No, sir. 24 MR. SCHWARTZ: Steve, I have 12:20. 25 MR. SUSMAN: Okay. 12:18:24 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299238 Page 155 1 Epstein 2 THE WITNESS: Thank you, guy. 3 THE VIDEOGRAPHER: Stand by. We are 4 going off the record. The time is 12:17 p.m. 5 This is the end of Tape Number 3. 12:18:34 6 (Time noted: 12:17 p.m.) 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299239 Page 156 1 2 AFTERNOON SESSION 3 (Time noted: 1:51 p.m.) 4 THE VIDEOGRAPHER: We are back on the 5 record. The time is 1:51 p.m. This is the 01:52:45 6 beginning of Tape Number 4. 7 JEFFREY EPSTEIN , 8 resumed as a witness, having been previously 9 sworn by the notary public, was examined and 10 testified further as follows: 11 EXAMINATION CONTINUED BY 12 MR. SCHWARTZ: 13 Q. Mr. Epstein, when we broke off, you had 14 just finished telling us about a conversation on a 15 conference call with Mr. Zwirn and Mr. Dubin. 01:52:58 16 With respect to this matter, what 17 happened next? 18 A. Do you want to bring me back to 19 which call, I'm sorry? 20 Q. I'll read you your testimony. 01:53:13 21 A. Please. Thank you. 22 (Discussion off the record.) 23 Q. Sure. Dan said, Thank you for reducing 24 the demand to 80 million. That will help. It 25 will avoid a run on the bank. And with respect to 01:54:22 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299240 Page 157 1 Epstein 2 making sure that you feel comfortable with respect 3 to the balance of your money there, your 4 additional 53 or 54 million dollars, we can set up 5 a meeting if you like with Harry Beller it came 01:54:31 6 out here as CK -- et cetera, et cetera. 7 Do you remember? That's the 8 conversation we're talking about? 9 A. Yes, sir. 10 Q. That's the conversation with the three 01:54:44 11 of you; correct? 12 A. Yes, sir. 13 Q. What happened next? 14 A. In terms of? 15 Q. In terms of this whole matter, in terms 01:54:48 16 of your investment. 17 A. My best recollection is we then filled 18 out a redemption request for $80 million. I 19 submitted it on November 13th, I believe. 20 Q. Who did you instruct to do that, if 01:55:09 21 anyone? 22 A. I would agree -- most likely Darren 23 Indyke. 24 Q. Do you know if he used a form or he 25 used his own letter? 01:55:25 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299241 Page 158 1 Epstein 2 A. I don't know. 3 Q. When did you send that with respect to 4 the conversation with Mr. Zwirn and Mr. Dubin? 5 A. I personally don't send things. 01:55:36 6 Q. Do you have an understanding as to when 7 it was sent with respect to the timing of the 8 conversation with the three of you? 9 A. It would be shortly thereafter. 10 MR. SCHWARTZ: We're going to mark this 01:56:19 11 as Exhibit 5. 12 (Exhibit 5, letter dated 11/13/06 from 13 FTC and Zwirn, Bates-stamped JE 2000, marked 14 for identification.) 15 (Discussion off the record.) 01:56:31 16 MR. SCHWARTZ: Exhibit 5 is a 17 memorandum on the letterhead of Financial 18 Trust Company and Zwirn dated November 13, 19 2006, with the Bates number JE 2000. 20 Q. Do you recognize that to be your 01:56:46 21 signature? 22 A. I recognize the signature. 23 Q. Is it yours? 24 A. It could be Harry Beller signing for 25 me. 01:56:55 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299242 Page 159 1 Epstein 2 Q. Did you read this before it went? 3 A. I couldn't -- I don't recall. 4 Q. Would Harry Beller be authorized to 5 sign something you hadn't read on your behalf? 01:57:03 6 A. Yes. 7 Q. Is that similar to the way you would 8 have signed it? 9 A. Yes. 10 Q. Harry has developed an ability to mimic 01:57:14 11 your signature? 12 A. Remarkably so. 13 Q. The date of this is November 13, 2006. 14 Does that help you date the conversation in which 15 the three of you -- you, Mr. Dubin, and 01:57:27 16 Mr. Zwirn -- discussed your redemption? 17 A. Yes. 18 Q. How does it help? 19 A. It would be before this. 20 Q. Do you have a ballpark as to how early 01:57:38 21 or before? 22 A. No. It could be as much as -- no. 23 Q. As much as how much? 24 A. Anywhere between October 15th and 25 November 13th. I don't remember the first 01:57:50 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299243 Page 160 1 Epstein 2 telephone call, the telephone call with respect to 3 the 80 million, how long after that was this 4 letter. 5 Q. So the first sentence, the only 01:57:57 6 sentence, above the instructions says, as per our 7 conversation, I hereby instruct you to immediately 8 liquidate an interest in the amount of $80 million 9 of Financial Trust Company's interest in 10 D.B. Zwirn Special Opportunities Fund, L.P., and 01:58:13 11 then it gives wire instructions; correct? 12 A. That's what it says. 13 Q. When were you expecting your position 14 to be liquidated? 15 A. Immediately. 01:58:26 16 Q. And is that what you were asked 17 prior to sending this and the conversation that 18 you had with Mr. Dubin and Mr. Zwirn, did you have 19 any other conversations with Mr. Dubin or 20 Mr. Zwirn about the investment? 01:58:48 21 A. III sorry, you have to repeat the 22 question. 23 Q. Prior to sending this memorandum or 24 having it sent 25 A. Yes. 01:59:06 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299244 Page 161 1 Epstein 2 Q. and after the conversation you had 3 with Mr. Dubin and Mr. Zwirn together, did you 4 have any other conversations with Mr. Dubin or 5 Mr. Zwirn about the investment? 01:59:15 6 A. I don't recall. If you have something 7 to show me that might refresh my recollection, 8 please, feel free. 9 Q. I do feel free to do that. 10 A. Okay. Thank you. 01:59:46 11 Q. Well, did you ever have a conversation 12 in which Mr. Zwirn identified the particular 13 issues as to why Mr. Gruss had been terminated? 14 A. Yes. 15 Q. When was that? 02:00:02 16 A. Sometime in October. 17 Q. So it was before you sent this 18 redemption? 19 A. My best recollection. 20 Q. And was it before the conversation in 02:00:13 21 which you discussed $80 million with Mr. Dubin and 22 Mr. Zwirn? 23 A. I don't recall. 24 Q. What do you recall Mr. Zwirn saying to 25 you in that conversation? 02:00:28 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299245 Page 162 1 Epstein 2 A. There was a conversation -- and I can't 3 pin down exactly when in October; it was I think 4 after October 15th, around the 20th -- that he 5 said that there was monies that were improperly 02:00:40 6 moved from the onshore fund -- from the offshore 7 fund to the onshore fund, that there were more 8 details of what was perceived or presented as an 9 accounting problem, that the onshore fund was -- 10 had borrowed money from the offshore fund and the 02:01:04 11 interest rate wasn't -- was going to be adjusted. 12 Therefore there was a bunch of journal 13 entries that were going to have to be done, and 14 the amount of money, however, was only a couple of 15 basis points of an adjustment. So that was really 02:01:18 16 the issue. 17 Q. That's the only thing he told you? 18 A. That I can recall, yes, sir. 19 Q. Did he tell you that in certain months 20 over a two-year period management fees earned by 02:01:37 21 DBZ Co. were advanced after they had been earned 22 but prior to when they were payable? 23 A. I remember hearing about that. I 24 can't -- I don't recall with specificity whether 25 it was on the telephone call or some time later. 02:01:51 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299246 Page 163 1 Epstein 2 Q. But you do remember him telling you is 3 that on one occasion where fund assets 4 constituting approximately one basis point were 5 used to pay for nonfund expenses? Do you recall 02:02:04 6 him telling you that? 7 A. No. 8 Q. Do you recall him telling you that 9 funds were returned within 45 days? 10 A. No. 02:02:13 11 Q. Do you recall him telling you that the 12 management company paid the interest on those 13 funds? 14 A. No. 15 Q. Excuse me, that interest was paid by -- 02:02:25 16 to the LP by the management company? You don't 17 recall him telling you that? 18 A. No, I have a recollection of him saying 19 that there were, again, accounting errors that 20 someone someone had received too much money, 02:02:38 21 whether it be the management company, and they had 22 made the appropriate journal entries/refund. 23 Q. Do you recall him telling you in words 24 or substance that in the earlier phone call -- 25 that in an earlier phone call in which he told you 02:02:55 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299247 Page 164 1 Epstein 2 about Perry Gruss's departure he had not disclosed 3 the two issues we discussed because they were 4 deemed immaterial and in consultation with our 5 advisors but they now had additional information 02:03:09 6 to tell you? 7 A. No. 8 Q. Do you recall him telling you in any 9 phone call that there was a reporting error of 10 approximately $3 million expense that was 02:03:17 11 misapplied in March $2006 and subsequently 12 reversed in April and May $2006? 13 A. No. 14 Q. Do you recall him ever telling you that 15 there were -- that they had become aware of 02:03:30 16 certain interfund transfers over a 13-month period 17 that should not have occurred? 18 A. That's what I just described. 19 Q. And did he tell you that those 20 transfers were approximately $108 million? 02:03:45 21 A. I don't believe that was the number -- 22 the transfers were over $108 million? 23 Q. Transfers were approximately -- 24 A. No. 25 Q. Excuse me, that the average amount of 02:03:57 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299248 Page 165 1 Epstein 2 the transfers outstanding during the period were 3 approximately $108 million. 4 A. No. 5 Q. Did he tell you that the interest rate 02:04:03 6 of the transfers totaled approximately $8 million? 7 A. No. 8 Q. Did he tell you they had not been 9 properly booked, that they were now being properly 10 booked, and that the LP would be reimbursed with 02:04:16 11 interest by January? 12 A. No. 13 Q. Did he tell you the management company 14 would bear the cost of the interest? 15 A. No. 02:04:24 16 Q. When the November 13th memorandum went 17 out, were you aware that it had been sent? 18 A. Could you repeat -- when it went out, 19 I'm sorry? 20 Q. It's dated November 13. Do you have 02:05:06 21 any reason to believe -- take a look at the second 22 page. You see a fax second page of Exhibit 5. 23 A. Yes. 24 Q. Do you see that it went out on November 25 13 at 6:09 p.m.? 02:05:19 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299249 Page 166 1 Epstein 2 A. Okay. 3 Q. Did you know at or about the time that 4 it went out that it had actually been sent? 5 A. No. 02:05:27 6 Q. Is that something Mr. Beller would have 7 told you: We made the redemption request? 8 A. I would have said, after the telephone 9 call with Dan and Glenn: Make sure I get my 10 money, but that's probably all. 02:05:41 11 Q. And that's all you would have said to 12 Mr. Beller? 13 A. Correct. 14 Q. And he wouldn't have reported to you 15 his efforts to get that money? 02:05:46 16 A. I don't think so. 17 Q. Do you recall at or about this time 18 scheduling any meetings with Mr. Zwirn or 19 attempting to schedule meetings with Mr. Zwirn? 20 A. I remember Mr. Zwirn attempting to 02:06:39 21 schedule a meeting. 22 Q. What do you remember about that? 23 A. As per the last conversation, I think 24 he was attempting to have a follow-up to convince 25 me -- or to let me and Harry Beller with Glenn 02:06:52 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299250 Page 167 1 Epstein 2 Dubin and someone else, to the best of my 3 recollection, review each position one at a time. 4 Q. And did that meeting take place? 5 A. No. 02:07:10 6 Q. Why? 7 A. I felt it was a waste of time, because 8 in fact the securities would have to be -- would 9 take a great deal of time, in any large hedge fund 10 to be valued, that in fact if Highbridge was 02:07:21 11 staying in, eventually that asset -- I agreed the 12 $80 million, he had agreed the $80 million. 13 The net asset value would be what it 14 was, but it would take a while for an accounting 15 firm to go through a complicated $4 billion 02:07:35 16 portfolio. By the time November 22nd or 23rd -- I 17 think he wanted it ten days or two weeks later -- 18 it wouldn't be enough time. So the information 19 would have been a waste of my time. 20 As I told you before, I don't have a 02:07:47 21 lot of patience. 22 Q. Did Mr. Beller ever tell you that on or 23 about November 13, 2006, he had a phone call with 24 Dan Zwirn in which Dan Zwirn explained to him the 25 lockups that applied to your account? 02:08:21 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299251 Page 168 1 Epstein 2 A. My best recollection was -- ask me the 3 question again, sorry? 4 Q. Did Mr. Beller ever tell you that on or 5 about November 13, 2006, he had a phone call with 02:08:35 6 Dan Zwirn in which Dan Zwirn explained to him the 7 lockups that applied to your account? 8 A. Yes. 9 Q. Was anybody else present when 10 Mr. Beller explained this to you? 02:08:51 11 A. Not to my best recollection. 12 Q. Where was this conversation? 13 A. My best guess was in my office. 14 Q. One or more conversations? 15 A. It was in response to me asking if I 02:08:59 16 need to get my additional monies out how long 17 would it take me to get my additional monies out. 18 I want to make sure that since now something's 19 odd, I'm not sure I'm being told the truth, that 20 if I need my additional $54 million how long 02:09:16 21 when can I get it? 22 Q. And what did he tell you? 23 A. He was going to find out. 24 Q. And did he report back to you? 25 A. I don't recall. 02:09:26 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299252 Page 169 1 Epstein 2 Q. Why was it important to you to have a 3 unified -- a single date on which you could 4 withdraw all of your funds, a single lockup date 5 for all your tranches? 02:09:46 6 A. I always -- I don't understand the 7 question. 8 Q. You testified earlier -- 9 A. Yes. 10 Q. that you understood both before and 02:09:54 11 after January 2005 -- 12 A. Yes, sir. 13 Q. -- that there was a single lockup 14 period that applied to all the tranches of your 15 investments with this fund. 02:10:04 16 A. Correct. 17 Q. Why was that important to you? 18 A. In the event that -- again, I -- what 19 was important to me was that my money not be 20 locked up for more than two years and, if problems 02:10:16 21 develop, I'm able to get my money quickly. 22 Q. Wouldn't you have wanted to get 23 whatever part of your money you could quicker at 24 an earlier time if you could? 25 A. That's not the way I think about it. 02:10:29 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299253 Page 170 1 Epstein 2 Q. Going back to the conversations with 3 Mr. Beller, you told him that you wanted him to 4 talk to Zwirn -- 5 A. I didn't say that. 02:10:44 6 Q. -- or you told him you wanted to find 7 out about the remainder of your money, and to the 8 best of your recollection, he never reported back 9 to you about any communications he had? 10 A. Correct. 02:10:54 11 Q. Did he at any time tell you that he had 12 conversations with people -- either with Mr. Zwirn 13 or people at Mr. Zwirn's office about the lockups? 14 A. Yes. 15 Q. When did he tell you that? 02:11:13 16 A. When the -- I believe somewhere after 17 the first of the year of February when they said 18 they weren't going to give me my $80 million back. 19 They had been -- that he was apoplectic that he 20 had been misled by Dan Zwirn that somehow I'm 02:11:33 21 not -- I wasn't -- not only was I not getting my 22 full amount, my initial demand, but now the $80 23 million was now in some type of controversy. 24 Q. Between November 13 and January 1, did 25 you have any conversations with anybody about 02:11:56 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299254 Page 171 1 Epstein 2 getting your $80 million? 3 A. I assumed I was getting my $80 million. 4 MR. SUSMAN: That wasn't the question. 5 THE WITNESS: Sorry. 02:12:06 6 MR. SUSMAN: "Yes" or "no." 7 Q. Did you have any conversations with 8 anybody about getting the $80 million? 9 A. I don't recall. 10 Q. Did you ever say to Harry Beller: 02:12:11 11 Harry, call these guys and find out where the $80 12 million is -- 13 A. I don't think so. 14 Q. -- in words or substance? 15 A. I don't think so. 02:12:21 16 Q. Did you ever say to Glenn Dubin: You 17 guys promised me $80 million, where is it, in 18 words or substance? 19 A. No. 20 Q. You were expecting to be paid 02:12:30 21 immediately; correct? 22 A. No, I was expecting to be paid around 23 March. 24 Q. And why were you expecting to be paid 25 around March? 02:12:37 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299255 Page 172 1 Epstein 2 A. Because I understood that in most 3 things -- most hedge funds take some time to get 4 accountings done properly, and before they pay out 5 a check, I thought I was money good for my $80 02:12:46 6 million and it would happen -- as in every 7 transaction I have ever engaged in, when someone 8 tells me I'm getting paid, I usually get paid. 9 Q. So when the letter used the word 10 "immediately," you understood that to be sometime 02:13:00 11 around March? 12 A. It meant basically sell keep my 13 position -- yes, I'm sorry, yes. 14 MR. SCHWARTZ: Mr. Susman, you are 15 nodding and shaking your head at different 02:13:13 16 times depending on what's going on. I don't 17 know whether Mr. Epstein sees you or not; I 18 imagine he doesn't. But I would ask you do 19 not do it. 20 Q. Do you have any recollection of these 02:14:05 21 meetings concerning the NAV actually being set up 22 and then canceled at your instance? 23 A. I remember seeing a document that 24 reflected such a thing. 25 Q. Do you have any memory independent of a 02:14:19 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299256 Page 173 1 Epstein 2 document? 3 A. No. 4 Q. Did you have any conversations that you 5 recall with Dan Zwirn between the last 02:14:26 6 conversation you relayed to us in which Mr. Dubin 7 was involved and the end of the year? 8 A. The end of that year? 9 Q. The end of 2006. 10 A. Not to the best of my recollection. 02:14:49 11 Q. Do you recall calling Dan Zwirn on 12 November 14? 13 A. No. 14 Q. Do you recall telling Glenn Dubin that 15 you wanted to talk to Dan Zwirn on November 14th, 02:16:03 16 or thereabouts? 17 A. No, I don't recall. 18 Q. Do you recall speaking with Dan Zwirn 19 and asking him to bring certain deliverables to 20 him when he comes to your office? 02:16:16 21 A. What's a deliverable? 22 Q. The answer is no? 23 A. No. 24 Q. Did you ask him to bring anything with 25 him? Did you ever ask him to bring anything to 02:16:26 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299257 Page 174 1 Epstein 2 your office, any statements, any records? 3 A. Me? 4 Q. Yes. 5 A. No. 02:16:34 6 Q. Do you recall wanting to do an 7 assignment of the partnership interests in 8 D.B. Zwirn Special Opportunities Fund from 9 Financial Trust Company to JEEPERS? 10 A. Yes, sir. 02:16:54 11 Q. What was the purpose of that, sir? 12 A. I -- it was to -- D.B. Zwirn had a New 13 York-sourced income that was -- showing New 14 York-sourced income. As my business is a Virgin 15 Islands entity, I wanted to be extra clear that I 02:17:16 16 was not in an active trade or business myself and 17 through Financial Trust Company in New York. So 18 we formed a wholly owned subsidiary called 19 JEEPERS. 20 Q. Which was the wholly owned subsidiary 02:17:31 21 of Financial Trust Company? 22 A. Yes, sir. 23 Q. Financial Trust Company is located 24 where? 25 A. The Virgin Islands, U.S. Virgin 02:17:38 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299258 Page 175 1 Epstein 2 Islands. 3 Q. And the subsidiary was a U.S. Virgin 4 Islands subsidiary? 5 A. It's a qualified sub S, is my best 02:17:44 6 recollection. 7 Q. Can you tell us what professionals 8 advised you with respect to that? 9 A. The accountants. 10 Q. Who were they? 02:17:57 11 A. George Delson & Associates. 12 Q. That's the outside accounting firm you 13 used? 14 A. Yes, sir. 15 Q. Did you discuss with any outside 02:18:03 16 counsel in getting this assignment? 17 A. I don't think so. 18 Q. Was this on the advice of -- 19 A. When you say "outside counsel," my 20 outside counsel? 02:18:14 21 Q. Yes, your outside counsel? 22 A. Not Davis Polk or anybody else who was 23 I think somebody else. The answer is no. 24 Q. Let's start with your outside counsel. 25 A. I don't think so. 02:18:24 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299259 Page 176 1 Epstein 2 Q. Did you discuss with anybody else's 3 outside counsel? 4 A. I think -- my -- no, no. 5 Q. Did you undertake this at -- whose idea 02:18:31 6 was this? 7 A. I don't recall. 8 Q. Had you asked the accountants to look 9 into it, or had they come to you and said, We've 10 looked? 02:18:47 11 A. I don't know which happened first. 12 Q. Who else did you talk to about it other 13 than your accountants? 14 A. I might have spoken I don't recall 15 with specificity, but it wasn't a secret, so there 02:19:12 16 was conversations about it, maybe Glenn Dubin. 17 Q. Was there going to be an immediate tax 18 savings to having done this? 19 A. No, not to the best of my knowledge. 20 Q. So the purpose was prophylactic and not 02:19:30 21 actually to gain a savings? 22 A. That's correct. 23 Q. You viewed this as important to the 24 company to do? 25 A. I viewed it as professional to do. 02:19:42 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299260 Page 177 1 Epstein 2 Q. And you understood that you needed -- 3 that you needed D.B. Zwirn Special Opportunities 4 Fund's consent to be able to do it? 5 A. Again? 02:20:01 6 Q. Did you understand that you needed the 7 fund's consent to be able to do it? 8 A. I don't know specifically. 9 Q. Did you talk to Mr. Dubin about 10 obtaining the fund's consent to do it? 02:20:13 11 A. I believe so. 12 Q. What did you say to Mr. Dubin about 13 that? 14 A. That I wanted to get it done. 15 Q. Did Mr. Dubin tell you you need the 02:20:26 16 consent of the fund to do it? 17 A. I don't recall. 18 Q. You sought the consent of the fund; 19 correct? 20 A. I don't know -- I don't know if -- I 02:20:35 21 believe we sought the consent of the fund. You're 22 asking me if it was required. I don't know if it 23 was required. 24 Q. Did you ask Mr. Dubin to speak to 25 Mr. Zwirn about getting this document? 02:21:00 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299261 Page 178 1 Epstein 2 A. It's possible. 3 Q. Did you in any way indicate to 4 Mr. Dubin that you would be prepared to relinquish 5 your $80 million withdrawal if the fund helped you 02:21:18 6 with that? 7 A. Definitely not. 8 Q. Did the fund provide assistance in 9 doing this for you? 10 A. Assistance, I'm sorry? 02:21:32 11 Q. Do you know if the fund undertook any 12 activity so that you could do this? 13 A. I believe they agreed to the 14 assignment. 15 Q. Is that all you recall? 02:21:39 16 A. Yes. 17 Q. And you recall no conversations with 18 anybody other than your accountants about this, as 19 you sit here today? 20 A. Again, I could have spoken to Glenn 02:21:57 21 saying I wanted to get it done by the end of the 22 year, would be the only thing I could remember. 23 Q. Well, did you ever tell Glenn to make 24 sure that Zwirn wrapped it up? 25 A. It's possible. 02:22:15 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299262 Page 179 1 Epstein 2 Q. Do you recall that? 3 A. It's possible. 4 Q. I didn't ask whether it was possible; I 5 asked whether you recall it. 02:22:21 6 A. Not with specificity, no. 7 Q. Do you recall generally? 8 A. Yes. I wanted to get it done by the 9 end of the year. 10 Q. And do you recall being a little 02:22:29 11 impatient that it wasn't getting done by the end 12 of the year? 13 A. I'm always impatient. 14 Q. Do you recall telling Mr. Dubin to tell 15 them to wrap it up? 02:22:37 16 A. I wanted the transaction done by the 17 end of the year. So it's possible that I said 18 make sure it gets done by the end of the year. 19 Q. And you needed their consent to get it 20 done by the end of the year; correct? 02:22:47 21 A. I don't know. 22 Q. Well, would you have told Mr. Dubin to 23 make sure it gets done by the end of the year if 24 you didn't need their consent to do it? It was 25 your understanding at the time that you needed 02:22:55 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299263 Page 180 1 Epstein 2 their consent; correct? 3 A. I don't know. 4 Q. So you would have told Mr. Dubin to 5 make sure they get it done by the end of the year 02:23:07 6 even though you may not have needed their consent? 7 A. Right. 8 Q. Would you have discussed with your 9 in-house counsel whether their consent was needed? 10 A. I don't recall. 02:23:24 11 Q. Is that the kind of topic you would 12 have taken up with your in-house counsel? 13 A. I don't think so. 14 Q. Would you have discussed with your 15 accountants whether you needed the consent? 02:23:36 16 A. I would just say get it done. 17 Q. And part of getting it done appears to 18 have been getting their consent. Who advised you 19 with respect to that? 20 A. I would say get it done, and I assume 02:23:46 21 it gets done. 22 Q. Well -- 23 A. You're asking me... 24 Q. When you put in a new telephone line in 25 your office, you don't call Mr. Dubin and say get 02:23:57 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299264 Page 181 1 Epstein 2 it done, do you? 3 A. Mr. Dubin? 4 Q. Yes, Mr. Dubin. 5 A. No. 02:24:03 6 Q. You called Mr. Dubin here, and you said 7 get it done with Zwirn; correct? 8 A. You're going to raise your voice now? 9 Sorry. 10 Q. Are you going to answer the question, 02:24:12 11 sir? 12 A. Repeat the question? 13 You called Mr. Dubin and you said get 14 it done with Zwirn; correct? 