EFTA01124872

CONFIDENTIAL Page 1 1 ** CONFIDENTIAL ** CONFIDENTIAL * * 2 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK 3 Civil Action No. 09 Civ 6441 (DC) 4 PERRY A. GRUSS, 5 6 Plaintiff, 7 -against- 8 DANIEL B. ZWIRN, D.B. ZWIRN & CO., LP, 9 and D.B. ZWIRN PARTNERS, LLC., 10 11 Defendants. r 12 x 13 June 28, 2010 9:30 a.m. 14 ***CONFIDENTIAL*** 15 16 DEPOSITION of PERRY GRUSS, 17 the Plaintiff in the above-captioned action, 18 taken by Defendants, held at the offices of 19 Cooley, LLP, 1114 Avenue of the Americas, New 20 York, New York, before Eileen Mulvenna, CSR/RMR, 21 Certified Shorthand Reporter, Registered Merit 22 Reporter and Notary Public of the State of New 23 York. 24 25 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124872 JAIT EFTA01124873 Page 2 Page I " CONFIDENTIAL " CONFIDENTIAL " 2 APPEARANCES: 1 Gross - CONFIDENTIAL 3 2 PERRY GROSS, 4 LIDDLE & ROBINSON, LIE 3 having been duly sworn by Eileen Mulvenna, 5 Ammer for Phimiff 4 a Notary Public of the State of New York, 800 Third Avenue 6 Nc-*Yoek, New York 10022 5 was examined and testified as follows: BY: ETHAN A. BUCHER, ILSQ. 6 EXAMINATION JENNIFER ROD 7 BY MR. LEVINE: a 9 8 Q. State your name and address for the 10 9 record, please. LANKIER SIFFERTA WOK, LIP 11 Mwmcpe for Defendant Daniel& 2onen 10 Perry A. Gruss, 500 Fifth Meese 12 New Pod/. New York 10110 11 BY: DANIEL& REYNOLDS, ESQ. 12 THE REPORTER: Usual stipulations? 13 JOHN SIEFERT. ESQ. 13 MR. SIFFERT: It will be done by the 14 14 Federal Rules of Civil Procedure. ANDREW S. LEE. ESQ. IS 15 MR. LEVINE: Nothing other than what 16 16 the Federal Rules of Civil provides. 17 COOLEY, LIE 17 THE ' • RTF-R: Okay. IS Af10111L)S for Defendant D.B. Rutin! & co., LP and O.B. ZwImPattnen.11C 18 MR. BRECHER: Are there stipulations 19 1114 Averse of Os Americas 19 or are there not? New Yak, New York 10036 20 BY. ALAN LEVINE ESQ. 20 MR SIFFERT: Federal Rules of Civil 21 MILAN H. O'BRIEN, ESQ. 21 Procedure controls. 22 MR. LEVINE: Don't need speaking 22 MAXINE SLEEPER. ESQ. 23 objections. I won't argue with you. If I 23 24 sense your objection is a good one, I may 24 25 25 rephrase the question. You'll get an Page 3 Pege5 1 **CONFIDENTIAL ** CONFIDENTIAL ** 1 QV.% - CONFIDENTIAL 2 IT IS HEREBY STIPULATED AND AGREED, 2 opportunity to review the transcript and 3 by and between the attorneys for the respective 3 sign it and do an errata sheet. 4 parties herein, that fi ling and sealing be and 4 BY MR. LEVINE: 5 the same are hereby waived. 5 Q. Mr. Gross, my name is Alan Levine, 6 6 and I represent D.B. Zwim & Co. L.P. and 7 IT IS FURTHER STIPULATED AND AGREED 7 D.B. Zwim Partners, LLC, defending them in a 8 that all objections, except as to the form of the 8 lawsuit which you filed in the Federal Court, 9 question, shall be reserved to the time 9 Southern District of New York, July 20, 2009, 10 of the trial. 10 Civ. No. 096441. 11 11 Is that a lawsuit that you Sled? 12 IT IS FURTHER STIPULATED AND AGREED 12 A. Yes. 13 that the within deposition may be signed and 13 Q. Have you ever been deposed before? 14 sworn to before any officer authorized to 14 A. Yes. 15 administer an oath, with the same force and 15 Q. How many times? 16 effect as if signed and sworn to before the 16 A. I believe four. 17 officer before whom the within deposition was 17 Q. In what matters? 18 taken. 18 A. By the SEC in the matter of D.B. 19 19 Zwirn & Co. — Fm not exactly sure of the rest. 20 20 Q. Have you given any other sworn 21 21 testimony in your career 22 22 A. No. 23 23 Q. — of any kind? 24 24 A. No, I don't believe so. 25 25 Q. Never been in a lawsuit personally? 2 (Pages 2 - 5) VERITEXT REPORTING COMPANY 212-267-686R www.veritext.emm 516-60R-74M EFTA01124874 Page 6 Page 1 Gruss - CONFIDENTIAL 1 Grass - CONFIDENTIAL 2 A. No. 2 Q. What did you do at Nomura 3 Q. Other than this matter. 3 Securities? 4 A. No. 4 A. I was a product controller for their 5 Q. lust a couple of ground rules. I S real estate group. 6 ask the questions, you answer them. Pm going to 6 Q. What did that job entail? 7 try very hard not to interrupt you in the middle 7 A. I was the one who calculated the P&L 8 of an answer. Please don't guess what my 8 for the front office. 9 answer -- my question's going to be because there 9 Q. What skill-set did you need to do 10 could be a word at the end that surprises you. 10 that? 11 So let me get it all out of my mouth. And 11 A. Brains. 12 nodding -- understand all of this; correct? 12 Q. Did you have a math background? 13 A. Yes. 13 A. No. 14 Q. Also, your lawyer has a right to 14 Q. So give me more of an idea what you 15 object, as you just heard, so don't jump on my 15 did even, day. 16 questions because then you deprive him of an 16 A. Reports would — the front office 17 opportunity to work. Okay? 17 would trade. Reports would come out. I would 18 And if you don't understand any 18 calculate the reports, produce a P&L, and then it 19 question that I ask, tell me you don't understand 19 would be verified against the front office P&L 20 it and I'll rephrase it. 20 that they produced. 21 And subject, of course, to what your 21 Q. What kind of trades? 22 lawyer says, I'm entitled to an answer on the 22 A. CMBS trades. 23 record for every question that i ask unless he 23 Q. What are CMBS trades? 24 directs you otherwise. 24 A. Collateralized mortgage-backed 25 Understand all of this? 25 securities. 9$8* 7 Page 9 1 Gruss - CONFIDENTIAL 1 Grass - CONFIDENTIAL 2 A. Yes. 2 Q. When did you first learn about 3 Q. Where did you graduate from college? 3 collateralized mortgage-backed securities? 4 A. Oneonta State University New York. 4 A. Around 1994. 5 Q. What year? 5 Q. Where did you learn about that? 6 A. 1989. 6 A. Nomura. 7 Q. What did you do after you graduated? 7 Q. Who taught you about that? 8 A. I was employed by American 8 A. The controller at the time. 9 International Group. 9 Q. Who was that? 10 Q. Doing what? 10 A. Bob Rottman. II A. I was a — 'would say I was a 11 Q. What did Nomura Securities do with 12 systems accountant. 12 respect to collateralized mortgage-backed 13 Q. Did you take accounting in college? 13 securities? 14 A. No. 14 A. They packaged, securitized and sold. 15 Q. Did you take any accounting courses 15 Q. Did they also trade in the secondary 16 in college? 16 market? 17 A. Not one. 17 A. Yes. 18 Q. What did you do at AIG? 18 Q. So they were an originator and 19 A. i worked in the systems group. 19 trader? 20 Q. For how long did you work in the 20 A. Exactly. 21 systems group? 21 Q. Did all of those functions come 22 A. From 1989 through — I don't want to 22 within the group that you were working in? 23 guess -- 1994. 23 A. Yes. 24 Q. What did you do after that? 24 Q. What were the entities that you were 25 A. Worked at Nomura Securities. 25 calculating the P&L for? 3 (Pages 6 - 9) VERITEXT REPORTING COMPANY "111 ICI 4040 .............«0....1a"... C C 4110 41A AA EFTA01124875 Page 10 Page 12 1 Gruss - CONFIDENTIAL Onuss - CONFIDENTIAL 2 A. I don't recall. 2 you sell them. 3 Q. I take it P&L stands for profit and 3 Q. Package into what? 4 loss? 4 A. CMBS, commercial mortgage-backed 5 A. Correct. 5 securities. 6 Q. Were the transactions that you were 6 Q. Are you saying that you take, in 7 calculating the profit and loss trades in the 7 your example, ten commercial loans and aggregate 8 secondary market for the collateralized 8 them into one security which is then sold as a 9 mortgage-backed securities? 9 security? 10 A. Some were. Some weren't. 10 A. It wouldn't be one security. It 11 Q. What were the ones that were not? II would be several securities spreading the risk I2 A. The ones that were originated. 12 across individual trenches. 13 Q. Were these proprietary trades for 13 Q. What is a tranche? 14 Nomura or were these trades on behalf of funds? 14 A. The single A, triple A, double A. 15 A. Proprietary. 15 My example earlier. 16 Q. How long did you stay at Nomura? 16 Q. And those are rating agency credit 17 A. Through 2002. 17 ratings? 18 Q. Some eight years? 18 A. Correct. 19 A. Yes. In different capacities. 19 Q. How do the rating agencies decide 20 Q. What was the second capacity that 20 what rating to give each of these trenches? 21 you functioned in at Nomura? 21 A. I don't know. 22 A. I worked for the production side of 22 Q. Were you involved in that process at 23 the business securitizing and structuring CMBS. 23 all? 24 Q. What did that job involve? 24 A. No. 25 A. More -- more detail and analysis. 25 Q. Were you involved in selecting the Page II Page 13 1 Grass - CONFIDENTIAL Gruss - CONFIDENTIAL 2 Q. What kind of detail and what kind of 2 commercial loans for the diffacat trenches? 3 analysis? 3 A. No. 4 A. Just packaging of the real estate 4 Q. What was your job? 5 loans, the commercial real estate loans, and then 5 A. I was a -- just an analyst. 6 assisting with the rating agencies in 6 Q. What were the nature of your duties 7 structuring. 7 as an analyst? 8 Q. Could you explain what you mean by 8 A. I would say once you received all 9 packaging a loan or just give us as freshman in 9 the loans, the ten loans — let's go back to 10 high school an explanation of what a CMS [sic] 10 that — the ten loans, I would be helping the 11 is? 11 head of structuring accumulating investment memos 12 MR. BRECHER: Objection. 12 on the real estate loans, et cetera. 13 Q. You may answer. 13 Q. Were you participating in the 14 A. For instancy, you have ten 14 decision which tranche the different commercial 15 commercial mortgages, you pool them together and 15 loans applied? 16 they you securitize them and you tranche them 16 A. No. 17 out. There could be triple A securities, double 17 Q. Was this assignment within the same 18 A, single A. 18 group as the group that you joined in '94? 19 Q. What is the -- 19 A. No. 20 A. Then you sell them through a 20 Q. The P&L work that you were doing 21 broker/dealer. 21 before was for a different group? 22 Q. What do you mean by securitize them 22 A. No, the P&L work was for the same 23 out? 23 group. 24 A. Like I said, ten loans, you package 24 Q. Right. 25 them, get a rating agency to rate them and then 25 A. Yes. I thought you asked if it was 4 (Pages 10 - 13) VERITEXT REPORTING COMPANY a ••••••• EFTA01124876 Page 14 Page t6 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 the same group. It was not the same group. 2 You described a proprietary business 3 Q. You just described two different 3 at Nomura; correct? 4 jobs that you had — 4 A. Correct. 5 A. Exactly. 5 Q. How large a business was it? 6 Q. -- at Nomura? 6 A. I don't know. 7 A. That's correct. 7 Q. How many people were employed in the 8 MR.. BRECHER: Let him finish the 8 proprietary trading business at Nomura at the 9 question. 9 time, late '90s? 10 THE WITNESS: Pm sorry. 10 A. Over 50, below a thousand. 11 Q. What did you do next at Nomura after 11 Q. So you went back to the back office, 12 you worked on the production of these securitized 12 were promoted to the title of director — 13 loans? 13 A. Uh-huh. 14 A. I went back to the back office where 14 Q. — and who did you report to? 15 I had started with the P&Ls and just — and just 15 A. Bob Rottman. 16 took on more responsibility. 16 Q. Who was Bob Rottman? 17 Q. What was your title at that time? 17 A. He was the CFO at the time. 18 A. Director. 18 Q. And how many people reported to Bob 19 Q. What was your area of 19 Rottman? 20 responsibility? 20 A. I don't recall. 21 A. The same -- it was the same 21 Q. How long did you stay as a director 22 responsibility, but now for the real estate 22 in the back office? 23 group, the fixed income group, and I believe 23 A. About 2002. 24 emerging markets; but can be — can't be sure 24 Q. So when you left Nomura, you left in 25 about the latter. 25 that position? Page 15 Page 17 1 .Gruss - CONFIDENTIAL 1 Omss - CONFIDENTIAL 2 Q. What was that responsibility? 2 A. Correct. 3 A. I was now managing those individuals 3 Q. Had you been promoted again before 4 that did the P&I, not unlike the P&L I did for 4 you left Nomura? 5 real estate. 5 A. I don't recall. 6 Q. What were the nature of the 6 Q. Did you -- withdrawn. 7 businesses that you were analyzing the Pa for? 7 Where did you go next to work? 8 A. The fixed income division traded a A. At D.B. Zwirn & Co. 9 corporate bonds. They traded residential 9 Q. How did it come about that you left 10 mortgage-backed securities -- not commercial 10 Nomura to go D. B. Zwim in 2002? 11 mortgage-backed securities -- and treasuries, 11 A. I got a call from a recruiter that 12 repos, reverse repos. 12 D.B. Zwim & Co. — HighbridgetZwim — 13 Q. And you calculated the P&L for all 13 Higbbridge at the time was looking for a CFO to 14 of these different proprietary trading accounts? 14 run the distressed special opportunities group. 15 A. At that point, the people who worked 15 Q. Who did you meet with at D.B. Zwim 16 for me did. 16 and Co.? 17 Q. And how many people at that point 17 A. I met with Dan Zwim, Glenn Dubin, 18 were working on your team? 18 and possibly one or two other people. 19 A. I don't recall. 19 Q. When did those initial meetings take 20 Q. Approximately. 20 place? 21 A. Ten. 21 A. Summer of 2002. 22 Q. How large a business was this — 22 Q. When were you actually hired? 23 MR. BRECHER: Objection. 23 A. Summer of 2002. 24 Q. — with Nomura. 24 Q. Am I correct, then, that you left 25 Withdrawn. 25 Nomura Securities on good terms? 5 (Pages 14 -17) VERITEXT REPORTING COMPANY EFTA01124877 Par IS Page20 I Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. Oh, yes, very good. 2 recites what someone other than yourself said, 3 Q. Did Mr. Rottman or anybody else at 3 that you are not verifying the accuracy of that 4 Nomura make any effort to keep you there? 4 statement? 5 A. Mr. Rottman moved on to Wachovia 5 A. Do you — 6 Securities in Charlotte. His replacement 6 MR. BRECHER: Objection. 7 absolutely tried to retain me. 7 A. Can you drum that down for me, what 8 Q. When you joined D.B. Zwim, who was 8 you're trying to say? 9 your actual employer? 9 Q. There are a lot of allegations in 10 A. I believe Highbridge Capital 10 here about yourself; correct? 11 Management. 11 A. Yes. 12 Q. Let me show you what we marked -- 12 Q. And allegations that you've made 13 we'll mark as Gruss 1. 13 about what other people did; correct? 14 (Gruss Exhibit 1, Complain and Jury 14 A. Correct. 15 Demand, marked for identification.) 15 Q. To the best of your knowledge, these 16 Q. Are you familiar with that? 16 are accurate? 17 A. Yes. 17 A. Yes. 18 Q. Is this a copy of the complaint that 18 Q. And are you prepared to take an oath 19 you filed in this action? 19 that they're accurate? 20 A. Yes, but it's not the original. 20 A. Yes. 21 Yes. 21 Q. And do you so swear that they're 22 Q. Did you review it before it was 22 accurate? 23 filed? 23 MR. BRECHER: Objection. 24 A. Yes. 24 A. Yes. 25 Q. Did you make corrections to it 25 Q. Do I understand you to be saying Page 19 Page 21 1 (buss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 before it was filed? 2 that you believe that statements that were made 3 A. I don't recall. 3 about you were inaccurate? 4 Q. Does this represent your statement 4 A. Correct. 5 of what happened for the matters that are 5 Q. And it's those statements that 6 asserted in it? 6 you're not verifying are accurate? 7 MR BRECHER: Objection. 7 A. Correct. Thank you. 8 You can answer. 8 MR. LEVINE: Let's mark this 9 A. Oh, I'm sorry. I apologize. 9 Gruss 2. 10 Generally. 10 (Gruss Exhibit 2, Bates Nos. DBZ 11 Q. Well, is there any statement in this 11 0000038 through 39, 6/7/02 Letter to Gruss 12 complaint that you don't believe is accurate? 12 from Zwim, marked for identification.) 13 A. All the statements that were made on 13 Q. Do you recognize the document? 14 my behalf are accurate. 14 A. Yes. 15 Q. Is there -- did you make any 15 Q. What is it? 16 corrections to any of the statements that you saw 16 A. It appears to be my offer letter 17 in it before it was filed? 17 from Highbridge Capital. 18 A. I don't -- I don't recall. 18 Q. Is that your signature? 19 Q. Do I understand you correctly that 19 A. Yes, it appears to be. 20 to the extent that this complaint quotes what 20 Q. Was there any other employment 21 other people or institutions purport to have 21 agreement in June of 2002 that applied to you? 22 said, you're not attesting to that accuracy? 22 A. I don't recall. 23 A. Can you repeat that 23 Q. In 2002, in June, what was the 24 Q. Do I understand you correctly that 24 structure of the different investment vehicles at 25 to the extent that the complaint repeats or 25 Highbridgc Capital Management? 6 (Pages 18 - 21) VERITEXT REPORTING COMPANY EFTA01124878 Page 22 Page 24 Gruss - CONFIDENTIAL I Gruss - CONFIDENTIAL 2 A. This — just to be clear, this says 2 Q. Did you read, for instance -- 3 !joined in July of 2002. I think you said June. 3 withdrawn. 4 Q. Now please answer my question. 4 Was there offering memoranda for 5 A. I'm sorry, can you repeat it. fm 5 investors for sure each of those two funds? 6 sorry. 6 A. Yes. 7 MR. LEVINE: Eileen, you want to 7 Q. Did you read the offering materials, 8 read it back to him. 8 including the offering memoranda, for each of 9 (Record read.) 9 those two funds? 10 A. There were several. I can't recall. 10 A. I'm sure I did. 11 Q. What was Highbridge Capital 11 Q. Were you generally familiar with the 12 Management? 12 terms of those offering memoranda as it applied 13 A. The hedge fund. Highbridge Capital 13 to the investors for each of those funds? 14 Management was the management company that 14 A. Generally. 15 managed hedge fluids, to be clear. 15 Q. Did you have copies of those 16 Q. What was your understanding in 16 materials in your office to refer to as you were 17 July 2002 of what a hedge fund was? 17 doing your job in 2002? 18 A. A pool of capital that would make 18 A. At one time of another, yes. 19 investments on behalf of investors. 19 Q. And did you always have those 20 Q. What did you understand your job was 20 materials available to you if you had any 21 supposed to be in July of 2002 at Higbbridge 21 questions about what the terms were for any of 22 Capital Management? 22 those funds? 