15 MR. SUSMAN: If you know. 02:24:21 16 A. No. 17 Q. What did you say to him? 18 A. My best recollection was I said 19 something about let's see if we can wrap it up. 20 Q. And when you buy a new telephone 02:24:29 21 system, you don't ask him to wrap it up; correct? 22 A. Correct. 23 Q. You felt you needed Zwirn's approval; 24 correct? 25 A. No. 02:24:37 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299265 Page 182 1 Epstein 2 Q. Just wrap it up, ambiguous, doesn't 3 matter who you wrap it up with, is that what 4 does "wrap it up" mean? 5 A. Try to get it finished. 02:24:46 6 Q. With whom? 7 A. Zwirn. 8 Q. In fact, it was finished; right? 9 A. I believe so. 10 MR. SCHWARTZ: Exhibit 6, please. 02:25:18 11 (Exhibit 6, assignment, marked for 12 identification.) 13 MR. SCHWARTZ: How much time have we 14 been on the record since lunch? 15 THE VIDEOGRAPHER: Thirty-three 02:25:26 16 minutes. 17 Q. Do you recognize this to be the 18 assignment? 19 A. That's what it says. 20 Q. And it is in fact consented to by 02:25:44 21 D.B. Zwirn Partners and Zwirn Holding 22 D.B. Zwirn Partners by the holding company? 23 A. Yes. 24 Q. And it was executed prior to the end of 25 the year; correct? 02:26:05 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299266 Page 183 1 Epstein 2 A. Correct. 3 Q. Do you have any recollection of having 4 spoken to Mr. Dubin on the subject of the 5 withdrawal of your accountant or part of your 02:26:46 6 accountant between the time of the three-way call 7 and the end of the year? 8 A. I have no specific recollection. 9 Q. In fact, you have no recollection of 10 having any conversation in that time period with 02:27:07 11 anybody other than telling Mr. Beller to get it -- 12 to effectuate the withdrawal; correct? 13 A. Correct. 14 Q. So let's switch years. Let's focus on 15 January 2007. Did you have any telephone calls 02:27:25 16 with Mr. Dubin, or meetings with Mr. Dubin, in 17 January 2007 concerning the issue of the 18 withdrawal of part of your capital account or all 19 of your capital account? 20 A. Not to the best of my recollection. 02:27:45 21 Q. How about internally, conversations 22 with anybody? 23 A. I don't recall. 24 Q. How about with Mr. Zwirn? 25 A. I don't recall. 02:27:58 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299267 Page 184 1 Epstein 2 Q. Did you have any conversations in 3 January 2007 with Mr. Zwirn at all that you 4 recall? 5 A. No. 02:28:03 6 Q. Did you have any conversations with 7 anybody at Zwirn's fund in January 2007 that you 8 recall? 9 A. Not that I can recall here. 10 Q. To your knowledge did Mr. Beller have 02:28:22 11 any conversations with anybody at Mr. Zwirn's fund 12 in January 2007? 13 A. No. 14 Q. Are you aware that he had any 15 conversations concerning your capital account 02:28:37 16 balance in that time period with people at the 17 Zwirn fund? 18 A. No. 19 Q. Did you learn in January 2007 that 20 Mr. Dubin had informed the Zwirn -- Mr. Zwirn that 02:29:10 21 that fund was no longer to manage any Highbridge 22 accounts? 23 A. No. 24 Q. Did you ever learn that? 25 A. Yes. 02:29:31 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299268 Page 185 1 Epstein 2 Q. When did you first learn that? 3 A. A couple months ago. 4 Q. How did you learn that? 5 A. I think on document review. 02:29:34 6 Q. Document review from this case? 7 A. Yes, sir. 8 Q. Other than with your counsel, have you 9 had any conversations about that with anyone? 10 A. Not to the best of my recollection. 02:29:48 11 Q. Have you spoken to Mr. Dubin since that 12 time of learning that? 13 A. Yes. 14 Q. Did you mention it to him? 15 A. No. 02:29:58 16 Q. How did you react when you learned it? 17 A. I was surprised. 18 Q. Were you angry? 19 A. No, I was surprised. 20 Q. Why were you surprised? 02:30:14 21 A. Because I didn't know about it. 22 Q. He in fact told you he was going to 23 keep his money in? 24 A. That's correct. 25 Q. And about two and a half months or 02:30:24 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299269 Page 186 1 Epstein 2 three months after he told you that, he didn't; 3 correct? 4 A. I don't know that for a fact. 5 Q. You don't know that for a fact? Is 02:30:32 6 that what you said? 7 A. Yes. 8 Q. Well, if he didn't, he would have 9 misled you; correct? 10 A. You have to repeat the full question 02:30:40 11 for me, please. 12 Q. If he had made a decision after telling 13 you he was going to keep his money in to pull his 14 money out, that is something you would have 15 expected him to tell you; isn't that correct? 02:30:56 16 A. Yes. 17 Q. And if he made that decision prior to 18 telling you he was going to keep his money in, he 19 would have lied to you; correct? 20 A. No. 02:31:12 21 Q. That would not have been a lie? 22 A. No. 23 Q. Why is that? 24 A. If you'd repeat the question, the 25 answer is no. 02:31:24 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299270 Page 187 1 Epstein 2 Q. If he had made the decision prior to 3 telling you he was going to keep his money in, 4 that he was not going to keep his money in, when 5 he told you he was going to keep his money in, 02:31:33 6 that would have been a lie; correct? 7 A. Your question's confusing me. I'm 8 sorry. 9 Q. Did you have a conversation with 10 Mr. Zwirn at some time approximately -- Mr. Dubin 02:31:51 11 sometime in approximately October of 2006 -- 12 A. Correct. 13 Q. in which you asked him whether 14 Highbridge is going to keep its money in; correct? 15 A. Correct. 02:32:01 16 Q. And he said yes? 17 A. Correct. 18 Q. If in fact he knew at that time that it 19 was not going to keep its money in, that would 20 have been a lie; correct? 02:32:09 21 A. That's correct. 22 Q. Did you ask anybody in the January 2007 23 time frame, either in-house or at Zwirn or 24 Mr. Dubin, when am I getting my 30 -- my $80 25 million? 02:32:37 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299271 Page 188 1 Epstein 2 A. No. 3 Q. When was the next time the $80 million 4 came up? 5 A. The best of my recollection is when I 02:32:41 6 was told in February that somehow the 80 million 7 was not -- the 80 million was not going to be 8 paid. 9 Q. And you were told that by Mr. Beller? 10 A. Yes. 02:32:54 11 Q. I know that I asked you about this 12 before, but can you tell us again, so we don't 13 have to go back and look, what did Mr. Beller tell 14 you about that? 15 A. Do you want to go back to what you 02:33:06 16 asked me before so she can read it back? 17 Q. It's going to take a lot of energy to 18 find it. We don't have a search mechanism. 19 A. They said that they -- Zwirn had made 20 some representation that I wasn't even going to 02:33:19 21 get my $80 million now. 22 Q. Did he give you any more specifics 23 about that? 24 A. No, not to the best of my recollection. 25 Q. Did he tell you it was Dan Zwirn who 02:33:34 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299272 Page 189 1 Epstein 2 made the representation to him? 3 A. No. 4 Q. Did he tell you he had received a 5 redemption schedule? 02:33:40 6 A. No. 7 Q. Are you aware that anybody at your shop 8 ever received a redemption schedule, from Zwirn? 9 A. Yes. 10 Q. When? 02:33:55 11 A. Repeat the question, I'm sorry. 12 Q. Prior to February -- prior to -- prior 13 to your demand to withdraw all your funds in 14 February 2007, were you aware that anybody at your 15 shop had ever received a redemption schedule? 02:34:11 16 A. No. 17 Q. When Mr. Beller had this conversation 18 with you in approximately February, what did you 19 do next? 20 A. I said get -- demand all the money out 02:34:27 21 right now. 22 Q. Did you call Mr. Dubin? 23 A. I believe so. 24 Q. What did you say to Mr. Dubin? 25 A. Something to the effect that this is 02:34:41 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299273 Page 190 1 Epstein 2 crazy, I want all my money, again. 3 Q. What did Mr. Dubin say to you? 4 A. Let me check into it. 5 Q. What happened next? 02:34:58 6 A. I was told that they weren't going to 7 honor the $80 million request. 8 Q. You were told that by whom? 9 A. I believe again by Harry first. 10 Q. Anyone else after Harry? 02:35:21 11 A. Glenn Dubin. 12 Q. What did Mr. Dubin say to you? 13 A. I think I reviewed that conversation. 14 Q. No. 15 A. He said Dan Zwirn is a lying scumbag. 02:35:28 16 Q. That's the conversation? 17 A. That's the -- that's the first nice 18 phraseology, yes, that's the first time I heard. 19 Q. That's the conversation you told us 20 about this morning? 02:35:39 21 A. Yes. 22 Q. And that conversation came before you 23 actually made the request to withdraw your funds, 24 all your funds? 25 A. No, I told you when Harry told me about 02:35:45 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299274 Page 191 1 Epstein 2 the 80 million was going to be not honored, I 3 immediately demanded all my money. 4 Q. Then you had a conversation after the 5 demand was made with Mr. Dubin which you related 02:35:54 6 to us this morning? 7 A. Correct. 8 Q. Conversations with anybody else? 9 A. Not that I can recall. 10 Q. Do you recall calling Dan Zwirn around 02:36:32 11 February 13th, 2007? 12 A. Not specifically. 13 Q. Do you recall trying to reach Dan Zwirn 14 by phone in February 2007? 15 A. It's possible. 02:36:47 16 Q. Why were you calling him? 17 A. My guess is III been told he wasn't 18 going to pay me even my $80 million. 19 Q. What were you planning to tell him? 20 A. I was going to be very forceful and say 02:37:01 21 I want all my money immediately. 22 Q. Why did you give up the effort to reach 23 him? 24 A. I probably talked to Glenn, but I don't 25 remember specifically. I believe Dan Zwirn was 02:37:17 VERITEXT REPORTING COMPANY 212-267-6868 516-608-2400 EFTA00299275 Page 192 1 Epstein 2 ducking my telephone calls, that's correct. He 3 wasn't returning my phone calls. 4 Q. Did you speak to Mr. Dubin about that? 5 A. Yes, I did. 02:37:40 6 Q. What did you tell him? 7 A. That Dan Zwirn was ducking my phone 8 calls, that they had not even agreed -- they had 9 decided not to pay me my $80 million. I want all 10 my money, again. 02:37:54 11 MR. SCHWARTZ: Mark a document as 12 Exhibit 6 -- 7. 13 (Exhibit 7, e-mails, marked for 14 identification.) 15 Q. I'm showing you an e-mail chain, the 02:39:11 16 top e-mail of which is an e-mail from Harry Beller 17 to you dated February 13, 2007. 18 A. Uh-huh. 19 Q. And he's forwarding to you an e-mail 20 that he received from Cara Howe at D.B. Zwirn & 02:39:27 21 Company. Do you see that? 22 A. Yes, sir. 23 Q. Do you remember receiving this? 24 A. No, sir. 25 Q. Do you know what Mr. Beller was 02:39:51 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299276 Page 193 1 Epstein 2 referring to when he says, This looks very 3 suspicious? 4 A. As I said, I believe I was calling Dan 5 Zwirn. I think Harry was calling Dan Zwirn. No 02:40:00 6 one was returning telephone calls. I think he got 7 this e-mail in response to a bunch of unreturned 8 telephone calls, basically saying don't -- don't 9 reach out for Dan Zwirn anymore, speak to somebody 10 else, call David Lee. 02:40:19 11 Q. So you believe that this e-mail was 12 sent because you wanted to talk to Dan and they 13 were trying to deflect you to David Lee? 14 A. It wasn't me. I think this was Harry. 15 Q. Harry. When you got that, is that what 02:40:37 16 you believed? 17 A. I didn't get it. 18 Q. It was forwarded to you; right? Are 19 you jeeproject@yahoo.com? 20 A. Yes. He only says this looks 02:40:49 21 suspicious. I don't know if the attachments came 22 with it. 23 Q. Did you speak to him about it? 24 A. "Him" being who? 25 Q. Harry Beller. 02:41:00 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299277 Page 194 1 Epstein 2 A. Probably. 3 Q. Do you have a recollection of it? 4 A. No. 5 Q. Let me show you another e-mail. 02:41:10 6 (Exhibit 8, e-mails with attachment, 7 marked for identification.) 8 Q. Exhibit 8 is an e-mail chain forwarded 9 to you by Glenn Dubin on February 14th; is that 10 correct? 02:42:11 11 A. That's what it says, yes. 12 Q. And it has, in fact, an attachment to 13 it; correct? It notes that on the front page. It 14 says right at the top: attachments. 15 A. Yes, sir. 02:42:23 16 Q. And there is an attachment to this 17 e-mail; correct? 18 A. Yes. 19 Q. And I note that this is produced by 20 Highbridge Capital and that the Bates numbers are 02:42:35 21 consecutive between the e-mail and the attachment. 22 A. Okay. 23 Q. Do you remember receiving this? 24 A. No. This no. The entire document? 25 There's a bunch of different e-mails in here so... 02:42:58 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299278 Page 195 1 Epstein 2 Q. Do you remember receiving an e-mail 3 from Glenn Dubin on or about February 14th, 2007, 4 attaching a redemption schedule for your 5 investment? 02:43:12 6 A. No. 7 Q. Let me show you Exhibit 9. 8 (Exhibit 9, e-mails, marked for 9 identification.) 10 Q. This is an e-mail chain with the top 02:44:11 11 e-mail being an e-mail from Mr. Dubin to you dated 12 February 14th at 11:29 a.m. Do you see that? 13 A. Yes, sir. 14 Q. And do you see that below that, if you 15 go two e-mails down, is the chain that was in 02:44:23 16 Exhibit 8 that Mr. Dubin forwarded you. It starts 17 in the middle of the first page with "FYI." It's 18 the same chain that Exhibit 8 is. It may be 19 easier, Mr. Epstein, if you compare Exhibit 8 to 20 Exhibit 9. 02:44:43 21 A. Okay. 22 Q. You'll see the text of Exhibit 8 starts 23 from an e-mail from Mr. Dubin to you which is the 24 third e-mail down on Exhibit 9? 25 A. Is this the one that says, Note we have 02:44:55 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299279 Page 196 1 Epstein 2 made him $47 million in gains and now 50 3 consecutive up months? 4 Q. Go up two e-mails. 5 A. Yes. 02:45:05 6 Q. Do you see where it says FYI? 7 A. Yes. 8 Q. From that e-mail down is Exhibit 8; 9 correct? 10 A. Yes. 02:45:11 11 Q. I just want to be clear for the record. 12 A. Got it. 13 Q. So this is your reply to Exhibit 8; 14 right? It starts with your reply to Exhibit 8, 15 the next e-mail up? There's an e-mail from 02:45:19 16 Epstein to Dubin -- 17 THE WITNESS: Right here. 18 Q. There's an e-mail from Epstein to Dubin 19 dated February 14th, 2007, 11:42 a.m., the second 20 e-mail on the page; right? 02:45:32 21 A. Yes. 22 Q. That appears to be your reply to 23 Mr. Dubin, having forwarded you the chain in 24 Exhibit 8; correct? 25 A. Correct. 02:45:37 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299280 Page 197 1 Epstein 2 Q. Do you recall replying -- 3 MR. SUSMAN: There's no exhibit 4 there's no attachment to Exhibit 9. I think 5 you're suggesting that somehow he saw this 02:45:46 6 attachment. It's not attached to Exhibit 9. 7 MR. SCHWARTZ: It is attached to 8 Exhibit 8. 9 MR. SUSMAN: I understand that. 10 MR. SCHWARTZ: Sometimes when you -- 02:45:55 11 MR. SUSMAN: He's already talked about 12 Exhibit 8. 13 MR. ARFFA: The last page of Exhibit 9 14 it references attachments, whether or not it 15 was actually attached. 02:46:03 16 MR. SCHWARTZ: And when you reply to an 17 e-mail with -- when you reply to an e-mail 18 with attachments, the attachments don't go. 19 When they're forwarded, they do go. That's 20 how Outlook and most systems work. 02:46:13 21 A. Okay. 22 Q. There's no sir, just go back to 23 Exhibit 8 so we can be clear. On Exhibit 8 the 24 e-mail that -- do you have Exhibit 8 in front of 25 you? 02:46:30 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299281 Page 198 1 Epstein 2 A. Yes, sir, yes, sir. 3 Q. The e-mail Mr. Dubin sends to you 4 actually has the word attachments: financial 5 trust.11.13.06.xls; correct? 02:46:37 6 A. I see that, yes. 7 Q. And the same e-mail which is replied to 8 in Exhibit 9 does not have those words, 9 attachments, et cetera; correct? 10 A. Correct. 02:46:54 11 Q. Do you recall sending this e-mail to 12 Mr. Dubin? 13 A. Yes. 14 Q. Do you now recall receiving the prior 15 e-mail from Mr. Dubin? 02:47:04 16 A. No, no. 17 Q. What do you recall? 18 A. I recall getting a statement that at 19 this time that Dan Zwirn was trying to say that he 20 had sent things months ago, and I said the e-mail 02:47:22 21 to which he refers was -- this was supposedly sent 22 months ago. 23 What I am in essence saying is Dan 24 Zwirn once again is full of shit, many conflicting 25 conversations, and I want to all my money. That's 02:47:36 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299282 Page 199 1 Epstein 2 what this is saying. 3 Q. Do you know what e-mail 4 A. The e-mail to which he refers is the 5 concept was supposedly sent months ago. There 02:47:46 6 were many conflicting conversations since then. 7 After yesterday -- not necessarily with me. When 8 I was promised to get a firm answer, we heard 9 nothing except the e-mail we received this morning 10 copied to you. 02:47:58 11 Q. Mr. Dubin said 12 A. He said, Fine, take all your money out. 13 You have to feel comfortable. Obviously you do 14 not. Take all your -- I think what Mr. Dubin says 15 here, I understand, you should put in a redemption 02:48:21 16 and move on. You need to feel comfortable with 17 who's managing your money. I understand -- it 18 says, I want out. 19 Q. Mr. Dubin doesn't refer to any terms of 20 the redemption; correct? 02:48:35 21 A. I beg your pardon? 22 Q. He doesn't refer to what the terms of 23 the redemption would be -- correct? -- it just 24 says put in a redemption and move on? 25 A. Yes. 02:48:44 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299283 Page 200 1 Epstein 2 Q. In your e-mail where you refer to 3 conflicting conversations, what are the 4 conversations you're talking about? 5 A. How much -- I believe this was how much 02:49:06 6 money he in fact made me in a period of time. 7 Q. And who had those conversations been 8 among? 9 A. My best recollection was that the -- 10 when they talked about having a net asset value 02:49:18 11 made solid, there was different numbers between 12 127 and 134. I think -- what I remember hearing 13 is the numbers consistently changed month by 14 month. 15 Q. Were you involved in any of those 02:49:32 16 conversations? 17 A. I was told that. 18 Q. By whom? 19 A. Harry. 20 Q. By anybody else? 02:49:38 21 A. No, sir. 22 Q. Were you ever told that any you were 23 not directly involved in these conversations? 24 A. No. 25 Q. This was all Mr. Beller reporting to 02:49:45 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299284 Page 201 1 Epstein 2 you? 3 A. Correct. 4 Q. And the reason that you are telling 5 Mr. Dubin that you want out is because you can't 02:50:10 6 get a firm answer on this issue; isn't that 7 correct? That's what the e-mail says; correct? 8 A. What I was suggesting, again, is that I 9 had enough of Dan Zwirn and his firm bullshitting 10 us, lying to us, misleading us. I want all my 02:50:26 11 money out. 12 Q. What you say, This is why I want out. 13 A. Correct. 14 Q. The e-mail to which he refers was sent 15 months ago. There were many conflicting 02:50:36 16 conversations since then. After yesterday when I 17 was promised to get a firm answer, we heard 18 nothing except the e-mail received only this 19 morning, copied to you; correct? That's what it 20 says? 02:50:47 21 A. Yes. 22 Q. And it makes reference to no other 23 issue about getting out is that correct? 24 except what's there? 25 A. You have to repeat the question, I'm 02:50:58 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299285 Page 202 1 Epstein 2 sorry. 3 Q. It states a reason for wanting to get 4 out and states nothing further; correct? 5 A. No. 02:51:07 6 Q. It does state something further? 7 A. Yes. 8 Q. What does it state further? 9 A. It says there were many conflicting 10 conversations since then. 02:51:19 11 Q. And those were the conversations about 12 the valuation; correct? 13 A. It was the valuation, and my 14 recollection is that it goes back to when I can 15 get my additional $53 million out. Sorry. 02:51:25 16 Q. You testified a moment ago that the 17 conflicting conversations were about the 18 valuation. Are you changing that testimony? 19 A. Yes, sir. You just refreshed my 20 recollection. Thank you. 02:51:40 21 Q. What was it that I said that refreshed 22 your recollection? 23 A. Because there were many conflicting 24 statements, and the concept was I wanted to know 25 when I could get the rest of my money out, all 02:51:48 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299286 Page 203 1 Epstein 2 along, and then in fact I think this refreshed my 3 recollection that they were saying you can't get 4 your $80 million and there's a crazy redemption 5 schedule for the rest. 02:52:00 6 Q. What did I say that refreshed your 7 recollection? 8 A. I don't know specifically. 9 Q. But I refreshed your recollection? 10 A. But thank you. 02:52:06 11 Q. And the $80 million isn't referred to 12 anywhere here; is that correct? 13 A. That's correct. It says total, I want 14 all of it out. It says I want out, which is all 15 of it. 02:52:18 16 Q. There is nothing in the text of the 17 e-mail that refers to $80 million; is that 18 correct? 19 A. That's correct, that's correct. 20 MR. SCHWARTZ: This would be a good 02:52:31 21 time for a break. 22 THE VIDEOGRAPHER: Stand by. We are 23 going off the record. The time is 2:51 p.m. 24 This is the end of Tape 4. 25 (Recess taken from 2:51 to 3:04.) 02:52:51 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299287 Page 204 1 Epstein 2 THE VIDEOGRAPHER: We are back on the 3 record. The time is 3:04 p.m. This is the 4 beginning of Tape Number 5. 5 Q. After the last e-mail chain that I 03:06:05 6 showed you, did you have any conversations with 7 Mr. Dubin before sending your notice of 8 withdrawal? 9 A. I don't recall. 10 Q. Up to February 14th -- up to February 03:06:39 11 14th, 2007, other than the conversations that 12 you've testified about with Mr. Zwirn, do you 13 recall any other conversations with him? 14 A. Through the date -- there was some 15 conversation, I believe, with respect to George 03:06:58 16 Mitchell, but I'm not sure if it was in that 17 period of time. 18 Q. What was that conversation? 19 A. It was a conversation about him hiring 20 Senator Mitchell. 03:07:08 21 Q. You just don't recall when it was? 22 A. No, sir. 23 Q. Other than that possible conversation 24 about Senator Mitchell? 25 A. No. 03:07:16 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299288 Page 205 1 Epstein 2 Q. No others? 3 A. No. 4 Q. Are there any other conversations with 5 Mr. Dubin about the funds -- about the -- about 03:07:19 6 this fund prior to February 14th, 2007, that you 7 recall? 8 A. Not that I recall. 9 MR. SCHWARTZ: Make this Exhibit 10, 10 please. 03:07:46 11 (Exhibit 10, letter, marked for 12 identification.) 13 Q. Do you recognize Exhibit 10? 14 (Pause.) 15 A. I've read it. 03:08:28 16 Q. Do you recognize it? 17 A. No, sir. 18 Q. Did you sign it? 19 A. It appears so. 20 Q. Could that be Mr. Beller signing for 03:08:37 21 you? 22 A. It could be. 23 Q. If you signed it, would you have read 24 it? 25 A. Not necessarily. 03:08:47 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299289 Page 206 1 Epstein 2 Q. Do you know who prepared it? 3 A. No. 4 Q. Did you have any conversations with Dan 5 Zwirn after this letter was sent? 03:09:03 6 A. Not that I recall. With regard to the 7 investments? 8 Q. With regard to the investments. 9 A. Yes, not that I recall. 10 Q. Any conversations about anything else 03:09:10 11 with him? 12 A. I'm not sure of the time frame that 13 Senator Mitchell called, which is in the back of 14 my mind, but I don't have a specific recollection. 15 Q. Did you ever have a conversation with 03:09:28 16 you, Dan Zwirn, and Mr. Dubin's wife? 17 A. I don't remember -- I don't recall 18 that. 19 Q. You don't recall that sometime in early 20 2007 the three of you had a conference call? 03:09:43 21 A. No. No. 22 Q. The answer is no? I'm sorry. 23 A. No. 24 Q. Have you ever given testimony before 25 the Securities and Exchange Commission? 03:10:03 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299290 Page 207 1 Epstein 2 A. Yes. 3 Q. Relating to what? 4 A. I think it was in 1979 with respect to 5 option trading in St. Joe Minerals. 03:10:20 6 Q. Have you ever given testimony at any 7 other time to the Securities and Exchange 8 Commission? 9 A. Not that I recall. 10 Q. Were you subpoenaed by the Securities 03:10:38 11 and Exchange Commission in connection with your 12 investments -- in connection with this fund? 13 A. No, sir. 14 Q. Following the February 14th letter 15 withdrawing -- withdrawal of your capital account, 03:11:09 16 did you have any conversations with Mr. Dubin 17 about this matter? 18 A. Yes. 19 Q. When? You had the conversation you 20 testified to earlier this morning; correct? 03:11:27 21 A. Yes. 22 Q. Other than that conversation. 23 A. Yes. 24 Q. How many? 25 A. Can you repeat the question? 03:11:36 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299291 Page 208 1 Epstein 2 Q. How many? 3 A. That's not a question. 4 Q. Conversations with Mr. Dubin other than 5 the one you testified to this morning did you have 03:11:49 6 with him concerning this matter. 7 A. Fifteen or twenty. 8 Q. Over what period of time? 9 A. Two years. 10 Q. Do you recall any of them specifically? 03:12:09 11 A. Yes. 12 Q. What's the first one you recall 13 specifically? 14 A. I couldn't tell you it was the first 15 call. The time order isn't consistent. Glenn 03:12:24 16 Dubin said that Dan Zwirn was a liar, a cheat, 17 it's amazing that the SEC found him -- found no 18 substantial violation, he must done a very good 19 job. Sorry, that he misled everybody, he was a 20 micromanager, that even the idea of the airplane 03:12:58 21 expenses, nothing Dan Zwirn had told him turned 22 out to be accurate. 23 Q. Was that one conversation? 24 A. No, it was many conversations, sorry. 25 Q. This was many conversations? 03:13:17 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299292 Page 209 1 Epstein 2 A. I'm conglomerating many conversations 3 over a period of time. 4 Q. The conversation with him about the SEC 5 not finding anything substantial, is what you 03:13:24 6 said, when was that? 7 A. That was recently, after the SEC gave 8 Dan a pass. 9 Q. He called you up? 10 A. No. 03:13:34 11 Q. You called him up? 12 A. It was on a telephone call. I don't 13 know who called. 14 Q. Who raised the issue? 15 A. I did. 03:13:41 16 Q. What did you say? 17 A. How is it possible that the SEC didn't 18 call me and ask me to testify against this 19 scumbag. That's what I said. 20 Q. And in response to that he said what 03:13:51 21 you said he said, that it's amazing that they 22 didn't find a substantial violation? 23 A. And that they didn't call you. 24 Q. Did they call him? 25 A. I don't know. 03:14:01 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299293 Page 210 1 Epstein 2 Q. Did you ask him? 3 A. No. 4 Q. Are you aware whether they found an 5 insubstantial violation that Mr. Zwirn had 03:14:08 6 committed? 7 A. No. 8 Q. Are you aware that they found any 9 violation that Mr. Zwirn committed? 10 A. No. 03:14:15 11 Q. In fact, are you aware that he didn't 12 commit a violation? 13 A. No. 14 Q. Any other conversations you remember 15 with Mr. Dubin about this matter? 03:14:24 16 A. They all basically came down to the 17 same -- again, conglomerate a bunch of 18 conversations, it was all the fact that Dan Zwirn 19 was a crook. 20 Q. Did you ever have a conversation with 03:14:36 21 Perry Gruss? 22 A. Yes. 23 Q. When was that? 24 A. In the past two months. 25 Q. Who was present? 03:14:49 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299294 Page 211 1 Epstein 2 A. I believe just Mr. Gruss and me. 3 Q. Who set up the meeting? 4 A. I did. 5 Q. How? 03:15:05 6 A. I called him. 7 Q. And asked if he would meet with you? 8 A. Yes. 9 Q. Where did you meet? 10 A. My house. 03:15:12 11 Q. In New York? 12 A. Yes, sir. 13 Q. How long was the meeting? 14 A. Five minutes. 15 Q. What did you say to him and what did he 03:15:18 16 say to you? 17 A. I said tell me about Dan Zwirn. He 18 said, Dan Zwirn is a very bad guy. He was a 19 micromanager. The fund has monstrous liquidity 20 problems. There was never going to be -- even 03:15:42 21 though he told you there was going to be a run on 22 the bank, that was not true. 23 The fact is that the fund had no money, 24 it had no liquidity, that it had been borrowing 25 from the offshore fund because in fact it deferred 03:15:56 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299295 Page 212 1 Epstein 2 fees to benefit Zwirn's personal tax position, 3 that the -- he thought that the SEC might file an 4 investigation against him, Perry Gruss, sometime 5 in the future. 03:16:18 6 That Mr. Kahn had showed up on most of 7 the e-mail with respect to the airplane which 8 Schulte Roth had been -- I believe it was, Schulte 9 Roth had been called in in May of '06, my best 10 recollection, sir, to deal with the issues of the 03:16:38 11 airplane, which was never disclosed to me; that -- 12 Q. "You" "me" meaning you? 13 A. Yes, sir. 14 That I -- that there had been a lawsuit 15 I believe he told me he had filed against Zwirn, 03:16:59 16 but I'm not sure of that; that as everyone else 17 knew that Dan was a micromanager; that he -- 18 though the SEC found he didn't know anything about 19 the airplane, that was his position, it was 20 ridiculous. 03:17:19 21 Dan Zwirn was the only one who could 22 make investments. Dan Zwirn ran the company very 23 tightly; that Dan Zwirn never had any real cash; 24 that after -- after the conversations with me with 25 respect to my redemption, it became even -- he 03:17:42 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299296 Page 213 1 Epstein 2 wasn't there. But most of the blame was going to 3 be put on him, something like that. 4 Q. Anything else you remember? 5 A. No. 03:17:58 6 Q. In five minutes were you sitting down? 7 Were you standing up? Did you actually invite him 8 in? 9 A. I have very little patience. I invited 10 him in. 03:18:09 11 Q. That's already been established. 12 A. I sat down. 13 Q. You sat down? 14 A. Yes. 15 Q. And he made a speech and then left? 03:18:13 16 A. Yes. 17 Q. Did you ask him any questions? 18 A. Not very many. 19 Q. So it was just tell me about Dan Zwirn, 20 and this is what he said? 03:18:21 21 A. That's correct. 22 Q. Did he tell you of any instance in 23 which he communicated with Dan Zwirn about 24 anything that he was doing that was improper? 25 A. No. 03:18:31 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299297 Page 214 1 Epstein 2 Q. He told you that Dan Zwirn knew about 3 the airplane in the spring of 2006 because Schulte 4 Roth was called in to look at it then? 5 A. That's my best recollection. 03:18:48 6 Q. Did he tell you that he had ever 7 communicated to Dan Zwirn anything about the 8 airplane prior to the spring of 2006? 9 A. As I said before, he told me that Dan 10 Zwirn was a micromanager, he knew everything, and 03:19:00 11 Mr. Kahn was the person in fact who got fired 12 but -- over the airplane. And it was never -- it 13 was never disclosed to me that in fact there was 14 no liquidity in the fund. Sorry. 15 Q. Did he ever tell you -- two things are 03:19:15 16 established: Some people think that Dan Zwirn is 17 a micromanager, and you're impatient. 18 A. Correct. 19 Q. My question to you is did he ever tell 20 you that he communicated anything to Dan Zwirn 03:19:28 21 about the airplane prior to the spring of 2006 22 A. No. 23 MR. SIFFERT: Or even in 2006. 24 Q. Or anything after the spring of -- did 25 he ever tell you he communicated anything to Dan 03:19:53 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299298 Page 215 1 Epstein 2 Zwirn about wrongdoing after the spring of 2006 3 face-to-face? 4 A. No. 5 Q. Do you know who Ron Tutor is? 03:20:11 6 A. No. 7 MR. SUSMAN: How do you spell that? 8 MR. SCHWARTZ: T-U-D-O-R. I'll check 9 it. T-U-T-O-R. 10 Q. You reached settlement with the fund at 03:20:42 11 some point; correct? 12 A. Correct. 13 Q. Did you have any conversations with 14 Mr. Dubin about that? 15 A. Yes. 03:20:50 16 Q. What was that? 17 A. I told him I reached a settlement. 18 Q. What did he say? 19 A. Good. 20 Q. Anything else you remember? 03:21:05 21 A. No, sir. 22 Q. Have you and Mr. Dubin ever gone back 23 and discussed since February 2007 the call that 24 you've testified about that the three of you -- 25 Mr. Zwirn, Mr. Dubin, and you -- had on the phone 03:21:22 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299299 Page 216 1 Epstein 2 concerning the $80 million? 3 A. Yes. 4 Q. When did you discuss that? 5 A. I've discussed it since November -- 03:21:28 6 sorry, since February 2007. 7 Q. With Mr. Dubin? 8 A. Yes, sir. 9 Q. Have you gone back and told him what 10 your memory of it was? 03:21:41 11 A. He's told me of his memory, as well as, 12 yes, sir. 13 Q. Did your memories jibe? 14 A. Yes, sir. 15 Q. Did you ever ask Mr. Dubin to contact 03:21:48 16 Mr. Gruss for you? 17 A. I might have. 18 Q. Did he? 19 A. I don't know. 20 Q. Let me show you a document, please, 03:21:59 21 which is Exhibit 11. 22 (Exhibit 11, e-mails with attachment, 23 marked for identification.) 24 Q. That's an e-mail chain with the top 25 e-mail being from you to Mr. Dubin dated December 03:23:00 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299300 Page 217 1 Epstein 2 6, 2009, enclosing -- attaching an e-mail from 3 Mr. Dubin to you and another one from you to 4 Mr. Dubin. 5 Do you recall these? 03:23:22 6 A. I see them now. 7 Q. You see the bottom e-mail, Jeffrey 8 Epstein to Glenn Dubin Sunday, December 6, 2009, 9 2:05? 10 A. Yes, sir. 03:23:32 11 Q. Do you recall sending that? 12 A. I sent it. 13 Q. Do you recall sending that? 14 A. No, not really. 15 Q. It's cc'd to Mr. Glenn Dubin and 03:23:40 16 Mr. Susman; is that correct? 17 A. Yes. 18 Q. Does this refresh your recollection 19 that you in fact asked Mr. Dubin to meet with 20 Perry Gruss and put questions to him? 03:23:53 21 A. No, sir. 22 Q. Did Mr. Dubin ever get back to you with 23 answers to these questions? 24 A. I don't recall. 25 Q. Well, he says in his response to you: 03:24:09 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299301 Page 218 1 Epstein 2 I'll get e-let you know how it goes. Did he ever 3 let you know how it went? 4 A. I'm sorry, I only have 5 Q. He responds. 03:24:26 6 A. Okay. 7 Q. The top of your e-mail is his response. 8 A. I see it. 9 Q. Did he ever tell you how it went? 10 A. I don't think so. 03:24:34 11 Q. And then you asked him whether to 12 find out whether he would agree to meet with you 13 or your lawyers. 14 A. That's correct. 15 Q. Did Mr. Dubin ever tell you whether 03:24:45 16 Mr. Gruss had agreed to do that? 17 A. I think -- I think we decided at that 18 time it was not a good idea. 19 Q. "We" being who? 20 A. Me. 03:25:05 21 Q. Why? 22 A. I don't recall. 23 Q. Why was it a good idea recently but not 24 a good idea in 2009? 25 A. My best recollection is that the -- 03:25:15 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299302 Page 219 1 Epstein 2 Perry Gruss was still at this point being 3 investigated by the SEC, and I thought maybe, on 4 further reflection, it would be a good idea to 5 meet with him at that time. 03:25:39 6 Q. You met with Perry Gruss before he 7 received word that he was going to be charged by 8 the SEC; is that correct? 9 A. That was more than a year after this 10 was written. 03:25:47 11 Q. But before he was charged; correct? 12 A. Correct. 13 Q. And so as far as you knew, he was still 14 under investigation by the SEC; is that correct? 15 A. I gave it little thought. 03:25:54 16 Q. So in 2009 you thought it might not be 17 a good idea because he might still be under 18 investigation by the SEC; correct? 19 A. Correct. 20 Q. And in 2011 or 2010 it was okay 03:26:05 21 A. '11. 22 Q. -- even though he still might be under 23 investigation by the SEC? 24 A. 2011. 25 Q. What had changed? 03:26:17 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299303 Page 220 1 Epstein 2 A. My decision. 3 Q. Did you discuss that decision with 4 Mr. Dubin? 5 A. I don't recall. 03:26:22 6 Q. Did you discuss it with anybody other 7 than your counsel? 8 A. I don't think so. 9 Q. Take any notes of your conversation 10 with Perry Gruss? 03:26:29 11 A. No. 12 Q. I take it you don't take notes? 13 A. Yes, that's correct. 14 Q. Doesn't go with impatience? 15 A. Correct. 03:26:38 16 Q. Did you ever meet with any other 17 potential witnesses in this case other than those 18 that work for you? 19 A. You'll have to give me a list. I'm 20 sorry, I don't know who the potential witnesses 03:27:01 21 are. 22 Q. Did you ever meet with anybody else 23 about this case other than people who work for you 24 or Mr. Dubin? 25 A. Again? 03:27:08 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299304 Page 221 1 Epstein 2 Q. Did you ever meet with any -- put aside 3 your lawyers. Did you ever meet with anybody else 4 about this case other than people who work for you 5 or Mr. Dubin? 03:27:17 6 A. No. 7 Q. Mr. Gruss would be the only one? 8 A. To the best of my recollection, yes, 9 that I'm aware of. 10 Q. Did you ever speak with anyone put 03:27:41 11 aside meeting -- other than Mr. Gruss? 12 A. No. 13 Q. Were you aware of a lawsuit between 14 Mr. Dubin and Mr. Zwirn? 15 A. Again? 03:28:00 16 Q. Were you aware of a lawsuit between 17 Mr. Dubin and Mr. Zwirn? 18 A. When? 19 Q. At any time. 20 A. Yes. 03:28:12 21 Q. What were you aware of? 22 A. That there was a lawsuit between 23 Mr. Dubin and Mr. Zwirn. 24 Q. What did you know about the lawsuit? 25 A. Very little. 03:28:19 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299305 Page 222 1 Epstein 2 Q. Who told you about the lawsuit? 3 A. I don't recall. 4 Q. Was it Mr. Dubin who told you about the 5 lawsuit? 03:28:29 6 A. No. 7 Q. Do you know what it was about? 8 A. No. 9 Q. Do you know what happened to the 10 lawsuit? 03:28:44 11 A. I believe I read it was settled. 12 Q. Where did you read that? 13 A. In the documents. 14 Q. That were produced in this case? 15 A. Yes, sir. 03:28:54 16 Q. Is that where you know about the 17 lawsuit from? 18 A. Yes, sir. 19 Q. Now, you've told us that Mr. Dubin told 20 you that he was misled by Mr. Zwirn; correct? 03:29:04 21 A. Correct. 22 Q. How many times did he tell you that? 23 A. More than five, less than a hundred. 24 Q. So I take it it was a frequent topic of 25 conversation after February 2007? 03:29:19 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299306 Page 223 1 Epstein 2 A. He might have said it repeatedly in the 3 same conversation. 4 Q. It was fair to say he was angry? 5 A. Fair. 03:29:29 6 Q. And did he tell you specifically the 7 things that he personally was misled about? 8 A. I believe I testified to that this 9 morning. 10 Q. I would like to list the things that 03:29:46 11 Mr. Dubin personally was misled about. 12 MR. SUSMAN: I think that was totally 13 answered this morning right out of the bag. 14 That was the first -- 15 MR. SCHWARTZ: Then I'm going back and 03:30:03 16 getting more detail. I don't think I asked 17 that question. 18 MR. SIFFERT: Mr. Susman, it will take 19 longer to do that. 20 MR. SCHWARTZ: It's my deposition, and 03:30:12 21 I've asked the question. It's a question I 22 have not asked before, and I would like an 23 answer to it. 24 He testified about a single 25 conversation this morning. I did not go into 03:30:18 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299307 Page 224 1 Epstein 2 detail and ask him follow-ups. Nor did I ask 3 him about any of the other between 10 and 100 4 conversations in which Mr. Dubin might have 5 said this. 03:30:29 6 Q. In any of those conversations, did he 7 tell you specifically the things that he was 8 misled about as opposed to things that he thought 9 you may have been misled about? 10 A. The purchase of the airplane. 03:30:38 11 Q. How did he tell you he was misled about 12 that? 13 A. He said if he would have known about 14 the airplane he would have taken all his money out 15 right away. 03:30:48 16 Q. And when did he tell you he knew about 17 the airplane for the first time? 18 A. I don't specifically recall. 19 Q. Do you have any reason to believe that 20 he knew about the airplane before you did? 03:31:00 21 A. Yes. 22 Q. And what is that? 23 A. I think it was Glenn that told me about 24 the airplane. 25 Q. And do you have any reason to believe 03:31:08 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299308 Page 225 1 Epstein 2 that Mr. Dubin found out about the airplane at or 3 about the same time that Mr. Zwirn did? 4 A. No. 5 Q. Would you believe that he would not 03:31:21 6 from what he told you? 7 A. Yes. 8 Q. What else did he tell you he was misled 9 about? 10 A. He told me basic -- in general terms, 03:31:28 11 again, that he was misled by Dan Zwirn about most 12 things, that Dan Zwirn didn't know how to tell the 13 truth. 14 Q. I'm asking specifically. 15 A. Okay. That the fact that there was a 03:31:38 16 monstrous cash shortage and that the fund was 17 really totally illiquid, that there had been -- so 18 he was misled about that. 19 Q. Anything else? 20 A. Yes. The -- I believe he had told me 03:31:58 21 that the same concept of he was initially told the 22 thing was immaterial and turned out to be 23 material. I'm sorry. 24 Q. I'm sorry, I didn't mean to interrupt 25 you. 03:32:11 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299309 Page 226 1 Epstein 2 A. Okay. 3 Q. I think you just finished saying, "I 4 believe he told me the same concept of he was 5 initially told the thing was immaterial and turned 03:32:18 6 out to be material." 7 A. That's correct. 8 Q. Did he tell you that he would have been 9 aware that Schulte Roth had been asked to look 10 into the airplane? 03:32:25 11 A. Yes. 12 MR. SUSMAN: I think you asked him to 13 make a list. Why don't you let him make a 14 list. 15 MR. SCHWARTZ: That's fine. 03:32:36 16 MR. SUSMAN: So you don't say later you 17 forgot to tell me something. 18 Q. Anything else in the list, sir? 19 A. The concept was the funds were illiquid 20 and that in fact badly managed, that the -- sort 03:32:47 21 of the concept of the fear of being run on the 22 bank was really a fear that they didn't have the 23 liquidity to make my first $80 million withdrawal, 24 that the airplane was -- the money was taken from 25 the Highbridge-managed account. 03:33:07 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299310 Page 227 1 Epstein 2 And had he known that there was funny 3 business -- that, again, the dollar value might 4 have been immaterial. But the fact that monies 5 were purloined from the clients' account was 03:33:21 6 extremely material, and had he known that he would 7 have taken and advised me to take all my money out 8 as soon as he found out about it. 9 Q. Anything else? 10 A. Not that I can recall. 03:33:43 11 Q. Did he tell you that he was surprised 12 to find out that the fund had -- that the funds' 13 investments were almost all in illiquid 14 investments? 15 A. No. 03:33:52 16 Q. Did he tell you that he knew that they 17 were in illiquid investments? 18 A. No. 19 Q. Nor did he tell you that in 2002; 20 correct? 03:34:07 21 A. The concept of -- what he told me was 22 the fact that some of your investments are 23 illiquid has little bearing on the fact of the 24 fund itself being illiquid. The fact that a 25 responsible fiduciary would never have their 03:34:22 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299311 Page 228 1 Epstein 2 entire portfolio in only illiquid investments and 3 no liquidity. 4 So the concept it's an issue of 5 proportion. The concept was they had maxed out 03:34:33 6 their fund early. 7 Q. Did he tell you when he used the phrase 8 "illiquid" what he meant? 9 A. They didn't have the money to pay me 10 back. 03:34:47 11 Q. They didn't have the money to pay you 12 back when? 13 A. Even the first time that Dan Zwirn 14 convinced him to have him convince me to reduce my 15 initial demand from the entire amount to 80 03:35:00 16 million. 17 Q. Did he ever tell you what his view of 18 the lockup period for the funds was? 19 A. No. 20 Q. Did he ever tell you that he was aware 03:35:26 21 that the fund was maintaining investments in 22 lockups on an investment-by-investment basis as 23 opposed to on an investor-by-investor basis? 24 A. No. 25 Q. Would you be surprised to hear that he 03:35:38 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299312 Page 229 1 Epstein 2 knew that? 3 A. No. 4 Q. Why? 5 A. You asked me if I'd be surprised. 03:35:50 6 Q. And I asked you why. 7 A. not surprised by anything anymore. 8 Q. Because your view of Mr. Dubin has 9 changed over time? 10 A. No. I just don't get surprised. 03:35:59 11 Q. Were you involved in obtaining an 12 affidavit from Mr. Dubin for this litigation? 13 A. I asked Glenn if he would provide an 14 affidavit. 15 Q. In fact, you sent him the affidavit you 03:36:24 16 wanted him to provide; right? 17 A. No. 18 MR. SCHWARTZ: Exhibit 12, please. 19 (Exhibit 12, document on Epstein 20 letterhead, marked for identification.) 03:37:00 21 Q. I ask you to look at Exhibit 12. 22 A. Yes. 23 Q. Is this document on your letterhead? 24 A. Yes, sir. 25 Q. This is one of your homes in Palm 03:37:10 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299313 Page 230 1 Epstein 2 Beach? 3 A. Yes, sir. 4 Q. And Lesly Groff is your personal 5 assistant? 03:37:18 6 A. Yes, sir. 7 Q. Did you send a draft of the affidavit 8 from Mr. Dubin to sign? 9 A. No, sir. 10 Q. Did Ms. Groff? 03:37:31 11 A. Yes, sir. 12 Q. And did you request her to do that, 13 sir? 14 A. I don't think so. 15 Q. So she would write, Jeffrey requested I 03:37:41 16 send you the attached, even though you had not 17 requested her to do that? 18 A. Yes. 19 Q. She did that on her own initiative? Is 20 that your testimony? 03:37:53 21 A. My testimony is that I did not ask her 22 to do it. 23 Q. Well, can you explain to me why she 24 would do it if you didn't ask her to do it? 25 A. No. 03:38:03 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299314 Page 231 1 Epstein 2 Q. Did you read this affidavit before 3 Mr. Dubin signed it? 4 A. I don't believe so. 5 Q. Did you ever see it before Mr. Dubin 03:38:21 6 signed it? 7 A. I could have. 8 Q. But you do not believe that on or about 9 February 2nd, 2010, you requested that she send 10 this affidavit to Mr. Dubin? 03:38:36 11 A. That's correct. 12 Q. Did you have a conversation with 13 Mr. Dubin about the affidavit before it was sent 14 to him, before February 10th, or on February 10th? 15 A. Again? 03:39:17 16 Q. Did you have a conversation with 17 Mr. Dubin about the affidavit before he executed 18 it? 19 A. Yes. 20 Q. How many conversations? 03:39:24 21 A. Probably less than five. 22 Q. Did you discuss with him what should go 23 into the affidavit? 24 A. No. 25 Q. What did you discuss with him? 03:39:37 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299315 Page 232 1 Epstein 2 A. I asked him if he would file an 3 affidavit in this case. 4 Q. And you mentioned that to him less than 5 five times, but that's in essence what you said to 03:39:45 6 him? 7 A. Yes. 8 Q. And he said he would? 9 A. Yes. 10 Q. Who drafted the affidavit? 03:39:50 11 A. I don't know. 12 Q. Was it drafted by your counsel? 13 A. I don't know. 14 Q. Do you know how it arrived at your Palm 15 Beach home? 03:39:58 16 A. I don't know if it arrived at my Palm 17 Beach home. 18 Q. Do you know how it arrived in your 19 personal assistant's hands? 20 A. No. 03:40:10 21 Q. Mr. Dubin told you that if he had known 22 about the airplane he would have pulled his money 23 out; correct? 24 A. Correct. 25 Q. And in the phone call in October or 03:40:22 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299316 Page 233 1 Epstein 2 November that you and Mr. Dubin and -- that you 3 had with Mr. Dubin about withdrawing your funds, 4 you asked him if he was going to keep his money in 5 the account; correct? 03:40:36 6 A. I asked him if he was keeping 7 Highbridge's money in the account. 8 Q. And he said he was; correct? 9 A. Yes. 10 MR. SCHWARTZ: Give me just a second, 03:41:02 11 sir. 12 THE WITNESS: Sure. 13 (Pause.) 14 Q. Let me show you Exhibit 12 -- 13. 15 (Exhibit 13, memorandum dated 2/13/08 03:42:25 16 with fax cover sheet, marked for 17 identification.) 18 Q. You see Exhibit 13 is a fax from 19 JEEPERS to Dan Zwirn attaching a memorandum on 20 JEEPERS' letterhead dated February 13, 2008? 03:42:36 21 A. Yes. 22 Q. Have you seen this before? 23 A. Not to the best of my recollection. 24 Q. Did anyone on or before February 13th, 25 2008, discuss with you the possibility of sending 03:43:08 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299317 Page 234 1 Epstein 2 such a memorandum? 3 A. They might have. 4 Q. Do you have any recollection? 5 A. No, not sitting here today. 03:43:16 6 Q. Do you have a recollection of 7 discussing it with Mr. Dubin? 8 A. No. 9 Q. Do you have any understanding as to why 10 he's a cc on this? 03:43:26 11 A. All my dealings with Dan Zwirn were 12 through Glenn Dubin, virtually. 13 MR. SCHWARTZ: I am going to pass. I'm 14 done. 15 THE WITNESS: Thank you. 03:43:45 16 MR. SCHWARTZ: Thank you. 17 MR. ARFFA: Do you want me to go? Do 18 you want to take a break? 19 THE WITNESS: No. 20 (Pause.) 03:44:15 21 THE VIDEOGRAPHER: We're going off the 22 record. The time is 3:43 p.m. 23 (Recess taken from 3:43 to 3:45.) 24 THE VIDEOGRAPHER: We are back on the 25 record. The time is 3:45 p.m. 03:46:33 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299318 Page 235 1 Epstein 2 EXAMINATION BY 3 MR. ARFFA: 4 Q. Good afternoon, Mr. Epstein. 5 A. Good afternoon, Mr. Arffa. 03:46:46 6 Q. I'm Alan Arffa. I'm from Paul, Weiss 7 and represent the current manager, as you know, of 8 the fund. 9 A. Yes, sir. 10 Q. Mr. Epstein, you characterize yourself 03:46:54 11 as a sophisticated investor? 12 A. Yes. 13 Q. FTC is the vehicle through which you 14 generally invest or just in this instance? 15 A. Generally, sir. 03:47:06 16 Q. Are you aware that each time you made 17 an investment you executed on behalf of FTC a 18 subscription -- a set of subscription documents? 19 A. No, sir. 20 Q. Let me just mark one of them to show 03:47:21 21 you. 22 (Exhibit 14, subscription document, 23 marked for identification.) 24 Q. So it's your testimony you didn't 25 read have you ever seen Exhibit 14 before 03:47:36 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299319 Page 236 1 Epstein 2 today? 3 A. Yes, sir. 4 Q. Did you read it at the time it was 5 executed in I believe it was late 2002 03:47:42 6 A. No, sir. 7 Q. -- I'm sorry, May of 2002? 8 A. No, sir. 9 MR. SUSMAN: Do you have another copy 10 of that? 03:47:57 11 MR. ARFFA: Sure. 12 (Pause.) 13 Q. Just if you look on page 17, do you 14 recall whether or not you signed the document at 15 the time, which appears to be April 2002? 03:49:15 16 A. I don't recall. 17 Q. Do you know if this is something you 18 signed or Mr. Beller signed for you? 19 A. He could have signed for me 20 Q. I think I may have asked you this 03:49:33 21 already, but do you recall if FTC executed a set 22 of subscription documents each time it made its 23 investments in the fund? 24 A. You've asked me that before. The 25 answer is no. You've asked me that before. The 03:49:45 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299320 Page 237 1 Epstein 2 answer is no, sorry. 3 Q. But in any event are you aware that in 4 these documents, FTC certified that it had in 5 excess of $25 million in investments? 03:49:58 6 A. Yes, sir. 7 Q. And that was true at the time, I 8 assume? 