23 A. I was going to be the CFO of the 23 A. Yes. 24 Ffighbridge/Zwim Special Opportunities Funds as 24 Q. Did you understand, in July 2002, 25 well as the managed account that Dan Zwirn ran on 25 that — withdrawn. Page 23 Page 25 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 behalf of Highbridge Capital Management. 2 Who did you understand were the 3 Q. And what were the different funds 3 investors in L.P. and Ltd.? 4 that made up the Highbridge/Zwim Special 4 MR. BRECHER: Objection. 5 Opportunity Funds as of July 2002? 5 A. I don't recall. 6 A. I believe at the time there were 6 Q. Were they — I don't mean by name. 7 two. Highbridge/Zwirn Special Opportunities 7 A. Right. 8 Fund, L.P. And Highbridge/Zwim Special 8 Q. I mean by type. Were they 9 Opportunity Funds, Ltd. 9 individuals? 10 Q. What was the difference between the 10 A. At that time? II Special Opportunities Fund identified by L.P. 11 Q. Yes. 12 with the fund identified by Ltd.? 12 A. I don't recall. 13 A. The L.P. was onshore investors. 13 Q. Do you recall the nature of any of 14 Domestic investors could invest in it. And Ltd. 14 the investors at that time? 15 was offshore. Foreign investors invested through 15 A. The nature, can you -- 16 it. 16 Q. Were they individuals? Were they 17 Q. Was July of 2002 the first time that 17 partnerships? Were they LLCs? 18 you ever confronted an investment structure of 18 A. It could have been individuals, but 19 that kind? 19 I don't — I don't recall. 20 A. Yes. 20 MR. BRECHER: Don't guess. If 21 Q. How did you learn what that 21 you -- 22 structure was made up of? 22 Q. Do you recall how many investors 23 MR. BRECHER: Objection. 23 there were in each? 24 A. By way of reading the material that 24 A. Na 25 existed. 25 Q. Did you understand, in July of 2002 7 (Pages 22 - 25) VER1TEXT REPORTING COMPANY ^Orb seem /nen MO • •• /SS OD • II Ib EFTA01124879 Page 26 Page 28 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 or shortly thereafter, that if an investor were 2 the onshore, it would have to be expensed by the 3 invested in the limited, the L.P., the onshore 3 onshore fund. And the same goes for if there was 4 entity, that that investor was called a limited 4 an expense of the offshore fund, it would be 5 partner? 5 expensed on the offshore fund. 6 A. Yes. 6 Q. Did you understand that investors of 7 Q. Did you understand that an investor 7 the onshore could not pay — should not pay for 8 in Ltd., the offshore fund, was also called a 8 expenses of the offshore fund? 9 limited partner? 9 MR. BRECHER: Objection. 10 A. No, I don't believe so. 10 A. If the onshore did not incur the 11 Q. What did you understand they were 11 expenses, they should not have incurred the 12 called? 12 expenses. 13 A I don't know. 13 Q. And did you understand that it would 14 Q. Who do you understand was the 14 not be proper if investors of the onshore fund 15 manager of each of these funds? IS were charged for expenses of the offshore fund? 16 A. I don't recall. At that time, I 16 MR. BRECHER: Objection. 17 don't recall. 17 A. 1don't know. 18 Q. You don't recall the specific name 18 Q. Well, did you think that maintaining 19 of the management company or you don't recall 19 separate expenses was convenience or something 20 generally who was the manager? 20 required by the agreements? 21 A. I dont recall generally. 21 A. As I said earlier, if there was an 22 Q. Who did you report to? 22 onshore expense, it should have been expensed to 23 A. I reported to Dan Zwim. 23 the onshore. If there was an offshore expense, 24 Q. Did you understand you were working 24 it could have been expensed to the offshore. 25 for the investment adviser to the funds or to the 25 Q. When you say "should have been Page 27 Page 29 1 Gruss - CONFIDENTIAL 1 thuss - CONFIDENTIAL 2 administrative manager for the funds? 2 expensed," is that because that's what was 3 A. The management company. 3 required by the legal agreements? 4 Q. And what did you understand the job 4 A. I believe so. 5 was of the management company withdrawn. 5 Q. Did you understand that as CFO, you 6 What did you understand the duties 6 have a fiduciary duty to investors to maintain 7 were of the management company? 7 separate records of their investments and the 8 A. To manage the assets on behalf of 8 expenses attributable to the investments? 9 the investors. 9 MR. BRECHER: Objection. 10 Q. Did you understand that the 10 A. Oh, Pm sorry. Yes. 11 investors of the limited partnership were 11 Q. There's no question about that; 12 separate and distinct from the investors of Ltd.? 12 correct? 13 A. Yes. 13 A. No, there would be a question. 14 Q. Did you understand that L.P.'s funds 14 Q. What would the question be? 15 were to be segregated and kept separate from 15 A. 1would need to see all of the 16 Ltd.'s funds? 16 expenses attributable to all of the expenses that 17 A. The investor investments, yes. 17 tan through the funds on the management company. 18 Q. Did you understand that expenses 18 Q. Am I correct that as CFO, it was 19 attributable to the offshore fund could not be 19 your job to set up a system so that all of the 20 paid by the onshore? 20 expenses got attributed correctly as between the 21 A. What type of expenses? 21 onshore and the offshore fund? 22 Q. Any kind of expenses. Did you 22 A. It was my job to manage the 23 understand that the expenses of each of the funds 23 individuals whose responsibility it was. 24 had to be kept separately? 24 Q. Was it ultimately, as CFO, your 25 A. If there was an expense incurred by 25 responsibility to make sure that they did the 8 (Pages 26 - 29) VERITEXT REPORTING COMPANY EFTA01124880 Page 30 Page 32 1 Gruss - CONFIDENTIAL 1 Cress - CONFIDENTIAL 2 correct job? 2 A. [don't recall. It would be the 3 A. It was my responsibility to manage 3 same entity that employed myself. 4 them. 4 Q. Did you understand that there were 5 Q. Did managing them involve making 5 investments that were made that were invested — 6 sure they did a correct job? 6 withdrawn. 7 A. Part of the responsibility, yes. 7 Did you understand that there were 8 Q. There's no question about that; 8 assets that were invested in by both L.P. and 9 right? 9 Ltd.? 10 MR. BRECHER: Objection. 10 A. Yes. 11 A. No, there is a question about that. 11 Q. Was part of your job making mire 12 I just went through it. 12 that the people that worked for you kept track of 13 Q. The question is that it's a 13 that apportionment of investment where there was 14 challenge, but there's no question it was part of 14 each -. where it was a situation each of the 15 your job? 15 funds was investing in the same asset? 16 A. To manage the individuals, no 16 A. Insofar as it was appropriate for an 17 question. 17 asset to be invested in by both the onshore and 18 Q. And there's no question that it was 18 the offshore fund, yes. 19 part of your job of managing the individuals to 19 Q. And sometimes a separate entity was 20 make sure that the allocation of expenses was 20 created so that the onshore could invest in a 21 done correctly? 21 particular asset and the offshore fund 22 A. It was my responsibility to manage 22 essentially invests in the same asset, but 23 these individuals insofar as what exactly they 23 through a different entity? 24 did on a day-to-day basis. I couldn't 24 A. Pm sorry, can you repeat that. 25 micromanage exactly what they did. 25 (Record read.) Page 31 Page 33 1 Gnus - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 Q. Did you give all of the people that 2 A. I don't recall. 3 were responsible for doing this work on a 3 Q. Did you understand that part of the 4 day-today basis the rules that we just recited a 4 fiduciary duty to keep the investments in the 5 few minutes ago? 5 fund separately was because you were — you were 6 MR. BRECHF.R: Objection. 6 keeping track of investments made by individuals 7 A. They — they knew the rules. They 7 or entities that had every right not to have to 8 had access to the offering memorandums, as did L 8 pay for investments made by people or entities in 9 Q. Did you make sure that they knew the 9 a different fund? 10 rules? 10 MR. BRECHER: Objection. 11 A. I don't recall. 11 THE WITNESS: That was a long one. 12 Q. Did you take steps to make sure that 12 Could you ... 13 they complied with the rules? 13 (Record read.) 14 A. I believe I did. 14 A. I don't know. 15 Q. Am I correct that Highbridge Capital 15 Q. Well, wasn't that the essence of 16 Management controlled -- withdrawn. 16 keeping the funds separate? 17 (Discussion off the record.) 17 MR. BRECHER: Objection. 18 Q. Who — who did you understand was 18 A. I would just ask if you can ask the 19 making investment advisory decisions on behalf of 19 question a little simpler. 20 the fimds? 20 Q. Well, people in the onshore — 21 A. Dan Zwim. 21 withdrawn. 22 Q. And who did you understand - 22 Did you understand that there are 23 withdrawn. 23 rules -- actual investment rules as applied to 24 What did you understand was the 24 who can invest in an onshore and who can invest 25 entity that employed Dan Zwim for that purpose? 25 in an offshore fund? 9 (Pages 30 - 33) VERITEXT REPORTING COMPANY EFTA01124881 Page14 Page 36 1 Gruss - CONFIDENTIAL 1 Oruss - CONFIDENTIAL 2 A Yes. 2 he or she would invest in the onshore fund. If 3 Q. There are tax rules that apply; 3 there was an offshore investor, he or she would 4 correct? 4 invest on the offshore fund. Based on what 5 A. In some Stances. 5 criteria, I don't know. 6 Q. These are rules and laws that are in 6 Q. Did you understand that it was 7 force in the United States; correct? 7 simply convenience or did you understand laws 8 MR. BRECHER: Objection. 8 actually applied to it? 9 A In some instances. 9 A. There is clearly a reason beyond 10 Q. Keeping them separate — keeping 10 convenience. 11 investors in these funds separate is part of 11 Q. Did you understand that a person 12 complying with Federal tax laws; isn't that 12 living domestically could not as a matter of law 13 right? 13 invest in the offshore fund and vice versa? 14 MR. BRECHER: Objection. 14 A. I didn't know. I don't know. 15 A. I don't know. I'm not a tax expert. 15 Q. What would be the reason for keeping '16 Q. Just generally, in July of 2002 — 16 them separate? 17 withdrawn. 17 MR. BRECHER: Objection. 18 In July of 2002, was that the first 18 A. I'm not — rm not a tax accountant 19 time ever that you had learned about what an 19 or lawyer, but I would assume it's tax based. 20 onshore fund was and what an offshore fund was? 20 MR. BRECHER: Don't assume anything. 21 A. Yes. 21 Q. Didn't you know that it was tax 22 Q. Do you understand that there were 22 based? 23 federal tax laws that applied to what an onshore 23 A. I don't recall whether or not I 24 fund was and what an offshore fund was? 24 knew. 25 A. I don't believe at the time of my 25 Q. What did you think was possibly the Page 35 Page 37 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 hiring. 2 reason for the separation? 3 Q. What did you understand was the 3 MR. BRECHER: Objection. 4 reason that they were separate? 4 Q. Was it just to keep addresses 5 A. The -- I don't recall 5 separate or convenient — 6 Q. What was it based on? 6 MR. BRECHER: Objection. 7 A. Whether or not an investor was an 7 Q. — or was it a law that applied to 8 domestic investor or an offshore investor. 8 the people? 9 Q. What did you — how was it 9 MR. BRECHER: Objection. 10 determined -- how was it determined whether an 10 A. I don't recall at the time what I 11 investor was an onshore investor or an offshore 11 thought. 12 investor? 12 Q. Did you think it mattered to keep 13 A. I don't know. 13 them separate or just a matter of convenience? 14 Q. Did you know there were laws that 14 A. Clearly at the time, I did not 15 applied? 15 recall. 16 MR. BRECHER Objection. 16 Are you asking me today? 17 A. I don't recall if I knew there were 17 Q. No, I'm asking you did you read the 18 laws. 18 offering memorandum at the time? 19 Q. What did you think there was? 19 A. Yes. 20 A. I wasn't the general counsel. 20 Q. So that did you understand what the 21 Q. I'm not asking you your 21 offering memorandum said as to how one qualified 22 understanding as a lawyer. I'm asking you your 22 to be an investor in either one of the funds? 23 understanding as what became the chief financial 23 A. I don't recall if I read that 24 officer of the entities. 24 specific ... 25 A. If there were an onshore investor, 25 Q. Did you ever tell anybody when you 10 (Pages 34 - 37) VERITEXT REPORTING COMPANY PI 4 P. ••• tem • • • P e end, n.nn EFTA01124882 Page 38 Page40 1 Gluts - CONFIDENTIAL 1 °MSS - CONFIDENTIAL 2 started work there that you didn't understand the 2 A. Yes. The entities and the 3 rules that apply? 3 individuals. 4 A. No, I never told anyone that. 4 Q. Please take a look at page 20, 5 Q. Did you have confidence when you 5 paragraph 131. 6 started there that you understood the rules as 6 (Witness peruses the exhibit.) 7 they applied to the extent you had to do your 7 Q. So 'just would like to go through 8 job? 8 paragraph 131 with you. 9 A. Not when I first started there. 9 A. Sure. 10 Q. After a few months? 10 Q. Did your job as CFO of 11 A. As time went by, I became more and 11 Highbridge/Zwirn Capital Management, LLC, include 12 more knowledgeable. 12 determining the logistics of how specific 13 Q. Did you ever tell anybody in the 13 investments were to bo funded? 14 first couple of months that you really didn't 14 A. Yes. In addition to others. 15 understand what you were doing? 15 Q. Did it include determining how 16 A. I don't recall. 16 investments would be allocated among the managed 17 Q. It's something that somebody might IT funds? 18 recall. Did you feel competent to do your job in 18 A. Yes, in concert with others, Dan 19 the beginning? 19 Zwim. 20 A. Yep. 20 Q. And what wore the managed funds at 21 Q. Did you ever tell anybody that you 21 the time? 22 were not competent to do your job in the 22 A. At the time, it was only the 23 beginning? 23 Highbridge managed account. 24 A. No. 24 MR. ERECHER: Can we just have a 25 Q. Did you at any time during the time 25 clarification. When you say "at the time: Page 39 Page 41 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 that you were at Zwim feel incompetent to do 2 is that when he first started or — 3 your job? 3 Q. Did your job include those two 4 A. Never. 4 functions when you started to work in July of 5 MR. LEVINE: Let's mark this 5 2002? 6 Gruss 3. 6 A. I don't recall. 7 (Gruss Exhibit 3, Answer and 7 Q. Do you recall when it came about 8 Counterclaims of Defendants D.B. Zwim & 8 that those were included as your 9 Co., L.P. and D.B. Zwirn Partners, LLC, 9 responsibilities? 10 marked for identification.) 10 A. No. 11 BY MR. LEVINE: 11 Q. Did it become part of your 12 Q. Marked before you (buss Exhibit 3, 12 responsibility at some point during your 13 which is the answer and counterclaims of the 13 employment? 14 defendants, D.B. Zwim & Co., L.P. and D.B. Zwirn 14 A. It was neither my sole 15 Partners, LLC. 15 responsibility or was 1 responsible solely. 16 Do you see that? 16 Q. Next sentence reads, "It was also 17 A. Yes. 17 Grass's responsibility to inform Zwim of funding 18 Q. Have you ever looked at that 18 limitations on all of the investments that the 19 document? 19 company had identified as otherwise satisfying 20 A. Yes. 20 the company's risk adjusted return criteria in 21 Q. Would you please go — withdrawn. 21 which it was necessary to explore the options 22 Do you understand that this is the 22 identified in paragraph 122." 23 formal legal document that is prepared and filed 23 Do you — 24 by the entities to respond to the complaint that 24 A. Can I just read it? 25 was filed on your behalf? 25 Q. Sure. 11 (Pages 38 - 41) VERITEXT REPORTING COMPANY EFTA01124883 Page 42 Page 44 1 Gruss - CONFIDENTIAL 1 Own - CONFIDENTIAL 2 A. Thanks. 2 Did Dan Zwirn delegate to you 3 (Witness peruses the exhibit.) 3 responsibilities as CFO to, among other things, 4 A. Is the question whether or not I 4 determine the logistics of how specific 5 agree with C? 5 investments would be funded? 6 Q. Not C. The sentence after C. 6 A. At times. 7 A. Oh. 7 Q. Did you understand that you were 8 Q. It's right there, Mr. Gruss. It's 8 generally responsible as CFO for determining how 9 right — C has a period. 9 the logistics — determining -- withdrawn. 10 A. Oh, I see. 10 Did you understand that you were 11 Q. Let me — I'm sorry, you clearly 11 generally responsible as CFO for determining the 12 don't -- we have a miscommunication. 12 logistics of how specific investments would be 13 A. Yes. 13 funded? 14 Q. Did part of your responsibility 14 A. Generally it was part of my 15 include identifying new sources from which to 15 responsibilities. Part. In concert with Dan. 16 finance investments, for example, by arranging 16 Q. Go to paragraph 260 on page 37. 17 nonrecourse fording lines? 17 A. Got it. 18 A. That's part of my responsibilities, 18 Q. Why dont you just take a moment to 19 yes. 19 read that paiagraph to yourself. 20 Q. And the next sentence reads, "It was 20 (Witness peruses the exhibit.) 21 also Gruss' responsibility to inform Zwirn of 21 Q. You got it? 22 funding limitations." 22 A. (Witness nods head in the 23 As that sentence is written, do you 23 affirmative.) 24 agree with that? 24 Q. You're nodding. 25 A. No. 25 A. Yes. Page 43 Page 45 1 ' Gross - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 Q. Who was — whose responsibility was 2 Q. I need you to utter the words. Yes. 3 it to inform Dan Zwim of funding limitations on 3 Did you read it? 4 all investments? 4 A. Yes, I read it. 5 A. It was collectively Dan, myself and 5 Q. During — withdrawn. 6 the other individuals that sat in on what's 6 You were the CFO from in or about 7 called a pipeline meeting. 7 July 2002 until in or about October of 2006; 8 Q. Did you have separate and 8 correct? 9 independent responsibilities from Dan Zwim in 9 A. Correct. 10 doing the job that's described in paragraph 131? 10 Q. During that time, did anybody else 11 A. I don't know the question. 11 assume CFO responsibilities above you? 12 Q. Was Dan the CFO also? 12 A. No. 13 A. No. 13 Q. Did you hire a lot of people below 14 Q. What was Dan Zwirn? 14 you? 15 MR. BRECHER: Objection. 15 A. Yes, scores. 