9 A. Yes. 10 Q. So it's true that as of the time of 03:50:08 11 your investments you and FTC had over $25 million 12 in money? 13 A. Yes. 14 Q. I don't want to pry too much, but 15 approximately -- 03:50:18 16 A. Not the word too much. 17 Q. But are you a billionaire? 18 DI MR. SUSMAN: You don't need to answer 19 that question. 20 Q. Do you have hundreds of millions of 03:50:26 21 dollars? 22 A. I have hundreds -- 23 DI MR. SUSMAN: You don't have to answer 24 that question. 25 MR. ARFFA: Well, I believe it is 03:50:30 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299321 Page 238 1 Epstein 2 relevant. 3 MR. SUSMAN: I instructed him not to 4 answer. If you want to call the judge right 5 now, we can do that. 03:50:35 6 MR. ARFFA: I don't want to waste my 7 time right now with that, but we can do it at 8 the hearing. That's fine. 9 MR. SUSMAN: Bet you won't. 10 Q. You said that the -- 03:50:45 11 MR. ARFFA: Oh, I bet I will. 12 MR. SUSMAN: How much? 13 Q. You said that the entity itself was 14 a as I understand when you left Bear Stearns, 15 you started this business -- correct? -- FTC or 03:50:53 16 its predecessor? 17 A. Its predecessor. 18 Q. And that business has, I believe from 19 your prior testimony, since that time, so for 30 20 years or so, been an advisor to wealthy 03:51:07 21 individuals; is that fair? 22 A. That's fair. 23 Q. Does the entity itself then have just 24 your money, just the fees that it earns? 25 A. Yes, sir. 03:51:21 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299322 Page 239 1 Epstein 2 Q. So in other words that entity does not 3 hold money for your clients and invest that money? 4 A. That's correct. 5 Q. So all of the money in FTC is your 03:51:33 6 money? 7 A. That's correct. 8 Q. And it makes its money by charging fees 9 to people for whom it provides investment advice; 10 fair? 03:51:42 11 A. That's correct, sir. 12 Q. Are you a licensed investment advisor? 13 A. No, sir. 14 Q. Do you hold any licenses? 15 A. No, sir. 03:51:48 16 Q. Fair to say by the time you made the 17 investment here you had been working in the 18 financial world for something in the order of 30 19 years? 20 A. Yes, sir. 03:51:59 21 Q. Could you give us a sense of the 22 amounts of money for which you've provided advice, 23 again, very rough number? I'm not going for 24 anything specific. 25 A. Billions of dollars. 03:52:16 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299323 Page 240 1 Epstein 2 Q. Now, the entity FTC we've talked about, 3 are you do you recall your specific title there 4 or position that you hold? 5 A. I believe I'm chairman or president or 03:52:40 6 potentially both. 7 Q. And you are the sole owner, though; 8 correct? 9 A. Yes. It's all my money. 10 Q. Right. 03:52:52 11 And it's incorporated in the British 12 Virgin Islands; correct? 13 A. No. 14 Q. Sorry? 15 A. No. 03:53:02 16 Q. Okay. That's incorporated where? 17 A. United States Virgin Islands. 18 Q. Sorry, correct. U.S. Virgin Islands. 19 U.S. Virgin Islands; correct? 20 A. Yes, sir. 03:53:12 21 Q. JEEPERS also is a wholly owned 22 subsidiary? 23 A. It's a qualified -- I believe it's a 24 qualified sub S, yes. 25 Q. I want to ask you about that. 03:53:22 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299324 Page 241 1 Epstein 2 A. Okay. 3 Q. Just start with the corporation itself 4 is a Virgin Islands corporation; correct? 5 A. It's an LLC, I believe. 03:53:29 6 Q. A Virgin Islands LLC, sorry; correct? 7 A. Yes. 8 Q. I think we've referred a couple times 9 to the fact that it's an S Corp.; is that fair? 10 Or it's a, sorry, subchapter S subsidiary; is that 03:53:48 11 fair? 12 A. You have to ask a better question, III 13 sorry. 14 Q. Okay. Let me just show you this form. 15 (Exhibit 15, document, marked for 03:54:13 16 identification.) 17 A. Yes. 18 Q. You see here it's referred to as a 19 corporation, subsidiary corporation, for which 20 well, let me start have you ever seen this form 03:54:44 21 before. 22 A. I must have. 23 Q. Is that your signature there? 24 A. Yes, it is. 25 Q. JEEPERS, according to this, is a 03:54:51 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299325 Page 242 1 Epstein 2 corporation? Do you see that? JEEPERS, Inc.? 3 A. Yes, sir. 4 Q. At least at this time, let's say, was a 5 corporation; correct? 03:55:02 6 A. Yes. 7 Q. And at least as of that time there was 8 an election made by FTC to treat JEEPERS as a 9 subchapter S subsidiary; correct? 10 A. Correct. 03:55:17 11 Q. And did you understand that was for the 12 purpose of avoiding corporate taxes on that 13 entity; otherwise you'd have to pay corporate 14 taxes on its earnings, and then you'd have to pay 15 taxes on whatever income you received from it; 03:55:28 16 correct? 17 A. I believe so. 18 Q. Could you just look at the assignment 19 that's Exhibit 6. Do you have that? 20 A. Yes, sir. 03:55:51 21 Q. I can't remember, did you say that was 22 your signature or you thought that was someone 23 signing for you on that document? 24 A. It looks like someone signing for me. 25 Q. Could you look at the -- isn't it true 03:56:01 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299326 Page 243 1 Epstein 2 that in the assignment both FTC and JEEPERS in 3 fact represented to the fund that the assignee was 4 not an S corporation or other pass-through entity 5 for New York State income tax purposes? Do you 03:56:18 6 see that on the first page? 7 A. I'm sorry? 8 Q. You see that on the first page in the 9 fourth paragraph? 10 A. Yes. 03:56:28 11 Q. Each of the assignor and assignee does 12 represent that, and if you go to number 3, the 13 assignee is not an S corporation or other 14 pass-through entity for New York State income tax 15 purposes. Do you see that? 03:56:39 16 A. Yes. 17 Q. Isn't that representation inaccurate? 18 A. No. 19 Q. Do you know? 20 A. No, I don't believe so. 03:56:48 21 Q. And why not? 22 A. This is -- this says the U.S. Internal 23 Revenue Code. 24 Q. I'm going to try to talk about some of 25 the subjects we talked about earlier today but 03:57:07 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299327 Page 244 1 Epstein 2 hopefully not repeat them. 3 A. Okay. 4 Q. I was a little unclear on your 5 testimony at the beginning on lockups, sort of the 03:57:25 6 purpose of lockups. You understand that money 7 you've heard of lockups -- you had heard of 8 lockups before you invested in the fund; correct? 9 A. Yes, sir. 10 Q. And you understood the purpose of a 03:57:37 11 lockup from what -- you understand why managers 12 want lockups; correct? 13 A. There are many reasons. 14 Q. Right. One of the reasons would be a 15 manager can have time to implement a particular 03:57:51 16 strategy, for example? 17 A. Correct. 18 Q. And they don't want to have to 19 prematurely -- in their view prematurely exit 20 investments that they've made; correct? 03:58:04 21 A. Correct. 22 Q. And they might have -- I think you said 23 one reason is they may want to buy an -- lease an 24 office space, buy equipment and have expenses and 25 they don't want to have everybody pull out at once 03:58:18 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299328 Page 245 1 Epstein 2 and then they're stuck with all these unnecessary 3 expenses; correct? 4 A. Correct. 5 Q. Now, investors, on the other hand -- 03:58:29 6 A. What? 7 Q. Investors, as opposed to the managers. 8 A. Yes. 9 Q. They would rather be locked up as 10 little as possible; right? 03:58:38 11 A. Different instances, not necessarily. 12 Q. Not necessarily. 13 MR. ARFFA: Can I just mark this. 14 (Exhibit 16, document, marked for 15 identification.) 03:59:15 16 Q. I just want to -- this I just took off 17 a Web site. If you go down to the middle of the 18 page, there's a discussion of lockups, lockup -- 19 it says, Lockups are periods usually commencing 20 from the time of the investment during which 03:59:27 21 investors are precluded from redeeming their 22 investment. Lockups may range from one to three 23 years depending on the liquidity of the underlying 24 investments. 25 Some funds may permit investors to 03:59:38 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299329 Page 246 1 Epstein 2 redeem even during the lockup period provided the 3 investor pays an early redemption charge. All 4 redemption charges paid by exiting investors 5 usually and should accrue to the benefit of the 03:59:49 6 fund in order to compensate the remaining 7 investors for possible harm created by 8 destabilizing the asset base. 9 Now I want to call your attention to 10 the next paragraph: Managers desire lockups in 04:00:00 11 general because a stable asset base eases pressure 12 for smoother return streams for fear that 13 investors may pull capital because of poor short- 14 term results and permits the deployment of capital 15 over longer time horizons. 04:00:14 16 Let me just top you there. Do you 17 agree with that? 18 A. That's what it says. 19 Q. But do you agree with it? Are those 20 reasons that managers desire lockups? 04:00:25 21 A. That's what it says. 22 Q. I'm asking for your opinion as a 23 seasoned, sophisticated investment professional. 24 A. I think managers prefer lockups so that 25 they can be in certain areas assured of getting 04:00:38 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299330 Page 247 1 Epstein 2 their performance fees over a longer period of 3 time. 4 Q. And the second -- is that another 5 reason in addition to the ones you gave me before? 04:00:52 6 A. I think that was in addition -- I think 7 I added that one this morning. I had that as 8 well, sorry. 9 Q. Then the next sentence says, quote, For 10 obvious reasons investors generally desire higher 04:01:04 11 liquidity. Do you see that? 12 A. I see that. 13 Q. Do you agree with that? 14 A. No. 15 Q. No. You think investors generally 04:01:11 16 desire less liquidity? 17 A. No, no. 18 Q. So which is it? They generally desire 19 less or they generally desire higher liquidity? 20 A. I think investors is a very broad 04:01:25 21 category of statements. There are many different 22 types of investors. 23 Q. So some investors prefer to be locked 24 up for long term? 25 A. Very long term. 04:01:35 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299331 Page 248 1 Epstein 2 Q. And some prefer not to be locked up at 3 all? 4 A. That's correct. 5 Q. Is it your testimony, from what you 04:01:39 6 said earlier, you prefer to be locked up for two 7 years? That's your preference? 8 A. No longer than two years. 9 Q. No longer than two years? 10 A. Correct. 04:01:48 11 Q. Would you rather be locked up within 12 the two-year period as little as possible or as 13 close to the two years as possible? 14 A. Every investment's a different 15 investment. 04:01:57 16 Q. So it would depend on the investment? 17 A. That's correct. 18 Q. So some investments you might want to 19 be locked up on a six-month basis; correct? 20 A. Yes. 04:02:07 21 Q. Whereas others you might want to be 22 locked up for two years; correct? 23 A. That's correct. 24 Q. Do you understand when you invest in a 25 hedge fund that each investment that's made has to 04:02:25 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299332 Page 249 1 Epstein 2 be separately tracked and accounted for by the 3 hedge fund? Do you understand what I'm saying? 4 A. No. 5 Q. Let me try it again. Do you know when 04:02:40 6 you invest in a fund that the investment manager 7 has to track the profits and losses and the fees 8 applicable to each investment when it's made? 9 A. No. 10 Q. Okay. Let me take an example. You 04:02:58 11 know hedge fund managers receive fees; correct? 12 A. Yes. 13 Q. And there are management fees that are 14 paid; correct? 15 A. Correct. 04:03:09 16 Q. Those are a percentage of the assets 17 held; it could be 1.5 or 2 percent; correct? 18 A. It could be. 19 Q. And then there are also incentive fees; 20 correct? 04:03:21 21 A. Sometimes. 22 Q. Sometimes. Don't most hedge funds 23 generally have 20 percent incentive fees? 24 A. I don't know what most hedge funds 25 have. 04:03:30 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299333 Page 250 1 Epstein 2 Q. Did you know what Zwirn had when you 3 invested in it? 4 A. I believe it had 20 percent. 5 Q. Meaning they were going to take as a 04:03:37 6 fee 20 percent of the gain correct? -- on the 7 investors fund? 8 A. Yes. 9 Q. So let me get back to my first 10 question, which is don't they have to therefore 04:03:56 11 keep track -- didn't up understand that hedge fund 12 managers have to keep track of each investment in 13 order to properly assess the performance fees? 14 A. No. 15 Q. So you're telling so let's say you 04:04:10 16 invest -- give me -- can I give you an example? 17 A. Please. 18 Q. You invested $10 on January 1st; 19 correct? 20 A. Yes. 04:04:20 21 Q. June 1st it's now worth 20; okay? 22 A. Yes. 23 Q. Now, June 1st you make another 24 investment of 10. 25 A. Yes. 04:04:29 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299334 Page 251 1 Epstein 2 Q. Okay? That investment, the 10, is flat 3 for the rest of the year; okay? In other words, 4 once it goes to 20, they gained a hundred percent, 5 right, that hundred percent gain through June. 04:04:41 6 A. Yes. 7 Q. And then June through December, flat. 8 A. Yes. 9 Q. For the first investment, right -- 10 A. Yes. 04:04:49 11 Q. -- that investment made a hundred 12 percent; right? 13 A. You say made a hundred percent. 14 Q. Received a hundred percent return in 15 that year. 04:04:57 16 A. How are you defining return? 17 Q. They got 10; now it's worth 20. 18 A. Is that a gain? 19 Q. Is that a gain? I guess in my world, 20 yes. I would rather have my counts go up. 04:05:06 21 A. Okay. 22 Q. So isn't it true the manager has to 23 assess is allowed to assess a 20 percent fee, 24 in my example, on the first investor's gain, the 25 10 -- additional 10 they received in that year? 04:05:23 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299335 Page 252 1 Epstein 2 A. Every fund is different. 3 Q. Do you know how the Zwirn hedge fund 4 worked? 5 A. No, not specifically. 04:05:31 6 Q. Do you know if they, in my example, 7 would be able to take the 20 percent fee on the 10 8 gain for investment one? 9 A. I assume you mean if they mispriced the 10 assets so that in fact what was really valued at 04:05:41 11 10 they valued at 20, you're suggesting he was 12 able to take a percentage fee on something that 13 was reported as a value increase as opposed to a 14 gain? 15 A gain is normally a taxable event. So 04:05:53 16 if in fact the stock simply went up from 10 to 20 17 in your example, it isn't necessarily a gain; it's 18 an increase in value. 19 Q. Whether or not it is a real gain, 20 doesn't the hedge fund account for it by taking a 04:06:06 21 fee against that paper gain? 22 A. Every hedge fund's different. 23 Q. Did you know how the Zwirn fund worked 24 in that regard? 25 A. No, sir. 04:06:14 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299336 Page 253 1 Epstein 2 Q. And isn't it true in my example 3 investment two, assuming the hundred did work how 4 I'm saying where they take 20 percent on the gain, 5 investment two, which went in in June where you 04:06:26 6 put in 10 and it was still 10 at the end of the 7 year, no fee gets assessed as to that investment; 8 isn't that true? 9 A. You say "that investment." 10 Q. Right, as to that 10. 04:06:37 11 A. Every hedge fund is different. 12 Q. In my example where they are 13 assessing 14 A. You're telling me in your example they 15 don't assess a fee, then they don't assess a fee. 04:06:47 16 Every hedge fund is different. 17 Q. I'm saying assume a world that a hedge 18 fund manager at the end of the fiscal year is 19 allowed to assess a 20 percent incentive fee with 20 respect to the profits relating to that 04:07:03 21 investment. Wouldn't they have to track each 22 investment separately? 23 A. In that example, yes. 24 Q. And similarly, in the second for 25 investment two, they wouldn't get any performance 04:07:15 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299337 Page 254 1 Epstein 2 fee -- right? -- it was flat? They wouldn't get 3 the performance incentive. They might get the 4 management fee but not the incentive fee; correct? 5 A. That's correct. 04:07:25 6 Q. Similarly, isn't it true that hedge 7 funds have to track investments separately to 8 understand the losses that may be attributable to 9 that account -- to that investment, sorry? 10 A. Every hedge fund is different. 04:07:41 11 Q. Do you know how the Zwirn fund worked 12 in terms of dealing with losses? 13 A. No, sir. 14 Q. Let's take an example. Let's say you 15 put in 10 at the beginning of the year; okay? 04:07:53 16 A. Yes, sir. 17 Q. At the end of the year, it's 8. You 18 lost money. 19 A. Yes, sir. 20 Q. No investment fee, under my scenario 04:08:01 21 correct? -- no performance fee, sorry, under that 22 scenario -- correct? -- there's a loss? 23 A. That's correct. 24 Q. You put in -- second investment you put 25 in another 10 on that date; okay? 04:08:15 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299338 Page 255 1 Epstein 2 A. Yes. 3 Q. With me? Now, in the second year the 4 fund shows returns of 50 percent, let's call it. 5 So on that first investment that was 8 at the end 04:08:27 6 of year one, that investment's now at 12; right? 7 Do they -- is that correct? Are you with me so 8 far? 9 A. I'm with you. 10 Q. Do you know whether the fund takes 04:08:41 11 can charge -- whether hedge funds generally assess 12 the performance incentive fee on the full 8 to 12 13 rise, the 4, or do they only assess it on the 2 14 from what you originally invested? 15 A. Every hedge fund is different. 04:09:05 16 Q. Do you know how that worked in the 17 Zwirn fund? 18 A. No, sir. 19 Q. Do you know whether the Zwirn fund in 20 fact utilized a concept of a loss recovery account 04:09:12 21 to deal with the kind of situation I was just 22 describing? 23 A. No, sir. 24 Q. And do you know whether the Zwirn fund 25 in fact would only give you the -- would only 04:09:23 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299339 Page 256 1 Epstein 2 assess the fee on the amount that was higher than 3 what you originally put in? 4 A. No, sir. 5 Q. Do you know whether they took into 04:09:32 6 account the losses? 7 A. I don't know what they did. 8 Q. Do you know the concept high watermark? 9 Have you ever heard that in connection with a 10 hedge fund? 04:09:44 11 A. Yes, sir. 12 Q. Okay. What's that? 13 A. It's different for every hedge fund. 14 Q. But the high watermark concept is 15 again -- the same concept I was describing -- 04:09:51 16 right? -- that you look at the high watermark, not 17 maybe how it just did over the last fiscal year, 18 because you may have made money. But if compared 19 to another point in time there were losses, you 20 take those into account; right? 04:10:05 21 A. Yes, sir. 22 Q. And in my example the second investment 23 where you put in the 10, got a 50 percent return 24 at the beginning of the year, then you would get 25 the fee on that fully assessed on the gains on 04:10:19 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299340 Page 257 1 Epstein 2 that investment; correct? 3 A. In your hypothetical, potentially, yes. 4 Q. So didn't you understand -- well, did 5 you or didn't you have any understanding 04:10:29 6 whatsoever as to whether Zwirn fund, Zwirn's fund, 7 because of the way performances fees were assessed 8 and gains and losses were allocated, was tracking 9 separately each investment for the reasons I've 10 just described? Did you have any concept of that? 04:10:48 11 A. No, sir. 12 Q. Did you ever discuss that with anyone? 13 A. No, sir. 14 Q. And never asked anybody about anything? 15 A. No, sir. 04:10:56 16 Q. Do you recall there was a point in time 17 where a one-year plus option was added to the 18 fund; do you recall that? 19 A. No, sir. 20 Q. Do you recall declining to take the 04:11:06 21 one-year plus -- it was a redemption option where 22 at the end of the year investors were given an 23 option to say, okay, I want -- you can redeem me 24 in one year but it's fixed at whatever's in the 25 fund attributable to me and I have to -- I don't 04:11:24 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299341 Page 258 1 Epstein 2 actually get it all in one year; I get it as those 3 investments are sold off, but it's frozen in time 4 at that point. 5 Do you recall that option? 04:11:36 6 A. No, sir. 7 Q. And you don't recall discussing that 8 with anyone? 9 A. No, sir. 10 Q. Do you know who declined it on your 04:11:40 11 behalf? 12 A. No, sir. 13 Q. You don't recall signing something? 14 A. No, sir. 15 Q. You don't recall discussing it with 04:11:47 16 anyone? 17 A. No, sir. 18 Q. You certainly don't recall ever being 19 under the impression that that option applied to 20 you; is that fair? 04:11:56 21 A. Never discussed it. 22 Q. And I take it you had no -- I take it 23 from what you said earlier today you didn't have 24 an understanding that the lockups at the Zwirn 25 fund were applied by the investment -- on an 04:12:21 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299342 Page 259 1 Epstein 2 investment-by-investment basis; correct? 3 A. That's correct. 4 Q. I think you already went through you 5 had a discussion about that with Mr. -- was it 04:12:33 6 Dubin? 7 A. Yes, sir. 8 Q. And Mr. Dubin told you it would always 9 be whatever the first investment was? 10 A. That was my understanding. 04:12:42 11 Q. Okay. So even if you put your money in 12 a year and a half later, it was always -- the 13 redemption right was always triggered by the two 14 years from the initial investment? 15 A. Yes, sir. 04:12:55 16 Q. What understanding, if any, did you 17 have about other investors in the fund? Do you 18 know whether they had lockups by investment? 19 A. The only time I believe I understood 20 anything about any other investors was when they 04:13:12 21 said before that January 11th, '05, letter that 22 when other investors would have a three-year 23 lockup that I would not continue to be involved in 24 the fund unless I continued to have only a two- 25 year lockup. 04:13:27 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299343 Page 260 1 Epstein 2 Q. But other than that -- 3 A. No. 4 Q. -- before that memo -- 5 A. No, sir. 04:13:32 6 Q. -- did you have any understanding 7 whether their lockup were by investments or the 8 initial date when they first put in money? 9 A. No, sir. 10 Q. You never discussed that with anyone? 04:13:44 11 A. No, sir. 12 Q. Did you think it was important to 13 understand whatever the redemption rights were? 14 A. No, sir. Separate from the fact they 15 could not be locked up for more than two years. 04:13:57 16 Q. That was important to you? 17 A. Yes. 18 Q. You didn't want to go beyond two? 19 A. That's correct. 20 Q. Had you previously invested in any 04:14:07 21 hedge funds that had lockups? 22 A. I don't recall. 23 Q. Do you recall whether you invested in 24 hedge funds that definitely did not have lockups? 25 A. Yes. 04:14:18 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299344 Page 261 1 Epstein 2 Q. Did you do any research on lockups when 3 you made this investment? 4 A. No, sir. 5 Q. Have you ever done any research on 04:14:25 6 lockups? 7 A. No, sir. 8 Q. Okay. I think you've mentioned a 9 couple times -- you just mentioned again -- that 10 at some point you learned that there was a switch 04:14:41 11 to a three-year lockup; correct? 12 A. Yes, sir. 13 Q. And you didn't like that; right? 14 A. Yes, sir. 15 Q. You wanted to be relieved of that; 04:14:51 16 fair? 17 A. "Relieved" is a word -- 18 Q. You didn't want that. 19 A. I wouldn't agree to it. 20 Q. You didn't want that to apply to you? 04:15:02 21 A. That's correct. 22 Q. By the way, do you recall there being a 23 switch in the fee, the management fee, from 1.5 to 24 2 and you also asked that that stay with 1.5? 25 A. Initially, yes. 04:15:14 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299345 Page 262 1 Epstein 2 Q. And do you recall that was was that 3 around the same time as this two- to three-year 4 change? 5 A. I don't remember. 04:15:22 6 Q. But you did ask it stay at 1.5? 7 A. Correct. 8 Q. Let's see. When you learned about the 9 three-year lockup and you said, I just want two, 10 is that something you said to Mr. Dubin? This is 04:15:41 11 now the end of 2002, beginning of '05 -- I'm 12 sorry, end of 2004, beginning of '05. 13 A. Yes, sir. 14 Q. That refreshes your recollection. 15 To whom did you express this view: No, 04:15:56 16 I'm staying at a two-year lockup? 17 A. To Mr. Dubin as well as my in-house 18 people. 19 Q. I'm sorry if this was asked before. 20 Had Mr. Dubin approached -- this was -- eventually 04:16:12 21 became a $20 million investment; correct? 22 January in January 1 of '05, you invested 20 23 million added $20 million to the fund; correct? 24 A. Correct. 25 Q. And that $20 million investment, was 04:16:26 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299346 Page 263 1 Epstein 2 that something that -- I think you testified 3 earlier Mr. Dubin recommended to you; fair? 4 A. Yes. 5 Q. And when he recommended it, did you 04:16:39 6 say, Okay, but it's got to stay on a two-year 7 cycle? 8 A. Yes. 9 Q. And do you know whether he went back to 10 Mr. Zwirn and got approval for that? 04:16:54 11 A. I don't recall. 12 Q. So you didn't have any direct 13 discussions with Mr. Zwirn about the two-year 14 lockup for that money? 15 A. No. 04:17:04 16 Q. Did you have any discussion with anyone 17 else at Zwirn about that money? 18 A. No. 19 Q. Do you know whether any of your other 20 employees had any discussion with Zwirn about that 04:17:16 21 January 1, '05, investment? 22 A. Yes. 23 Q. And that was the -- and then there was 24 a side letter -- this was the genesis of the side 25 letter; correct? 04:17:44 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299347 Page 264 1 Epstein 2 A. I believe so. 3 MR. SUSMAN: It's time for a pit stop. 4 MR. ARFFA: Oh, okay. 5 THE VIDEOGRAPHER: Stand by. We're 04:17:53 6 going off the record. The time is 4:14 p.m. 7 This is the end of Tape 5. 8 (Recess taken from 4:14 to 4:24.) 9 THE VIDEOGRAPHER: We are back on the 10 record. The time is 4:24 p.m. This is the 04:25:26 11 beginning of Tape Number 6. 12 Q. Mr. Epstein, when is the first time you 13 recall ever learning that at least the Zwirn fund 14 was taking the position that in fact a two-year 15 lockup applied with respect to each of your 04:25:48 16 investments separately? 17 A. February of '07. 18 MR. ARFFA: Can you mark this as the 19 next. 20 (Exhibit 17, e-mail dated 11/13/06 from 21 Zwirn to Dubin, marked for identification.) 22 Q. I want to show you Exhibit 17. I 23 understand this wasn't to you. It's from Dan 24 Zwirn to Glenn Dubin on November 13, 2006. 25 A. Yes. 04:26:33 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299348 Page 265 1 Epstein 2 Q. And it says, Spoke calmly as possible 3 to Harry 4 A. Yes. 5 Q. -- re the facts of lockups, et cetera. 04:26:37 6 A. Yes. 7 Q. Would be very good for you to call 8 Jeffrey. 9 Do you see that? 10 A. Yes, sir. 04:26:44 11 Q. Do you recall -- I mean, does this 12 refresh your recollection that maybe in fact much 13 earlier, somewhere around November of 2006, if not 14 earlier, but certainly on November 13 Dan Zwirn 15 had walked Harley Beller through the different 04:27:00 16 lockups the fund believed applied with respect to 17 your investments? 18 A. No. This -- my best recollection 19 MR. SUSMAN: Whoa. No question. 20 A. No. 04:27:14 21 MR. SUSMAN: We want to get out of 22 here. 23 Q. Do you recall having discussion with 24 anyone at or around this time, the time of this 25 e-mail, November of 2006, about how exactly the 04:27:21 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299349 Page 266 1 Epstein 2 fund believed the redemptions the two-year 3 lockup worked with respect to your investments? 4 A. Again, I'm sorry? 5 Q. Do you recall having a discussion with 04:27:38 6 anyone around this time, which is November of 7 2006, about how exactly the fund believed the 8 two-year lockup worked with respect to your 9 investments? 10 A. Yes. 04:27:53 11 Q. Okay. And what discussion do you 12 recall? 13 A. This was -- this was regarding the $53 14 million. 15 Q. You're saying by this time -- by the 04:28:05 16 time Mr. Zwirn called and walked Harry Beller 17 through, you had already made your decision that 18 you were taking out 80 and you were leaving in a 19 53? 20 A. That's correct. 04:28:23 21 Q. And you had conveyed to Mr. Beller and 22 to Mr. Dubin and through Mr. Dubin to Mr. Zwirn? 23 A. Not through Mr. Dubin. Mr. Zwirn was 24 on the phone. 25 Q. Okay. And you believe this happened 04:28:32 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299350 Page 267 1 Epstein 2 after the phone call? 3 A. Yes. 4 Q. Do you recall what they said at that 5 time about how the remaining 53 would be handled? 04:28:45 6 A. There would be some lockups. 7 Q. Do you recall whether it was one or 8 two? 9 A. There would just be some lockups on the 10 53. 04:28:56 11 Q. And do you recall how -- you made a 12 number of different investments -- correct? -- in 13 the fund; is that fair? Hello? 14 A. Yes. 15 Q. Do you recall which of that 80, how was 04:29:08 16 that 80 going to be allocated? Did you have a 17 discussion as to was the 80 coming from the 18 earlier investments or the later investments? 19 A. I think I've given you my best 20 recollection of the phone calls how it would be 04:29:20 21 made. 22 Q. To be clear, you don't recall any 23 discussion like on the subject I was, like where 24 was the 80 going to be coming from? 25 A. That's correct. 04:29:32 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299351 Page 268 1 Epstein 2 Q. Which investments it was going to be 3 coming from? 4 A. No, sir. 5 Q. And you don't exactly recall the 04:29:39 6 lockups to which you were subject going forward on 7 the 53? 8 A. No. 9 Q. Putting aside the discussion that you 10 had with Mr. Epstein and Mr. Zwirn, what was your 04:30:21 11 understanding as to the 80? Was that available at 12 that time or was that subject to lockups, absent 13 that communication? 14 A. I want to be kind to you. I didn't 15 have a conversation with Mr. Epstein. 04:30:37 16 Q. I'm sorry. Let me try that again. 17 Good point. 18 A. Okay. 19 Q. Putting aside your discussion with 20 Mr. Dubin and Mr. Zwirn, what was your 04:30:44 21 understanding as to the 80? Was that available at 22 that time or was it subject to lockups had you 23 never had that conversation you say you had with 24 Dubin and Zwirn? 25 A. My understanding was that I was going 04:31:00 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299352 Page 269 1 Epstein 2 to get my $80 million. There was a problem at the 3 fund. In fact, to some extent it was -- it was 4 never discussed about which tranche. It was $80 5 million. 04:31:17 6 Q. But had you not had that conversation 7 earlier in the day before the conversation, before 8 you had any conversation with Dubin and Zwirn or 9 Dubin or Zwirn, did you believe the 80 was there 10 for you or was it subject to some kind of lockups? 04:31:30 11 A. I believed my 80 was subject to a 12 lockup, but as long as it was done before the end 13 of the year. 14 Q. But as long as you exercised it by the 15 end of that year, you were okay? 04:31:42 16 A. The quarter ending -- 17 MR. ARFFA: Please don't nod, 18 Mr. Susman. 19 Q. Go ahead. 20 A. Yes. 04:31:50 21 Q. Yes, as long as you did it by the end 22 of the year, you had the 80? 23 A. I don't want to say by the end -- by 24 the quarter. 25 Q. By the end of that quarter? 04:31:59 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299353 Page 270 1 Epstein 2 A. Yeah. 3 Q. Okay. But you don't recall any of the 4 other details about the 80 or the lockups or -- 5 A. No. 04:32:09 6 Q. -- which year? 7 A. No. 8 Q. Did you have any -- I'm not sure if you 9 were asked this. Do you have any notes, memos, 10 any piece of paper that you can point us to about 04:32:22 11 this conversation? Let's start with you didn't 12 write any note of it; correct? 13 A. I don't write notes. 14 Q. Did you do a memo of it? 15 A. Just the instructions. 04:32:34 16 Q. Did you do any -- 17 A. No, I didn't make any notes. 18 Q. -- memo of the meeting? 19 A. No, sir. 20 Q. Did you tell other people in your 04:32:42 21 office about the conversation? 22 A. I would have said to either Harry or 23 Darren that Dan agreed to the $80 million, let's 24 get it done. 25 Q. Have you ever seen any piece of paper 04:32:54 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299354 Page 271 1 Epstein 2 where they wrote down this is what was agreed in 3 this conversation? 4 A. Not that I've ever seen. 5 Q. And have you ever seen any record from 04:33:01 6 Mr. Dubin of what was said in that conversation? 7 A. No. 8 Q. You've never seen any notes or memo or 9 anything from him; correct? 10 A. Not to the best of my knowledge. 04:33:10 11 Q. Mr. Zwirn, have you ever seen any 12 document, any memo, any note from -- on the Zwirn 13 fund side recording what was said in this 14 conversation? 15 A. I don't recall. 04:33:29 16 Q. Did you ever ask to see -- did you ever 17 ask him: Do you guys have a tape -- 18 A. No. 19 Q. Did you ask him whether conversations 20 were taped? 04:33:40 21 A. No. 22 Q. Did you ask him whether they had any 23 memos of the conversation? 24 A. No. 25 Q. Sorry, one other thing on the 04:33:58 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299355 Page 272 1 Epstein 2 assignment that occurs thereafter. Do you recall 3 why the assignment was made retroactive? 4 A. What exhibit number, I'm sorry? 5 Q. Go back to 6, sorry. 04:34:12 6 A. Okay. 7 Q. Do you see on page 3 of 4 it says the 8 effect of 9 A. I'm sorry. 10 Q. It's the second-to-last page of the 04:34:25 11 exhibit. Do you see it says the effective date of 12 the assignment shall be January 1, 2006? 13 A. Yes. 14 Q. Do you know why it was made effective 15 retroactively? 04:34:47 16 A. No, no, sir. 17 Q. You agree this was executed on December 18 29, 2006; correct? 19 A. Yes. 20 MR. ARFFA: I think that's all I have. 04:35:12 21 Thank you very much. 22 THE WITNESS: Pleasure. 23 MR. SIFFERT: I have no questions. 24 MR. SUSMAN: We're done? Thank you. 25 THE VIDEOGRAPHER: Please stand by. We 04:35:24 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299356 Page 273 1 Epstein 2 are going off the record. The time is 4:34 3 p.m. This is the end of Tape Number 6. 4 (Time noted: 4:34 p.m.) 5 6 JEFFREY EPSTEIN 7 8 Subscribed and sworn to before me 9 this day of 2011. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 VERITEXT REPORTING COMPANY www.yeritext.com EFTA00299357 Page 274 1 2 CERTIFICATE 3 STATE OF New York 4 : ss. 5 COUNTY OF New York ) 6 7 I, LAURIE A. COLLINS, a Registered 8 Professional Reporter and Notary Public 9 within and for the State of New York, do 10 hereby certify: 11 That JEFFREY EPSTEIN, the witness 12 whose deposition is hereinbefore set forth, 13 was duly sworn by me and that such 14 deposition is a true record of the 15 testimony given by the witness. 16 I further certify that I am not 17 related to any of the parties to this 18 action by blood or marriage, and that I am 19 in no way interested in the outcome of this 20 matter. 21 IN WITNESS WHEREOF, I have hereunto 22 set my hand this 20th day of April 2011. 23 24 25 LAURIE A. COLLINS, RPR VERITEXT REPORTING COMPANY www.veritext.com EFTA00299358 Page 275 1 2 INDEX 3 4 WITNESS: EXAMINATION BY: PAGE 5 Jeffrey Epstein Mr. Schwartz 9 6 7 TRANSCRIPT MARKINGS 8 DIRECTIONS: 237:18, 237:23 9 MOTIONS: 10 REQUESTS: 11 RULINGS: 12 TO BE FURNISHED: 13 14 EXHIBITS 15 NO. DESCRIPTION PAGE 16 17 Exhibit 1, letter 33 18 Exhibit 2, memorandum dated 9/17/04 49 19 from Zwirn to limited partners of 20 D.B. Zwirn special opportunities fund 21 Exhibit 3, invoice from FTC to Resnick 97 22 Exhibit 4, draft consulting agreement 98 23 with fax cover sheet 24 Exhibit 5, letter dated 11/13/06 from 158 25 FTC and Zwirn, Bates-stamped JE 2000 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299359 Page 276 1 2 Exhibit 6, assignment 182 3 Exhibit 7, e-mails 192 4 Exhibit 8, e-mails with attachment 194 5 Exhibit 9, e-mails 195 6 Exhibit 10, letter 205 7 Exhibit 11, e-mails with attachment 216 8 Exhibit 12, document on Epstein 229 9 letterhead 10 Exhibit 13, memorandum dated 2/13/08 233 11 with fax cover sheet 12 Exhibit 14, subscription document 235 13 Exhibit 15, document 241 14 Exhibit 16, document 245 15 Exhibit 17, e-mail dated 11/13/06 from 264 16 Zwirn to Dubin 17 18 19 20 21 22 23 24 25 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299360 Page 277 1 2 ERRATA SHEET VERITEXT REPORTING COMPANY 3 1250 Broadway New York, New York 10001 4 (212) 279-9424 5 CASE: Fortress v. JEEPERS DEPOSITION DATE: April 20, 2011 6 DEPONENT: Jeffrey Epstein 7 PAGE/LINE(S)/ CHANGE REASON 8 / / / 9 / / / 10 / / / 11 / / / 12 / / / 13 / / / 14 / / / 15 / / / 16 / / / 17 / / / 18 / / / 19 / / / 20 21 JEFFREY EPSTEIN 22 SUBSCRIBED AND SWORN TO BEFORE ME THIS DAY OF , 2011. 23 24 25 NOTARY PUBLIC DATE COMMISSION EXPIRES VERITEXT REPORTING COMPANY www.veritext.com EFTA00299361 [& - 2006] Page 1 10022 3:15 14th 173:15 194:9 277:5 10036.7798 3:22 195:3,12 196:19 2000 67:6,19,24 & 1:18 3:4 4:4 5:23 10110.3398 4:7 204:10,11 205:6 68:2,10 69:9 72:23 6:4,9,11,12,15,20 175:11 192:20 108 164:20,22 165:3 207:14 73:24,25 158:13,19 10.06 57:19,21 15 88:11 97:15,18 275:25 0 10.14 57:21,23 241:15 276:13 2000s 78:16 04 97:5 10th 231:14,14 150 145:6 2002 13:15,23 14:23 05 22:18 43:2,3 11 43:7 54:17 158 275:24 14:24,24 15:5,13,19 57:10 120:23 216:21,22 219:21 15th 3:14 145:17 15:25 20:17 24:8,12 259:21 262:11,12 276:7 159:24 162:4 27:2 28:16,23 29:2 262:22 263:21 11/13/06 158:12 16 245:14 276:14 29:11,12,14 33:13 06 36:15,20,21 264:20 275:24 17 50:4 71:8 236:13 34:4 39:2 40:12 65:13 122:8 123:14 276:15 264:20,22 276:15 42:12 45:17,21 46:8 212:9 1114 2:9 3:21 5:9 17th 50:14 68:21 69:2,5,11 07 43:3 65:13 11:13 112:23,25 18 65:2 66:12,23,24 75:2,4 76:2 77:9,12 117:24,25 122:7 11:28 112:25 113:3 72:19 100:11 103:4,17 264:17 11:29 195:12 182 276:2 105:3,9 107:6,21,22 08 65:14 11:42 196:19 192 276:3 108:16,20 227:19 09 65:14 11th 259:21 194 276:4 236:5,7,15 262:11 1 12 71:8 85:9 133:18 195 276:5 2003 14:25 15:15 1 14:23,24,24,24 229:18,19,21 1976 58:18 16:7 46:18 81:14 15:13,19,25 16:7 233:14 255:6,12 1979 207:4 108:24 32:17,22 33:3,7 276:8 1981 58:19 60:8,15 2003/2004 93:16 35:25 42:12 45:17 1250 277:3 1994 69:18 70:16 2004 13:15,22 15:15 45:21 46:8,18 52:7 127 200:12 1:45 7:24 15:22 16:4,9,13 52:18,23 55:3,13,17 1285 3:6 1:51 156:3,5 23:17 27:7,17,18 56:8 57:2,20 170:24 12:17 155:4,6 1st 145:16 250:18,21 28:6 29:15 42:14 262:22 263:21 12:20 7:23 154:24 250:23 43:6 50:4,14 51:2 272:12 275:17 13 158:18 159:13 2 51:18,18 53:14 1.5 249:17 261:23 164:16 165:20,25 80:24,24 97:25 2 32:22 49:13,14 261:24 262:6 167:23 168:5 262:12 57:24 93:3,5 112:24 10 45:17,21,23 170:24 192:17 2005 14:19 24:9 249:17 255:13 46:18 73:22 105:6,7 233:14,15,18,20 25:18 28:7 37:2 261:24 275:18 105:12 205:9,11,13 264:24 265:14 40:2 43:7 47:4,7 2.5 92:24 224:3 250:18,24 276:10 49:2 51:10 52:6,7 2/13/08 233:15 251:2,17,25,25 134 146:5 147:5 52:15,19,23 53:19 276:10 252:7,11,16 253:6,6 200:12 54:5,9,14 55:3,13 20 1:22 2:5 10:2 253:10 254:15,25 13th 157:19 159:25 55:17 56:9,15 57:2 56:15 88:4,5,9 95:6 256:23 276:6 165:16 191:11 109:13,17 169:11 95:10,14 102:7,10 100 73:16 121:17 233:24 2006 29:15 42:17 102:14,15 132:23 224:3 14 71:8 173:12 43:7,13,20,24 45:11 249:23 250:4,6,21 10001 277:3 235:22,25 276:12 55:12,16 56:9 64:12 251:4,17,23 252:7 10019-6064 3:7 140.50 138:9 117:4 128:5,17 252:11,16 253:4,19 1425006537 1:8 158:19 159:13 262:21,22,23,25 5:14 164:11,12 167:23 VERITEXT REPORTING 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147:7 98 275:22 222:25 33 275:17 148:2 151:6 9:01 5:5 2008 42:20 233:20 3:04 203:25 204:3 6:09 165:25 9:02 1:23 2:6 233:25 3:43 234:22,23 2009 217:2,8 218:24 7 a 3:45 234:23,25 219:16 7 92:15 121:15,17 1:23 2:6 5:6 4 192:12,13 276:3 57:19,23 112:23 2010 219:20231:9 2011 1:22 2:5 5:5 4 32:22 92:15 98:21 71 58:7 113:3 195:12 219:20,24 273:9 98:22,25 132:25 74 58:15 196:19 274:22 277:5,22 156:6 167:15 750 146:12 150:10 abandoned 83:16 205 276:6 203:24 255:13 76 58:15 ability 159:10 20th 5:5 162:4 272:7 275:22 8 able 11:24 25:14 274:22 45 134:13 163:9 169:21 177:4,7 8 8:15 165:6 194:6,8 212 277:4 47 196:2 252:7,12 195:16,18,19,22 216 276:7 49 275:18 absent 268:12 196:8,13,14,24 229 276:8 4:14 264:6,8 absolutely 22:20 197:8,12,23,23,24 22nd 167:16 4:24 264:8,10 25:23 47:14 254:17 255:5,12 233 276:10 5 accepted 56:12,22 276:4 235 276:12 access 11:3,24 5 32:22 88:12,19,20 80 104:24 105:21 237:18 275:8 accommodating 89:7 91:4,15 158:11 122:14 146:19 23rd 167:16 158:12,16 165:22 7:22 147:12,13,16 148:3 241 276:13 204:4 264:7 275:24 accomplish 47:3 148:6,9 149:2 245 276:14 accomplished 37:17 50 73:16 84:7,8 92:9 152:24 153:18 25 237:5,11 account 13:19,20 121:17 196:2 255:4 154:9,14 156:24 264 276:15 16:21 27:21 31:16 256:23 157:18 160:3,8 279-9424 277:4 50,000 121:17 161:21 167:12,12 37:15,22,24 38:3,20 29 272:18 500 4:6 111:11 170:18,22 171:2,3,8 39:20 40:7,15 41:9 2:05 217:9 146:11,12 150:10 43:6,8 45:3,13 46:2 171:11,17 172:5 2nd 231:9 46:12,22 47:5 49:2 150:10 178:5 187:24 188:3 55:7 56:4 57:9 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299363 [account- anybody] Page 3 108:2 116:15,18 additional 8:23 agree 7:3 28:20 allowing 135:13 117:11 125:23 25:13 29:12 31:12 157:22 218:12 amazing 208:17 147:4,5 167:25 31:21 32:5,10,13 246:17,19 247:13 209:21 168:7 183:18,19 38:18,18 39:25 42:8 261:19 272:17 amazingly 117:10 184:15 207:15 43:12,19 44:11 45:6 agreed 7:7,8 103:4 ambiguous 182:2 226:25 227:5 233:5 45:12 46:8 47:9,19 118:17 146:18,18 american 58:24 233:7 252:20 254:9 47:20,25 55:6 73:17 148:13 152:22 59:14 255:20 256:6,20 73:20 102:13,14,17 154:13 167:11,12 americas 2:10 3:6 accountant 139:16 103:16 112:6 114:7 178:13 192:8 3:21 5:9 139:18,22 153:24 149:9 150:22 218:16 270:23 amount 12:10 44:20 183:5,6 153:22 157:4 164:5 271:2 91:8 97:15 105:13 accountants 153:24 168:16,17,20 agreement 24:9 134:24 137:3 160:8 175:9 176:8,13 202:15 251:25 32:20 42:3 51:16 162:14 164:25 178:18 180:15 adjusted 162:11 55:19 56:13,23 95:3 170:22 228:15 accounted 249:2 adjustment 162:15 95:4 96:14,22,25 256:2 accounting 89:16 advanced 162:21 98:15,22 99:5,15 amounts 239:22 119:17,25 120:7 advantage 114:10 275:22 ample 113:11,12,23 122:18 134:22 advice 60:17 67:14 agreements 7:2,18 114:2,4 135:3 136:13 67:16,18 74:13 7:19 analysis 22:14 142:17,22 146:16 90:18 97:14 102:23 ahead 35:7,12 anderson 66:18,20 154:20 162:9 104:9 105:16 269:19 andrew 4:10 6:12 163:19 167:14 130:15 175:18 airplane 116:14 angry 185:18 223:4 175:12 239:9,22 117:10 120:22 anniversary 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35:20 66:13,23 104:7 217:23 added 247:7 257:17 66:24 69:17 72:19 allocation 136:10 antenna 130:20 262:23 77:25 96:3 105:20 allocations 80:10 anybody 19:18 26:6 addition 40:6 247:5 107:13 108:4 185:3 allowed 251:23 26:8,10,13,20,23 247:6 198:20,22 199:5 253:19 28:3,8,12 29:2 201:15 202:16 33:20 37:16 51:13 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299364 [anybody - aware] Page 4 51:14 53:24 56:12 april 1:22 2:5 5:4 52:11 91:11 92:4 assured 246:25 56:22 76:8,10 91:2 164:12 236:15 93:4 104:9 111:14 attached 99:5 197:6 129:10 131:23 274:22 277:5 111:16,18 168:15 197:7,15 230:16 139:2,7,10 141:6 arastu 3:25 5:25 173:19 177:22 attaching 195:4 151:12,20 152:16 arbitrage 106:13 180:23 225:14 217:2 233:19 168:9 170:25 171:8 arbitration 1:2 5:12 246:22 attachment 194:6 175:22 176:2 area 59:15 121:9 asks 24:25 148:12 194:12,16,21 197:4 178:18 183:11,22 areas 120:20 246:25 assess 250:13 197:6 216:22 276:4 184:7,11 187:22 arffa 3:8 6:14,14 251:23,23 253:15 276:7 189:7,14 191:8 8:19 9:6 24:20,24 253:15,19 255:11 attachments 193:21 200:20 220:6,22 25:3,7 41:4,17,19 255:13 256:2 194:14 197:14,18 221:3 257:14 107:10 197:13 assessed 253:7 197:18 198:4,9 anymore 193:9 234:17 235:3,5,6 256:25 257:7 attempting 81:5 229:7 236:11 237:25 assessing 253:13 166:19,20,24 apart 79:15 238:6,11 245:13 asset 94:8 167:11,13 attend 72:20 84:17 apologize 121:6 264:4,18 269:17 200:10 246:8,11 attention 246:9 apoplectic 170:19 272:20 assets 60:24 92:14 attorney 35:3 appears 43:10 45:5 arranged 94:15 146:17 163:3 135:23 136:21 45:8 49:20,23 57:14 arrangement 83:20 249:16 252:10 attorneys 3:5,12,19 97:12 99:3,4 180:17 83:22 98:4 assignee 243:3,11,13 4:5 5:16 130:25 196:22 205:19 arrived 232:14,16 assignment 174:7 135:12,12 236:15 232:18 175:16 178:14 attractive 19:7 applicable 249:8 artist 58:8 182:11,18 242:18 attributable 254:8 applied 48:21 aside 109:15 221:2 243:2 272:2,3,12 257:25 167:25 168:7 221:11 268:9,19 276:2 auditors 115:19 169:14 258:19,25 asked 11:5,15 18:6 assignor 243:11 august 88:9 264:15 265:16 22:19 25:22 34:8 assistance 178:8,10 authored 52:20 applies 12:9 52:25 53:18,22 54:4 assistant 230:5 authorized 159:4 apply 25:13 261:20 54:8,13,16,25 55:5 assistant's 232:19 available 108:16 appreciate 146:20 55:10 70:5,16 71:10 associate 85:12 268:11,21 approached 262:20 76:4 83:3 102:20,23 associates 67:8 avenue 2:10 3:6,14 appropriate 7:3 112:5 122:13 146:4 175:11 3:21 4:6 5:9 163:22 149:4 153:10 assume 33:5 51:15 average 71:23,24 approval 181:23 160:16 176:8 179:5 51:20,22,24,25 77:18 164:25 263:10 187:13 188:11,16 52:25 53:4,4 56:18 avoid 32:23 153:19 approved 66:3 211:7 217:19 113:10,25 124:18 156:25 approximate 36:14 218:11 223:16,21 180:20 237:8 252:9 avoiding 122:15 approximately 5:5 223:22 226:9,12 253:17 242:12 23:4 64:4 68:19,21 229:5,6,13 232:2 assumed 113:23 aware 116:3 119:2 69:5 72:23 75:4 233:4,6 236:20,24 136:14 171:3 123:15 132:17 78:4 86:4 128:16 236:25 257:14 assuming 53:2 142:16 164:15 129:5 163:4 164:10 261:24 262:19 56:23 253:3 165:17 184:14 164:20,23 165:3,6 270:9 assurance 31:22 189:7,14 210:4,8,11 187:10,11 189:18 asking 17:8 24:14 assure 31:10 47:4 221:9,13,16,21 237:15 25:20 38:8 51:24,25 I 226:9 228:20 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299365 [aware - broke] Page 5 235:16 237:3 122:17 136:6 250:4 259:19 264:2 bet 34:22 238:9,11 b 152:24 172:12 266:25 269:9 better 67:9 81:6 193:8 210:16 believed 193:16 82:5 241:12 back 7:24 11:4 basis 135:2 136:23 265:16 266:2,7 beyond 260:18 25:10 28:16 33:13 162:15 163:4 269:11 big 110:18 37:2 45:16 57:22 228:22,23 248:19 beller 139:14,15 biggest 111:10 76:17 100:8 105:2 259:2 153:23 157:5 bill 99:20 100:2 113:2 116:19 118:4 bates 158:13,19 158:24 159:4 166:6 billion 92:6,7,12,15 131:5 132:21 134:5 194:20 275:25 166:12,25 167:22 92:18,22,25 93:3,5 135:6 144:4,14,15 beach 64:14 65:8,10 168:4,10 170:3 121:15,17 143:5 145:11 147:24,25 230:2 232:15,17 171:10 183:11 167:15 148:4,5 151:2,9,12 bear 58:18,20,22 184:10 188:9,13 billionaire 237:17 151:25 153:14 59:11,23 60:7 61:14 189:17 192:16,25 billions 239:25 156:4,18 168:24 165:14 238:14 193:25 200:25 birth 71:2 170:2,8,18 188:13 bearing 227:23 205:20 236:18 bit 95:24 188:15,16 197:22 beg 199:21 265:15 266:16,21 blame 213:2 202:14 204:2 began 23:21 39:8 bells 123:12 block 59:16 206:13 215:22 beginning 32:12 beneficial 89:6 blood 274:18 216:9 217:22 223:15 228:10,12 38:6 57:24 59:11 benefit 89:7 91:4 blue 130:6 113:4 128:16 156:6 212:2 246:5 book 118:12 234:24 250:9 263:9 204:4 244:5 254:15 best 25:19 26:2,5 booked 165:9,10 264:9 272:5 256:24 262:11,12 27:9 59:13 60:23 bookkeeping 117:6 background 58:2 264:11 66:12 72:24 73:3 118:14 136:6,14 bad 116:20211:18 behalf 6:23 159:5 75:2,22 76:9,12 born 69:16 71:10 badly 122:12 226:20 235:17 258:11 77:4 85:2 86:2,14 borrow 115:25 bag 223:13 believe 15:23 21:13 92:3,24 95:5 97:5 borrowed 162:10 balance 149:11,13 28:14 33:22 34:4 98:5 100:18 102:12 borrowing 115:21 153:21,25 157:3 44:16 51:11 75:10 103:9 104:23 116:2 123:24 184:16 80:24 84:7,9 97:2 105:20 108:11 211:24 ballpark 159:20 98:2,8,16 126:11 115:12 118:2 121:7 bother 87:17 bank 116:9 122:16 131:10,16 135:22 124:25 128:11 bottom 217:7 123:21 145:25 143:15 157:19 133:9 137:15,21 breached 122:6 148:19,24 153:19 164:21 165:21 139:9 140:9 141:7,9 break 7:23 8:8,11 154:5,12 156:25 170:16 177:11,21 143:3 145:17 8:14,17 55:22 57:16 211:22 226:22 178:13 182:9 152:18 154:6,11 112:20 203:21 base 246:8,11 189:23 190:9 157:17 161:19 234:18 based 16:19 22:13 191:25 193:4,11 167:2 168:2,11,13 breaks 7:6 8:12,14 33:19 75:14 92:13 200:5 204:15 211:2 170:8 173:10 175:5 bright 75:9 95:13,20 102:8,11 212:8,15 222:11 176:19 181:18 bring 156:18 173:19 106:22,24 108:12 223:8 224:19,25 183:20 185:10 173:24,25 123:25 130:14,15 225:5,20 226:4 188:5,24 200:9 british 240:11 131:10 231:4,8 236:5 212:9 214:5 218:25 broad 247:20 basic 225:10 237:25 238:18 221:8 233:23 broadway 277:3 basically 21:8 28:20 240:5,23 241:5 265:18 267:19 broke 156:13 47:22 71:20 89:3 242:17 243:20 271:10 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299366 [broker - collins] Page 6 broker 59:18 189:22 193:10 I caption 5:10 changing 202:18 brokers 60:4 206:20 208:15 cara 192:20 characterization build 93:23 209:12,18,23,24 caruso 99:22 67:4 bullshitting 201:9 215:23 232:25 case 5:10 114:23 characterize 67:5 bulmer 100:2 238:4 246:9 255:4 118:15 130:23 77:10 141:21 142:8 bunch 162:12 193:7 265:7 267:2 185:6 220:17,23 235:10 194:25 210:17 called 9:13 58:25 221:4 222:14 232:3 charge 140:3 246:3 business 39:20 59:20 60:24 61:10 277:5 255:11 60:20,22,24 61:3,6 73:3 109:18 119:17 cash 212:23 225:16 charged 219:7,11 61:8,13,18 62:4,6 120:2 123:13 129:8 category 12:17 charges 246:4 62:14,17 63:6,8 129:9,12 131:22 247:21 charging 239:8 67:8,11,14,16,18 132:21 133:13,21 caught 35:13 chaudhury 3:25 72:22 73:2 80:16,19 133:25 134:11 cause 145:24 5:25 6:2 83:13,20,22 89:14 137:16 138:2 141:4 caused 108:5 154:12 cheat 208:16 93:24 113:13,14 143:24 145:14 cautioned 139:5 check 172:5 190:4 123:9 174:14,16 147:24,25 148:5 cc 234:10 215:8 227:3 238:15,18 151:25 153:3 cc'd 217:15 child 69:16 70:3,14 businesses 62:22 174:18 181:6,13 cc's 99:18 70:18 80:3 buy 11:19 86:23 206:13 209:9,11,13 certain 24:17 25:11 children 69:14,19 110:21 116:17 211:6 212:9 214:4 162:19 164:16 70:10,22 71:17 79:2 136:9 181:20 266:16 173:19 246:25 79:20 244:23,24 calling 129:18,22 certainly 117:20 choice 10:18 buying 81:9 93:13 130:5 141:11 118:6 258:18 chronological 59:7 96:9 146:16 173:11 265:14 ck 157:6 191:10,16 193:4,5 certified 237:4 claimants 1:6,12,12 calls 145:18 146:24 certify 274:10,16 3:5 6:16 c 3:2 4:2 274:2,2 148:12 152:8 cetera 157:6,6 198:9 clear 14:5 17:13 calendar 19:15 20:3 183:15 192:2,3,8 265:5 29:17 42:11 54:19 39:21 193:6,8 267:20 cfo 129:19,23 130:6 67:17 75:7 83:9 call 79:23,25 100:19 calm 131:5 138:16 132:12 134:23 111:14 174:15 100:20,23,25 124:7 145:11 136:5 196:11 197:23 131:8,9,20 132:9,24 calmly 265:2 do's 130:19 267:22 133:7,10 134:2,7 canceled 172:22 chain 192:15 194:8 client 35:3 85:13 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103:19 107:18 compensated 87:21 conglomerating 18:24 19:3,6,24 109:16 140:10,11 87:22,25 209:2 20:14,25 25:25 26:3 176:9 completed 66:6 connection 75:24 26:21,24,25 27:4,7 comes 173:20 complicated 167:15 84:21 207:11,12 27:11,15,1628:13 comfort 153:25 concept 143:9 199:5 256:9 30:20 31:2,6 33:11 comfortable 150:21 202:24 225:21 connotation 137:8 33:12,19,25 34:15 153:20 157:2 226:4,19,21 227:21 consecutive 194:21 35:6 37:10 45:25 199:13,16 228:4,5 255:20 196:3 93:8,11,15,21 102:8 coming 8:10 105:5,6 256:8,14,15 257:10 consent 177:4,7,10 103:21 105:3 267:17,24 268:3 concern 21:16 26:16 177:16,18,21 109:24 116:21 commencing 245:19 44:20,21 105:23 179:19,24 180:2,6,9 119:10 121:8 commission 206:25 concerned 7:16 180:15,18 126:24 127:8 207:8,11 277:25 149:8 153:5 consented 182:20 132:19 135:21,25 commit 115:2 