16 A. The managing partner, the CEO. 16 Q. And all of those people came into 17 Q. Did you understand -- 17 the finance and operations side of the business 18 A. The individual responsible for the 18 reporting to you? 19 fund, the firm, the management company. 19 A. Yes. Toward -- caveat. Towards the 20 Q. Did you understand that as CFO, you 20 end, several of them also reported to Hal Kahn, 21 had separate and independent responsibilities 21 who was the COO. 22 from Dan Zwim? 22 Q. Did your duties and responsibilities 23 A. Yes. 23 as CFO include managing the company's finance, 24 Q. Do you understand that Dan Zwirn -- 24 accounting and treasury operations? 25 withdrawn. 25 A. Yes. 12 (Pages 42 - 45) VERITEXT REPORTING COMPANY ••• mt. ••• •••• EFTA01124884 Page 46 Page 48 1 Gnus - CONFIDENTIAL Gruss - CONFIDENTIAL 2 Q. And using the word *company there, 2 Q. There's no question you had a 3 Fm referring to D.B. Zwim & Co. L.P. 3 fiduciary duty to the investors in the funds; 4 Do you understand that? 4 isn't that right? 5 A. Yes. 5 MR. BRECHER: Objection. 6 Q. And D.B. Zwim Co. -- withdrawn. 6 A. Yes. 7 D.B. Zwim & Co. L.P. is the 7 Q. So am I correct that you understood 8 management company; correct? 8 that as part of your fiduciary duty to the 9 A. Correct. 9 investors of the funds, that you needed to assure 10 Q. Was it also part of your 10 that the financial relations between the company 11 responsibilities as CFO to supervise the 11 and the funds was proper and in accordance with 12 company's back office? 12 the agreements? 13 A. Yes. 13 A. I assured to the extent that I was 14 Q. Was it also part of your 14 capable of assuring. 15 responsibility as CFO to assure that the 15 Q. Was it also part of your 16 financial relations between the company and the 16 responsibility to assure that investments made by 17 managed funds were proper and in accordance with 17 the managed funds were financed in a proper 18 the agreements and other documents relating to 18 manner? 19 those relations? 19 A. Yes, that was part of my 20 A. I believe so. 20 responsibilities. 21 Q. So apart from the general counsel, 21 Q. Was it also part of - 22 you were — you understood that you needed to 22 A. But not my sole responsibility or 23 know and understand what the legal agreements 23 solely responsible for. 24 provided for as respect to the financial 24 Q. There's no one in the financial side 25 relations between the funds? 25 of the business more senior than the CFO; Page 47 Page 49 Crniss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. I didn't need that to do my job, but 2 correct? 3 I generally did understand that. 3 A. The CEO. 4 Q. If part of your job required you to 4 Q. In the financial side of the 5 assure that the financial relations between the 5 business, you had ultimate responsibility for the 6 company and the managed funds were proper and in 6 financial matters of the business as reporting to 7 accordance with the agreements, didn't you need 7 the CEO; correct? 8 to be familiar with the agreements to do that 8 MR. ERECHER: Objection. Note my 9 part of your job? 9 objection. 10 A. 1 was responsible for the 10 MR. LEVINE: Ill rephrase it. 11 management — managing of the scores of people. 11 Q. Dan Zwirn didn't have the title of 12 Q. And didn't the management of the 12 CFO, did he? 13 scores of people include assuring that the 13 A. Correct, he did not. 14 financial relations as between the funds was in 14 Q. So am I correct that -- was it fair 15 accordance with what the agreements provided? 15 for Dan Zwirn to rely on you to perform the job 16 A. At times, yes. 16 and assume the responsibilities of CFO? 17 Q. And am I correct that you 17 MR. BRECHER: Objection. 18 tmderstood, because of the fiduciary duty that 18 A. In certain matters. 19 you admitted earlier that you owed, that it was 19 Q. Including all of the matters that we 20 important to keep the financial relations clear, 20 just testified to that are in paragraph 260; 21 separate and in accordance with the agreements? 21 correct? 22 MR. BRECHER: Objection. 22 MR. BRECHER: Objection. 23 A. 1 don't know if I admitted that I 23 A. Those that I testified to. 24 had fiduciary responsibilities earlier. I'd have 24 Q. And was it also part of your 25 to see the transcript 25 responsibility as CFO to assure that the 13 (Pages 46 - 49) VER1TEXT REPORTING COMPANY EFTA01124885 Page 50 Page 52 1 Gross - CONFIDENTIAL 1 Gruss CONFIDENTIAL 2 financial transactions between the company and 2 Q. And you understood that to the 3 the managed funds and between the managed funds 3 extent that you knew and understood how they were 4 were properly documented? 4 calculating the math withdrawn. 5 A. Yes. 5 You understood that to the extent 6 Q. Is it also part of your 6 that you knew how they were calculating the rates 7 responsibility to assure that the financial 7 of return, that you agree that it was part of 8 affairs and rates of return of the managed funds 8 your responsibility to assure that the rates of 9 were accurately and properly reported? 9 return were accurately and properly reported? to A. It was not my responsibility to 10 MR. BRECHER; Objection. 11 assure that the rates of return were met. 11 A. Yes. 12 Is that your question. 12 Q. For instance, if you knew that a 13 Q. No. 13 mistake was made in doing the calculation, you 14 I asked you whether it was part of 14 had an obligation to correct the mistake; 15 your responsibility to assure that the financial 15 correct? 16 affairs and rates of return of the managed funds 16 A. If I was aware of the mistake? 17 were accurately and properly reported? 17 Q. Yes. 18 A. Oh, it was my responsibility to make 18 A. Yes. 19 sure that those individuals responsible did their 19 MR. LEVINE: Mark this Gruss 4. 20 job. I did not do the math is my point. 20 (Gruss Exhibit 4, Plaintiffs Reply 21 Q. But in relying on somebody else to 21 to Defendants' Counterclaims, marked for 22 do the math, did you then have ultimate 22 identification.) 23 responsibility for assuring that the financial 23 BY MR. LEVINE: 24 affairs and rates ofreturn of the managed funds 24 Q. Take a look at Gruss 4, which is a 25 were accurately and properly reported? 25 legal document entitled Plaintiffs Reply to Page 51 Page 53 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 MR. BRECHER: Objection. 2 Defendants' Counterclaims. 3 A. In much the same way, the CEO had 3 Do you see that? 4 the responsibility to make sure that I did the 4 A. Yes. 5 same. 5 Q. And you recognize that as a document 6 Q. Mr. Gruss, please listen to the 6 that was filed on your behalf by your lawyers? 7 question and answer the question. 7 A. Yes. 8 A. Sure. 8 Q. Did you review that with your 9 Q. So apart from relying on somebody 9 lawyers before it was — before it was filed? 10 reporting to you to do the math, did you 10 A. I don't recall. 11 understand that it was part of your II Q. Take a look at page 12 of the 12 responsibility to assure that the financial 12 document 13 affairs and rates ofreturn of the managed funds 13 (Witness peruses the exhibit) 14 were accurately and properly reported? 14 Q. You have it in front of you? 15 MR. BRECHER: Objection. 15 A. Yes. 16 A. Apart from relying on those 16 Q. Go down to ParagraphNo. 161 Do 17 individuals, yes. 17 you see that? 18 Q. Your testimony is, I take it, that 18 A. Yes. 19 you relied on the individuals to do the math; but 19 Q. And do you see that that states, 20 you assume responsibility for making sure that 20 "Admits the allegations contained in 21 the financial affairs and rates of return were 21 paragraph 2601 22 accurately and properly reported. 22 A. Yes. 23 A. I relied on the individuals to do 23 Q. And do you understand that sentence 24 their.jobs, part of which was calculating the 24 to refer to paragraph 260 in the answer and 25 math correctly. 25 counterclaims of the defendants that we have just 14 (Pages 50 - 53) VERITEXT REPORTING COMPANY Olio /Po /OW ••••• EFTA01124886 Page 54 Page 56 1 Gruss - CONFIDENTIAL 1 Gruss-CONFIDENTIAL 2 reviewed? 2 A. Yes. 3 A. Yes. 3 Q. Did they understand that they 4 Q. So do you see that on your behalf, 4 reported to you? 5 your lawyers admitted that all of the items in 5 MR. BRECHER: Objection. 6 paragraph 360 [sic] were part of your 6 A. I don't know. 7 responsibility? 7 Q. Did you make it clear to them that 8 A. Yes. 8 they reported to you? 9 MR. BRECHER: You mean 260. 9 A. I don't recall. 10 THE WITNESS: I see it shows that. 10 Q. Did they report to you? 11 MR. LEVINE: 260, not 360, Eileen. 11 A. Yes. 12 THE WITNESS: 260. 12 Q. No question about that? 13 BY MR. LEVINE: 13 A. No question. 14 Q. Now, who were the principal people 14 Q. Did there come a time when you hired 15 that reported to you starting in 2002? 15 anybody of similar senior position after you 16 A. Matt Husar and Bob Racusin. 16 joined? 17 (Discussion off the record.) 17 A. Yes. 18 Q. What was Matt Husar's area of 18 Q. Who did you hire? 19 responsibility? 19 A. Scores of people. 20 A. He was on the finance side, so he 20 Q. Give me the principal people. 21 was an accountant. 21 A. Oh -- 22 Q. What did his job involve on the 22 Q. Identify the principal people that 23 finance side? 23 you hired. 24 A. Re would reconcile the P&L. He 24 A. Sylvia Wu. 25 would calculate the month end NAV. And other 25 Q. When did you hire Miss Wu? Page 55 Page 57 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 financial accounting responsibilities. 2 A. I don't recall specific dates. 3 Q. And what entities was he reconciling 3 Q. Do you know approximately when? 4 the P&L and NAV for? 4 A. No later than mid to end 2003. 5 A. At least Highbridge/Zwim Special 5 Q. What was Miss Wu's area of 6 Opportunity Fund, the same Ltd., the Ifighbridge 6 responsibility? 7 managed account 7 A. She replaced Matt Husar. 8 Q. What does "NAV" stand for? 8 Q. What was her area of responsibility? 9 A. Net asset value. 9 A. Oh — 10 Q. What does that mean? 10 Q. Exactly what Mr. Husar's was? 11 A. It's calculating the investment plus 11 A. Yes, exactly. 12 or minus any returns on the investments. By 12 Q. She was responsible for the finance 13 "investment, I mean investor investment in the 13 side, which included all of the funds? 14 fund. 14 A. Correct. 15 Q. What did Mr. Racusin's job involve? 15 Q. And who else did you hire? 16 A. He was on the operations side. 16 A. I hired — you want me to rattle off 17 Q. What did that job involve? 17 names? 18 A. He would clear trades. He would 18 Q. Did you hire a woman by the name of 19 book trades into the system. He would set up not 19 Li Anne Law? 20 only trades, but also private originated assets. 20 A. Yes. 21 Direct lending. 21 Q. L-I, A-N-N-E, L-A-W. 22 Q. Did you hire Messrs Husar and 22 A. Yes. 23 Racusin? 23 Q. What was her area of 24 A. No. 24 responsibilities? 25 Q. Were they there when you got there? 25 A. She was also responsible for the 15 (Pages 54 - 57) VERITEXT REPORTING COMPANY EFTA01124887 Page 58 Page60 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 accounting and finance of the funds and the 2 management company, did she report to you? 3 management company. 3 A. She reported to Sylvia Wu. 4 Q. Did one of the people in your -- 4 Q. Who were the other people that 5 withdrawn. 5 reported directly to you in '03 and '04? 6 Did you separate the jobs as CFO of 6 A. Bob Racusin. I don't recall if 7 people -- ofpeople who were in charge of the 7 there were any. 8 onshore fund from thosc responsible for the 8 Q. During the period from '02 to '06, 9 offshore fund? 9 when you were employed as CFO, who were all of 10 A. No. That would have been -- if that 10 the people reporting to you? 11 occurred, that would not have been me. That 11 A. Directly to me at — Sylvia was at 12 would have been either Sylvia Wu or the 12 one time. Bob Racusin at one time. Jim Wilk at 13 controller. 13 one time. Jason Pecora at one time. And then 14 Q. Did that happen? 14 Li Anne Law at one time once she took on the 15 A. I don't know. 15 responsibility of controller. 16 Q. How was Miss Law's job different 16 Q. What was Mr. Wilk's 17 from Miss Wu's job? 17 responsibilities? 18 A. Miss Law came in side by side with 18 A. He was the head of operations. 19 Sylvia. So she was employed by Sylvia. 19 Q. What was Mr. Pecora's 20 Q. So you didn't pay her salary? 20 responsibility? 21 A. No. Of course, not. 21 A. He was the treasurer. 22 Q. You don't mean — 22 Q. What was the job of treasurer? 23 A. Oh, no, I don't mean personally 23 A. He was responsible for financing of 24 employed by. 24 the firm's assets. His direct responsibility was 25 Q. Did Miss Wu hire Miss Law or did you 25 financing of the firm's assets. Page 59 Page 61 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 hire Miss Law? 2 Q. He reported to you as treasurer? 3 A. I don't recall. 3 A. Yes. 4 Q. Go back to my original question. 4 Q. What was -- what did Li Anne Law's 5 How was Miss Law's job different from Miss Wits 5 responsibilities become? 6 job? 6 A. She was the controller. Responsible 7 A. It wasn't that large of a 7 for the same responsibilities as Sylvia Wu and 8 distinction, to my knowledge. 8 Man Husar before her. 9 Q. Was one of them responsible for 9 Q. So Li Anne Law was the third 10 financial controls of one area of the business 10 controller at the management company during the 11 and the other responsible for the other -- for II time that you were there? 12 another? 12 A. Essentially, yes. Not — to be 13 A. No, I don't think so. 13 clear, not just the management company. 14 Q. Who else was — were they both CEO 14 Q. What else? 15 right below you? 15 A. The funds and the managed accounts. 16 A. At times. You have to lay out time 16 MR. LEVINE: Mark this as Gruss 5. 17 frame. 17 (Gruss Exhibit 5, Bates Nos. DBZ 18 Q. When Miss Wu came on, at least in 18 0000173 through 206, Limited Partnership 19 '03, was she reporting directly to you? 19 Agreement, marked for identification.) 20 A. Yes. 20 Q. Before I go to Gruss 5, was there 21 Q. Was there anyone between her and you 21 also a person reporting to you by the name of 22 in terms ofhierarchy of the department? 22 O'Hara? 23 A. No. 23 A. Directly to me, no. 24 Q. And was there anybody — withdrawn. 24 Q. Who was O'Hara? 25 When Miss Law came to work for the 25 A. Michelle O'Hara, she was someone 16 (Pages 58 - 61) VERITEXT REPORTING COMPANY EFTA01124888 Page 62 Page 64 1 Gress - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 brought in upon Sylvia's advice -- Sylvia Wu' 2 A. Yes. 3 advice to be in charge of accounts payable. Her 3 Q. What is it? 4 job later morphed into or grew into she was 4 A. The limited partnership agreement of 5 responsible for the management company, solely 5 D.B. Zwim & Co., L.P. 6 the management company, not the hedge funds or 6 Q. When was the first time 7 the managed accounts. 7 withdrawn. 8 Q. Just explain that distinction. 8 Have you seen that document before? 9 A. The management company wasn't the 9 A. I believe so, yes. 10 hedge fund. So the hedge fund dealt with the 10 Q. When was the first time you ever saw 11 investments and the — to be as simple as 11 that document? 12 possible, the hedge funds managed the 12 A. I don't know. 13 investments. The management company managed the 13 Q. Was this the limited partnership 14 management company. 14 agreement for the management company? 15 Q. So it was Michelle O'Hara's job to 15 A. Yes. 16 maintain the books reporting to the CFO of the 16 Q. Did you become a partner of the 17 management company? 17 management company? 18 A. It was — it was her responsibility 18 A. Yes. 19 to maintain the books reporting to the controller 19 Q. When did you become a partner of the 20 who reported to myself. 20 management company? 21 Q. And if you were — 21 A. Sometime in 2006 effective 22 A. Michelle O'Hara did not have a 22 January 1, 2006. 23 direct line into myself. 23 Q. How did you learn that you would 24 Q. Do I take it that it was very clear 24 become a partner of the management company? 25 distinction that her job only involved the 25 A. Dan Zwim and Chris Suan told me. Page 63 Page 65 I °MSS - CONFIDENTIAL Gnus - CONFIDENTIAL 2 management company and not the hedge funds that 2 Q. Who is Chris Suan? 3 you identified? 3 A. Chris Suan is one of the —one of 4 A. Correct, yes. 4 the original partners of the management company. 5 Q. So that if— withdrawn. 5 Q. What was Chris Suan's job when you 6 Did you understand when you were 6 were there? 7 dealing with Michelle O'Hara that you were 7 A. He was a partner and he was also 8 dealing with the management company and not the 8 what I would consider a deal guy. 9 hedge funds? 9 Q. Were you -- withdrawn. 10 A. Yes. 10 Do you recall when you learned that 11 Q. Who had the Michelle O'Hara job for 11 you were becoming a partner of the management 12 the hedge funds? 12 company? 13 A. Either Sylvia — at different times, 13 A. No, I don't recall exactly. 14 Sylvia Wu, Li Anne Law. But to be clear, they 14 Q. Was that a matter of celebration, 15 also had responsibility for the management 15 when you became a partner of the management 16 company. 16 company? 17 Q. But as part of that responsibility, 17 A. Yes. It wasn't a bad thing. 18 they were supervising Michelle O'Hara? 18 Q. Did you expect to be made a partner 19 A. Exactly. 19 of the management company before you learned you 20 Q. Whose sole and exclusive 20 were becoming a partner? 21 responsibility was the management company? 21 A. I felt that rd earned it. 22 A. Exactly. 22 Q. Did you tell Dan Zwim that you had 23 Q. Please take a look at Gnus 5. 23 earned it before a decision was announced to you? 24 (Witness peruses the exhibit.) 24 A. I don't recall. 25 Q Can you identify it? 25 Q. Did you lobby Dan Zwim to become a 17 (Pages 62 - 65) 'VERITEXT REPORTING COMPANY EFTA01124889 Page 66 Page 68 1 Grass - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 partner of the management company -- 2 believe that. You don't make someone a partner 3 A. Not really. 3 if you believe that they're not competent. 4 Q. — at all? 4 Q. It would be — withdrawn. 5 A. Not really. 5 Competency isn't the standard for 6 Q. Did you ever say to Dan Zwim, Pm 6 making partner iSn't that right? 7 entitled to be a member or a partner of the 7 MR. BRECHER: Objection. 8 management company? 8 A. I don't know what the standard would 9 A. Not like that 9 be. 10 Q. How did you say it in your words? 