concerning 18:4 consider 44:9 82:2 147:22 152:3,19 210:12 26:25 85:6 172:21 98:9 130:8 153:14 154:4 committed 210:6,9 183:17 184:15 considered 43:25 156:14 157:8,10 committing 43:11 208:6 216:2 67:21 81:9 82:21 158:4,8 159:14 43:18 44:10 47:8 conclude 125:18 123:5,6 125:23 160:7,17 161:2,11 commonly 59:24 136:18 149:12 161:20,25 162:2 communicate 26:7 concluded 125:9,11 considering 81:12 166:23 168:12 26:11 142:14 85:23 86:4 173:6 183:10 187:9 communicated conclusion 120:6 consistent 208:15 189:17 190:13,16 213:23 214:7,20,25 122:20 consistently 200:13 190:19,22 191:4 communication conclusions 127:4 constituting 163:4 204:15,18,19,23 268:13 condition 149:13,15 consult 98:17 206:15 207:19,22 communications 150:19 consultant 98:9 99:9 208:23 209:4 170:9 conditions 146:8 consultation 164:4 210:20 220:9 community 65:3,16 conference 156:15 consulted 82:24 222:25 223:3,25 company 1:113:13 206:20 consulting 96:21,24 231:12,16 268:15 39:22 40:9 61:11,12 conferences 152:14 98:4,22 99:3,5,15 268:23 269:6,7,8 61:24 62:9,20 63:5 confirm 31:13 34:8 275:22 270:11,21 271:3,6 63:9,14 88:8,10,12 44:5 contact 216:15 271:14,23 89:4,4,12 90:24 confirmation 31:16 contemplated 84:22 conversations 17:14 91:17 93:9,13 97:13 32:6 context 10:6 143:7 17:21 18:3,7 20:19 117:13 158:18 confirmed 20:10 143:10 28:2,8,16,22,25 163:12,16,21 123:18 142:7 continue 32:22 85:3 30:9,11,15 33:20,22 165:13 174:9,17,21 confirming 26:18 259:23 70:12 75:4,7 81:15 174:23 176:24 37:16 continued 4:2 47:5 91:22 98:3,7 100:8 182:22 192:21 conflicting 198:24 156:11 259:24 115:5 128:16,19 212:22 277:2 199:6 200:3 201:15 contribute 31:20 146:23 151:11,17 company's 160:9 202:9,17,23 32:5,9 160:19 161:4 168:14 170:2,12,25 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299368 [conversations - dan] Page 8 171:7 173:4 176:16 47:10,13,14 48:3,4 227:20 231:11 craft 60:6 178:17 183:21 48:7,15,17,21 49:22 232:23,24 233:5,8 crazy 130:12 131:3 184:2,6,11,15 185:9 49:25 50:2,4,5,16 238:15 239:4,7,11 138:8 190:2 203:4 191:8 198:25 199:6 51:2 52:6,19,24 240:8,12,18,19 create 31:10 60:19 200:3,4,7,16,23 53:8,14,20 54:6,17 241:4,6 242:5,9,10 created 61:13 246:7 201:16 202:10,11 55:4,13 56:5,9,15 242:16 244:8,12,17 criminal 64:9 202:17 204:6,11,13 57:3,7,13 66:21 244:20,21 245:3,4 crook 210:19 205:4 206:4,10 67:12 69:2,11 72:8 248:4,10,17,19,22 current 50:21 53:7 207:16 208:4,24,25 82:22,23,25 83:2,4 248:23 249:11,14 53:10,11 56:14 209:2 210:14,18 83:5,7,14,18 86:23 249:15,17,20 250:6 235:7 212:24 215:13 86:24 87:5 88:16 250:19 254:4,5,21 currently 78:12,13 224:4,6 231:20 90:8,11,12 91:18 254:22,23 255:7 cycle 38:25 40:23 271:19 92:8 95:8 99:10 257:2 259:2,3 263:7 convertible 106:12 103:17,18,24,25 260:19 261:11,21 d conveyed 266:21 104:2 108:10,14 262:7,21,23,24 d 3:16 215:8 275:2 convict ion 64:9,15 110:11 112:16,19 263:25 266:20 ■ 1:17,18 3:19,20 convince 166:24 116:22 128:3,4,7,10 267:12,25 270:12 5:22,23 6:3,4 16:21 228:14 133:13,14 140:20 271:9 272:18 16:23 49:15,21 convinced 228:14 142:9,10,12,13,16 cost 165:14 160:10 174:8,12 cooley 2:9 3:18 5:8 143:8 144:17,25 counsel 21:5 25:7 177:3 182:21,22 6:2,7 147:11,15 148:14 28:11,13,17,23 192:20 275:20 cooling 77:5 149:3,6 151:2,8 33:23 34:2,5,7,15 dalton 58:13,16 cooper 58:3,6,11 157:11 160:11 35:18 41:20 90:11 dan 13:7 20:21 copied 199:10 166:13 169:16 90:11,17 130:15,17 31:14 32:7 42:3 201:19 170:10 171:21 130:19,19,20,22 50:3 55:5,6 74:23 copy 236:9 176:22 177:19 139:6 151:14 74:24 75:5,17,20,25 cordial 70:10 179:20 180:2 181:7 175:16,19,20,21,24 76:3,5,23 100:13,14 corp 241:9 181:14,21,22,24 176:3 180:9,12 101:6,9 111:6,13 corporate 61:16 182:25 183:2,12,13 185:8 220:7 232:12 116:6,10,20 117:5 242:12,13 185:24 186:3,9,15 counter 1:12,15 117:10 118:11 corporation 241:3,4 186:19 187:6,12,14 country 66:8 120:19 121:2,3 241:19,19 242:2,5 187:15,17,20,21 counts 64:18,21,25 122:3 123:25 243:4,13 191:7 192:2 194:10 251:20 124:10,13,14,21,23 correct 9:22 10:13 194:13,17 196:9,24 county 274:5 125:4,6,9,10,11,14 12:21 14:4 16:5,10 196:25 198:5,9,10 couple 107:12 135:2 125:16,19,20,24 17:9 20:5,9 24:19 199:20,23 201:3,7,7 135:2 136:22 138:4 126:10,15,17,20,25 28:18 29:15,15,21 201:13,19,23 202:4 143:4 146:8 151:3 129:9 132:9,24 30:2,24 31:7,8,11 202:12 203:12,13 162:14 185:3 241:8 133:10,25 134:11 31:23 32:6 40:3,12 203:18,19,19 261:9 138:16 141:12,20 40:25 42:14,15,17 207:20 213:21 court 5:18 141:23 145:20,22 42:18,20 43:9,14,21 214:18 215:11,12 cover 98:23 99:4 146:4,18 147:23 44:14 45:3,4,7,19 217:16 218:14 233:16 275:23 148:5,6,17,20 45:22,23 46:2,3,5,6 219:8,11,12,14,18 276:11 151:25 152:10,12 46:10,12,13,15,16 219:19 220:13,15 covered 34:12 152:14,23 153:10 46:22,23,25 47:2,6 222:20,21 226:7 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299369 [dim - discuss] Page 9 153:17 156:23 david 193:10,13 define 67:9 74:15 destabilizing 246:8 166:9 167:24,24 davis 118:11,12 defining 111:25 destroy 146:2 168:6,6 170:20 130:18,18 137:16 251:16 detail 223:16 224:2 173:5,11,15,18 137:20 139:4 definitely 178:7 details 22:15 135:14 188:25 190:15 140:21,22 175:22 260:24 153:2 162:8 270:4 191:10,13,25 192:7 day 39:21 133:11,13 deflect 193:13 determine 143:13 193:4,5,9,12 198:19 133:15 152:6,6 deliverable 173:21 develop 66:22 198:23 201:9 206:4 269:7 273:9 274:22 deliverables 173:19 169:21 206:16 208:16,21 277:22 delson 175:11 developed 159:10 209:8 210:18 days 137:15 138:4 demand 36:21,24 di 237:18,23 211:17,18 212:17 163:9 167:17 122:12 146:5 dial 132:3,4 212:21,22,23 dbz 1:18 3:20 5:23 152:24 153:18 dicola 4:14 5:3 213:19,23 214:2,7,9 6:4 162:21 154:8 156:24 different 9:7 10:23 214:16,20,25 deal 40:21 81:6 170:22 189:13,20 10:23 11:10 12:19 225:11,12 228:13 97:21,22 167:9 191:5 228:15 35:2 37:22 38:5 233:19 234:11 212:10 255:21 demanded 145:24 61:16 72:13 80:10 264:23 265:14 dealing 254:12 191.3 80:11 83:13 100:16 270:23 dealings 234:11 demanding 36:17 104:5 106:14 dan's 117:13 148:13 december 14:24 department 59:19 141:18 172:15 152:21 15:25 43:5 46:7 departure 164:2 194:25 200:11 dangers 30:13 51:18 53:13 103:17 depend 248:16 245:11 247:21 daniel 1:19 4:5,9 6:9 107:6 108:20 depending 172:16 248:14 252:2,22 6:10,11,13 124:12 216:25 217:8 251:7 245:23 253:11,16 254:10 darren 35:16 90:5 272:17 deployment 246:14 255:15 256:13 157:22 270:23 decent 111:4 deponent 277:6 265:15 267:12 date 5:4 14:7 24:13 decide 11:25 149:17 deposition 1:25 2:8 differently 42:2,5 29:24 31:5 38:2,11 decided 55:6 68:7 5:7 7:10,15 39:11 43:17 51:3,9 38:15,23,25 39:2,24 69:7 81:6 82:5 223:20 274:12,14 difficult 67:23 41:7,9 42:24 44:21 106:23 109:16 277:5 diminished 121:23 45:11 46:4,14,24 116:14 124:2 145:2 depositions 7:4,8,17 direct 263:12 54:21 55:2,11 56:3 145:5 192:9 218:17 7:19 direction 141:13 57:11 159:13,14 decision 102:7,10 derivatives 59:25 directions 275:8 169:3,4 204:14 106:21 108:3,6,12 describe 67:25 68:9 directly 65:17 89:13 254:25 260:8 116:4 142:4 149:16 68:22 70:14 72:2,15 91:9 200:23 272:11 277:5,25 150:19 186:12,17 described 77:2 discipline 22:16 dated 22:18 37:4 187:2 220:2,3 164:18 257:10 discipline's 135:17 49:14 50:3 158:12 266:17 describing 72:11 disciplined 21:7 158:18 165:20 decisions 111:20 255:22 256:15 disclosed 164:2 192:17 195:11 declined 258:10 description 275:15 212:11 214:13 196:19 216:25 declining 257:20 desire 25:17 26:11 disclosure 122:5 233:15,20 264:20 deemed 164:4 27:13 30:9 246:10 discretion 63:12 275:18,24 276:10 defendants 32:17 246:20 247:10,16 discuss 19:9 29:7 276:15 deferral 124:3 247:18,19 33:9 82:17 96:24 dating 46:14,24 deferred 117:14 desk 58:25 59:16,17 104:13,17 175:15 211:25 176:2 216:4 220:3,6 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299370 [discuss - effective] Page I0 231:22,25 233:25 178:9 213:24 144:5,13,16 145:8 duties 122:6 257:12 dollar 121:14,23 145:14 146:22 e discussed 30:21 143:5 227:3 151:24 153:9 e 3:2,2 4:2,2,9 9:12 31:3 83:20 94:13 dollars 92:6,15 93:3 156:15 158:4 9:12,12,12 156:2,2 104:19 109:12 93:6 102:15 104:24 159:15 160:18,19 156:7,7,7,7 192:13 159:16 161:21 105:21 121:19,21 161:3,4,21 167:2 192:15,16,16,19 164:3 180:8,14 135:2 138:9 143:4 171:16 173:6,14 193:7,11 194:5,6,8 215:23 216:5 149:10 153:22 176:16 177:9,12,15 194:17,21,25 195:2 258:21 260:10 157:4 237:21 177:24 178:4 195:8,10,11,11,15 269:4 239:25 179:14,22 180:4,25 195:23,24 196:4,8 discussing 37:3 double 137:8 181:3,4,6,13 183:4 196:15,15,18,20 105:10 127:7 234:7 doubt 101:8 183:16,16 184:20 197:17,17,24 198:3 258:7,15 draft 98:15,22 99:4 185:11 187:10,24 198:7,11,15,20 discussion 9:11 230:7 275:22 189:22,24 190:3,11 199:3,4,9 200:2 32:18 33:6 97:9 drafted 99:15 190:12 191:5 192:4 201:7,14,18 203:17 101:24 156:22 232:10,12 194:9 195:3,11,16 204:5 212:7 216:22 158:15 245:18 drew 127:3 195:23 196:16,18 216:24,25 217:2,7 259:5 263:16,20 dubin 17:4,6,15,22 196:23 198:3,12,15 218:2,7 264:20 265:23 266:5,11 18:2,3,9 19:13,25 199:11,14,19 201:5 265:25 274:2,2 267:17,23 268:9,19 20:2,10,25 24:17 204:7 205:5 207:16 275:2 276:3,4,5,7 discussions 99:12 25:11 26:2,15,25 208:4,16 210:15 276:15 263:13 27:15,16,25 28:5 215:14,22,25 216:7 earlier 109:12,23 distinction 72:10 29:2 30:23 31:6 216:15,25 217:3,4,8 119:5 138:4 163:24 distinctly 129:3,4 33:11,20 34:4 37:8 217:15,19,22 163:25 169:8,24 distinguish 100:21 37:10,20 42:4 45:25 218:15 220:4,24 207:20 243:25 distrust 144:10 66:11,14,23 67:12 221:5,14,17,23 248:6 258:23 263:3 distrusted 144:17 67:21,24 68:3,7,22 222:4,19 223:11 265:13,14 267:18 divisions 75:10 72:8,11,23 74:13 224:4 225:2 229:8 269:7 document 44:23 75:4,25 76:4 77:6 229:12 230:8 231:3 early 16:24 28:7 49:18 98:20 172:23 79:15,18 80:14 81:3 231:5,10,13,17 78:16 93:16 117:4 173:2 177:25 185:5 81:16 82:12 83:10 232:21 233:2,3 140:23 159:20 185:6 192:11 83:10 84:2,18,24 234:7,12 259:6,8 206:19 228:6 246:3 194:24 216:20 85:4 91:23 92:9 262:10,17,20 263:3 earned 162:20,21 229:19,23 235:22 93:9,12 94:12,21 264:21,24 266:22 earnings 242:14 236:14 241:15 95:2 98:4 100:9 266:22,23 268:20 earns 238:24 242:23 245:14 102:20 103:21 268:24 269:8,9 eases 246:11 271:12 276:8,12,13 108:8 109:18 115:6 271:6 276:16 easier 195:19 276:14 118:21 119:13 dubin's 72:3 75:14 education 58:4 documents 33:14,21 120:17 125:16,18 80:18 206:16 educational 58:2 56:17,18 222:13 125:24 126:25 dubins 70:13,22 effect 11:11 134:5 235:18 236:22 127:12,25 131:12 72:18 145:10 189:25 237:4 131:18,22 132:4 ducking 192:2,7 272:8 doing 60:12 81:12 133:6,15 134:3 duly 9:13 274:13 effective 272:11,14 101:13 109:7,19 137:17,23 138:2,7 duplicates 32:23 110:5 148:6 152:25 138:15,21 143:24 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299371 [effectively - exchange] Page 11 effectively 57:11 17:1 18:1 19:1 20:1 169:1 170:1 171:1 errata 277:2 effectuate 183:12 21:1 22:1,22 23:1 172:1,17 173:1 error 164:9 effort 191:22 24:1 25:1,4 26:1 174:1 175:1 176:1 errors 163:19 efforts 81:20 166:15 27:1 28:1 29:1 30:1 177:1 178:1 179:1 especially 21:9,13 eight 108:4 31:1 32:1 33:1 34:1 180:1 181:1 182:1 21:15 113:14 136:8 either 78:6 86:12 35:1 36:1 37:1 38:1 183:1 184:1 185:1 esq 3:8,9,16,23,24 89:10 117:21 118:7 39:1 40:141:1 42:1 186:1 187:1 188:1 3:25 4:8,9,10,13 152:5 170:12 43:1 44:1,18 45:1 189:1 190:1 191:1 essence 198:23 187:23 270:22 46:1 47:1 48:1 49:1 192:1 193:1 194:1 232:5 election 242:8 50:1 51:1 52:1 53:1 195:1,19 196:1,16 essentially 61:13,15 else's 27:22 176:2 54:1 55:1 56:1 57:1 196:18 197:1 198:1 61:18 91:17 95:16 employ 35:23 57:25 58:1 59:1 199:1 200:1 201:1 140:4 employed 61:23 60:1 61:1 62:1 63:1 202:1 203:1 204:1 established 213:11 employee 76:4 64:1 65:1 66:1 67:1 205:1 206:1 207:1 214:16 employees 62:9 90:2 68:1 69:1 70:1 71:1 208:1 209:1 210:1 et 5:11,11 157:6,6 115:2 263:20 72:1 73:1 74:1 75:1 211:1 212:1 213:1 198:9 265:5 enclosing 217:2 76:1 77:1 78:1 79:1 214:1 215:1 216:1 ethical 143:11 encourage 31:20 80:1 81:1 82:1 83:1 217:1,8 218:1 219:1 eva 66:18,19 32:9 84:1 85:1 86:1 87:1 220:1 221:1 222:1 event 169:18 237:3 encouraged 32:4 88:1 89:1 90:1 91:1 223:1 224:1 225:1 252:15 ends 44:22 92:1 93:1 94:1 95:1 226:1 227:1 228:1 events 139:3 energy 188:17 96:1 97:1 98:1 99:1 229:1,19 230:1 eventual 126:12 engaged 172:7 100:1 101:1 102:1 231:1 232:1 233:1 eventually 167:11 engagements 79:14 103:1 104:1 105:1 234:1 235:1,4,10 262:20 79:15 106:1 107:1 108:1 236:1 237:1 238:1 everybody 27:22 enhanced 65:19 109:1 110:1 111:1 239:1 240:1 241:1 42:2 208:19 244:25 66:6 112:1 113:1 114:1 242:1 243:1 244:1 ex 72:12,14 ensued 152:19 115:1 116:1 117:1 245:1 246:1 247:1 exact 143:3 enter 96:14,21 118:1 119:1 120:1 248:1 249:1 250:1 exactly 9:8 34:24 entering 86:12 121:1 122:1 123:1 251:1 252:1 253:1 108:5 120:12 121:8 entire 23:12 33:18 124:1 125:1 126:1 254:1 255:1 256:1 127:2 130:8 137:4 40:7 48:14 194:24 127:1 128:1 129:1 257:1 258:1 259:1 145:18 162:3 228:2,15 130:1 131:1 132:1 260:1 261:1 262:1 265:25 266:7 268:5 entity 63:5 88:7,8 133:1 134:1 135:1 263:1 264:1,12 examination 9:16 90:20 117:15 136:1 137:1 138:1 265:1 266:1 267:1 156:11 235:2 275:4 174:15 238:13,23 139:1 140:1 141:1 268:1,10,15 269:1 examined 9:14 239:2 240:2 242:13 142:1 143:1 144:1 270:1 271:1 272:1 156:9 243:4,14 145:1 146:1 147:1 273:1,6 274:11 example 244:16 entries 135:6 136:4 148:1 149:1 150:1 275:5 276:8 277:6 249:10 250:16 162:13 163:22 151:1 152:1 153:1 277:21 251:24 252:6,17 entry 117:6 118:14 154:1 155:1 156:13 equipment 244:24 253:2,12,14,23 epstein 1:25 2:8 157:1 158:1 159:1 equities 101:18 254:14 256:22 5:15 6:24 8:5 9:1,10 160:1 161:1 162:1 equity 100:22 excess 237:5 9:18 10:1 11:1 12:1 163:1 164:1 165:1 106:13 exchange 58:24 13:1 14:1 15:1 16:1 166:1 167:1 168:1 59:14 206:25 207:7 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299372 [exchange - find] Page 12 207:11 explain 10:22 11:12 150:23 167:8,10 205:6 207:14 exclusive 7:5 11:16 12:15 65:20 182:8,20 183:9 215:23 216:6 exclusively 89:4 88:25 134:21 185:22 186:4,5 222:25 231:9,14,14 excuse 12:23 34:23 230:23 187:18 194:12 233:20,24 264:17 51:23 65:14 123:10 explained 167:24 200:6 203:2 210:11 fee 94:16,20,22 163:15 164:25 168:6,10 210:18 211:23,25 95:17 96:15 97:19 executed 182:24 expletives 131:4 214:11,13 217:19 250:6 251:23 252:7 231:17 235:17 exploring 94:5 225:15 226:20 252:12,21 253:7,15 236:5,21 272:17 express 262:15 227:4,22,23,24 253:15,19 254:2,4,4 exercised 269:14 expressed 26:16 229:15 241:9 243:3 254:20,21 255:12 exhibit 33:3,7 35:25 121:22 252:10,16 255:20 256:2,25 261:23,23 49:13,14 97:8,10,12 extend 38:1153:18 255:25 260:14 feel 153:20 157:2 98:21,22,25 158:11 54:4,8,13,18,19,21 264:14 265:12 161:8,9 199:13,16 158:12,16 165:22 54:25 55:10 269:3 fees 95:20 114:8 182:10,11 192:12 extended 38:15 57:6 factors 107:14,22 116:13 117:14 192:13 194:6,8 57:12 108:2 123:25 162:20 195:7,8,16,18,19,20 extending 48:14 facts 125:11 141:24 212:2 238:24 239:8 195:22,24 196:8,13 extent 101:24 265:5 247:2 249:7,11,13 196:14,24 197:3,4,6 141:14 142:12 fair 10:17 11:2,23 249:19,23 250:13 197:8,12,13,23,23 143:13 269:3 12:2,5,7,8,13 20:23 257:7 197:24 198:8 205:9 extra 174:15 80:4 94:23 95:7 felt 167:7 181:23 205:11,13 216:21 extremely 227:6 110:13,22 142:14 fiancé 66:15 216:22 229:18,19 f 223:4,5 238:21,22 fiduciary 122:2,6 229:21 233:14,15 239:10,16 241:9,11 123:15 227:25 f 9:12,12 156:2,7,7 233:18 235:22,25 274:2 258:20 261:16 fifteen 208:7 241:15 242:19 263:3 267:13 fifth 4:6 face 31:14 132:11 245:14 264:20,22 family 70:9 78:25 file 212:3 232:2 215:3,3 272:4,11 275:17,18 far 7:16 99:14 filed 212:15 facility 8:5,17 65:9 275:21,22,24 276:2 219:13 255:8 filled 157:17 fact 11:20 12:18 276:3,4,5,6,7,8,10 father 70:4 finance 81:23 22:17 36:22 37:21 276:12,13,14,15 fault 107:18,19 financial 1:11 3:13 44:10 47:8,21 52:3 exhibits 32:22 favor 148:7,21,21 39:19 59:2,20,22 52:13 109:3 111:11 275:14 fax 98:23 99:3,3,4,6 60:3,6 61:11,12,24 115:19,20,23 116:5 exit 244:19 165:22 233:16,18 62:20 63:5,8,10,14 116:11,11,13,16 exiting 246:4 275:23 276:11 88:8,9,11,12,14 117:7,8,12,19 expected 186:15 118:14,15,16,18 fear 226:21,22 89:2,11,12,14 90:17 expecting 160:13 246:12 90:23 91:5,16 95:21 119:17,19 120:2,4,6 171:20,22,24 february 115:14 97:13 158:17 160:9 120:22 121:12,17 expense 164:10 117:25 119:8,13 174:9,17,21,23 121:18,25,25,25 expenses 89:10 120:15,16 122:7 198:4 239:18 122:7,8,11,16 123:6 163:5 208:21 124:7 170:17 188:6 financing 82:17,25 123:7,25 124:12 244:24 245:3 189:12,14,18 find 81:25 132:15 126:10,13 129:19 experienced 9:21 191:11,14 192:17 144:14 152:25 136:11 137:4,5 expires 277:25 194:9 195:3,12 168:23 170:6 143:2 149:17 196:19 204:10,10 171:11 188:18 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299373 [find - fund] Page 13 209:22 218:12 243:6,8 250:9 251:9 forwarded 193:18 21:18 23:4,22 26:8 227:12 251:24 255:5 259:9 194:8 195:16 26:13 29:21 30:5 finder 96:4 260:8 264:12 196:23 197:19 31:4 42:4 43:12,19 finder's 95:17,20 fiscal 253:18 256:17 forwarding 192:19 44:11 47:9,25 49:16 finding 209:5 five 8:8 76:14 77:25 found 117:4 208:17 49:22 64:4 75:6 fine 18:19 32:24 86:9 211:14 213:6 208:17 210:4,8 80:19 96:10 100:9 76:5 135:8 148:3 222:23 231:21 212:18 225:2 227:8 100:10,12,17,17,19 199:12 226:15 232:5 four 14:20 17:24 100:21 101:4,10,10 238:8 fixed 257:24 96:3 104:4 120:20 101:22 103:8,11,14 fingers 132:3 flat 251:2,7 254:2 fourteen 35:20 71:5 103:17 106:12,13 finish 8:19 122:10 floor 3:14 58:23 71:7,9,11 106:13 107:7,21 123:10 141:15 59:14 fourth 46:17 243:9 108:7,20 109:22 finished 156:14 florida 64:14 frame 84:4 187:23 110:14 111:7 182:5,8 226:3 focus 183:14 206:12 113:10,14 114:2 fire 114:16 129:19 focused 144:21 free 9:3 161:8,9 115:7,24,24 116:2 130:6 134:23 135:4 focusing 126:24 frequency 78:18 116:13,25 117:10 fired 126:5 129:25 144:23 frequent 222:24 117:19 118:16 130:2 135:8 214:11 follow 32:21 106:6 frequently 78:15 119:7,15 121:15,18 firing 117:5 129:23 106:16,18,19 friend 67:10,22,23 122:11 123:16,21 132:12 145:25 166:24 68:23 70:9 72:4,7,9 126:14 127:10,21 firm 60:5 120:7 224:2 72:11 77:13 128:2 130:24 131:4 123:15 139:17 followed 106:10 friends 66:25 67:3,5 131:11 135:13 146:16 153:3 122:18 70:4 72:15 136:9 137:9 142:5 154:20 167:15 following 65:17 friendship 77:6 143:5 146:2 149:5 175:12 199:8 201:6 207:14 front 98:25 194:13 160:10 162:6,7,7,9 201:9,17 follows 9:15 139:25 197:24 162:10 163:3 167:9 firms 119:17,25 156:10 frozen 258:3 169:15 174:8 first 7:15 13:21 14:8 footing 111:8 ftc 6:24 12:22,23 177:16,18,21 178:5 15:5 17:24 18:4,8 forced 115:25 97:10 158:13 178:8,11 184:7,11 18:10 19:15 20:15 forceful 191:20 235:13,17 236:21 184:17,21 205:6 20:17 22:2 24:6 forgot 226:17 237:4,11 238:15 207:12 211:19,23 30:24 31:6 42:6 form 65:19 157:24 239:5 240:2 242:8 211:25 214:14 45:17 46:5,15 50:8 241:14,20 243:2 275:21,25 215:10 225:16 50:9 60:24 72:22 formed 174:18 full 55:21 101:24 227:12,24 228:6,21 75:20 97:3 102:7 former 66:15,17 105:13 122:13 235:8 236:23 243:3 119:19 120:3 122:4 68:24,25 141:14 142:12 244:8 246:6 248:25 129:2,3 131:9,13,16 formula 96:2 143:13 145:3,5 249:3,6,11 250:7,11 133:10 135:17 forth 116:19135:6 146:5 170:22 252:2,3,20,23 140:24 147:2 274:12 186:10 198:24 253:11,16,18 159:25 160:5 fortress 1:5,5,14 255:12 254:10,11 255:4,10 170:17 176:11 4:13 5:10 6:16,17 fully 256:25 255:15,17,19,24 185:2 190:9,17,18 6:21,22 277:5 fund 1:6,15 6:17,22 256:10,13 257:6,6 195:17 208:12,14 forward 98:10 12:20 13:5,17,25 257:18,25 258:25 223:14 224:17 268:6 14:2,9,10,13,16 259:17,24 262:23 226:23 228:13 18:22 19:4,8 20:11 264:13 265:16 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299374 [fund - groff] Page 14 266:2,7 267:13 general 12:17 28:11 82:12 94:21 95:2 86:22 98:17 101:13 269:3 271:13 90:11,17 104:9 109:18 115:6,17 101:19 104:14 275:20 114:14 225:10 117:21 118:7,21 105:19 110:4 fund's 130:18,21 246:11 120:17,19,21 112:23 114:12,25 140:13,18,19 177:4 generally 30:16,19 123:18 131:22 123:20 127:18 177:7,10 252:22 81:18 95:20 179:7 132:21 135:19 129:19,25 130:6 funded 116:18 235:14,15 247:10 143:24 145:13 132:16,18 134:2 funds 9:22,25 10:3,6 247:15,18,19 146:10,24 150:7,9 135:7 137:7 142:12 10:19 13:7 14:7 249:23 255:11 152:21 153:9,24 142:15 143:14 15:10,14,21 21:12 genesis 263:24 154:10,11,15 166:9 146:13 150:11,15 21:15,15,24 22:5,11george 175:11 166:25 171:16 150:25 151:6 153:2 36:17,21 38:16 204:15 173:14 176:16 155:4 158:10 41:16,24 57:6 63:18getting 138:9,10 178:20,23 190:11 162:11,13 168:23 63:22,25 74:11 75:6 144:19,21,23 191:24 194:9 195:3 170:2,18 172:16 87:15 100:12 104:7 170:21 171:2,3,8 208:15 217:8,15 176:17 181:8,10 104:8 106:4 114:23 172:8 175:16 224:23 229:13 185:22 186:13,18 116:11 120:10,24 177:25 179:11 234:12 264:24 187:3,4,5,14,19 123:8,23 125:22 180:17,18 187:24 glenn's 68:4 188:7,17,20 190:6 136:7 163:9,13 198:18 201:23 go 11:4 21:12 25:10 191:2,18,20 203:23 169:4 172:3 189:13 223:16 246:25 32:25 35:7,12 45:16 211:20,21 213:2 190:23,24 205:5 girlfriend 66:16,17 76:17 79:17 100:8 219:7 223:15 233:4 226:19 227:12 68:24 69:2 72:12 105:2,17 153:6,14 234:13,21 239:23 228:18 233:3 girlfriends 72:14 154:19 167:15 243:24 250:5 264:6 245:25 249:22,24 give 8:2 22:24 36:14 188:13,15 195:15 267:16,24 268:2,6 254:7 255:11 41:12 55:5,6 59:7 196:4 197:18,19,22 268:25 273:2 260:21,24 65:22 68:7 73:15 220:14 223:25 good 5:2 9:9,18,19 funny 227:2 75:8 88:3,5,6 231:22 234:17 68:23 72:7,11,15 furnished 275:12 100:14 105:16 243:12 245:17 101:23 104:10 further 156:10 106:2 153:25 251:20 260:18 108:9 114:15 172:5 202:4,6,8 219:4 170:18 188:22 269:19 272:5 203:20 208:18 274:16 191:22 220:19 godfather 69:13,18 215:19 218:18,23 future 212:5 233:10 239:21 69:20,21,25 70:6,8 218:24 219:4,17 f'i 195:17 196:6 250:16,16 255:25 70:13,18 235:4,5 265:7 given 10:18 15:22 godfrey 3:11 268:17 67:14,16 206:24 godward 3:18 5:8 governed 14:2,7 gain 176:21 250:6 207:6 257:22 godwin 2:9 21:20,25 29:24 251:5,18,19,24 267:19 274:15 goes 202:14 218:2 30:17,22 31:4 252:8,14,15,17,19 gives 160:11 251:4 gp 1:18 3:20 5:23 252:21 253:4 giving 31:22 143:7 going 6:25 8:7,11,22 6:4 gained 251:4 145:17 9:4 11:17 20:11 great 70:10 86:20 gains 196:2 256:25 glenn 17:4,6,14,22 32:2,14 33:13 37:2 93:23,24,25 100:14 257:8 26:2 34:4 37:8,10 42:8 47:20 48:9,10 111:10 145:4 167:9 game 7:16 37:20 42:4 66:11,14 48:11,13,1449:3 greater 11:3 garrison 3:4 6:15,20 67:24 68:7 69:7 52:4,16 56:13,24 groff 230:4,10 75:7,25 77:6 81:3 57:19 65:22 81:4 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299375 [gross - identification] Page 15 gross 121:25 147:24 156:17 hello 76:16 267:13 holding 182:21,22 group 88:13,14 157:13 176:11 help 60:4 153:18 holdings 1:19 5:24 89:11,15 90:14,17 190:5 222:9 266:25 156:24 159:14,18 6:5 91:5,16 happens 136:7 helped 80:21 178:5 home 76:17 232:15 grown 110:17 144:12 henry 84:9 232:17 gruss 117:5 122:3 happy 14:18 hereinbefore 274:12 homes 229:25 124:24 126:5 hard 108:4 hereunto 274:21 honesty 137:6 161:13 210:21 harley 265:15 high 256:8,14,16 honor 190:7 211:2 212:4 216:16 harm 246:7 highbridge 13:6,8 honored 191:2 217:20 218:16 harry 118:11,12 13:11,25 14:2,12,16 hope 8:19 219:2,6 220:10 130:17 137:16,20 17:8,9 18:16 31:4 hopefully 8:21,24 221:7,11 139:3,14,15 140:21 63:17 67:19 68:5 244:2 gruss's 164:2 153:6,23 157:5 69:8 73:5,18 74:4,6 horizons 246:15 guess 32:17 91:25 158:24 159:4,10 74:9,20 75:6,9,11 horrendous 116:4 92:4,5,12 93:2,4 166:25 171:10,11 76:4 80:5,13,22 hour 7:24 8:8,8,10 133:18 140:23 190:9,10,25 192:16 81:5,7,9,21,23 82:4 8:18 134:13 168:13 191:17 193:5,14,15,25 82:6,7,9,10,18,21 hours 7:5,20,21 8:20 251:19 200:19 265:3 83:4,6,8,17,24 84:2 house 21:5 28:13,16 guilty 64:16,19 266:16 270:22 84:6,13 85:15 86:13 28:23 35:18,23 guy 90:10 116:20 he'll 148:4 86:23 87:9,11,24 61:22 90:11 94:21 144:11 155:2 head 24:22 58:25 88:2,5 91:20 93:22 139:6 151:14 180:9 211:18 59:18,19 60:3 94:7,10 96:10,15 180:12 187:23 guys 171:11,17 172:15 97:3,14 99:2,10 211:10 262:17 271:17 hear 72:16 74:8 100:12,15,15,17,22 howe 192:20 h 228:25 100:23,25 101:4,22 huh 192:18 heard 35:10 190:18 104:7 105:25 106:3 hundred 74:10 half 7:24 134:13 199:8 201:17 244:7 106:11 107:3,7,20 135:2 143:4 222:23 146:6,6,14 147:3,19 244:7 256:9 107:24 110:18 251:4,5,11,13,14 147:19 148:2,7,8,13 hearing 33:2 125:18 113:6,20 115:7 253:3 148:18,22 150:12 162:23 200:12 116:15 117:11 hundreds 237:20,22 150:16 185:25 238:8 120:24 127:21 hung 131:6,25 259:12 hedge 9:22,25 10:3 146:9,10,15 149:5 husband 68:24,25 hand 116:2,3 245:5 10:6 21:12,14,15,18 150:7,9,20 167:10 hypothetical 257:3 274:22 21:24 22:5,11 23:4 184:21 187:14 handled 267:5 23:22 63:22,25 64:4 194:20 226:25 hands 232:19 idea 114:15 118:17 104:8 113:14 114:2 highbridge's 111:5 hannah 3:9 6:18 121:16 123:11 167:9 172:3 248:25 111:8,12 146:13 happen 68:17 134:5 141:12 176:5 249:3,11,22,24 150:3,12,16 233:7 172:6 208:20 218:18,23 250:11 252:3,20,22 higher 247:10,19 happened 27:11,14 218:24 219:4,17 253:11,16,17 254:6 256:2 37:23 72:25 82:3 ideas 104:2 254:10 255:11,15 hiring 204:19 98:13 99:12,13 identification 33:8 256:10,13 260:21 history 21:11 108:4 132:20 133:7 49:17 97:11 98:24 260:24 hold 58:20 239:3,14 134:10,21 135:14 158:14 182:12 held 2:8 5:7 58:22 240:4 137:14 142:9 192:14 194:7 195:9 59:12 249:17 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299376 [identification - investment] Page 16 205:12 216:23 inaccurate 243:17 instances 1 I :17 67:24 68:7,8 69:6,7 229:20 233:17 inc.'s 39:20 63:15 105:12 73:4,5,13,17 86:23 235:23 241:16 incarcerated 65:5 245:11 96:18,19 104:18 245:15 264:21 incarceration 65:3 institutions 95:21 105:14 108:17,21 identified 161:12 incentive 249:19,23 instruct 22:22 111:20 112:8 identify 5:17 253:19 254:3,4 157:20 160:7 235:14 239:3 illiquid 113:18 255:12 instructed 35:8 248:24 249:6 117:20 225:17 include 64:5 238:3 250:16 226:19 227:13,17 income 174:13,14 instruction 35:11,14 invested 10:4 15:12 227:23,24 228:2,8 242: I 5 243:5,14 instructions 160:6 21:19 29:11 45:17 imagine 172:18 incorporated 160:11 270:15 52:22 53:19 54:5,9 immaterial 117:6,8 240: I 1,16 instruments 59:2,21 54:14 55:3 56:8,15 121:13,14,24 increase 19:8 59:23 60:3,6 57:2 67:18 74:3 123:19 126:6,7 252:13,18 insubstantial 210:5 75:18 100:11 101:4 130:2,7,9,13 131:2 increases 19:10 integrity 137:7 103:16 107:6,20 132:13 135:15 indefinitely 53:7,9 intention 41:2 110:16,24 112:2,10 137:2,5,7,9,10 