10 Q. You understand what the word 11 A. No, IM saying I don't — I don't 11 "competent" means, don't you? 12 recall whether or not I did. 12 A. Sure. 13 Q. Did you ever tell Chris Suan that 13 Q. So am I comet that you understood 14 you deserved to be a partner of the management 14 that you had to be more than just competent to be 15 company? 15 made a partner of the management company? 16 A. When Chris Suan brought it up to me, 16 A. Oh, yes, yes. 17 yes. 17 Q. Yes, you understood that? 18 Q. When he brought it up to you, had a 18 A. Yes. 19 decision been made that you were becoming a 19 Q. Yes, you understood that you had to 20 partner or was it before you learned that a 20 be doing -- performing your job at the highest 21 decision had been made? 21 level in order to be made a partner? 22 A. No, it was before a final decision 22 A. No, not necessarily. 23 had been made. 23 Q. What did you understand — were 24 Q. What was the conversation with Chris 24 there any other criteria for the CFO to be made a 25 Suan about that? 2S partner of the management company other than they Page 67 Page 69 1 Gruss - CONFIDENTIAL 1 Oruss - CONFIDENTIAL 2 A. Oh, I don't recall. 2 were doing a superb job as CFO? 3 Q. Generally what, do you recall being 3 A. Adding value. 4 said? 4 Q. CFO was adding value by virtue of 5 A. Him telling me that Dan and himself S doing the job well; isn't that right? 6 and Glean Dubin were contemplating making me a 6 A. Yes, I would think so. 7 partner. 7 Q. And did you have any reason to 8 Q. What did you say? 8 believe that Dan or Glenn Dubin or Chris Suan 9 A. "Great." 9 knew that you were — that you were not doing the 10 Q. Did you understand at that point in 10 job well? 11 time, that Dan Zwim, Chris Suan and Glenn Dubin 11 A. h was doing the job well. 12 had confidence in your ability? 12 MR. LEVINE: Let's mark this 13 A. Yes. 13 Gruss 6. 14 Q. Did you understand at that time that 14 (Gross Exhibit 6, Bates Nos. PG00388 15 all three of them trusted and had faith in you? 15 through 401, Supplementary Agreement, 16 A. I would hope so. 16 marked for identification.) 17 Q. Did you believe that to be the fact? 17 Q. Mr. Gross, apart from doing the job 18 A. Yes. 18 well up until the day you made partner, was there 19 Q. Did you understand at that time that 19 ever a circumstance or event where Mr. Zwirn or 20 there was any reason in the world why any of the 20 Mr. Dubin or Mr. Suan gave you criticisms for 21 three of them would think or know that you 21 doing the job poorly? 22 weren't doing your job correctly? 22 A. I don't believe so. 23 MR BRECHER: Objection. 23 Q. Looking at what I've marked as 24 Q. Answer. 24 Gruss 6, can you identify it? 25 A. Oh, no, there's no reason for me to 25 (Witness peruses the exhibit) 18 (Pages 66 - 69) VERITEXT REPORTING COMPANY EFTA01124890 Page 72. 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. Yes. 2 Q. Take a look for Gruss 7, at 3 Q. What is it? 3 paragraph — page 16. 4 A This is my partnership agreement 4 (Witness penises the exhibit.) 5 Q. And did you understand — 5 Q. Do you see that Schedule 1? 6 A. My partnership agreement in the 6 A. Yes. 7 management company, not an L.P. in the fund. 7 Q. Did you understand that schedule 8 Q. Did you understand that this 8 applied to Gruss 7? 9 agreement was to be taken together with the 9 A. I don't — I don't recall. 10 limited partnership agreement, Grins 5? 10 Q. Did you understand that the schedule 11 A i believe it is referenced. 11 attached to Gruss 7 was incorporated into 12 MR. LEVINE: Mark this Gruss 7. 12 Gruss 7? 13 (Grins Exhibit 7, Bates Nos. PO0402 13 A. I don't recall. 14 through 420, Confidentiality, Noncompete 14 Q. Is there any -- do you see that 15 and Nonsolicit Agreement, marked for 15 Schedule 1 includes definition of terms that are 16 identification.) 16 used in the agreements? 17 BY MR. LEVINE: 17 A. I see that now, yes. 18 Q. Can you identify Gruss 7? 18 Q. Do you see, under the bottom of 19 (Witness penises the exhibit) 19 page 16, the words "forfeiting event"? 20 A. Yes. 20 A. Yes. 21 Q. What is Grins 7? 21 Q. Did you understand what forfeiting 22 A. This is the partnership confi- — a 22 event meant? 23 noncompete, nonsolicit. 23 A. 'don't recall if I read it. 24 Q. Did you understand that this 24 Q. Do you recall what forfeiting event 25 agreement, Gruss 7, also was part of the 25 meant? Page 71 Page 73 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 agreements that applied to your partnership in 2 MR. BRECHER: At what time? 3 the management company? 3 Objection. 4 A. Yes, I believe I did. 4 Q. While you became a partner. 5 Q. Did you understand that the limited 5 A. I don't recall. 6 partnership agreement, Gruss 5, together with the 6 Q. Did you understand -- if you go back 7 supplementary agreement, Gruss 6, together with 7 to Gruss 5, page 21 — 8 the partner confidentiality noncompcte and 8 A. Yes. 9 nonsolicit agreement, Gruss 7, arc all together 9 Q. -- Fm sony, page 20. 10 the agreements that applied to you when you 10 A. Yes. II became a partner? 11 Q. Do you understand Section 6.01 of 12 A. I believe that was it. 12 the partnership agreement provided for the 13 Q Did you have — did you review these 13 withdrawal or termination of a partner? 14 agreements when you became a partner? 14 A. Yes. 15 A Yes, generally I did. 15 Q. Did you understand under 16 Q. Did you hire any lawyer to look at 16 Section 6.01(c), that there were such things 17 them for you? 17 called forfeiting events? 18 A. I did not 18 A. I don't know. 19 Q b there any part of the agreements 19 Q. Well, did you understand when you 20 that you did not understand when you became a 20 became a partner that actually you could be 21 partner? 21 terminated from being a partner? 22 A. I don't — I don't recall. 22 A. Yes. 23 Q. You understood that these applied to 23 Q. Did you understand in effect that 24 you? 24 you could be fired? 25 A. Yes. 25 A. Yes. 19 (Pages 70 - 73) VERITEXT REPORTING COMPANY EFTA01124891 Page74 Page 76 1 Gnus - CONFIDENTIAL 1 Grass - CONFIDENTIAL 2 Q. And did you understand that you 2 partnership agreements before you became a 3 could be fired if you willfully failed to do your 3 partner? 4 job? 4 A. I don't know. 5 A. I don't recall the legal definition 5 Q. You testified a few minutes ago that 6 of -- 6 this language was customary. 7 Q. But you understood that if you — if 7 A. Yes. 8 you consciously didn't do your job well, you 8 Q. How did you know it was customary? 9 could be fired? 9 A. I believe I said employment 10 MR. BRECHER Objection. 10 contracts. 11 A. I do not recall whether or not I 11 Q. Did you understand that a standard 12 knew that. 12 employment contract was different than a 13 Q. Did you understand that you could be 13 partnership agreement? 14 rued if you didn't do your job well? 14 A. Yes. 15 A. Yes. 15 Q. And did you understand that 16 Q. What did you understand it would 16 partnership agreement? provisions could be 17 take? 17 different as to termination and withdrawal than a 18 A. I didn't — I didn't think about it. 18 standard employment agreement? 19 I was doing my job well. 19 A. Yes. 20 Q. Did You understand that the 20 Can I maybe clarify something? 21 agreement provided the terms or the circumstances 21 Q. Sure. 22 under which you could be terminated? 22 A. At the time I was made partner, 23 A. Yes. That's standard language in 23 there was another partner being made, Vasan 24 employment or partnership agreement 24 Kesavan. He negotiated this contract. Not mine, 25 Q. Did you understand that this 25 the blanket partnership contract. Vasan is an Page 75 Page 77 1 Gross - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 partnership agreement included language that 2 M.B.A. and a lawyer. Rightly or wrongly, I 3 would apply to the circumstances under which you 3 relied on his expertise. 4 could be terminated? 4 Q. You do affirm under oath that the 5 A. Yes. 5 partnership agreement applied to you from the day 6 Q. Did you understand that — whether 6 that you became a partner? 7 you read them or didn't read them - that the 7 A. Yes. 8 provisions of 6.01 applied to you when you became 8 Q. What day was that? 9 a partner? 9 A. I don't recall the date that it was 10 A. They applied to everyone that was a 10 made official, but it was as of January 2006. 11 partner. So yes. 11 January 1st, 2006. Right? Yes. 12 Q. Did they apply to you? 12 Q. And do you understand, going to 13 A. Yes. 13 Gruss 7, the confidentiality agreement -- 14 Q. And did you understand that a 14 A. Got it. 15 forfeiting event as described in this agreement 15 Q. — page 16, that the definition of 16 applied to you? 16 forfeiting event was modified for purposes of the 17 A. I don't know. 17 partnership agreement as it applied to you? 18 Q. But there's no question in your mind 18 A. No. 19 that it did apply to you; correct? 19 Q. Did you ever review the document to 20 A. Correct. 20 know or understand that? 21 Q. As you sit here, you just do not 21 A. I don't recall. 22 recall at what level of understanding or 22 Q. Am I correct that you don't dispute 23 knowledge you bad in 2006 about that document? 23 that arm 7 applies to you? 24 A. Correct. 24 A. I don't dispute that, yes. I don't 25 Q. Had you ever read or seen any other 25 dispute that. 20 (Pages 74 - 77) VERITEXT REPORTING COMPANY Mb Alb " •••• • efley, EFTA01124892 Page 78 Page 80 Gruss - CONFIDENTIAL 1 • Gruss - CONFIDENTIAL 2 Q. Whatever the legal provisions are of 2 whom you reported to was Dan? 3 Gruss 7, including the schedule, it applies to 3 A. I'm sorry, say that again. 4 you? 4 Q. Did you understand basically that 5 A. Yes. 5 the general partner for purposes of the person to 6 Q. Take a look at Gress 6, the 6 whom you reported to was Dan? 7 supplementary agreement. 7 A. Yes. 8 A. Got it. 8 Q. Did you understand that basically, 9 Q. Take a look at page 4. Do you 9 the person or the entity through a person who was 10 understand that the supplementary agreement, 10 the general partner with the authority under 11 Gruss 6, also has language modifying Section 6 of 11 Section 2.02 of the partnership agreement was Dan 12 the withdrawal and termination provisions? 12 Zwim? 13 (Witness peruses the exhibit.) 13 A. Yes. 14 A. Just by way of it saying that on 14 Q. Referring to page 5, little — (p), 15 here. 15 did you understand that Dan had the authority to 16 Q. It's your testimony that you don't 16 determine when a Forfeiting Event — capped F, 17 recall reading it at the time, but do you not 17 capped E — as &Scribed in Section 6.01(c)) has 18 dispute that it applies to you? 18 occurred with respect to a partner? 19 A. Correct. 19 A. No. 20 Q. And did you understand -- turn back 20 Q. Who did you understand, in 21 to pap — go back to Gruss 5, which is the 21 January — or as of January 2006 had the 22 limited partnership agreement, and turn to page 3 22 authority to determine when a forfeiting event 23 and 4 and 5. Does this set forth — 23 took place? 24 A. Hold on. Okay. 24 A. I don't believe I ever thought about 25 Q. Does this set out in Section 2.02 25 it. Page 79 Page 81 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 the authority of the general partner? 2 Q. Ts there any doubt in your mind as 3 (Witness peruses the exhibit.) 3 you sit here today that Section 2.02 (p) 4 A. Yes, as defined here. 4 authority applied to you as a partner in 5 Q. Who else did you understand -- as of 5 D.B Zwim & Co. L.P.? 6 January 2006, who the — withdrawn. 6 A. If this document is the executed 7 Who did you understand, as of 7 version, I don't dispute that at all. 8 January 2006, was the general partner of the 8 Q. What do you mean "executed version"? 9 partnership represented by Gruss 5? 9 A. I just mean if this is the official 10 (Witness penises the exhibit.) 10 version of the L.P. agreement, I don't dispute it 11 A. I believe at the time, I would have 11 one bit. 12 thought it was Dan. 12 Q. Did you ever sip the agreement? 13 Q. And was there any confusion or doubt 13 A. !don't recall if it was ever 14 in your mind about that? 14 signed. It was dispute about if it was signed — 15 A. Yes, clearly. Only because 1 said 15 I don't recall. 16 "I believe it was Dan." 16 Q. Is there any doubt in your mind that 17 Q. Who else would it have been? 17 you operated under it? 18 A. The distinction would be an entity 18 A. No doubt. 19 as opposed to personally, some entity. 19 Q. Is there any doubt in your mind that 20 Q. The entity would have been an entity 20 it applied to you? 21 owned or controlled by Dan? 21 A. No doubt. 22 A. I would have thought so, but I don't 22 Q. Is them any doubt in your mind that 23 want to guess. 23 it applied to the general partner in dealing with 24 Q. Did you understand basically that 24 you? 25 the general partner for purposes of the person to 25 A. I don't believe there's any doubt. 21 (Pages 78 - 81) VERTU-XI REPORTING COMPANY EFTA01124893 Page 82 Page 84 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 Q. Dan Zwim was obligated to follow 2 A. Sometime in 2006. 3 this agreement as much as you were; isn't that 3 Q. Can you give me a month? 4 right? 4 A. I would be guessing. 5 A. Exactly. 5 Q. Is it September of 2006 or earlier? 6 Q. He had whatever authority and 6 A. No, earlier. Earlier. 7 limitations were provided in the agreement just 7 Q. Is it sometime over the summer in 8 like you did; right? 8 2006? 9 A. Exactly. 9 A. rd be guessing, but I think it was 10 Q. So if this agreement says that the 10 more the spring, the late spring. 11 general partner had the authority to determine 11 MR. BRECHER: Don't guess. 12 when a forfeiting event as described in Section 12 THE WITNESS: Yes. 13 6.01(c) has occurred with respect to a partner, 13 Q. How did you learn that Shulte 14 then you don't dispute that? 14 Roth -- withdrawn. 15 A. Correct. 15 Who is Shulte Roth? 16 MR. LEVINE: Let's take a break. 16 A. The law firm brought in to look at 17 (Recess from the record.) 17 two issues. 18 BY MR. LEVINE: 18 Q. Was Shulte Roth the law firm for the 19 Q. Mr. Gruss, please go to Exhibit I. 19 management company and the entities? 20 A. Got it. 20 A. Yes. 21 Q. Take a look at page 8 and 9, and 21 Q. So Shulte Roth was outside counsel 22 just please review for yourself paragraphs 30 to 22 to the management company and the funds? 23 33. 23 A. Correct. 24 (Witness peruses the exhibit.) 24 Q. And am I correct that you knew that 25 A. Okay. 25 sometime before this so-called investigation Page 83 Page 85 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 Q. You've read paragraphs 30 to 33? 2 started? 3 A. Correct. 3 A. Yes. 4 Q. Now, you allege in paragraph 32 the 4 Q. Had you dealt with lawyers at Shulte S following sentence: "Once Zwim decided that 5 Roth before the spring of 2006 in your job? 6 Gruss would be blamed for the two issues, Gruss 6 A. Yes. 7 was forced to leave the company." 7 Q. What partners at Shulte Roth, prior 8 Do you see that? 8 to the spring of 2006, had you dealt with? 9 A. Yes. 9 A. Dan Oshinsky, Phillipe Benedict and 10 Q. What were the circumstances by which 10 others I can't recall. II you were, quote, forced to leave this company -- II Q. Were they capable lawyers as far as 12 Withdrawn. 12 you understood? 13 How did you learn that you were 13 MR. BRECHER: Objection. 14 "forced to leave the company," close quote? 14 A. I thought so. 15 A. Ultimately Lawrence Cutler, the 15 Q. In fact, isn't Shulte Roth known as 16 chief compliance officer, told me. 16 one of the go-to firms for hedge funds at that 17 Q. Where did that conversation take 17 time? 18 place? 18 MIL BRECHER: Objection. 19 A. The final conversation? 19 A. I'm sure as well as others, so 20 Q. The first conversation. 20 I don't — 21 A. Oh, the first. I don't recall. It 21 Q. Did you know that? 22 was sometime after the Shulte Roth investigation 22 A. Yea, yes. 23 started. 23 Q. You knew that they were? 24 Q. When did you learn the Shulte Roth 24 A. Yeah, they're very good. 25 investigation started? 25 Q. You knew that Dan Zwim and the 22 (Pages 82 - 85) VERITEXT REPORTING COMPANY EFTA01124894 Page 86 Page 88 1 Grass - CONFIDENTIAL 1 Grass CONFIDENTIAL 2 other partners had hired one of the best law 2 don't know if he was the first person that told 3 firms in town to represent them for these 3 me. He was definitely one of the first people 4 entities; correct? 4 that told me. 5 MR. BRECHER: Objection. 5 Q. Is there anybody else that you can 6 A. For the fund and management company 6 recall as you sit here today who you discussed 7 work, yes. 7 the Shulte Roth investigation with in mid-2006? 8 Q. And how — in your dealings with the A. Originally? 9 partners that you just identified, had you found 9 Q. Yes. 10 them to be capable — 10 A. Possibly David Proshan. II A. Yes. 11 Q. Who is David Proshan in mid-2006? 12 Q. — and straight shooters and honest? 12 A. The general counsel of the firm. 13 MR. BRECHER: Objection. 13 Q. Do you recall your conversation with 14 A. Yes. 14 Lawrence Cutler or David Proshan about the Shulte 15 Q. And what did you learn in mid-2006 15 Roth investigation when you first learned about 16 about what Shulte Roth was investigating? 16 it? 17 A. The early collection of management 17 MR. BRECIIER: Objection. 18 fees and the use of investor funds to purchase 18 A. I don't recall the specific 19 Dan's airplane and other expenses associated with 19 conversations or any conversations with David 20 Dan's airplane. 20 Proshan. 21 Q. How did you learn that Shulte Roth 21 Q. Did Lawrence Cutler — withdrawn. 22 bad been asked to do those two things? 22 How many conversations with Lawrence 23 A. I don't recall who told me 23 Cutler did you have about this subject before the 24 specifically. 24 circumstances in paragraph 32 came about? 25 Q. What did you understand Shulte Roth 25 A. Several. Page 87 Page 89 1 Gniss - CONFIDENTIAL 1 Grass - CONFIDENTIAL 2 was doing in investigating those two things? 2 How many is "several"? 3 A. I believe just looking into the 3 A. More than three to five, less than 4 circumstances. 4 20. 5 Q. What did you understand would be the 5 Q. Where did those conversations take 6 consequences of what Shulte Roth learned in doing 6 place? 7 the investigation of those two circumstances? 7 A. My office, possibly the hallways, 8 A. I had no idea. I was kept out of 8 definitely the gym. 9 the -- the decisions to do anything. 9 Q. Was anyone else present for any of 10 Q. It's your testimony that you were 10 those conversations? 11 not part of management that asked Shulte Roth to I1 A. 'don't — I don't recall. 12 investigate these two circumstances; is that 12 Q. What's the gist of what you remember 13 correct? 13 from your conversation with Lawrence Cutler at 14 A. That's correct. 14 that time? 15 Q. What I'm asking you is what did you 15 A. He kept saying that there was — 16 team about what they were asked to do? 16 there was nothing to worry about, and if there 17 A. I thought I just answered this. 17 was ever a time, then he would tell me. 18 They — they were asked to look into those two 18 Q. What was the "worry about" applying 19 issues that I previously mentioned. 19 to? 20 Q. Did you learn that from Lawrence 20 A. The early collection of the 21 cutler? 21 management fee the two issues that I had 22 A. Yes. 22 mentioned earlier. 23 Q. Is Lawrence Cutler the one who told 23 Q. What do you mean "worry about"? 24 you about this in the first instance? 24 A. That — that they would ultimately 2.5 A. No, that's what I was saying. I 25 blame it on me. 23 (Pages 86 - 89) • VERITEXT REPORTING COMPANY EFTA01124895 Pate 90 Page 92 1 Gruss - CONFIDENTIAL On= - CONFIDENTIAL 2 Q. That's what you were worried about? 2 Q. Did there come a time in mid-2006 3 A. No, that's what he said: If that 3 when Lawrence Cutler told you, in words or 4 occurred, then I should worry and he would tell 4 substance, that you should worry? 5 me. 5 A. Yes. 6 Q. Were you worried -- when you learned 6 Q. When did that take place? 7 of the circumstances of the two matters under 7 A. Sometime in September. 8 investigation, did you have concern for the fact 8 Q. Where did that conversation take 9 of whether you had done your job well? 9 place? 10 k No. 10 A. I believe the final conversations 11 Q. Did you know anything -- when you 11 took place in the gym. 12 heard the two things under investigation by 12 Q. How many final-type conversations 13 Shulte Roth, what was your reaction? 13 were there? 14 A. I didn't really pay it much mind. 14 A. Not many. IS Q. Did you remember that you had 15 Q. More than one? 16 knowledge of both of these circumstances? 16 A. I don't recall. 17 MR. SPECIES.: Objection. 17 Q. So is it your testimony that 18 A. No, I don't remember what my 18 sometime in September 2006, you understood that 19 knowledge was. 19 for purposes of that Shulte Roth investigation, 20 Q. Did you ask Lawrence Cutler if you 20 you had something to worry about? 21 should be worrying, during those conversations? 21 A. No. He told me that 1 have 22 A. I don't -- I don't recall. 22 something to worry about, and that was that I was 23 Q. Had you at that time already become 23 going to be let go. 24 a partner in the firm? 24 Q. Did he say anything else about that? 25 A. Yes. 25 A. He just said — he went on about how Page 91 Page 93 1 Oruss - CONFIDENTIAL Gnus - CONFIDENTIAL 2 Q. Were there partnership meetings in 2 ridiculous it was, the whole airplane and -- and 3 early 2006? 3 I was so against the airplane and ... 4 A. Yes. 4 Q. What do you recall Lawrence Cutler 5 Q. Did you learn in one of those early 5 said to you and you said to him in the 6 partnership meetings that Shulte Roth was 6 conversation at the gym in September 2006? 7 investigating these two circumstances? 7 A. I don't -- I don't recall exactly. 8 A. I don't believe so. 8 Q. What's the best that you recall? 9 Q. Did there come a time when you had a 9 A. That I was going to be — that -- 10 conversation with Lawrence Cutler — withdrawn. 10 I'm sorry. That it was too late. 11 Did you tell Lawrence Cutler that II Q. What was "too late"? 12 you were happy or you were willing to be 12 A. For me to -- for me to go in to him 13 interviewed about those two circumstances? 13 and to Dan and just say, you know, what the — 14 A. Yes, I'm sure I did. 14 pardon — what the heck is going on. 15 Q. Do you have a recollection of doing 15 Q. In one of the conversations 16 so? 16 immediately before that, had you asked for the 17 A. No. 17 opportunity to do that? 18 Q. Did you understand that the two 18 A. No. 19 matters under investigation related to work done 19 Q. Why then would he be saying it's too 20 under the CFO's area of responsibility? 20 late for you? 21 A. Yes. 21 Mt BRECHER: Objection. 22 Q. Did you pick up the phone and call 22 A. I don't know. 23 any of the partners at Shulte Roth to offer to be 23 Q. Did you understand before that 24 interviewed about either of the circumstances? 24 conversation in the gym that a decision had been 25 A. I don't believe so. 25 made that you were responsible for the 24 (Pages 90 - 93) VERITEXT REPORTING COMPANY EFTA01124896 Page 94 Page 96 1 Grass - CONFIDENTIAL 1 Grass - CONFIDENTIAL 2 circumstances that led to these two events? 2 Q. Who did you talk to at Shulte Roth? 3 A. No, I don't believe so. 3 A. Gentleman named Harry Davis. And I 4 Q. Did you learn at any time before 4 don't recall who else was in the room. 5 from Mr. Cutler himself that Shulte Roth was 5 Q. Just lawyers? 6 taking the position that you were responsible for 6 A. I believe so. 7 those problems? 7 Q. Did you understand that they were 8 A. I don't -- I don't remember. 8 conducting the investigation on behalf of the 9 Q. Did you understand that either one 9 entity? 10 of or both of those circumstances would or could 10 A. Yes. 11 be -- withdrawn. 11 Q. And did you understand that you had 12 Did you understand, when you first 12 an obligation to tell the truth? 13 learned of what Shulte Roth was investigating, 13 A. Yes. 14 that the early collection of management fees 14 Q. Did they show you documents during 15 would be a violation of the agreement between the 15 that interview? 16 funds and the management company? 16 A. I don't believe so. 17 A. Yes. 17 Q. After you were — withdrawn. IS Q. Did you understand — when you first 18 How many times were you interviewed 19 learned of what Shulte Roth was investigating, 19 by Shulte Roth regarding the conversation with 20 that the use of investor hinds to purchase an 20 Lawrence Cutler? 21 airplane for Dan, would also be a violation of 21 A. I want to say a couple. 22 the agreement between the funds and the 22 Q. Then there comes a point in time 23 management company? 23 when you talk to Mr. Cutler about what Shulte 24 A. Ycs. 24 Roth was doing? 25 Q. So did there come a time when you 25 A. Yep. Page 95 Page 97 Grass - CONFIDENTIAL 1 truss - CONFIDENTIAL 2 learned from Mr. Cutler that Shulte Roth was 2 Q. And Mr. Cutler tells you, according 3 holding you responsible for each of those two 3 to your testimony, that Shulte Roth has decided 4 circumstances? 4 that you're responsible for these two 5 A. Yes. 5 circumstances? 6 Q. And was that the last couple of 6 A. I don't recall if that's how he put 7 conversations before the conversation in the gym? 7 it. 8 A. Yes. 8 Q. How did he put it? 9 Q. When you learned that Shulte Roth 9 A. Ile just — lilts I said, he just said 10 was — when you learned from Mr. Cutler that 10 airs too late." 11 Shulte Roth was holding you responsible, did you 11 Q. But what would have been too late if 12 suggest or ask Mr. Cutler for an opportunity to 12 you had already talked to Shulte Roth? That's 13 talk to Shulte Roth? 13 what I don't get. 14 A. No, I don't believe I did. 14 MR. BREMER: Objection. 15 Q. Did you ask Dan Zwim — after you 15 A. You'd have to ask them. 16 learned from Mr. Cutler, did you ask Dan Zwirn 16 Q. Well, Mr. Cutler is telling you, 17 for an opportunity to talk to Shulte Roth? 17 according to your testimony, that it's too late 18 A. I don't believe I did. I did talk 18 for you to go in and talk to Shulte Roth; is that 19 to Shulte Roth. 19 your testimony? 20 Q. Did you talk to Shulte Roth before 20 A. No. 21 the conversation with Lawrence Cutler? 21 Q. What did he tell you was too late? 22 A. Yes, yes. 22 A. It's too late. I'm already going to 23 Q. When did you talk to Shulte Roth? 23 be let go. 24 A. Sometime throughout the time that 24 Q. Did you say -- was Mr. Cutler a 25 they were on the premises. 25 partner? 25 (Pages 94 - 97) VERITEXT REPORTING COMPANY EFTA01124897 Page 98 Page too Gross - CONFIDENTIAL Gruss - CONFIDENTIAL 2 A. No. 2 A. Uh-huh. 3 Q. Did you say there are certain rules 3 Q. — is that correct? 4 that apply to me as a partner? 4 A. Yes. 5 A. No. 5 Q. Did Mr. Cutler give you any advice 6 Q. Did you have any discussion with 6 as to what you should do when he was telling you 7 Mr. Cutler about what he understood by "let go"? 7 that? 8 A. No. 8 A. I don't recall if he did. 9 Q. Did you ask him when it was going to 9 Q. Is there anything that he possibly 10 happen? 10 told you to do that you are relying on in this 11 A. No. 11 case? 12 Q. Did you ask him how it was going to 12 A. I don't remember. 13 happen? 13 Q. Well, read your complaint -- 14 A. No. 14 A Yes. 15 Q. Is there anything else about the 15 Q. — paragraphs 30 to 33. Is there 16 conversations with Mr. Cutler before the gym or 16 anything in there that you're relying on that 17 in the gym about what Shulte Roth learned and 17 Mr. Cutler recommended to you that you do in 18 about what was going to happen that you haven't 18 connection with what he was telling you? 19 testified to? 19 A. Let me read it. 20 A. I don't recall. 20 (Witness peruses the exhibit) 21 Q. Did Mr. Cutler give you any advice 21 A. What was the last question? 22 as to what you should do? 22 Q. Is there anything, in the complaint, 23 A. I don't recall. 23 paragraphs 30 to 33, that you're relying on that 24 Q. Did you take advice from Mr. Cutler 24 Mr. Cutler recommended to you that you do in 25 as to what you should do? 25 connection with what he was telling you? Page 99 Page 101 Gruss - CONFIDENTIAL 1 Grusa - CONFIDENTIAL 2 A. I don't know. 2 A. I don't recall. 3 Q. Did Mr. Cutler tell you that -- 3 MR. LEVINE: Lefs mark this 4 before you were let go, that you should quit? 4 Gruss 8. 5 A. I don't recall. 5 (Gruss Exhibit 8, Bates Not 790 6 Q. Did Mr. Cutler tell you that before 6 through 791, E-mail Chain, marked for 7 any steps were taken to fire you, that you should 7 identification.) 8 do anything about it? 8 (Witness peruses the exhibit.) 9 A. I don't recall the specifies. 9 BY MR. LEVINE: 10 Q. As you sit here today, do you recall 10 Q. I'm showing you a copy — I'm 11 anything that Mr. Cutler told you by way of II showing you Gross 8, which is e-mail exchange on 12 advice to you about what you should do before you 12 or about March 3, 2007. 13 were fired? 13 A. Ult-huh. 14 A. I don't recall. 14 Q. You see that? 15 Q. Is there anything that you're 15 A. Uh-huh. 16 relying on in this case that Mr. Cutler said to 16 Q. Who is David Brooks? 17 you before you took actions based on what he told 17 A. He's the general counsel at Fortress 18 you? 18 Investments. 19 MR. BRECHER: Objection. 19 Q. And at the time, were you tenting to 20 Q. Do you understand my question? 20 Fortress Investments about working there? 21 A. I don't actually. 21 A. At this time, yes. 22 Q. You testified in the last 22 Q. In March of '07? 23 conversation — the last couple of conversations 23 A. Correct. 24 with Mr. Cutler, that Mr. Cutler told you that 24 Q. Do you see an e-mail from you to 25 you were going to be let go — 25 David Brooks on or about Saturday, March 3rd, 26 (Pages 98 -101) VERITEXT REPORTING COMPANY EFTA01124898 Page 102 Page 104 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 which says, in part, "I resigned. I walked in to 2 A. Yes. 3 him and said 'it's best for all if I resign'." 3 Q. Thought about it a fair amount•, 4 Do you see that? 4 right? 5 A. Yep. 5 A. Yes. 6 Q. Is that what happened between you 6 Q. Without disclosing any of the 7 and Dan Zwim? 7 conversations with your lawyer, you've also spent 8 A. 'walked in to Dan Zwim and the 8 some time talking to your lawyer about that; 9 words were "separated," if I recall. 9 correct? 10 Q. What did you say to Dan Zwim? 10 A. Yes. 11 A. I don't recall exactly what I said 11 Q. And the complaint says what it says 12 to Dan Zwim. 12 about being, quote, forced to leave the company 13 Q. Did you say, among other words, as 13 close quote; right? 14 you said here, "it's best for all if I resign"? 14 A. (Witness nods head in the 15 A. No. How would it be best for all? 15 affirmative.) 16 Q. These are your words in this e-mail; 16 Q. Am I correct that there's nothing 17 correct? You said in this e-mail, "I walked in 17 that Mr. Cutler said — withdrawn. 18 to him and said it's best for all if I 18 Am I correct that Mr. Cutler never 19 resive."; correct? 19 recommended to you that you resign? 20 A. Okay. 20 A. I don't recall what Mr. Cutler said. 21 Q. And is that what you told Mr. Broolca 21 Q. Is there anything that Mr. Cutler 22 in March of '07? 22 told you you should do that led you to do what 23 A. That's what the e-mail says. 23 you did with Mr. Zwim? 24 Q. And is it your testimony that that's 24 A. I don't know. 25 not what you said to Mr. Zwim? 25 Q. As you sit here today, can you think Page 103 Page 105 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. Correct. 2 of anything? 3 Q. Did you ask Mr. Zwim if you should 3 A. I don't recall what went on. 4 resign? 4 Q. You do recall that Mr. Cutler told 5 A. No. 5 you that Shulte Roth was holding you responsible 6 Q. Or did you tell Mr. Zwim you would 6 for these two circumstances; correct? 7 resign? 7 A. No, I don't recall if he said that 8 A. I did neither. 8 in the gym. 9 Q. Did you get any advice from 9 Q. Well, you testified that Mr. Cutler 10 Mr. Cutler about what you should tell or say to 10 told you that you would be let go as a result of 11 Mr. Zwim? 11 the Shulte Roth investigation; right? 12 A. I cloth believe so. 12 A. Yes. 13 Q. Is it your testimony that whatever 13 Q. So did you understand that to mean 14 you said and did with Zwim after the 14 that Shulte Roth had concluded you were 15 conversation with Mr. Cutler was what you 15 responsible for these two circumstances? 16 decided, not based on anything that Mr. Cutler 16 A. Yes. 17 told you to do? 17 Q. Now — 18 A. No, I said I don't recalL 18 A. No disrespect. That wasn't your 19 Q. Well, I mean, this is a center piece 19 question before that. 20 of your case; right? 20 Q. I try not to ask the identical 21 A. Yes. 21 question. 22 Q. So I take it you thought a fair 22 A. All right. 23 amount about what those circumstances were at the 23 Q. Pm trying to get at the facts, 24 end of September, beginning of October 2006, 24 Mr. Gruss. 25 before that; right? 25 A. I understand. I understand. 27 (Pages 102 -105) VERITEXT REPORTING COMPANY EFTA01124899 Page 106 Page 108 1 Gruss CONFIDENTIAL 1 Gross - CONFIDENTIAL 2 Q. If you don't disrespect me, you'll 2 about the conversation. 3 be the first person in a deposition that is 3 A. Once I was in there, Dan said this 4 not for the record. 4 is extremely difficult, because, you know, not 5 Now, tell me everything that you 5 only was I a partner, but I grew to be a friend 6 remember of your conversation with Mr. Zwim 6 and — and it was difficult. And he said I'm — 7 following the conversation with Mr. Cutler. 7 Shulte Roth has put me in a box about the 8 A. When I went in, he said, "This is 8 decision that needs to be made, that I have to go 9 the hardest thing that I ever have to do." 9 through with this, and it's the only way to 10 Q. The first words out of his mouth? 10 remain bullet proof and pearly white and ... 11 A. 'don't know what the first words 11 Q. What else did he say? Anything 12 out ofhis mouth were. 12 else? 13 Q. Well, did you go in and say to him I 13 A. Yes, he said that he believes that 14 just had a conversation with Cutler and I 14 he owes me, I believe the number was IS understand that Shulte Roth is blaming me for 15 $2.6 million. I said I believe it's higher than 16 this? 16 that. And he said something to the effect of 17 A. I don't recall if l said that. 17 Lawrence Cutler will go through all the numbers IS Q. Did you say anything that let 18 and get you, you know, whatever you're really 19 Mr. Zwim know that you had had a conversation 19 owed, or something like that. Something to the 20 with Mr. Cutler in which you learned what you had 20 effect of Lawrence is on your side or something. 21 learned? 21 Q. So you understand -- 22 A. I do not recall what the setup of 22 A. There's no dispute he let me go. 23 the conversation was. I just recall what the — 23 Q. There's — do I tinder,- — what did 24 in my opinion, the important aspects of it were. 24 you say in your response? 25 Q. So you're testifying here that there 25 A. Not a hell of a lot I kind of said Page 107 Page 109 1 Gross - CONFIDENTIAL 1 Gross - CONFIDENTIAL 2 are parts of that conversation that you don't 2 !understand and that you have a lot to — Pm 3 remember as you sit here today? 3 paraphrasing — to protect here. I don't re- 4 A. That's correct. 4 I don't recall exactly what I said. 5 Q. And so you are not testifying to the 5 Q. Going back to this e-mail from 6 entire conversation because you don't remember 6 March 2007, did you say to him is it best if I 7 it? 7 resign? 8 A. Correct. 8 A. No. 9 Q. And when you filed the complaint — 9 Q. Did you say to him it is best for 10 withdrawn. 10 all if I resign? 11 And when the complaint was filed on 11 A. No, I don't believe I would have. 12 your behalfby your lawyers, you had no better 12 Q. Why did you write — what is the 13 memory of this conversation than you're 13 gist, then, of what Dan said to you about, in 14 testifying here today, is that right? 14 your words, no dispute he let me go? 15 MR. BRECHER: Objection. 15 A. Say again. I'm sorry. 16 A. That's probably accurate. 16 Q. What is it that Dan Zwirn said to 17 Q. So by definition, Mr. Zwim is going 17 you from which you understood, as you testified a 18 to have a different memory of that conversation 18 few minutes ago, quote, "there's no dispute he 19 than you do; isn't that right? 19 let me go"? 20 MR. BRECHER: Objection. 20 A. He said that having me leave the 21 A. I don't know what Mr. Zwim's memory 21 fum is one of the most difficult things he's 22 is. 22 ever been through. 23 But yours is incomplete? 