independent 23:11 intercontinental 112:12 115:9 138:11,13 141:13 172:25 60:24 127:10,21 244:8 141:17 142:9,24 indicate 178:3 interest 39:23,25 250:3,18 255:14 143:7 164:4 225:22 individuals 60:13,16 40:5,8,10,11 50:20 260:20,23 262:22 226:5 227:4 61:2 63:11,13 53:24,25 61:2 76:3 investigate 123:14 immateriality 238:21 83:19 87:7,8,11 investigated 219:3 121:16,22 143:10 indyke 35:16 90:5 88:17,23 92:10 investigation 212:4 immediate 131:25 139:11 157:23 94:10 160:8,9 219:14,18,23 132:3 176:17 information 108:13 162:11 163:12,15 investing 9:22 21:8 immediately 131:22 108:15,19 109:2,21 165:5,11,14 21:12 40:2 80:18 143:25 160:7,15 112:6 164:5 167:18 interested 60:16 100:9 101:20 171:21 172:10 informed 184:20 86:12 93:13 94:4,5 104:15 105:25 191:3,21 initial 12:25 17:17 274:19 108:10 109:4 113:7 impatience 220:14 25:12 26:24 29:25 interests 8:21 174:7 114:15,17 115:8 impatient 130:11 29:25 30:18,22 31:5 interfund 164:16 investment 10:11 179:11,13 214:17 31:24 38:24,25 interim 8:11 11:11,25 12:3,9 implement 244:15 40:11,11 43:24 internal 243:22 13:2,17,18,23,25 implications 116:4 46:25 51:6,8 119:19 internally 183:21 14:8,11,23 15:5,13 important 21:14 120:3 145:23 interpretation 135:7 15:14,18,21,24 16:2 44:13 150:23 169:2 170:22 228:15 interrupt 114:12 16:3,6,8 17:18 18:5 169:17,19 176:23 259:14 260:8 225:24 18:8,10 19:14,16,21 260:12,16 initially 24:7 39:22 interview 124:14 19:22 20:4,7,8,16 impression 258:19 40:10 51:5 81:4 introduced 66:19 20:18 21:19 22:2 improper 124:25 111:6 112:5 117:3 93:17 30:24 31:7 33:15 213:24 118:13 225:21 introduction 87:23 34:5 38:24,25 42:12 improperly 162:5 226:5 261:25 94:16,20,22 45:10,17,20 46:5,7 inaccuracies 136:7 initiative 230:19 invest 18:16 22:20 46:15,17,25 48:5,15 136:15 instance 172:22 29:10,12 52:6,18 51:6,9 55:17 63:16 213:22 235:14 60:14 63:12,21,24 63:18,19 67:17 73:8 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299377 [investment - kind] Page 17 73:10,11 74:17,19 212:22 227:13,14 issue 98:11 126:11 joined 58:18 80:5,12 86:21 87:12 227:17,22 228:2,21 162:16 183:17 joint 81:4,6 82:7 101:23 102:2,5,11 236:23 237:5,11 201:6,23 209:14 83:13 86:12 87:3,4 103:3 105:3 108:9 244:20 245:24 228:4 journal 135:5 136:4 109:12,16,20 110:3 248:18 254:7 258:3 issues 125:8,17 162:12 163:22 110:7,15,24 111:16 260:7 264:16 161:13 164:3 jp 85:11 111:18,23,25 112:3 265:17 266:3,9 212:10 jpmorgan 80:22 112:7 113:25 267:12,18,18 268:2 items 123:19 81:2,8,22 82:4,6,8,9 120:10 127:9 investor 9:24 10:17 J 82:10,14,24 83:24 157:16 160:20 16:22 31:15 42:6 84:5,10 85:12,17 j 3:8,23 9:12 156:7 161:5 195:5 228:22 110:14 111:6 86:11 87:23 91:19 January 22:18 37:2 228:22 235:17 123:16 131:13,17 93:2 97:22,23 40:241:11,13 43:2 239:9,12,17 245:20 145:23,23 228:23 jpmorgan's 85:13 43:3,3,5,7 47:4 245:22 246:23 228:23 235:11 87:8 51:10,17 52:6,7,15 248:15,16,25 249:6 246:3 judge 238:4 52:18,23 53:19 54:5 249:8 250:12,24 investor's 251:24 judge's 9:5 54:17 55:3,13,17 251:2,9,11 252:8 investors 16:22 judicial 1:2 5:12 56:8,15 57:2,10 253:3,5,7,9,21,22,25 25:20,22 38:6,8 july 64:1265:13,13 109:13 165:11 254:9,20,24 255:5 43:17 44:7 48:9 65:14,14 169:11 170:24 256:22 257:2,9 49:9 52:5,8,16 57:4 june 14:24 15:14,22 183:15,17 184:3,7 258:25 259:2,2,9,14 145:25 245:5,7,21 16:4,7,9,13 42:14 184:12,19 187:22 259:18 261:3 245:25 246:4,7,13 42:17,20 43:7,13,20 250:18 259:21 262:21,25 263:21 247:10,15,20,22,23 43:24 45:11 46:18 262:22,22 263:21 investment's 248:14 250:7 257:22 55:12,16 56:9 272:12 255:6 259:17,20,22 108:24 250:21,23 je 158:13,19 275:25 investments 10:23 invests 111:20 251:5,7 253:5 jeepers 1:8,11 3:12 10:24 12:20 13:6 invite 213:7 k 5:11 6:24 174:9,19 14:15,20 15:4 17:21 invited 213:9 233:19,20 240:21 k 3:25 17:23,24 18:21 19:3 invoice 97:10,12,18 241:25 242:2,8 kahn 122:3 212:6 19:8 21:23 22:5,8 97:21 100:6 275:21 243:2 277:5 214:11 22:13,17 23:5 28:20 involuntary 24:21 jeeproject 193:19 keep 43:11,18 44:10 29:6,7 30:22 31:3 involved 125:4 Jeffrey 1:25 2:8 5:15 44:19 47:9 100:20 31:12 43:24 48:20 134:25 137:3 173:7 152:21 217:7 172:12 185:23 64:4,5 73:21 74:14 200:15,23 229:11 230:15 265:8 273:6 186:13,18 187:3,4,5 74:15 80:11 101:14 259:23 274:11 275:5 277:6 187:14,19 233:4 101:16,17 102:19 irregularities 277:21 250:11,12 103:10,14,24 118:14 134:22 jes 82:15 keeping 117:16 109:10,23 111:24 135:3 136:14 Jewish 69:22 70:17 233:6 112:15,18 113:6,16 142:18,22,23 jibe 216:13 kept 117:15 124:2 113:18 114:7,20 islands 62:3,5,7,10 job 208:19 kind 96:14 118:23 115:7 116:25 62:15,16,21 63:2 jobs 58:20,22 119:3 180:11 118:23 119:3,6,14 77:22 89:24 174:15 Joe 207:5 255:21 268:14 127:22 128:2 140:2 174:25 175:2,4 john 4:8 6:8 269:10 140:4 169:15 206:7 240:12,17,18,19 206:8 207:12 241:4,6 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299378 [kinds -11c] Page 18 kinds 128:2 258:10 259:18 learning 185:12 141:23 186:21 knew 68:4 81:2,3 263:9,19 272:14 264:13 187:6,20 92:19 108:7 110:15 knowing 122:6 lease 244:23 lied 120:20,25 110:23 111:22 knowledge 26:6,10 leave 58:6 60:7,9 122:19,21,24,25 122:25 131:18 53:19 83:23 84:11 146:13,14 149:18 124:10,21 125:6,9 152:16 187:18 152:18 176:19 149:22,23 150:3,11 125:10,12,14,16,19 212:17 214:2,10 184:10 271:10 150:12,15,16 125:24 126:3,4,15 219:13 224:16,20 known 122:9123:12 leaving 58:16 148:7 126:17,20,25 127:3 227:16 229:2 130:12 224:13 149:13 150:20,21 127:5 186:19 know 8:10 28:20 227:2,6 232:21 266:18 lies 124:12 126:23 44:22 49:11 50:24 knows 21:7 22:25 lee 4:10 6:12,12 lights 117:17,17 51:4,11,13,1456:17 kronish 2:9 3:18 5:8 193:10,13 limited 49:15,21,24 69:21,24 76:16 1 left 22:16 58:10 50:13 51:16 112:4 77:10 82:11 83:25 60:15 61:14 116:3 130:24 131:11 1.p. 1:18 3:20 5:23 84:12,14,15 85:8,9 150:2 213:15 141:25 142:2,5 6:4 160:10 85:16 87:6 89:23 238:14 275:19 lady 121:6 91:3,21 93:7 95:3 legal 89:17 90:18 line 180:24 277:7 lankier 4:4 6:8,10 96:18 99:17,20,22 143:10 liquidate 160:8 6:12 99:24 103:13 109:9 large 11:18 145:23 lesly 230:4 liquidated 160:14 110:2,6,9 111:2 letter 22:18 25:18 liquidity 21:13,14 167:9 112:9,17 117:2 26:18 27:20,25 28:6 107:4,15,16,25 largest 31:15 38:5 119:8,15,22 120:17 31:10,19,25 32:9 113:6,11,12,15,24 42:5 123:16 130:24 124:7 127:2 130:25 33:7 36:23 37:3,11 114:3,4,5,6,7,8,9,14 131:11,13,14 141:13,19,22,24 37:17,23,25 38:14 114:19 115:6,21,24 late 28:6 63:3 80:24 142:11 146:8 38:17 39:4,7 40:7 116:11,12,13 97:5,25 117:4 154:10 157:24 40:18,25 41:8,15,23 118:19 122:11,17 128:24 129:7 236:5 158:2 166:3 172:17 42:3,22 43:3 45:5,9 123:22 126:12,13 laurie 2:115:19 176:11 177:8,20,20 47:4 51:14 54:17 211:19,24 214:14 274:7,25 177:22 178:11 55:9 56:2 157:25 226:23 228:3 lawsuit 212:14 179:21 180:3 158:12 160:4 172:9 245:23 247:11,16 221:13,16,22,24 181:15 185:21 205:11 206:5 247:19 222:2,5,10,17 186:4,5 188:11 207:14 259:21 list 220:19 223:10 lawyer 22:23 34:21 192:25 193:21 263:24,25 275:17 226:13,14,18 34:25 35:15 90:8 199:3 202:24 203:8 275:24 276:6 listing 107:13 138:20 139:3 206:2 209:13,25 letterhead 99:2 litigation 36:9,13 140:11,12,12,13,18 212:18 215:5 158:17 229:20,23 39:8 229:12 140:19 141:22 216:19 218:2,3 233:20 276:9 little 72:13 122:18 lawyers 35:23 220:20 221:24 level 145:4 179:10 213:9 140:18 218:13 222:7,9,16 225:12 lexington 3:14 219:15 221:25 221:3 232:11,13,14,16,18 liable 121:20 227:23 244:4 learn 86:11 112:10 235:7 236:17 184:19,24 185:2,4 liar 208:16 245:10 248:12 243:19 249:5,11,24 licensed 239:12 live 62:13 learned 112:12 250:2 252:3,6,23 licenses 239:14 lives 71:21 185:16 261:10 254:11 255:10,16 lie 125:2,20,23 llc 1:5,6,15,17,18,19 262:8 255:19,24 256:5,7,8 126:7,9 141:18,20 3:19,20 5:11,23,23 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299379 [llc - material] Page 19 5:24 6:3,4,5,17,17 151:21 169:4,13 lose 86:22 male 140:17 241:5,6 228:18 244:11 loss 254:22 255:20 manage 87:14 llp 3:4,18 4:4 5:8 6:2 245:18 246:2 losses 249:7 254:8 144:11 184:21 6:15 259:23,25 260:7 254:12 256:6,19 managed 101:6 located 5:8 62:2,10 261:11 262:9,16 257:8 111:12 117:11 174:23 263:14 264:15 lost 87:17 254:18 125:22 226:20,25 location 7:10 266:3,8 269:12 lot 47:15 167:21 management 92:14 lock 18:14,25 25:22 lockups 10:16 12:16 188:17 111:9 114:8 116:13 locked 25:20 26:12 12:18,18 17:14,22 Ip 163:16 165:10 117:13 123:24,25 29:20 45:6 169:20 18:4 21:8 22:15 lucrative 60:10 162:20 163:12,16 245:9 247:23 248:2 27:2 28:17 30:10,12 lunch 7:23,25 79:17 163:21 165:13 248:6,11,19,22 30:16 33:13,19 144:3,4 182:14 249:13 254:4 260:15 167:25 168:7 luncheon 8:3 261:23 locking 114:22 170:13 228:22 lying 115:18 121:3 manager 114:24 lockout 14:3 21:21 244:5,6,7,8,12 190:15 201:10 235:7 244:15 249:6 lockup 10:7,9,14,15 245:18,19,22 m 251:22 253:18 10:18,19 11:12,20 246:10,20,24 managers 244:11 ma'am 127:16 12:2,5,8 13:2,10,13 258:24 259:18 245:7 246:10,20,24 mail 192:15,16,16 13:18 14:3,6 16:12 260:21,24 261:2,6 249:11 250:12 192:19 193:7,11 18:9,17,17 19:9,12 265:5,16 267:6,9 managing 76:2 194:5,8,17,21 195:2 19:14,15,22 20:3,20 268:6,12,22 269:10 199.17 195:10,11,11,23,24 20:24 21:17,21,25 270:4 march 41:13 43:9 196:8,15,15,18,20 21:25 22:11,19 23:7 long 8:14,14 9:24 43:13,20 55:12 56:4 197:17,17,24 198:3 23:18,20 24:2,5,6,8 11:12 22:25 61:5 164:11 171:23,25 198:7,11,15,20 24:10,12 25:12 76:13 78:4 106:12 172:11 199:3,4,9 200:2 27:14,22,23 29:8,13 106:13 113:18 mark 32:21 33:2 201:7,14,18 203:17 29:18,19,23,25 115:2 160:3 168:16 49:12 97:7 98:21 204:5 212:7 216:24 30:14,18,23 31:5,11 168:20 211:13 99:17 158:10 216:25 217:2,7 31:13,17,23,25 32:3 247:24,25 269:12 192:11 235:20 218:7 264:20 32:13,14 34:6,9 269:14,21 245:13 264:18 265:25 276:15 37:13,14 38:2,7,9 longer 10:19 11:19 marked 32:16 33:7 mails 192:13 194:6 38:12,19,22 40:16 56:7 184:21 223:19 49:16 97:11 98:23 194:25 195:8,15 40:22 42:7,10,13 246:15 247:2 248:8 158:13 182:11 196:4 216:22 276:3 43:16 44:6,8,17,21 248:9 192:13 194:7 195:8 276:4.5,7 44:22,23,24 45:2,11 look 35:25 39:4 205:11 216:23 maintain 114:9 45:14 46:4,14,24 76:16 81:25 165:21 229:20 233:16 maintaining 228:21 47:6,22 48:2,6,10 176:8 188:13 214:4 235:23 241:15 major 120:20 48:11,16 49:2,4,6 226:9 229:21 245:14 264:21 making 18:8,10 32:5 50:7,10,15,19,21,25 236:13 242:18,25 markets 106:25 36:24 109:10 112:7 51:19 52:5,14,17,24 256:16 113:16,17 114:20 marking 32:23 53:2,7,10,11,13,17 looked 176:10 markings 275:7 115:13 116:25 53:18,23 54:3,4,9 looking 105:13 marriage 274:18 118:23 119:3,7,15 54:13,18,20 55:8 looks 193:2,20 married 72:18 153:20 157:2 56:14,25 57:11 242:24 material 52:9,10 109:15 114:18 117:9 118:15 123:5 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299380 [material - money] Page 20 144:24 149:13,17 memorandum 149:9 150:9 152:25 225:8,11,18 225:23 226:6 227:6 49:14,20 50:13 153:4,18,22 154:9 mispriced 252:9 materiality 122:20 52:18,20 54:6,10,12 154:14 156:24 misrepresented 122:21 123:3 56:11,16,21,22 157:4,18 160:3,8 123:19 143:11 158:17 160:23 161:21 164:10,20 missed 153:15 mathematics 58:13 165:16 233:15,19 164:22 165:3,6 misspoke 150:18 matter 151:13 234:2 275:18 167:12,12 168:20 mitchell 204:16,20 156:16 157:15 276:10 170:18,23 171:2,3,8 204:24 206:13 182:3 207:17 208:6 memories 216:13 171:12,17 172:6 mode 148:2 210:15 274:20 memory 23:11 178:5 187:25 188:3 moment 106:20,23 maxed 228:5 172:25 216:10,11 188:6,7,21 190:7 143:21 202:16 mean 11:9 12:22 memos 270:9 271:23 191:2,18 192:9 moments 107:5 54:21,22 64:5 65:18 mention 185:14 196:2 202:15 203:4 money 10:12 11:3 71:13 87:14 111:19 mentioned 154:11 203:11,17 216:2 11:25 12:3 16:12,14 113:12 114:4 232:4 261:8,9 226:23 228:16 16:24 18:15,25 130:13 136:4 137:2 mentions 147:2 237:5,11 262:21,23 19:20 20:3 21:8 182:4 225:24 252:9 menus 12:18 262:23,25 266:14 22:20,21 24:10 265:11 mere 118:13 123:7 269:2,5 270:23 25:20,21,22 29:10 meaning 20:6 41:12 136:6,16 millions 237:20 29:11 31:14,21 32:5 140:12 212:12 merely 122:15 mimic 159:10 32:10 38:12,18,19 250:5 123:18 mind 41:9 46:11 39:25 40:24 41:8 means 54:19 65:20 mergers 97:14 206:14 42:8,13,16,19,23,24 69:24 114:5 met 66:24 75:20 mine 21:16 27:23 43:12,16,19,23 meant 40:7172:12 76:23,25 82:4,10,10 149:23 44:10 45:6,13,14 228:8 83:6 85:4,7 86:4 minerals 207:5 47:9,19,21,25 48:21 mechanism 188:18 100:6 128:7 219:6 minor 64:23 49:5 50:14,16,18 mediation 1:2 5:12 micromanager minute 105:20 52:4,5,16,18,22 meet 66:11,14 75:17 124:13 208:20 115:4 53:12,18 54:5,9,14 75:25 76:4,6,21 211:19 212:17 minutes 8:8 76:14 55:2,11,12,15 56:8 82:14 83:3 84:10 214:10,17 132:23 134:13 56:14,25 57:12 85:3,17 211:7,9 mid 128:25 182:16 211:14 60:14 63:13,18,19 217:19 218:12 middle 195:17 213:6 63:20,21,24 64:6,6 219:5 220:16,22 245:17 mis 115:19 145:4 67:18 68:8 69:7 221:2,3 million 45:18,22,23 misapplied 164:11 73:4,7,17 75:8 76:2 meeting 76:3,11,13 46:9,18 73:16 74:5 misappropriation 89:12 91:8 96:18,19 76:25 83:12 84:17 74:10 88:4,5,9,11 145:4 100:13 101:11 153:6,23 154:19 88:12,19,20 89:7 mischaracterized 104:11 110:19,21 157:5 166:21 167:4 91:5,1595:6,11,15 121:13,18,24 111:5,8,12 112:7 211:3,13 221:11 97:15,18 102:8,11 122:15 113:11 115:3,25 270:18 102:15,15 103:16 misleading 201:10 116:14 117:9,18 meetings 83:12 104:24 105:6,7,21 misled 115:19,19,20 123:23 124:2 84:17,20 166:18,19 111:12 121:20 117:7 126:10 126:13 131:4 172:21 183:16 122:14 138:9 145:6 170:20 186:9 132:14 134:25 memo 260:4 270:14 146:6,7,11,19 147:5 I 208:19 222:20 135:9,10,16,18 270:18 271:8,12 147:8 148:9 149:2,9 223:7,11 224:8,9,11 136:23 137:3 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299381 [money - obvious] Page 21 144:10,11,20,21,23 morning 5:2 9:9,18 211:20 212:11,23 noticed 24:23 145:6,7,20,21,24 9:19 190:20 191:6 214:12,13 227:25 november 23:17 146:13,14 148:8,16 199:9 201:19 257:14 258:21 50:13,14,25 128:24 148:22,22 149:11 207:20 208:5 223:9 260:10 268:23 128:25 157:19 149:14,20,23 150:3 223:13,25 247:7 269:4 271:8 158:18 159:13,25 150:12,12,16,16,20 mother 70:4 80:2 new 1:3,3 2:10,10 165:16,20,24 153:21 157:3 motions 275:9 2:13 3:7,7,15,15,22 167:16,23 168:5 162:10,14 163:20 move 62:18,25 3:22 4:7,7 5:4,9,9 170:24 173:12,15 166:10,15 169:19 199:16,24 5:13,13 25:21 38:7 216:5 233:2 264:24 169:21,23 170:7 moved 59:15,16,17 43:16 44:15 45:10 265:13,14,25 266:6 172:5 185:23 59:18 162:6 48:2,6,15,21 49:5 number 5:13 43:12 186:13,14,18 187:3 moving 98:9116:19 50:15 53:24,25 43:19 57:20,24 64:6 187:4,5,14,19 multiple 8:20 21:19 56:13,23 60:6 62:19 68:18 95:10,12,14 189:20 190:2 191:3 21:24 22:8,12 92:17 62:24 83:19 89:25 104:17 106:14 191:21 192:10 n 103:24 174:12,13 112:24 113:4 198:25 199:12,17 n 3:2 4:2 9:12 156:2 174:17 180:24 126:23 137:10 200:6 201:11 181:20 211:11 143:3,8 146:6,7 156:2,2,7 275:2 202:25 211:23 243:5,14 274:3,5,9 147:2,20 155:5 name 5:3,14,21,25 224:14 226:24 277:3,3 156:6 158:19 60:22 61:8 122:4 227:7 228:9,11 newspaper 129:21 164:21 204:4 nature 77:11 232:22 233:4,7 nice 190:17 239:23 243:12 nay 119:18,19,21 237:12 238:24 nine 44:11 45:7 47:9 264:11 267:12 120:2,4,5 146:17 239:3,3,5,6,8,22 57:6,12 272:4 273:3 153:3 154:2 172:21 240:9 244:6 254:18 nineties 63:3 numbers 139:25 necessarily 199:7 256:18 259:11 205:25 245:11,12 noble 4:13 6:21,21 194:20 200:11,13 260:8 263:14,17 nod 269:17 numerical 143:10 252:17 monies 29:12,13 nodding 172:15 144:25 necessary 8:24,25 32:13 47:22 102:13 nonfund 163:5 numerically 140:4,5 need 8:9 138:11 102:17 105:17 noon 133:19 140:6 145:3 146:8 168:16 116:19 117:12 normally 8:6 252:15 nuts 132:14 168:20 177:15 162:5 168:16,17 north 92:6,7,12,18 0 179:24 199:16 227:4 92:22 237:18 o 156:2,2,2 215:8,9 monstrous 211:19 notary 2:12 9:14 needed 177:2,3,6 o'brien 3:24 6:6,6 225:16 156:9 274:8 277:25 179:19,25 180:6,9 o'clock 8:15 132:25 month 71:19,20 note 194:19195:25 180:15 181:23 133:18 164:16 200:13,14 270:12 271:12 needs 8:5 30:17 oath 9:20 248:19 noted 155:6 156:3 107:4,15,16 obligation 122:2 months 43:13,20 273:4 negligence 122:2 obtain 15:10 25:18 44:11 45:7 47:10 notes 194:13 220:9 negotiate 94:24 obtained 29:14 57:7,12 65:2,3 220:12 270:9,13,17 net 167:13 200:10 64:15 71:25 77:15 79:13 271:8 never 18:14 20:21 obtaining 60:17 162:19 185:3,25 notice 8:3 15:15,16 34:20,23 100:6 177:10 229:11 186:2 196:3 198:20 15:22 16:3,9 24:21 112:12 118:16 obvious 247:10 198:22 199:5 41:12 204:7 127:25 128:9 170:8 201:15 210:24 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299382 [obviously - people] Page 22 obviously 9:4 261:8 263:6 264:4 outcome 274:19 partial 10:16 199:13 266:11,25 268:18 outlook 197:20 participate 26:20,24 occasion 163:3 269:15 270:3 272:6 outraged 120:19 particular 12:9 occurred 164:17 old 52:23 53:23 outside 66:8 175:12 161:12 244:15 occurs 272:2 57:11 175:15,19,20,21,24 parties 5:17 6:7 8:20 october 117:4 128:5 once 35:5 48:24 176:3 274:17 128:17 140:23,24 71:19,20,24,24 outstanding 165:2 partner 84:13 145:16 159:24 76:23 77:15 78:2,3 overall 137:6,6,6 130:24 131:11 161:16 162:3,4 79:9,13,22 85:4 overnight 78:8 142:6 187:11 232:25 128:7,13 198:24 owned 84:2,8 partners 1:17 3:19 odd 168:19 244:25 251:4 174:18,20 240:21 5:22 6:3 49:15,21 offering 56:16 ones 247:5 owner 240:7 49:25 50:13 141:25 office 5:8 7:9 21:4 onshore 115:24 ownership 89:5 142:3 182:21,22 26:7,11 76:7 90:4 136:9 162:6,7,9 owns 88:14 275:19 114:25 129:9 130:5 operated 20:12 P partnership 51:16 132:11 168:13 operation 114:8 174:7 p 3:2,24:2,2 9:12 170:13 173:20 115:21 137:9 party 1:12,20 7:9 156:7 174:2 180:25 operations 116:17 78:25 85:11 p.m. 155:4,6 156:3,5 244:24 270:21 opinion 246:22 pass 209:8 234:13 165:25 203:23 officer 65:21 66:4 opportunities 49:16 204:3 234:22,25 243:4,14 offices 2:9 49:22 94:6 112:4 264:6,10 273:3,4 patience 167:21 official 69:21 70:17 114:10 160:10 213:9 page 50:8 165:22,22 offshore 115:25 174:8 177:3 275:20 patient 130:10 194:13 195:17 116:18 117:15,15 opportunity 86:22 paul 3:4 6:14,19 196:20 197:13 124:2 136:9 162:6 87:18 96:3 115:22 235:6 236:13 243:6,8 162:10 211:25 opposed 33:20 pause 17:12 130:16 245:18 272:7,10 oh 71:8 238:11 79:21 124:21 127:3 149:25 205:14 275:4,15 277:7 264:4 224:8 228:23 245:7 233:13 234:20 paid 89:13 90:21,23 okay 17:11 23:3 252:13 236:12 91:5,9,15,23 92:2 35:4 39:6 41:21 option 58:24 59:3,4 pay 89:1091:19 93:2 96:15 123:22 44:25 52:2 54:25 59:15,15 207:5 92:20,21 94:23 130:25 163:12,15 57:15 100:25 257:17,21,23 258:5 114:7 115:22 116:2 171:20,22,24 172:8 114:13 121:5 258:19 116:12 123:23 172:8 188:8 246:4 124:16 127:19 options 12:19 59:19 163:5 172:4 191:18 249:14 147:22 153:8 order 59:7 208:15 192:9 228:9,11 palm 64:14 65:8,10 154:25 161:10 239:18 246:6 242:13,14 229:25 232:14,16 166:2 194:22 250:13 payable 162:22 paper 252:21 195:21 197:21 organize 80:21 paying 123:8 270:10,25 218:6 219:20 original 15:12 16:21 pays 246:3 paragraph 50:6,9 225:15 226:2 16:22 19:21 20:4,8 people 8:4 21:4 243:9 246:10 240:16 241:2,14 40:21 42:7,9,11,12 28:19 29:6,9 30:9 pardon 199:21 244:3 249:10 105:2 32:13 38:21 61:21 part 63:13 110:18 250:21 251:2,3,21 originally 255:14 61:23 89:2 93:24 169:23 180:17 254:15,25 256:12 256:3 107:2,24 125:3 183:5,18 257:23 259:11 151:15 170:12,13 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299383 [people - prepared] Page 23 184:16 214:16 perry 117:5 122:2 pieces 111:11 points 135:3 136:23 220:23 221:4 239:9 124:24 164:2 pin 97:6 108:5 162:3 162:15 262:18 270:20 210:21 212:4 pipe 101:13,15 polk 130:18 175:22 perceived 91:16 217:20 219:2,6 108:9 109:4 poor 246:13 162:8 220:10 pipeline 116:17 portfolio 167:16 percent 84:7,8 92:10 person 27:4,7 53:18 pipes 110:16,24 228:2 249:17,23 250:4,6 54:4 75:9 82:16 112:2,4,11,14 portion 83:25 97:19 251:4,5,12,13,14,23 86:16 130:10 127:21 portrayed 136:6 252:7 253:4,19 134:15 138:10 pit 264:3 position 9:2,6,7 255:4 256:23 214:11 place 76:15 102:7 11:18,22 35:17 38:4 percentage 249:16 personal 68:12,13 104:10 116:21 44:2,3,5 85:15 90:6 252:12 68:15 69:11 73:10 167:4 114:9 139:17 153:7 performance 19:7 73:12 102:19 placed 55:16 98:25 160:13 167:3 22:15 247:2 250:13 117:10,14 130:19 plan 83:13 172:13 212:2,19 253:25 254:3,21 212:2 230:4 232:19 planning 191:19 240:4 264:14 255:12 personally 88:6 plans 8:4 positions 59:6,12 performances 257:7 158:5 223:7,11 platform 93:23 154:20 performs 90:13,16 peter 115:22 played 107:22 possibility 29:21 period 10:10 11:10 phone 27:5,6,8,10 plea 64:16,17 233:25 11:19,20 12:2,6,10 79:10,23,25 86:16 plead 64:18,21 possible 24:11,14 12:11 13:18 14:3,6 124:7 128:10,15 please 5:16 12:15 45:9 82:25 96:7 18:9 20:24 21:21,25 129:13 131:6,20,23 39:5 41:17 50:7 109:5 178:2,25 24:12 25:12 45:15 133:7,9 134:15 51:21 55:21 88:25 179:3,4,17 191:15 47:6 48:21 51:20 137:17,22,25 138:2 97:8 101:21 156:21 204:23 209:17 54:9,13 56:25 57:5 138:6 140:16,25 161:8 182:10 245:10 246:7 65:11,11,17 66:5,6 146:21,22,24 186:11 205:10 248:12,13 265:2 66:9 73:23,23 77:16 147:14 148:5 149:4 216:20 229:18 possibly 139:14 85:21,22 105:24 151:4 152:2,11,12 250:17 269:17 potential 220:17,20 106:4 110:14,23 152:13,16,22 272:25 potentially 151:14 115:8,9 123:12 153:11 163:24,25 pleasure 272:22 240:6 257:3 126:22 128:22 164:9 167:23 168:5 plenty 47:17 110:20 precise 107:8,10 162:20 164:16 191:14 192:3,7 110:20 148:15 165:2 169:14 215:25 232:25 plus 257:17,21 precluded 245:21 183:10 184:16 266:24 267:2,20 pocket 100:20111:5 predecessor 62:22 200:6 204:17 208:8 phonetic 69:23 pockets 100:16,16 238:16,17 209:3 228:18 246:2 phrase 126:6 136:13 101:3 104:5,7 prefer 10:18 11:2 247:2 248:12 136:25 142:25 106:11,14 24:24 100:23 periods 10:24 143:6 154:5 228:7 point 63:4 116:5 246:24 247:23 114:18 245:19 phraseology 190:18 127:22 135:5 248:2,6 permission 9:5 physics 58:9,13 151:21 163:4 preference 248:7 permit 245:25 pick 79:23,25 215:11 219:2 prematurely 244:19 permits 45:10 picked 137:25 256:19 257:16 244:19 246:14 piece 87:3,7,8 258:4 261:10 prepared 86:25 permitted 39:19 270:10,25 268:17 270:10 178:4 206:2 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299384 [preparing - reached] Page 24 preparing 39:10 211:20 pry 237:14 23:24 24:4,25 26:9 prepaying 123:24 procedures 122:18 public 2:12 9:14 27:12 28:4 30:25 present 4:12 28:12 proceed 5:20 101:18 156:9 274:8 34:19 36:18 37:7 76:10 84:25 114:10 proceedings 5:1 6:1 277:25 41:3,4,5 52:10,11 139:7 168:9 210:25 7:1 8:1 pull 186:13 244:25 54:2,11,23 55:21,24 presented 162:8 process 137:6 246:13 56:20 70:5,6 79:16 president 89:22 150:19 pulled 115:3 232:22 94:18 108:25 119:5 240:5 procuring 64:23 purchase 40:1181:4 124:15 127:13,15 pressure 246:11 produced 194:19 81:5,23 82:7 83:15 127:17,18 142:19 pretty 138:24 222:14 83:24 93:25 224:10 160:22 168:3 169:7 previously 156:8 products 60:5 107:2 purchased 50:20 171:4 181:10,12 260:20 107:23 84:5 120:23,23 186:10,24 189:11 primary 21:15 profession 139:23 purchases 39:22 201:25 207:25 prior 14:19 18:4,8,9 professional 2:12 40:10 53:25 136:11 208:3 214:19 20:17 30:23 31:6 68:11,13,23 143:11 purchasing 81:21 223:17,21,21 34:3,4 36:9,13,16 176:25 246:23 82:21 83:17 237:19,24 241:12 40:24 41:11,12 274:8 purely 80:16 250:10 265:19 52:15 53:19 54:5,14 professionals 175:7 purloined 227:5 question's 187:7 55:3,17 56:8,15 profits 249:7 253:20 purpose 31:9,18 questioning 7:5 57:2 76:25 103:5 promise 100:14 32:8 114:22 174:11 questions 18:6 23:2 105:3 115:7,8 124:7 promised 134:2 176:20 242:12 44:20 213:17 128:5 138:20 171:17 199:8 244:6,10 217:20,23 272:23 160:17,23 162:22 201:17 purposes 113:15 quicker 11:24 182:24 186:17 prompted 25:17 117:14 124:3 243:5 169:23 187:2 189:12,12,12 60:9 243:15 quickly 169:21 198:14 205:6 214:8 proper 15:15,15,22 put 10:12 47:25 quite 95:24 126:23 214:21 238:19 16:3,8 55:13 96:3 101:11 136:7 private 101:17,17 properly 165:9,9 102:14,15,21,25 quote 247:9 privilege 34:13,18 172:4 250:13 104:10 147:17,18 r 34:21,24 35:3,6 prophylactic 176:20 180:24 199:15,24 r 3:2 4:2 9:12 156:2 probably 18:11 proportion 228:5 213:3 217:20 221:2 156:7 215:8,9 274:2 36:25 67:6 72:13 proposal 148:2 221:10 253:6 raise 31:14 42:8 73:16 104:4 110:5 proposed 8:7 254:15,24,24 256:3 47:20 181:8 129:20 132:23,25 proposing 147:7 256:23 259:11 raised 98:11 125:9 134:13 144:2 proprietor 60:25 260:8 209:14 151:19 166:10 61:4,19 putting 19:20 ran 63:5 212:22 191:24 194:2 prostitution 64:22 109:15 268:9,19 range 73:15 112:3 231:21 64:23 q 245:22 probation 65:19,21 I provide 74:13 90:18 qualified 175:5 rate 162:11 165:5 66:4,6 178:8 229:13,16 240:23,24 reach 191:13,22 problem 21:14 provided 239:22 quarter 15:11,11 193:9 23:15,21 24:3 25:9 246:2 39:21 269:16,24,25 reached 95:3,4 130:21 162:9 269:2 provides 89:16 question 11:5,13,14 215:10,17 problems 118:15 239:9 13:5,9 18:23 23:12 125:22 169:20 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299385 [react - refer] Page 25 react 185:16 124:23 126:8 127:6 198:14 reconfirm 43:15 read 36:4,20 39:13 128:12 129:3,5 recess 57:21 112:25 reconfirmed 31:24 39:14,16 50:6 55:19 135:20,24 138:23 203:25 234:23 31:25 32:11 34:5 105:19 118:4 140:7 145:12 264:8 38:4 41:25 129:20 156:20 151:18,19 152:5 recognize 97:16 reconfirming 34:7 159:2,5 188:16 154:18,22 159:3 99:7 158:20,22 record 5:3 7:3 9:11 205:15,23 222:11 161:6,23,24 162:18 182:17 205:13,16 32:18,19 33:6 57:19 222:12 231:2 162:24 163:5,8,11 recollection 14:17 57:23 97:9 112:23 235:25 236:4 163:17,23 164:8,14 14:20,22 25:19 26:2 113:3 155:4 156:5 reading 36:7,10,12 166:17 168:25 26:5 27:9 31:19 156:22 158:15 36:16 171:9 173:5,11,14 59:13 60:23 66:12 182:14 196:11 ready 9:8 173:17,18 174:6 72:24 73:3 75:2,22 203:23 204:3 real 212:23 252:19 176:7,14 177:17 76:9,12 77:4 85:2 234:22,25 264:6,10 reallocated 136:12 178:15,17 179:2,5,7 86:2,14 92:24 95:5 271:5 273:2 274:14 really 70:7 141:13 179:10,14 180:10 97:5 98:5 100:18 recording 271:13 162:15 217:14 183:23,25 184:4,8,9 102:12 103:9 records 68:5 174:2 225:17 226:22 191:9,10,13 197:2 104:23 105:20,23 recovery 1:5,14 6:17 252:10 198:11,14,17,18 108:11 115:12 6:22 255:20 reason 22:17 62:14 204:9,13,21 205:7,8 118:2 121:8 124:25 redeem 10:25 246:2 116:7 165:21 201:4 206:6,9,17,19 207:9 133:9 137:15,21 257:23 202:3 224:19,25 208:10,12 217:5,11 139:9 140:9 141:7,9 redeemed 10:11 244:23 247:5 277:7 217:13,24 218:22 143:4 154:6,11 redeeming 245:21 reasons 62:12,15 220:5 222:3 224:18 157:17 161:7,19 redemption 13:21 80:16 126:5 129:25 227:10 236:14,16 163:18 167:3 168:2 113:15 115:13 130:2 