23 Q. Did you 24 A. Yes. 24 A. There was no resignation. There was 25 Q. Tell us everything you remember 25 no letter of resignation. 28 (Pages 106 - 109) VERITEXT REPORTING COMPANY EFTA01124900 Page 110 Page 112 1 Gross - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 Q. Were you telling Fortress something 2 paragraph 32, that you were, quote, forced -- 3 that didn't happen when you said to him — when 3 withdrawn. 4 you said to Mr. Brooks, "I walked in to him and 4 When you wrote allege in 5 said it's best for all if I resign'."? 5 paragraph 32 that you were, quote, "forced to 6 A. I don't recall what I was telling 6 leave the company," am I correct that you did not 7 Brooks. 7 mean to imply that you resigned before being 8 Q. There's no question you told that to 8 fired? 9 Brooks; right? 9 A. That's correct. 10 A. In an e-mail, yes. 10 Q. Did you understand that if in fact II Q. There's no question that 11 Mr. Zwim was terminating you, that the 12 withdrawn. 12 partnership agreement, the supplementary 13 You were talking to Fortress about 13 agreement and the confidentiality agreement 14 going to work for Fortress; right? 14 applied? 15 A. Correct. 15 A. Say dist again, please. 16 Q. Fortress was -- 16 Q. Did you understand that if in fact 17 A. Correct. 17 Mr. Zwim was terminating you, that the 18 Q. — asking you through Mr. Brooks how 18 partnership agreement, Oruss Exhibit 5; the 19 did it come about that you left Zwim? 19 supplementary agreement, Gruss Exhibit 6; and the 20 A. Correct. 20 confidentiality agreement, Gruss Exhibit 7, would 21 Q. Fortress was looking for information 21 apply? 22 or corroboration whether you were fired or 22 A. Yes. 23 whether you simply resigned? 23 Q. Did you understand that your rights 24 A. Correct. 24 to any — withdrawn. 25 Q. You told Fortress no, it's best for 25 Did you understand that whatever Page III Page 113 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 all if I resigned? 2 your rights are as a partner in the company, in 3 A. That's correct 3 the partnership, upon termination, are set forth 4 Q. You told Fortress that you told 4 in those agreements? 5 Zwim that you were resigning, not being fired? 5 A. If it was a forfeiting event, yes. 6 A. I did not say that I was not being 6 Q. And do you understand that if Shulte 7 fired. 7 Roth concluded that you were responsible for the 8 Q. Well, you can't be fired and resign 8 two circumstances that you testified about, that 9 at the same time; right? It's one or the other, 9 the general partner could conclude that you had 10 isn't it? 10 willfully failed to perform your duties? 11 A. 'don't 'mow. 11 MR. BRECHER: Objection. 12 Q. Well, what did you say in words or 12 A. I don't know what that means. 13 substance to Dan Zwim before you fire me, I am 13 Q. Well, you understood that Shulte 14 going to resign? 14 Roth was investigating the early collection of 15 A. I don't recall what — no. 15 management fees and the use of investor funds to 16 Q. Did you intend to do that? 16 purchase Dan's airplane; correct? 17 A. No. 17 A. Correct. 18 Q. So am I correct, then, that Dan 18 Q. And you testified earlier that you 19 Zwim told you that letting you go was the most 19 understood that if either of those circumstances 20 difficult dung that he had ever done? 20 took place, that that would be a violation of die 21 A. Yes. 21 agreements between the funds and the management 22 Q. So isn't it a fact that Dan Zwim 22 company, correct? 23 basically terminated you? 23 A. Correct. 24 A. I believe that's the case, yes. 24 Q. And you also testified that you 25 Q. So ifs not the fact, in 25 understood that the responsibility for the early 29 (Pages 110 -113) VERITEXT REPORTING COMPANY EFTA01124901 Page 114 Page 116 1 . Grass - CONFIDENTIAL 1 Crust - CONFIDENTIAL 2 collection of management fees and the use of 2 observe, chief administrative officer, partner in 3 investor funds to purchase the airplane came 3 the company, and/or member of DBZ, LLC, Gnus is 4 within the responsibility of the CFO; correct? 4 assigned and had the duty and responsibility to 5 A. No, I don't believe I did. 5 supervise and control, among other things, the 6 Q. You did. 6 financial affairs of the company and the managed 7 Isn't it a fact that the early 7 funds which the company managed. These duties 8 collection of management fees -- withdrawn. 8 and responsibilities included, among other 9 Isn't it a fact that if there were 9 things," and then go down a couple of lines, 10 an early collection of management fees that 10 "assuring that the financial relations between I I violated the agreements between the funds and the 11 the company and the managed funds were proper and 12 management company, that that was something 12 in accordance with the agreements and other 13 within the responsibility of the CFO? 13 documents regulating those relations, assuring 14 MR. BRECHER: Objection. 14 that the financial relations between or among the 15 A. It would have been in violation of 15 funds and managed accounts were proper and in 16 the documents. 16 accordance with the agreements and other 17 Q. And wasn't adhering to the documents 17 documents relating to those relations," and then 18 as between — wasn't it assuring compliance and 18 there are other words. 19 financial relations between the funds and the 19 Do you see that? 20 management committee part of your responsibility 20 A. Yes 21 as CFO? 21 Q. And that's an allegation of the 22 A. To the best of my abilities. 22 defendants in response to your complaint; 23 Q. And so if the law firm concluded 23 correct? 24 that there was a violation of the agreements — 24 A. Yes. 25 withdrawn. 25 Q. And you testifiedthat those Page 11S Page 117 1 Gruss - CONFIDENTIAL Gross - CONFIDENTIAL 2 If the — if the law firm concluded 2 responsibilities were accurately described; 3 that there was a violation of the agreements 3 correct? 4 between the funds and the management company in 4 A. Yes. 5 the early collection of management fees, it could 5 Q. And you filed a pleading, Gros 4, 6 conclude that you have failed in your job as CFO; 6 on page 12? 7 isn't that correct? 7 A. Of the seine -- 8 MR. BRECHEFt: Objection. 8 Q. Of the next document. 9 A. No. 9 A. Which is 4? 10 Q. Well, assuring compliance with the 10 Q. 5. 11 agreements and the financial relations between 11 A. 5. 12 the management company and the funds was part of 12 Q. It's entitled Plaintiffs Reply to 13 your responsibility — ultimate responsibility as 13 Defendants' Counterclaim. Its before there. 14 CFO; isn't that right? 14 A. 4. I thought you said 5. 15 A. No, I thinlcyou just said 15 Q. Maybe I misspoke. 16 compliance. 16 Please refer to the plaintiffs 17 Q. It's your testimony that -- take a 17 reply to the defendants' counterclaim, Paragraph 18 look at Gross 2. Referring to Gnus 3, Gross 3, 18 No. 162 on page 12, in which your lawyers filed 19 which is the answer and counterclaims — 19 for you a legal statement, quote, 'Admits the 20 A. Hold, hold, hold. 20 allegations contained in paragraph 260"; correct? 21 (Witness penises the exhibit) 21 A. Correct. 22 A. Yes. 22 Q. Do you agree that matters relating 23 Q. Go to paragraph 260. 23 to the collection of management fees as between 24 A. Got it. 24 the fluids and the management company come within 25 Q. 260 reads, "As chief financial 25 the areas of responsibility in paragraph 260 that 30 (Pages 114 - 117) VERITEXT REPORTING COMPANY EFTA01124902 Page 118 Page 120 1 Gross - CONFIDENTIAL Grins - CONFIDENTIAL 2 I've just read? 2 THE WITNESS: Say that again. 3 A. Yes. 3 Q. Is there anything -- is there 4 Q. And do you agree that the use of 4 anything that you would view as a legal excuse 5 investor funds to purchase an airplane for Dan 5 not to hold you legally responsible? 6 Zwim would come within the areas of 6 MR. BRECHER: Objection. 7 responsibility in paragraph 260? 7 A. You just said the general partner 8 A. Yes. 8 could in his own discretion do what they want. 9 Q. So isn't it a fact that if lawyers 9 Q. I didn't say that. 10 for the funds and the management company 10 A. Oh. I I recommended to the general partner that the CFO 11 MR. BRECHER: Don't -- just answer 12 must be held responsible for failing to do his 12 his questions. 13 duties as described in paragraph 260, that the 13 A. I don't know. 14 lawyer would be giving advice that you could not 14 MR. BRECHER: Just answer his 15 disagree with? 15 questions. Don't get into a discussion. 16 MR. BRECHER: Objection. 16 Q. Take a look at Gross 5. Take a look 17 THE WITNESS: Can you read that back 17 at page 5. 18 tome. 18 A. Got it. 19 (Record read.) 19 Q. And take a look — starts with 20 A. I have no idea. 20 Section 2.02, beginning on page 3. It says, 21 Q. Do you agree that the general 21 'Except as otherwise expressly provided for in 22 partner had the legal authority to conclude that 22 this agreement, the general partner shall have 23 failing -- that one's failure to do one's job 23 the authority on behalf of the partnership to 24 under paragraph 260 was a forfeiting event under 24 take any action or make any decisions on behalf 25 the terms of the partnership agreement? 25 of the partnership hereunder to eery out any and Page 119 Page 121 1 Gruss - CONFIDENTIAL 1 Gross -CONFIDENTIAL 2 MR BRECHER: Objection. 2 all purposes of the partnership set forth in 3 A. I don't I don't know. 3 Section 1.03 and to perform all acts and enter 4 Q. I take it you don't like the fact 4 into and perform all contracts and undertakings 5 that you were forced to leave the company? 5 which it may dean necessary or advisable or 6 A. That's probably accurate. 6 incidental hereto, including, without limitation, 7 Q. And you were disappointed that that 7 the power to" — and then refer to (p) on 8 happened? 8 page 95 — "to determine when a forfeiting event 9 A. Yes. 9 as described in Section 6.01(c) has occurred with 10 Q. You felt you were unfairly being 10 respect to a partner"; correct? 11 held responsible? 11 A. Yes. 12 A. Enormously. 12 Q. And you testified before that that 13 Q. But is them anything I ask you 13 set out what Mr. Zwim individually or Mr. Zwim 14 under oath, is there anything about the 14 through an entity's responsibilities were as 15 circumstances from which you contend that the 15 general partner; correct? 16 general partner wasn't legally entitled to do 16 A. Ycs, yes. 17 what he did? 17 Q. Mr. Zwim had the legal authority to 18 MR. BRECHER: Objection. 18 decide in conformity with this agreement when a 19 A. That's — that's up for you all to 19 forfeiting event has occurred with respect to a 20 decide. 20 partner? 21 Q. Have you thought of anything that 21 MR. BRECHER: Objection. 22 would be an excuse for the general partner not to 22 A. No. 23 conclude once the law firm for the general 23 Q. Isn't that what it says? 24 partner recommended it? 24 A. It's not up for him to decide 25 MR. BRECHER: Objection. 25 whether or not a forfeiting event bas occurred. 31 (Pages 118 -121) VERITEXT REPORTING COMPANY EFTA01124903 Page 122 Page 124 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 Q. Who is it up to? 2 under the partnership agreement were different 3 A. It's going to be up to counsel. 3 than the general partner's rights; correct? 4 Q. Isn't it up to the general partner 4 A. Yes. 5 to decide when a forfeiting event has taken 5 Q. You understood, in layman's terms, 6 place? 6 that the general partner was in charge of the 7 A. That's what (p) says. 7 partnership? 8 Q. So you understood that the general 8 A. Yet 9 partner could get legal advice about that if he 9 Q. So you understood that the general 10 wanted to; correct? 10 partner could terminate a partner so long as it 11 A. 1didn't think about it. II was done legally in conformity with the 12 Q. Well, did you understand -- 12 partnership agreement; correct? 13 A. Are you asking me — 13 MR. BRECHER: Objection. 14 MR. BRECHER: Don't — 14 A. Generally. 15 THE WITNESS: Pm sorry. 15 Q. What you're complaining about is 16 Q. Did you understand, in late 16 that Mr. Zwim actually went ahead and exercised 17 September, early October 2006, that Dan Zwim had 17 that right as to you? 18 the legal authority under the partnership 18 A. Wrong. It's not what I'm 19 agreement to decide when a forfeiting event has 19 complaining about. 20 occurred with respect to a partner? 20 Q. And being asked and being forced 21 MR.. BRECHER: Objection. 21 to leave the partnership, that's what you're 22 A. No, I did not. 22 complaining about? 23 Q. Is there anything about anything 23 A. Fm complaining about the decision 24 that you've learned since then that has led you 24 that was made to force me to leave the 25 to believe that anybody else other than the 25 partnership. Page 123 Page 123 GUSS - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 general partner had the authority to decide when 2 Q. Because in your mind — 3 a forfeiting event took place? 3 A. I'm not connecting the dots between 4 MR. BRECHER: Objection. 4 Dan Zwim doing it or some other entity doing it. 5 A. As I'm staring at it now, no. 5 Q. In your mind, somebody else should 6 Q. Is there anything that anyone has 6 have been fund for doing it -- withdrawn. 7 said to you before October 4, 2006, that has led 7 In your mind, somebody else should 8 you to believe that somebody other than the 8 have been held [sic] for the two circumstances 9 general partner had the authority to decide when 9 that Shulte Roth investigated, hot you; is that 10 a forfeiting event took place? 10 right? 11 A. I don't recall. I1 A. That's not necessarily right. 12 Q. Isn't it a fact that what upset you 12 Q. In your mind, is it your testimony 13 was that Dan Zwim was making the decision, not 13 that nobody should have been held responsible for 14 that Dan Zwim didn't have the legal authority to 14 the violation of the agreements? 15 make the decision? 15 A. That's not what I'm saying. 16 A. No, what upset me was that the 16 Q. What are you saying? 17 decision was made. 17 MR. BRECHER: Objection. 18 Q. But the general partner had the 18 Do you have a question? There's no 19 authority to make the decision; right? 19 question. 20 MR.. BRECHER: Objection. 20 MR. LEVINE: I want to know what his 21 A. I didn't connect the two. 21 explanation is. 22 Q. You weren't the general counsel; 22 MR. BRECHER: Explanation for what? 23 right? 23 MR. LEVINE: For — if it's not — 24 A. Correct. 24 I'll ask another question. 25 Q. You understood that your rights 25 THE WITNESS: Please. 32 (Pages 122 - 125) VERITEXT REPORTING COMPANY EFTA01124904 Page 126 Page 128 1 Grass - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 BY MR. LEVINE: 2 general partner saw the violation of the 3 Q. Did you have in mind somebody else 3 agreements in these two respects, corrected the 4 that should have been held responsible for 4 problem in terms of paying the funds back, and 5 violating the agreements in these two respects? 5 did not hold anybody personally responsible with 6 MR. BRECHER: Objection. 6 their job for doing that or letting that happen; 7 A. Never crossed my mind. 7 correct? 8 Q. You understand, do you not, that 8 MR. BRECHER: Objection. 9 taking money of investors' funds in ways not 9 A. I -- I never thought about it. 10 permit [sic] by the legal agreements, it's a 10 Q. Well, you just testified that you 11 serious matter? 11 take issue with the decision that was made. 12 k Yes. 12 You're nodding yes? 13 Q. Would you agree that causing 13 A. Correct. 14 investor funds to be used for management expenses 14 Q. The decision that was made was to 15 in violation of the agreements constitutes a 15 hold someone responsible with their job for the 16 breach of the fiduciary duty to the investors and 16 violation of the agreements; correct? 17 their funds? 17 MR. BRECHER: Objection. 18 MR. BRECHER: Objection. 18 A. Not someone. 19 A. I don't know. 19 Q. You. 20 Q. I've asked you now several times 20 A. Correct. 21 earlier today, and you testified affirmatively, 21 Q. Your disagreement is the decision by 22 that your job included a fiduciary duty to the 22 the general partner to hold you responsible? 23 investors to use their funds in accordance with 23 A. Say again. 24 the agreements; correct? 24 (Record read.) 25 A. Yes. 25 MR. BRECHER: Objection. Page 127 Page 129 1 Gnzss - CONFIDENTIAL 1 Grass - CONFIDENTIAL 2 Q. And so if investor funds were used 2 Q. ra rephrase it. 3 inappropriately, not in accordance with the 3 Your disagreement is the decision by 4 agreements, that could be considered a violation 4 the general partner to hold you responsible for 5 of the fiduciary duty to the funds; correct? 5 the failure to abide by the agreements in these 6 A. Yes. 6 two respects? 7 Q. And isn't it a fact that it was and 7 MR. BRECHER: Objection. 8 is appropriate for the general partner to hold 8 A. Yes. 9 persons responsible who violated the agreement in 9 Q. But you agree, do you not, that the 10 that respect? 10 general partner had the authority to do that? 11 MR. BRECHER: Objection. 11 A. Yes. 12 A. Not necessarily. 12 Q. And when Dan Zwim said to you 13 Q. Was it at least within the 13 letting you go was the only way for for him to 14 discretion of the general partner to do that -- 14 remain bullet proof and pearly white, did you 15 MR. BRECHER: Objection. 15 understand Dan's word to be saying that in his 16 Q. — even if not necessarily to do it? 16 job as general partner of the management company, 17 MR. BRECHER: Objection. 17 his conduct needed to be bullet proof and pearly 18 A. If we're pointing again to (p), yes. 18 white? 19 Q. So what you actually would have 19 A. I took that to mean he needed to, in 20 preferred if Mr. Zwirn recognized the violation 20 the eyes of the investors, the investor community 21 of the agreements, but decided not to terminate 21 and anyone who he did business with, to be pearly 22 anyone in respect of it? 22 white and bullet proof. 23 MIL BRECHER: Objection. 23 Q. So he was actually -- withdrawn. 24 A. I haven't even thought about that. 24 Am I correct that he was telling you 25 Q. You would have preferred if the 25 that because he felt the obligation to conduct 33 (Pages 126 -129) VERITEXT REPORTING COMPANY EFTA01124905 Page 130 Page 132 1 Gruss - CONFIDENTIAL Gruss - CONFIDENTIAL 2 himself in a way as general partner that was 2 general partner. isn't that right? 3 bullet proof and pearly white, he needed to 3 A. That's not the way I took it. 4 terminate you? 4 Q. Isn't it a fact that what he was 5 A. That is not the way I took it. 5 telling you was that the investors and all the 6 Q. But am I correct that you wouldn't 6 other people that you identified in his mind had 7 disagree that someone could have taken it that 7 to look at him personally as conducting himself 8 way? S in a bullet proof, pearly white way on behalf of 9 MR. BRECHER: Objection. 9 the partnership? 10 A. That's not the way I took it. 10 MR. BRECHER: Objection. 11 Q. But you — 11 A. That's probably accurate. 12 A. He was acting as an individual, Dan 12 Q. And when he told you there was a lot 13 Zwim being pearly white and bullet proof. I 13 to protect here, quote-unquote, wasn't he 14 took it as he was not acting on behalf of the GP. 14 referring to the fact that there were substantial 15 Q. But he was only there in the room as 15 funds with lots of investors with serious 16 the general partner, right? 16 obligations that he needed to live up to on 17 MR. BRECHER: Objection. 17 behalf of the general partner? 18 A. No. 18 A. No, l took it to mean he personally 19 Q. Only the general partner had the 19 needed to make sure that people looked at him 20 authority to have that conversation with you; 20 personally as pearly white and bullet proof. 21 isn't that right? 21 Q. And the lot to protect was — 22 A. No, that's not right. 22 withdrawn. 23 Q. If Lawrence Cutler had that 23 As of the beginning of October 2006, 24 conversation with you, would you have been — 24 what were the size of the funds — the dollar 25 would that have been an event that was a 25 amount of the funds under management in the L.P.? Pasc 131 Page 133 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 terminating event? 2 A. I don't recall. 3 A. I don't believe so. 3 Q. Me we talking hundreds of millions 4 Q. The only person that could have that 4 of dollars? 5 conversation with you was somebody acting on 5 A. I believe it was over a billion. 6 behalf of the general partner? 6 Q. And in fact -- 7 A. My distinction is Dan is an 7 A. rd say over a billion, less than 8 individual, he's the CEO, he's the managing 8 5 billion. 9 partner and he's the general partner. 9 Q. In fact, the aggregate funds under 10 Q. And when he spoke to you on that 10 investment in the onshore fund and the offshore 11 day, he was all of those things; correct? 11 fund and the managed accounts as of October 2006 12 A. Yes, one could take it that way. 12 was over SI billion; isn't that right? 13 That's correct. 13 A. Say that again. 14 Q. And so when Dan spoke to you on that 14 Q. In fact, the aggregate funds under 15 day, he was speaking to you wearing all of those 15 investment in the onshore fund, the offshore fund 16 hats? 16 and the managed accounts as of October 2006 was 17 MIL BRECHER: Objection. 17 well over SI billion -- 18 A. I don't know. I wasn't — he's the 18 A. Correct. 19 one who was speaking, not me. 19 Q. — isn't that right? 20 Q. Did you understand him to be acting 20 A. Correct. 21 in any way other than wearing those four hats 21 Q. And Dan Zwim individually and 22 that you just described? 22 through entities was general partner responsible 23 A. In his self-interest is the way I 23 for those funds; correct? 24 interpreted him acting. 24 A. That's correct. 25 Q. But his self-interest was as the 25 Q. And when he said to you -- 34 (Pages 130 - 133) VERITEXT REPORTING COMPANY EFTA01124906 Page 134 Page 136 Gruss - CONFIDENTIAL Grass - CONFIDENTIAL 2 A. And all the activities of those 2 A. Yes. 3 funds. 3 Q. And didn't you understand that if 4 Q. When he said to you there was, 4 there were going to be any waiver of that 5 quote, a lot to protect here, that's what he was 5 partnership agreement, that it would have to be 6 referring to; isn't that right? 6 in writing and agreed to by the parties? 7 MR. BRECHER; Objection. 7 A. Say again. 8 A. No. As I stated earlier, that's not 8 Q. Didn't you understand that if there 9 the way I took it. 9 was going to be any waiver of the provisions of 10 Q. How did the conversation end with 10 the partnership agreement as to money, that it 11 Dan Zwim on that day? 11 would have to be in writing and agreed to by the 12 A. It ended where he was — I don't 12 parties? 13 know exactly how it ended. I don't want to 13 A. Yes. 14 speculate — 14 Q. And you are not contending, am I 15 Q. Do you remember — 15 correct, that by telling — by saying the 16 A. or guess. 16 conversation -- withdrawn. 17 Pardon me. 17 And you are not contending, am I 18 Q. — anything else that he said? 18 correct, by reciting the conversation that 19 A. Other than that -- other than the 19 Mr. Zwim had with you, that that had the legal 20 discussion about the money, not really. 20 effect of waiving the agreements? 21 Q. But you understood that the 21 A. I'm not going to be the one to do 22 discussion about the money was contingent on what 22 this, but this exhibit (indicating). 23 the legal agreement said; right? 23 Q. Gross 6? 24 A. No. 24 A. Yes. This is the separation 25 Q. You — 25 agreement. This shows — is it — Page 135 Page 137 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. Tin sony, which legal agreement? 2 (Witness penises the exhibit.) 3 Maybe Pm confused. 3 A. No, fm sorry. The separation 4 Q. The partnership agreement, the 4 agreement which we negotiated, which we began S supplementary agreement, the confidentiality 5 negotiating from the day I left, obviously set 6 agreement all applied to what your rights were as 6 forth some sort of waiver. Now, I'm not counsel. 7 a partner; isn't that right? 7 But there was numbers in there that clearly 8 A. No. He discussed money with me, 8 showed that after the conversation, they had 9 2.63, which obviously would lead anyone to 9 waived that right. 10 believe that he's already assumed that everything 10 As you're saying you need a 11 in that agreement has been followed. And I took 11 document, that's the document. I don't have the 12 it to mean he waived his rights as OP. 12 document. But somewhere the document exists. We 13 Q. Did he say that, I waive my rights 13 can get you that document. 14 as GP? 14 Q. Was that document signed? 15 A. No, but he said this is how much 15 A. No, it wasn't signed. 16 money you're owed and Lawrence will get you as 16 Q. Why wasn't it signed? 17 much money as possible. 17 A. You'd have to ask the company. 18 Q. You've been around Wall Street -- 18 Q. Do you understand that the company 19 you had been around Wall Street from 1989 19 ultimately was unwilling to sign the document? 20 until -- 20 A. Yes. 21 A. If you consider MG Wall Street, 21 Q. So am I correct that you understand 22 yes. I get your point. 22 the company, the partnership, by the general 23 Q. And in all of those years, you 23 partner ultimately concluded not to waive the 24 understood that legal agreements apply to what 24 provisions of the partnership agreement as it 25 people owed; isn't that right? 25 applied to you? 35 (Pages 134 -137) VERITEXT REPORTING COMPANY EFTA01124907 Page 138 Page 140 1 Gruss • CONFIDENTIAL I Gruss - CONFIDENTIAL 2 A. I don't know that. 2 a job? 3 Q. You understand -- 3 A. 1 don't remember. 4 A. You are referring — 4 MR. LEVINE: Let's mark this 5 Q. You understand, do you not, that if 5 Cause 9. 6 the general partner concluded that you were to be 6 (Gruss Exhibit 9, Bates No. JSB0158, 7 terminated as a forfeiting event, that you had 7 E-mail Chain, marked for identification.) 8 certain rights to funds as provided for in the 8 (Discussion off the record.) 9 partnership agreement? 9 BY MR. LEVINE: 10 A. I'm sorry, one more time. I 10 Q. Showing you what's been marked 11 apologize. 11 Gruss 9, is this an e-mail from you to Mr. Barr 12 Q. Now, after after you had the 12 on or about October 10th, 2006? 13 discussion with Dan Zwim, you left the offices? 13 A. Uh-huh. 14 A. I believe so. 14 Q. And did you say to -- 15 Q. Did you ever return to the offices? IS MR. BRECIIER: You have to answer 16 A. I don't recall. 16 with ayes or no. 17 Q. Did you ever — withdrawn. 17 THE WITNESS: Oh, yes. 18 After the conversation with Dan 18 Q. Did you say to Mr. Barr, quote -- on 19 Zwim, did you ever perform any of the duties as 19 the subject news, quote, "Yo, I'm sure by now 20 CFO again? 20 you've heard the news that I've resigned'? 21 A. I don't know. 21 A. Yes. 22 Q. Is there anything that stands out in 22 Q. "You'll probably start receiving 23 your mind? 23 calls from the entire back office. They're 24 A. I don't know. 24 completely free. A big TKT just hit the market.' 25 Q. Isn't it a fact that the 25 A. Yes. Page 139 Page 141 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 conversation with Dan Zwim took place on or 2 Q. Did you tell Mr. Barr that you 3 about October 4th? 3 resigned? 4 A. Yes, I do. 4 A. It looks like I did. 5 Q. You remember that date because it's 5 Q. That wasn't true? 6 been the subject of testimony at the SEC and 6 A. No. 7 other places? 7 Q. You had decided that you were going 8 A. Yes. But actually, there was 8 to tell Mr. Barr and all of the people that were 9 confusion in my mind as to what the date was, but 9 potential employers that you resigned and not 10 yes. 10 that you were forced out? 11 Q. Ant I correct that that confusion has 11 A. No. 12 now been cleared up by virtue of your testimony 12 Q. But did you tell him here I 13 at the SEC? 13 resigned? 14 A. I believe it has been. 14 A. Yes, but you said him and any 15 Q. And you now recall that the 15 potential employers that I resigned. 16 conversation with Lawrence Cutler and then the 16 Q. Well, you told Fortress — 17 conversation with Dan Zwim that you testified 17 A. I told him. 18 about this morning took place on or about 18 Q. And you told Fortress -- 19 October 4th? 19 A. Yep. 20 A. I believe it did. 20 Q. — that you walked in and resigned? 21 Q. And who is Joseph Barr? 21 A. tJh-huh. 22 A. He is a recruiter, an executive 22 Q. Is that true? 23 recruiter. 23 A. That's what the e-mail said. 24 Q. Did you turn to him shortly after 24 Q. So that's at least your headhunter 25 the conversation with Dan Zwim to help you find 25 and one of the potential employers; correct? 36 (Pages 138 - 141) VERITEXT REPORTING COMPANY EFTA01124908 Page 142 Page 144 Gross - CONFIDENTIAL Gruss - CONFIDENTIAL 2 A. In an e-mail, yes. 2 conversation that he agreed legally never to tell 3 Q. Well, why do you add "in an e-mail"? 3 investors that you had violated — you were being 4 A. Because -- 4 held responsible for violating the agreements 5 Q. People are allowed to lie in e-mails 5 between the funds and the management company? 6 or say things that aren't true in c-mails that 6 MR. BRECHER: Objection. 7 they wouldn't say face to face? 7 A. He does not say all those things. 8 MR. BRECHER: Objection. 8 Q. In fact, he said none of those 9 A. Possibly. 9 things; isn't that right? 10 Q. Did you have a habit of not 10 A. Repeat exactly what you said. 11 necessarily telling the truth when you wrote 11 Q. Did Dan Zwim — did Dan Zwirn ever 12 e-mails? 12 tell you in that conversation, in the last 13 A. No. 13 conversation, that he agreed legally never to 14 Q. But this wasn't the truth according 14 tell investors that you were being held 15 to your testimony today? 15 responsible for violating the agreements between 16 A. That's not the truth. 16 the funds and the management company? 17 Q. And it's inconsistent with what 17 A. I don't believe he said that. 18 you've alleged in your complaint; correct? 18 Q. So Mr. Barr then helped you find a 19 A. Cornet. 19 job? 20 Q. It's consistent with what you told 20 A. No, Mr. Barr couldn't fmd me a job. 21 Fortress? 21 Q. My question was so Mr. Barr then 22 A. Up front, yes. 22 helped you find a job? 23 Q. So you were -- 23 MR. BRECHER: Objection. 24 A. I had several conversations with 24 A. incorrect. 25 Fortress. 25 Q. Mr. Barr helped you try to find a Page 143 Page 143 1 Gruss-CONFIDENTIAL Gruss - CONFIDENTIAL 2 Q. You were prepared — you were 2 job? 3 prepared to have your headhunter tell potential 3 A. I hope he tried to help me find a 4 employers that you were available on the market 4 job, though unsuccessful. S having resigned from your CFO position at Zwirn; 5 Q. You are working now at Babcock & 6 correct? 6 Brown? 7 A. Incorrect. 7 A. Correct. 8 Q. But that's the effect of telling him 8 Q. What is Babcock & Brown? 9 that you resigned; isn't that right? 9 A. It's an Australian firm -- it's an 10 A. Dan and 1 had an agreement that what 10 Australian infrastructure firm. 11 we would be discussing, he would be telling 11 Q. What's its business? 12 investors, that we separated, we decided to part 12 A. It invests in infrastructure. It 13 ways. Me telling a headhunter I resigned, this 13 invests in other areas -- it's all over the 14 is — this is pride. 14 board. It's actually in receivership and 15 Q. I'm talking truth. You told the 15 bankrupt currently. 16 headhunter something that was not true; correct? 16 Q. Are you still employed? 17 A. In this e-mail. I'm sure P had 17 A. Yes. 18 subsequent discussions with Joe. 18 Q. When did it file for bankruptcy 19 Q. Did Dan Zwim ever tell you that he 19 protection? 20 would agree forever not to tell an investor that 20 A. I don't recall exactly. It's a 21 you had violated the agreements between the funds 21 public company, so you can look it up. 22 and the management company? 22 Q. What year? 23 A. I don't know. Forever's a long 23 A. 2008, I believe. I'm guessing. 24 time. 24 Q. When did you go to work for them? 25 Q. Did Dan Zwim ever tell you in that 25 A. I — the middle of 2007. 37 (Pages 142 -145) VERITEXT REPORTING COMPANY EFTA01124909 Page 146 Page 148 1 truss CONFIDENTIAL Gruss-CONFIDENTIAL 2 Q. So about six, eight months after you 2 AFTERNOON SESSION 3 left Zwim? 3 (1:13 p.m.). 4 A. Correct. 4 (Gross Exhibit to, Bates Nos. PG 5 Q. And did Mr. Barr have anything to do 5 00595 through 600, 11/26/07 Letter to Grass 6 with your getting that job? 6 from Cambia, marked for identification.) 7 A. Zero. Nor did any other executive 7 PERRY GAUSS, 8 recruiter. 8 having been previously sworn, resumed the 9 Q. You got that job on your own? 9 stand and testified further as follows: 10 A. No, I got that job through.a 10 EXAMINATION (Contd.) 11 friend -- II BY MR. LEVINE: 12 Q. On your own? 12 Q. Back on the record after lunch. 13 A. — in Australia. 13 Mr. Cross, rm handing what was 14 Q. On your own? 14 marked as Gnus Exhibit 10, which is a letter 15 A. Without the help of executive 15 dated November 26, 2007, between you and Babcock 16 recruiters, is that your point? Yes, yes. 16 & Brown; is that correct? 17 Q. And you talked to Fortress about a 17 A. Yes. 18 job? 18 Q. And is that your signature on the 19 A. Uh-huh. 19 last page? Was this the employment agreement -- 20 MR. BRECHER: You have to answer 20 A. Yes. 21 with a — 21 Q. — that you entered into with 22 A. I'm sorry. Yes. 22 Babcock & Brown? 23 Q. And you talked to Fortress about a 23 A. Yes. 24 job in the spring of '07? 24 Q. Have you been acting within the 25 A. Yes. 25 scope of this agreement since November of 'On Page 147 Page 149 Gross - CONFIDENTIAL 1 Crust - CONFIDENTIAL 2 Q. Was Mr. Barr responsible for getting 2 A. Yes. 3 you into Fortress? 3 Q. When did you start -- did you start 4 A. No. 4 on November 26, '07, as this letter sets forth? 5 Q. Did you do that on your own? 5 A. Permanently I started. I actually 6 A. Yes. 6 was consulting for about five months before this. 7 Q. Did you talk to a company called 7 So I believe July '07 or so. 8 Strategic Value Partners? 8 Q. And does this accurately state what 9 A. I don't believe so. 9 your salaries and benefits were? 10 Q. Have you heard of Strategic Value 10 A. Yes, except for the on page 2, 11 Partners? 11 the 975, it wasn't 975. It was less than that -- 12 A. I don't I don't know. It's such 12 Q. Okay. 13 a generic name. 13 A. - because the company went into 14 Q. Do you remember that Mr. Barr 14 banlauptcy. 15 offered you an introduction to Strategic Value 15 Q. Showing you what we we'll mark as 16 Partners sometime in February 2007? 16 Ovum 11. 17 A. I don't. 17 (Gruss Exhibit 11, Bates No. PG I8 MR. LEVINE: Let's take a break for 18 00585 through 604, 2007 Form 1040, marked 19 lunch. It's 20 of one. Well take one 19 for identification.) 20 half hour off and start at ten after one 20 MR. LEVINE: And we can put a 21 and go to the breaking time. 21 confidentiality stip on the next three 22 (Luncheon recess from the record.) 22 exhibits if you desire. 23 23 BY MR. LEVINE: 24 24 Q. Is Gross 11 pages from your Form 25 25 1040 for 2007? 38 (Pages 146 - 149) VISRITEXT REPORTING COMPANY EFTA01124910 Page 150 Page 152 1 Gross - CONFIDENTIAL 1 Gross - CONFIDEN TIAL 2 A. Yes. 2 guarantee of $975,000 that was in the employment 3 Q. Does the $50,000 gross receipts on 3 agreement? 4 Schedule C represent consulting fees for the part 4 A. Correct. 5 of 2007 before November 26, 2007? 5 MR. LEVINE: And let's mark this 6 A- I believe it must. 6 Grass 14. 7 Q. So is the income from Babcock & 7 (taus* Exhibit 14, Bates No. O60622, 8 Brown for 2007, that portion of the year, 8 Earnings Statement, marked for 9 approximately 475,000? 9 identificatio n.) 10 A. Yes. 10 Q. Is Gross 14 a pay stub for you from 11 Q. And was that an appropriate — was 11 Babcock & Brown through the first quarter of 12 that consistent with the November 26, 2007, 12 2010? 13 arrangement? 13 A. Correct. 14 A. Yes. 14 Q. You made approximately 4100,000 in 15 Q. And showing you Gruss 12. 15 the first quarter of 2010? 16 (Gruss Exhibit 12, Bates Nos. 16 A. Yes. 17 PG00605 through 612, 2008 Form 1040, marked 17 Q. Which amount includes a portion of 18 for identification.) 18 the bonus that you would have earned for calendar 19 (Witness penises the exhibit.) 19 year 2009 that was made in the first quarter of 20 BY MR. LEVINE: 20 2010? 21 Q. Is this your and your wife's Form 21 A. Yet 22 1040s for 2008? 22 Q. Do you have any employment agreement 23 A. Yes. 23 currently in place with Babcock & Brown that's 24 Q. Is the wages and salaries line of 24 different from the 2007 original agreement? 25 4287,000 the base salary component of the Babcock 25 k Yes. Page 151 Page 153 1 Gruss - CONFIDENTIAL 1 Gross - CONFIDEN TIAL 2 & Brown employment arrangement? 