144:22 236:21 240:3 168:11 170:8 116:8,22 118:18 244:13,14 246:20 257:16,18,20 258:5 172:20 173:10 126:12 147:7 148:9 247:10 257:9 258:7,13,15,18 175:6 181:18 183:3 157:18 159:16 recall 15:7 16:15 260:22,23 261:22 183:8,9,20 185:10 161:18 166:7 189:5 17:25 19:11,19 262:2 263:11 188:5,24 194:3 189:8,15 195:4 21:22 22:3,9,10 264:13 265:11,23 200:9 202:14,20,22 199:15,20,23,24 23:19,20,23 24:16 266:5,12 267:4,7,11 203:3,7,9 206:14 203:4 212:25 246:3 25:17 26:14,22 28:2 267:15,22 268:5 212:10 214:5 246:4 257:21 28:7,17,22,25 36:2 270:3 271:15 272:2 217:18 218:25 259:13 260:13 36:20 37:3,16 39:3 receive 64:24 91:7 221:8 233:23 234:4 redemptions 114:6 55:18 70:21 73:14 249:11 234:6 262:14 266:2 75:3,5 76:15,18 received 27:20,25 265:12,18 267:20 redo 59:10 78:3,4,8 81:19 28:6 36:4 37:11 recommendation reduce 122:13 146:5 84:19 86:10,17 89:6 91:9,12 94:19 75:15 228:14 88:17 90:7 93:10 163:20 189:4,8,15 recommendations reduced 80:4 94:3,12,14 96:6 192:20 199:9 22:14 106:3,7,9,15 reducing 152:24 98:19 105:8,9,15,18 201:18 219:7 recommended 153:17 154:8 106:16,18 108:22 242:15 251:14,25 108:21 109:19 156:23 109:25 115:13 receiving 36:2,6 263:3,5 reduction 80:12 119:4 120:18 40:25 42:22 192:23 recommending refer 199:19,22 122:22,23 124:9,20 194:23 195:2 109:3 200:2 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299386 [reference - returned] Page 26 reference 1:7 5:13 relevant 122:5 replied 198:7 resident 62:16 201:22 238:2 reply 196:13,14,22 resnick 97:11,13 references 197:14 relieved 261:15,17 197:16,17 100:4,5 275:21 referred 59:24 religion 69:22 70:17 replying 197:2 respect 13:24 20:15 75:10 90:10 203:11 relinquish 178:4 report 65:21 119:19 22:10,12 27:13 241:8,18 rely 21:3 119:21 120:3 29:19 33:15 38:2 referring 12:22 remain 53:6,9 56:13 168:24 48:20 70:11 74:14 17:23 40:10,14 56:24 reported 166:14 81:21 86:3 105:17 193:2 remainder 170:7 170:8 252:13 131:21 137:3 refers 40:8,9 198:21 remained 56:23 reporter 2:12 5:18 140:15 142:17,22 199:4 201:14 remaining 246:6 274:8 143:23 153:19,21 203:17 267:5 reporting 164:9 156:16,25 157:2 reflected 172:24 remains 45:11 53:12 200:25 277:2 158:3,7 160:2 175:8 reflection 219:4 remarkably 159:12 represent 5:18,22 180:19 204:15 reflects 11:20 remember 23:6,13 6:3,16 141:25 235:7 207:4 212:7,25 refresh 14:17,19,22 23:17,25 24:5,6,9 243:12 253:20 264:15 161:7 217:18 36:5,7,10,12,16,22 representation 265:16 266:3,8 265:12 98:12 99:13,14 117:21 118:7 respond 95:9 refreshed 202:19,21 120:19 128:15,20 188:20 189:2 responded 143:3 203:2,6,9 131:7 134:8 138:17 243:17 respondents 1:9,15 refreshes 262:14 138:25 143:19 representations 1:20 refund 163:22 151:16 157:7 120:21 responds 218:5 refused 136:17 159:25 162:23 represented 118:13 response 168:15 regard 206:6,8 163:2 166:20,22 118:17 119:20 193:7 209:20 252:24 172:23 178:22 120:4,6 121:13 217:25 218:7 regarding 126:11 191:25 192:23 123:18 126:5 142:5 responsibilities 60:2 266:13 194:23 195:2 146:17 154:2 243:3 139:21,24 registered 2:11 200:12 206:17 representing 147:16 responsible 227:25 274:7 210:14 213:4 represents 142:2 responsibly 114:2 regularly 8:6 215:20 242:21 reputation 68:6 responsive 22:23 reimbursed 165:10 262:5 130:11 rest 141:15 149:20 related 114:19 repeat 13:9 18:23 request 13:21 202:25 203:5 251:3 191:5 274:17 23:12,24 26:9 28:4 115:14,16,17 restricted 10:11 relating 207:3 30:25 36:18 54:11 116:22 118:18 65:24 253:20 94:17 119:9 127:13 122:14,14 148:9,23 restricting 12:10 relationship 66:22 127:15 160:21 157:18 166:7 190:7 restrictions 66:2 68:2,10,22 69:4,10 165:18 181:12 190:23 230:12 results 246:14 70:3,10,1471:12 186:10,24 189:11 requested 230:15,17 resumed 156:8 72:13 77:11 78:19 201:25 207:25 231:9 retail 59:3,4,18 80:14,19 244:2 requests 275:10 retroactive 272:3 relax 132:15,15 repeatedly 30:6 required 30:5 retroactively 272:15 138:16 145:10 223:2 177:22,23 return 246:12 relayed 132:19 rephrase 13:4 54:23 research 261:2,5 251:14,16 256:23 173:6 127:17,18 reserve 8:23 returned 141:4 163:9 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299387 [returning - sent] Page 27 returning 192:3 roth 123:13 212:8,9 199:14,18,24 201:7 255:3 256:22 193:6 214:4 226:9 201:20 202:9 272:10 returns 110:19 rough 239:23 203:13,14 217:25 secret 176:15 111:4,7 255:4 roughly 66:12 243:22 245:19 secretary 129:12 reup 47:21 110:4 round 147:20 246:18,21 247:9 securities 167:8 revenue 243:23 rpr 274:25 265:2 272:7,11 206:25 207:7,10 reversed 164:12 rules 7:14,15 scenario 254:20,22 security 11:18 review 33:14 36:23 rulings 275:11 schedule 7:25 41:15 see 15:8 39:18 71:15 167:3 185:5,6 run 113:13 114:8 41:23 65:22 71:22 71:17 77:14 79:12 reviewed 23:9 39:7 116:8 122:15 166:19,21 189:5,8 79:21 97:6 132:11 39:10 190:13 123:21 145:24 189:15 195:4 203:5 145:9 148:3 165:22 reward 107:3,14,25 148:18,24 153:19 scheduling 166:18 165:24 181:19 reynolds 4:9 6:10,10 154:5,10,12 156:25 schools 58:13 192:21 195:12,14 rick 4:13 6:21 211:21 226:21 schulte 123:13 195:22 196:6 198:6 ridiculous 144:9 running 115:20 212:8,8 214:3 226:9 217:6,7 218:8 231:5 212:20 117:17 schwartz 3:23 5:21 233:18 241:18 rifldnd 3:4 6:15 runs 90:4 5:22 7:11 9:9,17 242:2 243:6,8,15 right 7:13 8:23 15:2 11:15 24:23 32:16 247:11,12 262:8 32:12 38:6 42:21 32:24 33:4 34:14,17 265:9 271:16 272:7 s 3:2,9 4:2,8,10 9:12 45:18 46:8 47:16 156:2,2,2,7 175:5 34:23 35:5,10,13 272:11 50:23 82:21 105:14 240:24 241:9,10 48:8,18 49:12 57:15 seeing 172:23 116:2 120:16 134:5 97:7 112:20 140:19 seek 8:23 9:3 242:9 243:4,13 137:24 145:18 154:24 156:12 seen 25:5 39:9,12 277:7 147:13 153:13 158:10,16 172:14 49:18 233:22 safe 149:11 153:4 180:7 182:8 189:21 182:10,13 192:11 235:25 241:20 salary 91:11,13 193:18 194:14 197:7,10,16 203:20 270:25 271:4,5,8,11 sale 80:21 95:21 196:14,17,20 205:9 215:8 223:15 sees 172:17 96:10 114:16 223:13 224:15 223:20 226:15 sell 172:12 sales 136:11 229:16 238:4,7 229:18 233:10 selling 60:5 94:4 sat 213:12,13 240:10 244:14 234:13,16 275:5 senator 204:20,24 savings 176:18,21 245:10 251:5,9,12 scratch 47:23 48:3,6 206:13 saw 77:16 197:5 253:10 254:2 255:6 scumbag 115:18 send 26:18 158:3,5 saying 30:5 44:19 256:16,20 259:13 121:4 190:15 230:7,16 231:9 83:8 127:4 150:6 261:13 209:19 sending 160:17,23 161:24 163:18 rights 10:16 260:13 search 188:18 198:11 204:7 178:21 193:8 rise 145:3 255:13 seasoned 246:23 217:11,13 233:25 198:23 199:2 203:3 risk 48:24 107:3,14 sec 208:17 209:4,7 sends 198:3 226:3 249:3 253:4 107:25 209:17 212:3,18 sense 29:8 47:15,17 253:17 266:15 risky 21:17 219:3,8,14,18,23 135:9,11 239:21 says 10:15 42:25 rob 99:22 second 13:16 39:23 sent 56:12 132:11 44:23 50:20 52:21 roberts 99:17 45:20 51:20 137:22 158:7 160:24 53:6,15 100:5 151:9 role 107:22 140:16,24 165:21 161:17 165:17 160:6,12 182:19 rolling 16:11 165:22 196:19 166:4 193:12 193:2,20 194:11,14 ron 97:13 100:4,5 233:10 247:4 198:20,21 199:5 195:25 196:6 215:5 253:24 254:24 201:14 206:5 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299388 [sent - sorry] Page 28 217:12 229:15 sholl 3:9 6:18,18 147:4 169:3,4,13 259:7,15 260:5,9,11 231:13 shop 189:7,15 223:24 260:14 261:4,7,12 sentence 64:24 short 8:17 106:12 sir 52:10 58:5 59:9 261:14 262:13 65:16 118:3 141:16 246:13 62:8,11 65:13 72:6 265:10 268:4 160:5,6 247:9 shortage 225:16 73:9,19 74:12 75:13 270:19 272:16 separate 21:20 shorter 10:18 81:11 83:15 84:4 sit 23:6 154:18 24:13 123:6 128:19 shortly 158:9 86:8 87:10,13,16,19 178:19 260:14 show 98:20161:7 88:21 90:9 94:11 site 245:17 separately 249:2 194:5 195:7 216:20 95:18 97:17,20 sitting 55:19 108:22 253:22 254:7 257:9 233:14 235:20 99:11,19,21,23,25 109:25 136:2 264:16 241:14 264:22 100:3 101:5 102:3,6 143:21 213:6 234:5 september 14:24 showed 100:14 102:9 103:22 105:4 situation 144:19 15:19 29:12,14,14 204:6 212:6 105:11 106:5 255:21 45:21 50:3 103:4 showing 174:13 107:17 108:18 six 128:21,23 248:19 105:9 107:5 108:16 192:15 109:11,14 118:2 sixteen 71:9,11 117:4 120:23 shows 255:4 119:12 131:19,24 size 137:10 128:24 129:7 side 7:4 22:18 25:18 133:20 134:9,17 smell 135:17 sequence 145:19 31:10,19 51:14 136:16,24 137:13 smoother 246:12 series 128:15 145:17 141:8 263:24,24 138:5,19 141:2 social 79:14 serious 123:17 271:13 149:19 151:5 sold 95:2 258:3 service 1:2 5:13 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239:24 240:3 275:25 stolen 121:19 125:23 126:23 specifically 28:24 stan 26:17 stop 264:3 130:9 133:5 140:17 36:3,6 81:17 99:8 stand 57:18 112:22 story 145:3,5 156:19 160:21 105:15 118:12 155:3 203:22 264:5 straight 144:19 165:19 168:3 171:5 122:22 124:20 272:25 straighten 141:11 172:13 178:10 152:5 177:8 191:12 standing 213:7 strategy 88:12,14 181:9 187:8 189:11 191:25 203:8 start 7:19 35:19 89:3,11,15 90:14,17 202:2,15 206:22 208:10,13 223:6 62:19 65:15 70:20 91:5,16 102:2,5 208:19,24 214:14 224:7,18 225:14 81:12 107:21 129:2 110:3,7,15,24 111:4 216:6 218:4 220:20 252:5 175:24 241:3,20 111:17,19,23,25 225:23,24 236:7 specificity 22:9 270:11 112:7 120:10 127:9 237:2 240:14,18 106:17 120:18 started 59:14 62:20 244:16 241:6,10,13 243:7 151:18 162:24 67:24 69:6 238:15 streams 246:12 247:8 254:9,21 176:15 179:6 starting 47:7,22 stressed 122:12 262:12,19 266:4 specifics 188:22 48:2,6 51:10 57:9 strictly 121:24 268:16 271:25 speech 213:15 57:25 58:23 66:23 126:6 143:9 272:4,5,9 speed 132:4 68:2,10 73:24 strike 11:4 150:3 sort 146:2 153:2 spell 215:7 starts 195:16,22 structure 17:2 61:17 154:2,13 226:20 spent 65:2 196:14 structured 16:23 244:5 spoke 20:21 21:4 state 2:13 42:3 stuck 245:2 sought 177:18,21 27:24 28:5 76:19 202:6,8 243:5,14 sub 175:5 240:24 sound 45:18 46:18 119:7 120:15 274:3,9 subchapter 241:10 sounds 15:2 42:21 129:13 131:15 stated 136:3 242:9 45:19 139:6,7 140:7,10,11 statement 198:18 subject 24:10 27:21 sourced 174:13,14 144:4 146:18 statements 174:2 31:17 32:2,14 34:6 space 114:25 244:24 151:23 265:2 202:24 247:21 34:9 37:12,13 38:7 speak 78:9,11,15 spoken 28:19 77:2 states 39:18 202:3,4 38:9,19,21 40:15,21 79:2,3,5,6,8,20 128:9 129:23 130:4 240:17 42:6,9 44:6,7,16 133:15 135:22 132:10 139:13 stating 27:20 45:13,25 46:4,11,24 137:23 139:10 176:14 178:20 stay 261:24 262:6 47:21 48:15 49:2,3 140:22 177:24 183:4 185:11 263:6 50:15,18,21 51:15 192:4 193:9,23 spring 214:3,8,21,24 stayed 78:5,6 51:19 52:4,14,15,17 221:10 215:2 staying 146:9,15 52:23 53:7,9,12,16 speaker 140:17 ss 274:4 149:5 167:11 54:3 55:8 56:13,24 speaking 41:19 st 207:5 262:16 146:24 183:4 78:19 107:10 153:9 stable 246:11 stearns 58:18,21,22 267:23 268:6,12,22 173:18 staff 154:19 59:11,23 60:7 61:14 269:10,11 238:14 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299390 [subjected - tell] Page 30 subjected 57:8 156:23 157:2 166:9 54:22 55:2,11 56:3 tape 57:20,24 subjects 34:20 168:18,19 178:24 56:7 57:15 108:2 112:24 113:4 155:5 243:25 179:18,23 180:5 112:20 114:9,25 156:6 203:24 204:4 submitted 157:19 204:16 206:12 116:14 127:11 264:7,11 271:17 subpoenaed 207:10 212:16 233:12 143:25 146:19 273:3 subscribed 273:8 236:11 270:8 147:11,12,13 148:2 taped 271:20 277:22 surprised 72:17 148:10,12,13,18,21 tax 62:12,15 116:3 subscription 235:18 185:17,19,20 148:21,22 149:2 117:14 176:17 235:18,22 236:22 227:11 228:25 165:21 167:4,9,14 212:2 243:5,14 276:12 229:5,7,10 168:17 172:3 taxable 252:15 subsequent 17:21 Busman 3:11,16 6:23 188:17 199:12,14 taxes 242:12,14,15 18:21 19:3,14 20:6 6:23 7:13 9:2,8 220:9,12,12 222:24 teacher 58:12 98:5 11:13 22:22 24:20 223:18 227:7 telephone 129:11 subsequently 32:19,25 33:5 34:12 234:18 249:10 160:2,2 162:25 164:11 34:16,19 35:4,7,12 250:5 252:7,12 166:8 180:24 subsidiary 174:18 41:17 55:23 74:8 253:4 254:14 181:20 183:15 174:20 175:3,4 124:15 154:25 256:20 257:20 192:2 193:6,8 240:22 241:10,19 171:4,6 172:14 258:22,22 209:12 242:9 181:15 197:3,9,11 taken 7:9 57:21 tell 18:2,3 19:12,13 substance 35:9 215:7 217:16 110:18 112:25 19:18 20:14 24:18 133:8 163:24 223:12,18 226:12 117:9,13 125:22 47:18 48:25 58:2 171:14,18 226:16 236:9 180:12 203:25 59:10 93:20 100:10 substantial 68:5 237:18,23 238:3,9 224:14 226:24 101:9,12,19,25 208:18 209:5,22 238:12 264:3 227:7 234:23 264:8 103:7 104:14,21 substantially 110:17 265:19,21 269:18 takes 255:10 106:9 116:24 successful 110:19 272:24 talk 22:25 105:5,6 117:23 118:22 111:6 suspicious 193:3,21 135:19 136:20 119:2,6,14 120:9,12 sufficient 114:5,6 swear 5:19 6:25 137:17,20 138:16 122:19 124:6,10 147:10 swieca 84:9 138:21 139:2 125:10,11,14,16,21 suggested 108:17 switch 183:14 147:23 151:20 129:22 130:6,8,13 145:22 261:10,23 170:4 173:15 130:14 131:2 suggesting 72:5 sworn 9:13 156:9 176:12 177:9 132:13,17 133:12 141:18,20 197:5 273:8 274:13 193:12 243:24 135:12,13 136:17 201:8 252:11 277:22 talked 34:4,21 74:23 141:23 143:12 sunday 217:8 system 181:21 128:13 146:4 145:18 147:21 supposedly 117:6 systems 197:20 191:24 197:11 152:19 162:19 138:11,13 198:21 t 200:10 240:2 164:6,19 165:5,8,13 199:5 243:25 167:22 168:4,22 t 9:12 156:2,7 215:8 sure 11:9 30:3,4 215:9,9 274:2,2 talking 8:13 14:10 170:11,15 175:7 78:6 82:20 88:15,22 14:11,12 25:3 27:18 177:15 178:23 take 8:7,14,16 9:21 107:11 114:25 30:15 63:17 80:2 179:14 186:15 10:13 11:18 12:3,11 118:5 119:18 120:2 111:3 138:20 139:3 188:12,13,25 189:4 12:12 25:14,22 144:12 146:16 157:8 200:4 191:19 192:6 35:25 38:11 39:4 148:11 149:10 talks 30:13 208:14 211:17 40:17,24 45:10,14 150:5 153:3,8,17,20 213:19,22 214:6,15 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299391 [tell - time] Page 31 214:19,25 218:9,15 207:6 230:20,21 190:13 193:5,6,14 time 5:5,16 7:5 8:24 222:22 223:6 224:7 235:24 238:19 197:4 199:14 9:4 10:10,24 11:3 224:11,16 225:8,12 244:5 248:5 274:15 200:12 203:2 207:4 11:10,19 12:10,11 226:8,17 227:11,16 text 195:22 203:16 214:16 218:10,17 12:12 13:21 14:14 227:19 228:7,17,20 thank 7:22 57:17 218:17 220:8 15:20 16:2,13 17:17 270:20 152:23,23 153:17 223:12,16 224:23 17:20 18:22,24 20:7 telling 120:5 127:20 154:8,13 155:2 226:3,12 230:14 20:20 25:15 27:24 141:17 156:14 156:21,23 161:10 236:20 241:8 27:25 28:5,6 33:15 163:2,6,8,11,17,23 202:20 203:10 244:22 246:24 37:4,11 39:15 44:15 164:8,14 173:14 234:15,16 272:21 247:6,6,15,20 259:4 44:20,21 45:15 179:14 183:11 272:24 260:12 261:8 263:2 47:13 50:22 51:8 186:12,18 187:3 thereabouts 173:16 267:19 272:20 53:12 57:19,23 201:4 250:15 thief 123:4,7,9 thinks 152:22 60:15 64:8 65:11,12 253:14 thing 8:12 56:19 third 1:12,20 195:24 67:20 68:14 72:22 tells 150:25 172:8 108:7 110:13,22 thirty 182:15 74:22 75:20 80:5,8 ten 10:5 22:6 23:4 111:22 145:12,13 thought 60:10 68:4 80:11 84:4,5 85:14 64:4,6 84:23 86:5,6 162:17 172:24 73:4 75:8 81:3 85:21,22 92:15 86:7 90:3 167:17 178:22 225:22 83:16 86:20 87:2 97:22,24,25 100:10 tend 24:21 226:5 271:25 93:22,25 100:13 103:8,14 105:24 term 67:9 69:20 things 104:18 101:23 104:10 106:4 109:10,22,23 113:18 115:2 110:21 112:11 107:15 112:6 116:6 111:24 112:21,23 125:20 246:14 116:17,18 120:16 125:3 135:5 136:3 113:3,9 114:17 247:24,25 123:20 124:4 126:4 137:4 154:3 172:5 117:2 118:24 terminated 161:13 127:2,4 141:12 212:3 219:3,15,16 120:13,14 122:5 terms 22:11 23:6,10 158:5 172:3 198:20 224:8 242:22 123:13 126:22 23:11,18,20 24:5,6 214:15 223:7,10 thousand 13:22 130:4 132:10 56:12,22 114:14 224:7,8 225:12 38:24 73:25 121:19 140:10,11 142:16 121:14 136:23 think 7:3,8 28:15 135:2 143:4 148:10 151:23 137:5 157:14,15,15 31:20 33:24 34:17 three 22:19 25:21,23 155:4,6 156:3,5 199:19,22 225:10 34:25 36:15 37:7,9 26:12 27:14,23 32:3 162:25 166:3,17 254:12 37:9 47:13 48:8 32:14 37:14 38:7,9 167:3,7,9,16,18,19 testified 9:15 28:15 73:6 77:20 78:7 38:21 42:8 44:7 169:24 170:11 33:24 55:10 143:20 84:19 88:19 92:16 47:20 48:10,20 49:4 172:3 179:25 156:10 169:8 94:23 95:6,10,14 49:5 50:7,10,15,19 182:13 183:6,10 202:16 204:12 96:3 100:24 103:3 52:4,17 54:20 70:23 184:16 185:12 207:20 208:5 104:24 105:22 70:24 75:23 104:4 187:10,18,23 188:3 215:24 223:8,24 107:12 109:6 127:7 105:25 116:16 190:18 198:19 263:2 133:12 141:4,15 152:17 157:10 200:6 203:21,23 testify 35:5 209:18 143:2 144:2 146:12 158:8 159:15 204:3,17 206:12 testifying 33:10 150:10 152:23 182:15 183:6 186:2 207:7 208:8,15 testimony 14:5 15:9 154:10 162:3 206:20 215:24 209:3 218:18 219:5 23:25 31:9 32:8 166:16,23 167:17 245:22 259:22 221:19 224:17 47:24 56:2 127:23 169:25 171:13,15 261:11 262:3,9 225:3 228:13 229:9 150:4 156:20 175:17,23,25 176:4 tightly 212:23 234:22,25 235:16 202:18 206:24 180:13 185:5 236:4,15,22 237:7 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299392 [time - type] Page 32 237:10 238:7,19 167:20 168:19 30:17,18,2131:3 198:19 239:16 242:4,7 170:3,6 179:22 44:16 269:4 turned 116:10,12 244:15 245:20 180:4 185:22 186:2 trenches 21:19,24 122:16 208:21 246:15 247:3 187:5 188:6,9 190:6 22:7,12 169:5,14 225:22 226:5 256:19 257:16 190:8,19,25,25 transaction 16:23 tutor 215:5 258:3 259:19 262:3 191:17 200:17,22 17:3 82:5 84:21,22 twelve 71:5,7,9,11 264:3,6,10,12 208:21 211:21 85:14,23 86:3 94:25 twenty 208:7 265:24,24 266:6,15 212:15 214:2,9 96:5,8 97:4 172:7 twice 78:3 266:16 267:5 215:17 216:9,11 179:16 twins 71:6 268:12,22 273:2,4 222:2,4,19,19 transactions 63:10 two 6:16 13:13,22 times 8:3 73:20 86:5 224:23 225:6,10,20 67:11 15:5,12 16:14,24 86:6,7,9 114:24 225:21 226:4,5 transcript 275:7 18:6,15,17,17 19:2 151:3 172:16 227:21 232:21 transfer 80:3 19:22 21:9,17 22:21 222:22 232:5 241:8 259:8 transfers 164:16,20 24:8,10,12 27:22,23 261:9 tomorrow 132:25 164:22,23 165:2,6 28:21 29:8,13,18,18 timing 158:7 133:3 travel 65:24 66:3,8 29:20,23 30:10,12 title 139:19 240:3 tonight 8:15 treat 242:8 30:14,16,18,23 31:5 titles 139:20 top 192:16 194:14 treated 42:2,5 43:17 31:11,13,17,23,25 tobaly 99:24 195:10 216:24 51:3,5,9 32:12 34:6,9 37:12 today 5:4 7:7,14,23 218:7 246:16 tremendous 68:6 38:20,23,24,25 23:6 39:11,15 55:20 topic 28:3,8,23 29:3 93:22 39:17,21 40:9,16,19 59:24 61:7 74:2 180:11 222:24 trial 64:16 40:20,22,23 42:7,10 77:8 89:5 108:23 total 65:2 74:3 trigger 148:23 42:13 43:2,3,16 109:25 136:2 104:15 203:13 triggered 259:13 44:6,17,23,24 45:2 178:19 234:5 236:2 totaled 165:6 trouble 117:16 45:14 47:6,22 48:11 243:25 258:23 totally 116:3 117:19 135:18 49:2 50:22,25 51:19 told 24:7,11 25:11 223:12 225:17 true 52:3,13 211:22 52:14 53:2,8,11,13 26:17 30:6 48:25 track 68:4 249:7 237:7,10 242:25 53:17 54:3,20 55:8 86:15,18 93:12 250:11,12 253:21 251:22 253:2,8 57:9 58:3 64:20 101:3,6 108:8,9 254:7 254:6 274:14 68:20 71:24 73:25 109:24 113:21 tracked 249:2 trust 1:11 3:13 75:22 77:15 79:13 115:18,23 116:5,6,7 tracking 140:3 39:19 61:11,12,24 79:22 105:24 116:16 117:12 257:8 62:20 63:5,9,14 146:24 162:20 118:20 119:16,23 trade 174:16 88:8,10,11 89:12 164:3 167:17 121:7 124:12 traded 114:2 90:23 97:13 158:18 169:20 185:25 126:15,17,20,25,25 trader 59:4,5 160:9 174:9,17,21 195:15 196:4 208:9 127:8,22,25 129:18 trading 58:25 59:15 174:23 210:24 214:15 131:12 132:12 59:16,17207:5 trust.11.13.06.xls 248:6,8,9,12,13,22 133:8 134:23 train 60:4 198:5 253:3,5,25 259:13 135:18 136:22 trainer 59:3,4,5 truth 168:19 225:13 259:24 260:15,18 141:12,16,19,20 training 59:19 try 22:23 32:23 262:3,9,16 263:6,13 142:2,11 144:16,18 tranche 12:9,12 52:12 182:5 243:24 264:14 266:2,8 145:2,5,20 147:9 20:18 21:20,25 22:8 249:5 268:16 267:8 148:6 149:7 162:17 24:13 25:12,13 trying 7:13 11:6 type 82:7 170:23 163:25 166:7 29:19,20,24,25 I 191:13 193:13 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299393 [types - wealthy] Page 33 types 60:6 247:22 137:11 145:19,21 204:2 234:21,24 196:11 198:25 u 146:10 147:6 264:5,9 272:25 199:18 201:5,10,12 169:10 172:2,10 view 11:11 106:25 203:13,14 234:17 u 215:8,9 177:2 244:10 106:25 107:2,2,3,3 234:18 237:14 u.s. 174:25 175:3 259:19 107:14,15,23,23,24 238:4,6 240:25 240:18,19 243:22 undertake 176:5 107:24,25 228:17 244:12,18,23,25 uh 192:18 undertook 178:11 229:8 244:19 245:16 246:9 unaware 118:22 unfamiliar 122:4 262:15 248:18,21 257:23 120:9,13 unified 169:3 viewed 176:23,25 260:18 261:18,20 unclear 89:5 244:4 union 58:3,6,11 violation 208:18 262:9 264:22 uncomfortable united 240:17 209:22 210:5,9,12 265:21 268:14 144:18 unnecessary 245:2 virgin 62:3,5,6,10 269:23 uncommon 136:10 unreturned 193:7 62:15,16,21 63:2 wanted 38:18 44:22 underlying 245:23 ups 224:2 77:21 89:24 174:14 45:2 47:3 68:6 understand 11:6 upset 134:21 174:25,25 175:3 103:23,23 124:14 13:2,10,17 37:25 38:10,14,22 41:8 use 8:5,17 69:20 240:12,17,18,19 136:20 144:20 92:17 125:24 241:4,6 145:20,21 148:15 44:18 48:23 79:16 131:14 154:4 virtually 234:12 148:17 149:10 94:7 95:12,16 usually 22:14,16 visit 78:7 167:17 169:22 101:15 113:17,21 114:15 172:8 visited 77:21 170:3,6 173:15 114:18 134:20,20 245:19 246:5 voice 181:8 174:15 177:14 137:2 139:23 150:6 utilized 255:20 volunteer 34:14 178:21 179:8,16 150:7,8 169:6 177:6 v vrf 1:5 5:11 6:16 193:12 202:24 197:9 199:15,17 vs 1:7,13,16 229:16 261:15 238:14 242:11 v 277:5 w wanting 18:25 31:14 244:6,11 248:24 vacations 77:19 174:6 202:3 249:3 250:11 254:8 valuation 93:9 waived 34:17 35:6 wants 114:24 257:4 260:13 94:13 202:12,13,18 waiver 34:20 waste 167:7,19 264:23 value 1:5,14 6:17,22 waives 34:24 understanding 10:7 121:24 167:13 walked 265:15 238:6 watermark 256:8 13:13 15:17,19,20 200:10 227:3 266:16 256:14,16 15:25 16:7,15,17,19 252:13,18 want 8:2,16 11:19 way 20:1126:23 16:20 17:13 19:20 valued 93:5 167:10 18:15 29:17 30:4 32:4 45:8 67:8 20:13,24 26:19 30:7 252:10,11 33:9 34:22 44:24 91:16 114:19 32:11 33:12,18 35:2 values 121:15 47:19 51:22 67:17 141:22 144:24 43:2 45:12,24 46:21 varies 95:24 72:4 83:8 107:8,11 159:7 169:25 178:3 74:16 92:3,10,11 vehicle 235:13 115:3 116:7 125:15 183:6 257:7 261:22 95:19,23 102:4 venture 81:7 82:7 127:2 130:25 131:4 274:19 113:5 158:6 179:25 83:14 86:12 87:3,5 132:14 135:8,10,16 ways 33:24 234:9 257:5 258:24 veritext 5:4 277:2 135:22 138:12 we've 34:17 146:18 259:10,16 260:6 versus 5:11 144:9 145:6 146:7 153:2 176:9 240:2 268:11,21,25 videographer 4:14 148:15 153:12 241:8 understood 9:3 5:2 57:18,22 112:22 156:18 168:18 wealthy 60:13,16 13:19 16:11 38:17 113:2 155:3 156:4 188:15 190:2 63:11,13 238:20 48:19 49:8 113:22 182:15 203:22 191:21 192:9 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299394 [web - zwirn] Page 34 web 245:17 withdrawn 15:14,21 wrapped 178:24 263:6,13 264:14 wedding 72:20 witness 3:13 5:14,19 write 230:15 270:12 266:2,8 269:13,15 week 79:9 140:24 6:24 9:13 23:3 25:2 270:13 269:22 270:6 weeks 39:17 79:22 25:5,9 41:18,21 written 219:10 years 10:2 15:6,12 167:17 55:25 57:17 107:16 wrong 21:12 16:14,25 18:15 19:2 weiss 3:4 6:15,19 124:16 155:2 156:8 wrongdoing 123:14 20:21 21:9 24:12 96:3 235:6 171:5 196:17 123:17 125:4 215:2 25:21,23 26:12 went 58:3 88:9,11 233:12 234:15,19 wrote 271:2 28:21 29:20 35:20 88:12 104:13 133:3 272:22 274:11,15 x 38:21,23 39:22 40:9 144:2 159:2 165:16 274:21 275:4 40:19,20,23 42:9 x 275:2 165:18,24 166:4 witnesses 8:13 43:2,3 47:6 50:22 218:3,9 252:16 220:17,20 y 53:3,8,11 54:20 253:5 259:4 263:9 wohl 4:4 6:9,11,13 y 9:12 156:7 57:9 58:3 66:12,23 wharton 3:4 6:15,20 word 67:23 70:13 yahoo.eom 193:19 66:24 68:18 69:17 whatever's 257:24 70:20 74:17 125:24 yeah 34:16 50:9 72:19 73:18 75:23 whatsoever 257:6 126:9 131:14 153:13 270:2 77:6,25 78:24,25 whereof 274:21 137:12 172:9 198:4 year 13:13 18:17,17 85:9 96:3 105:24,25 whistles 123:12 219:7 237:16 19:22 21:17 22:19 108:4 129:24 whoa 265:19 261:17 22:21 24:8,10 27:14 169:20 183:14 wholly 174:18,20 words 10:12 25:14 27:22,23 29:8,13,18 208:9 238:20 240:21 76:18 91:12 120:21 29:18,23 30:10,12 239:19 245:23 wide 112:3 127:3 163:23 30:14,16,18,23 31:5 248:7,8,9,13,22 wife 72:3 79:5 171:14,18 198:8 31:11,13,17,23,25 259:14 260:15 206:16 239:2 251:3 32:3,12,14 34:6,9 yesterday 199:7 william 3:23,24 5:21 work 28:19 35:19 36:14 37:12,14 38:7 201:16 6:6 61:5,21 63:13 89:2 38:9,25 40:16,22 york 1:3,3 2:10,10 willing 92:20 148:25 89:3,3,4,24,25 42:7,10,13 43:16 2:13 3:7,7,15,15,22 wire 160:11 151:15 197:20 44:6,7,17,23,24 3:22 4:7,7 5:4,9,10 withdraw 14:7 15:3 220:18,23 221:4 45:2,14 47:20,22 5:13,13 62:19,24 16:3,8,12,13,24 253:3 48:10,11,20 49:2,4 89:25 174:13,14,17 20:6,7 36:21 38:15 worked 58:23,24,25 49:5 50:7,10,15,19 211:11 243:5,14 39:19 41:7,10,13,16 59:2 74:24 75:9 50:25 51:19 52:4,14 274:3,5,9 277:3,3 41:24 42:13,16,19 252:4,23 254:11 52:17 53:13,17 54:3 young 75:8 42:23,24 43:6,8,23 255:16 266:3,8 55:8 62:25 65:3 younger 85:12 55:15 57:6 127:18 working 35:21 67:6,19 162:20 yul 99:24 169:4 189:13 93:24 239:17 170:17 173:7,8 z 190:23 world 239:18 178:22 179:9,12,17 zero 96:2 115:21 withdrawal 10:16 251:19 253:17 179:18,20,23 180:5 zwirn 1:17,18,18,19 15:10 36:17 57:9 worse 121:11 182:25 183:7 219:9 248:12 251:3,15,25 3:19,20 4:5 5:22,23 122:13 178:5 183:5 worst 123:8 5:24 6:3,4,4,9,11,13 183:12,18 204:8 worth 250:21 253:7,18 254:15,17 12:20 13:5,6,7,8 207:15 226:23 251:17 255:3,6 256:17,24 14:2,13,16 16:21,23 withdrawing 207:15 wrap 179:15 181:19 257:17,21,22,24 19:12 20:20,21 26:4 233:3 181:21 182:2,3,4 258:2 259:12,22,25 26:7,12 31:4 32:4,7 261:11 262:3,9,16 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299395 [zwirn - zwirn's] Page 35 42:4 49:15,15,21 210:5,9,18 211:17 50:3,12 55:5,7 211:18 212:15,21 56:12 63:17 74:23 212:22,23 213:19 74:24 75:5,11,17,21 213:23 214:2,7,10 76:2,3,5,21,23 214:16,20 215:2,25 100:9,13,15,15,17 221:14,17,23 100:17,19,21,24 222:20 225:3,11,12 101:2,4,7,9,10,22 228:13 233:19 102:16,25 103:2 234:11 250:2 252:3 104:3,4 106:3 107:7 252:23 254:11 107:21 109:19 255:17,19,24 257:6 111:6 113:7,20 258:24 263:10,13 115:7,18 116:6,7,10 263:17,20 264:13 116:11,20 117:5 264:21,24 265:14 118:11,11 120:10 266:16,22,23 120:20 121:2,3 268:10,20,24 269:8 122:3 123:25 269:9 271:11,12 124:10,12,13,14,21 275:19,20,25 124:24 126:10,15 276:16 126:17 127:21 zwirn's 117:10 128:7 129:9 131:15 140:12,18 170:13 132:10,24 133:25 181:23 184:7,11 134:11 137:11,23 212:2 257:6 141:12,20,23 142:8 144:17 151:25 153:10 154:4,17 156:15 158:4,13,18 159:16 160:10,18 160:20 161:3,5,12 161:22,24 166:18 166:19,20 167:24 167:24 168:6,6 170:4,12,20 173:5 173:11,15,18 174:8 174:12 177:3,25 178:24 181:7,14 182:7,21,21,22 183:24 184:3,17,20 184:20 187:10,23 188:19,25 189:8 190:15 191:10,13 191:25 192:7,20 193:5,5,9 198:19,24 201:9 204:12 206:5 206:16 208:16,21 VERITEXT REPORTING COMPANY www.veritext.com EFTA00299396