2 Q. And what does it provide? 3 A. Yes. 3 A. I don't — I don't -- 4 Q. Was there any bonus consistent with 4 Q. What does it provide in terms of 5 the November 2007 agreement paid to you in 2008? 5 salary and bonus? 6 A. I don't believe so. 6 A. The salary I believe is 375. And I 7 Q. Just take a look at Gruss 13. 7 want to say there's — I thought you had this 8 (thugs Exhibit 13, Bates Nos. PG0613 8 actually. And I want to say that there's a 9 through 621, 2009 Form 1040, marked for 9 250,000 bonus payable in April of next year if 10 identification.) 10 I'm there. 11 Q. Marking Gross 13, which is the Form 11 Q. So notwithstanding — 12 1040 for you and your wife for 2009, can you 12 A. If the entity survives. 13 identify that? 13 Q. -- notwithstanding that pendency of 14 A. Yes. 14 the Chapter 11, you are still employed as the CFO 15 Q. So now, taking a look at Gruss 12 15 at a base salary of 375? 16 and 13 for 2008-2009, could you please explain, 16 A. I'm not the CFO. 17 is the 2009 income of some $900,000 include a 17 Q. What is your position? 18 portion of the 2008 bonus - 18 A Marketer. Ifs an Australian term. 19 A Exactly. 19 I'm not the CFO. 20 Q. — that was guaranteed in November 20 MR. LEVINE: Letts mark this 21 of 2007? 21 Cruse 15. 22 A. Exactly. 22 (Gruss Exhibit 15, Bates No. 729, 23 Q. So it's your testimony that bonus 23 Wage and Income Transcript, marked for 24 was paid, but because of the bankruptcy of the 24 identification.) 25 entity, it was some amount less than the 25 39 (Pages 150 -153) VERITEXT REPORTING COMPANY EFTA01124911 Page 154 Page156 1 Grass - CONFIDENTIAL I Gruss - CONFIDENTIAL 2 Q. Is this your W-2 statement for 2006? 2 Q. What was your expectation? 3 A. Yes. 3 A. There are spreadsheets that we went 4 Q. And what's your recollection of how 4 over and reviewed at least monthly showing on an 5 much of the 2006 income of approximately 5 accrual and actual basis there were terms on the 6 1.6 million was base and how much was bonus? 6 fund, but plus NAV on the fund with the AUM of 7 A. I want to say — hold on. 7 the fund which calculated the management fee and 8 (Witness peruses the exhibit) 8 the incentive fee payable. 9 A. 2006 — in 2006, there would have 9 Q. Do you have any recollection of what 10 been some portion of my partnership payment, • 10 your 2004 income was? I I 225,000 maybe, which was a front against my 11 A. It was four it was either it 12 eventual money that I never received, and the 12 was either 8 or 1.2. 13 delta would be for a bonus payable in 2006, 13 MR. LEVINE: Let's mark this as 14 earned in 2005. 14 Gauss 16 — 15 Q. So the 1.6 somewhat million dollars 15 Q. By "8," you mean 800,000, one 16 of the compensation on your W-2 statement for 16 point — 17 2006 has basically three components. It has your 17 A. — 2 nillion, yes. 18 base compensation for 2006. It has partners, in 18 MR. LEVINE: Marking Gruss 16. 19 the nature of a partner distribution for 2006. 19 Puss Exhibit 16, Bates Nos. 20 And it has bonus for 2004 before you were a 20 ISB0126 through 128, E-mail Chain, marked 21 partner - 21 for identification.) 22 A. '5. 22 Q. Is Grass Exhibit 16 a series of 23 Q. '5. 23 e-mails between you and Joseph Barr from October 24 A. Yes, but I think you just said base 24 of 2006? 25 salary and distributions -- 25 (Witness peruses the exhibit.) Page 155 Page 137 1 Grass - CONFIDENTIAL Gruss - CONFIDENTIAL 2 And that's one and the same? 2 A. Got it 3 A. Yes, exactly. I believe so. 3 Q. I'm going to the second page, the 4 Q. 1 stand corrected. 4 top e-mail from you to Mr. Barr from October 24, 5 A. There was no concept of base because 5 2006. 6 I was a partner. 6 Do you see that? 7 Q. Right. Okay. 7 A. Yes. 8 So die bulk then of withdrawn. 8 Q. You say, quote -- he's giving you an 9 So the 1.6 semimillion includes your 9 idea of a particular entity that he wants to talk 10 compensation as a partner for the first nine 10 to on your behalf — 11 months of the year and your 2005 bonus before you 11 A. Uh-huh. 12 became a partner? 12 Q. — correct? 13 A. Exactly. 13 A. Yes. 14 Q. What was your compensation, if you 14 Q. And you say, quote, "Assume Fm the 15 recall, in 2005? 15 candidate? What's the range? rm not being a 16 A. I want to say it was either 16 prick, but I'm going to be real selective. Small 17 1.2 million or 1.8 million. I think it was 17 world, Igo for a cup of coffee, words going to 18 1.8 million. 18 get out." 19 Q. What did you expect to make as a 19 Correct? 20 partner in 2006? 20 A. Yes. 21 A. That was the dispute. I expected it 21 Q. What instructions did you give 22 to be around 3 million or, as Dan said, it was 22 Mr. Barr off line away from e-mails — 23 more like two-six. The computation was nine — 23 A. Right 24 the computation was the entire year up until the 24 Q. -- as to the kind of position you 25 that left. 25 were looking for? 40 (Pages 154 - 157) VERITEXT REPORTING COMPANY EFTA01124912 Page 158 Page la 1 Gress - CONFIDENTIAL 1 °suss - CONFIDENTIAL 2 A. It would have been either -- it 2 an answer on that one. 3 probably would have been a COO position. Maybe 3 MR. BRECHER: You have to answer yes 4 CFO of a hedge fund. Of a hedge fund. 4 or no. 5 Q. Did you give him any particular 5 THE WITNESS: Oh, no. 6 minimal size for the hedge fund? 6 Q. Did you tell him that it had to be 7 A. No. 7 at least a million eight? 8 Q. Were you willing to relocate? 8 A. No, I don't believe so. 9 A. Yes, yes. 9 Q. Look at page 1. Do you see at the 10 Q. Did you tell him that? 10 bottom that Mr. Barr in response, "Got you 1M 11 A. I don't recall. 11 plus plus is no problem"? 12 Q. Isn't it a fact you told him you 12 A. Uh-huh. 13 were unwilling to relocate? 13 Q. "M you know, a large degree will 14 A. No, that's not a fact. 14 depend on how they perform, but I think we can 15 Q. Did you give him salary range? 15 get a SI million guarantee"? 16 A. I don't recall. 16 A. Uh-huh. 17 Q. Did you have, as you recall as you 17 Q. Is that in effect what you told him, 18 sit here today, any reference to salary range? 18 1 million? 19 (Witness pauses the exhibit.) 19 A. No, I don't know. 20 A. I don't recall. 20 Q. That's basically what the deal was 21 Q. What did you mean when you said you 21 with Babcock & Brown; isn't that right? 22 were going to be selective? 22 A. Yes. 23 A. I don't — I don't remember. I 23 Q. Between bonus and compensation, you 24 don't want to guess. 24 were a little over a million? 25 Q. I take it it was important that job 25 A. Yes. Page 159 Page 161 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 title and responsibility was something you were 2 Q. It's your testimony you were a 3 going to be selective about; correct? 3 little over a million in 2005 at Zwim before you 4 A. Yes. 4 became a partner? 5 Q. And were you also going to be S A. Yes. 6 selective about income level? 6 MR. LEVINE: Let's mark this 17. 7 A. Yes. 7 (Gruss Exhibit 17, Bates Nos. 8 Q. And what did you understand or what 8 ISB0101 through 103,1E-mail Chain, marked 9 did you tell Barr was your requirement on income 9 for identification.) 10 level? 10 (Witness peruses the exhibit.) 11 A. Comparable to what I was making at 11 BY MR. LEVINE: 12 Zwim. 12 Q. This is e-mails from 13 Q. And did comparable to what you were 13 February 2007 -- 14 making at Zwirn what you were just starting to 14 A. Uh-huh. 15 make as a partner or what you had made in the 15 Q. — between you and Mr. Barr? 16 year before as CFO/nonpartner? 16 A. Yes. 17 A. I -- I don't — I don't recall. I 17 Q. Now, take a look at page 2 and 18 mean a million eight under the right 18 Page 3. 19 circumstances, I think would have been fine 19 (Witness peruses the exhibit) 20 knowing who I am. 20 A. Yes. 21 Q. And did you tell him that it needed 21 Q. Do you see at the bottom of page 3, 22 to be above a million? 22 he's proposing another idea to you? 23 A. Un-un. 23 A. The bottom -- 24 Q. Did he understand that it had to be? 24 Q. He's talked to you about Strategic 25 MR. SIFFERT: I don't think we have 25 partners; do you see that? 41 (Pages 158 -161) VERITEXT REPORTING COMPANY EFTA01124913 Page 162 Page 164 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. Oh, the top of page 3. 2 Strategic Value Partners in Greenwich that you 3 Q. Yes. 3 passed on? 4 A. Hold on. 4 A. Pm sorry, where? 5 (Witness peruses the exhibit) 5 Q. The last two exhibits, Gross 17 and 6 A. Yes. 6 18, refresh your recollection now that there was 7 Q. Does that refresh your recollection 7 an entity called Strategic Value Partners in 8 that he offered you an interview with Strategic 8 Greenwich that you passed on? 9 Value Partners in Greenwich? 9 A. It doesn't 10 A. It doesn't 10 (Gruss Exhibit 19, E-mail Chain, 11 MR. LEVINE: Let's mark this as the 11 marked for identification.) 12 next exhibit. 12 Q. Take a look at Gruss 19, which is a 13 THE WITNESS: Doesn't mean it didn't 13 group of e-mails from August of'07. You see 14 happen, but I'll — 14 them? IS MR. LEVINE: Exhibit 18. 15 (Witness peruses the exhibit.) 16 (Gruss Exhibit 18, Bates No. 16 A. Yes. 17 JSB0112, E-mail Chain, marked for 17 Q. By August of'07, you're working at 18 identification.) 18 Babcock on a consulting basis and haven't been 19 BY MR. LEVINE: 19 hired yet? 20 Q. Showing you what we marked Gruss 18, 20 A. Exactly. 21 it's an e-mail from February 19th, 2007. 21 Q. And so you're still working and 22 Does this refresh your recollection 22 hoping Mr. Barr might help you find something? 23 that he proposed you to an entity Strategic Value 23 A. Yes. 24 Partners in Greenwich for CFO role? 24 Q. And am I correct that you and 25 A. It doesn't. 25 Mr. Barr acknowledged that the general economy, Page 163 Page 165 I Gruss - CONFIDENTIAL Gruss - CONFIDENTIAL 2 Q. Do you see at the bottom of page 2 2 particularly that in the financial industry, in 3 on Gruss 17 where you say, "London is a long way 3 the hedge fund world, had substantially slowed 4 from New York"? 4 down? 5 A. Yes. 5 (Witness peruses the exhibit) 6 Q. You were referring to London, 6 A. I would say that's tight. 7 England? 7 Q. And do you agree that your ability 8 A. Yes. 8 to have gotten a job in the summer of 2007 would 9 Q. You were unwilling to go to England? 9 have been much different if the economy generally 10 A. Absolutely not. 10 and the economy in the financial institution 11 Q. You were in fact -- II world had been more like it wee in 2006 end 2005? 12 A. I was absolutely — I would 12 A. I think that's accurate. 13 absolutely have gone to London. In fact, when I 13 Q. And is it a fact that there's really 14 was hired by Babcock & Brown, I almost went to 14 no way of knowing what your job prospects would 15 London. 15 have been in the robust economic world of the 16 Q. I'll show you what's been -- 16 hedge fund that took place in the mid-2000 17 A. Also, London is a long way from 17 period? 18 Great Neck. That's not me he's talking about. 18 A. You're saying is it a fact I have 19 That's Bob Racusin he's talking about, not me. 19 no idea. 20 Q. Take a look at this next exhibit. 20 MR. BRECHER: I object. 21 (Gruss Exhibit 18, Bates No. 21 Q. That there's clearly a difference in 22 JSB0112, E-mail Chain, marked for 22 the world that you went out to look for ajob in 23 identification.) 23 the summer of'07 or during '07 than the world 24 Q. The last two e-mails now refresh 24 that you would have been in in '05 or '06? 25 your recollection there was an entity called 25 MR. BRECHER Objection. 42 (Pages 162 - 165) VERITEXT REPORTING COMPANY EFTA01124914 Page 166 Page 168 Gruss - CONFIDENTIAL 1 Gnus - CONFIDENTIAL 2 A. Illsay the market conditions 2 came out with not existed. 3 certainly made it tough for people in the finance 3 Q. You're referring to the March '07 4 industry to get jobs easily as they did in the 4 memo to investors? 5 bull market, yes. 5 A. Yes. 6 Q. Now -- and so you expressed some 6 Q. You understood that the memo to 7 frustration earlier before lunch with Joseph 7 investors in March of '07 was the product of an 8 Barr's assistance. Is it fair to say that he was 8 investigation by Gibson Dunn and Deloitte and 9 some -- he was hampered somewhat for you and 9 Touche; right? 10 every other client that he would have had at the 10 A. Yes. 11 time tying to place people in the hedge fund II Q. You understood that once Gibson Dunn 12 industry - 12 and Deloitte & Touche conducted an investigation, 13 MR. BRECHER: Objection. 13 that the general partner had an obligation to 14 Q. — at that time? 14 provide the results of that investigation to the 15 MR. BRECHER: Objection. 15 investors? 16 A. Far more for me than anybody else in 16 A. I don't know that 17 the industry. 17 Q. Do you believe that as you sit here 18 Q. For everybody in the industry he had 18 today? 19 difficulty moving around; isn't that right? 19 A. I don't know. 20 MR. BRECHER: Objection. 20 Q. Has anyone ever told you that the 21 A. I don't know. 21 management company could have kept from the 22 Q. Well, hedge funds were literally 22 investors of the onshore and offshore funds the 23 shutting down in '07; right? 23 results of the Gibson Dunn investigation? 24 A. Uh-huh. 24 A. No, no one ever told me that 25 Q. You're nodding yes? 25 Q. And isn't it a fact that you don't Page 167 Page 169 Gnus - CONFIDENTIAL 1 Gnus - CONFIDENTIAL 2 A. Yes. 2 believe — withdrawn. 3 Q. Hedge fund administrative jobs, 3 Isn't it a fact that as you sit here 4 including CFO jobs and COO jobs, were literally 4 today, you understand that disclosing the results 5 drying up because hedge funds were literally 5 of the Gibson Dunn investigation to the investors 6 going out of business and redeeming for their 6 of the L.P. fund and the Ltd. fund was something 7 investors? 7 that the general partner was obligated to do? 8 MR. BRECHER: Objection. 8 A. As I said, I don't know that. 9 Q. You're nodding yes. 9 Q. Well, was it any part of your case 10 A. Fm agreeing, yes. 10 that the general partner acted without authority 11 Q. And so you're competing with all of 11 in making the results of that investigation 12 those senior management people on the street 12 public to the investors of the two funds? 13 without regard to why they were on the street in 13 MR. BRECHER: Objection. 14 2007? 14 A. Ideal — I don't understand the 15 A. Yes, but I was confident that if 15 question. 16 there was one COO job, I would have gotten it. 16 Q. You're not arc you quibbling -- 17 Q. And you did at Babcock & Brown? 17 are you taking issue with the fact that the 18 A. No, not a COO or CFO job. 18 general partner issued the March 2007 report to 19 Q. So the fact is there wasn't one then 19 the investors or are you taking issue with what 20 in the market in 2007? 20 that report said? 21 A. No, that's not what I said. 21 A. The latter, yes. 22 Q. You just said you were confident 22 Q. So you recognize, do you not — 23 that if there was one in the market in 2007, you 23 mean, you became a partner of the management 24 would have gotten it? 24 company; right? 25 A. Had — had the Zwim memo that he 25 A. Right. 43 (Pages 166 -169) VERITEXT REPORTING COMPANY EFTA01124915 Page 170 Page l72 1 Gnats - CONFIDENTIAL Cnuss - CONFIDENTIAL 2 Q. You testified earlier you had some 2 that there was any ill motive of the general 3 understanding of what the fiduciary duties were 3 partner in reporting the results of the Gibson 4 that officers of the management company had to 4 Dunn investigation to the investors? S investors; correct? S MR. BRECHER: Objection. 6 A. Correct 6 A. I don't know. 7 Q. Telling investors material events of 7 Q. Well, the report caused the 8 the management company responsible for managing 8 management company itself enormous damage, didn't 9 their funds is part of the fiduciary duty that 9 it? 10 the general partner had; isn't that right? 10 MIL BRECHER: Objection. 11 MR. BRECHER: Objection. 11 A. Yes. 12 A. Yes. 12 Q. And in fact, in some respects, it 13 Q. And you don't dispute that at all, 13 virtually wiped them out; isn't that right? 14 do you? 14 MR.. BRECHER: Objection. 15 A. I am in no way disputing that they 15 A. 1 don't know. 16 shouldn't have issued an investment memorandum 16 Q. Well, they got an enormous 17 saying that Gibson Dunn and Deloitte & Touche had 17 percentage of redemption requests; correct? 18 done an internal review, not at all. 18 MR.. BRECHER: Objection. 19 Q. Or what the material results were of 19 A. I don't know. 20 that investigation? 20 Q. They ultimately were sold -- the 21 A. That's not for me to opine. 21 assets were transferred to Fortress; correct? 22 Q. Whether or not somebody else wants 22 MR. BRECHER: Objection. 23 Perry Gross' opinion, or Perry Gruss' point of 23 A. Correct. 24 view, is these any dispute in your mind that you 24 Q. The results of the Gibson and Dunn 25 do not take issue with the legal responsibility 25 report caused enormous damage to the management Page 171 Page 173 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 of the management committee, particularly the 2 company; isn't that right? 3 general partner, to report to the investors of 3 MR. BRECHER: Objection. 4 the funds of the results of the Gibson Dunn 4 A. I don't know if that's what caused 5 investigation? 5 it. 6 MR. BRECHER: Objection. 6 Q. You can't testify as you sit here 7 A. I don't think -- I don't know if 7 today that the publication of the March 2007 8 they have a legal obligation to report it to 8 investor report caused the management company 9 investors. I don't have an issue whatsoever that 9 substantial injury? 10 they did report it to investors. 10 MR. BRECHER: Objection. 11 Q. Well, you don't believe that they -- 11 A. No, I can't 12 that the report to the investors was gratuitous 12 Q. But you agree that issuing that 13 on their part, do you? 13 report wasn't the product of some bad motive 14 MR. BRECHER Objection. 14 vis-a-vis Perry Gruss? 15 A. Can you explain that? 15 A. I think that's correct. Correct 16 Q. Well, do you contend that the report 16 meaning it was not 17 to the investors was — had a bad motive as to 17 Q. So take a look at page 2 of 19, of 18 Petty Gruss? 18 Gruss 19. You say in the middle, quote, "Things 19 A. Yes. 19 are okay. Frustrating. Very close to coming out 20 Q. So is it your view that reporting it 20 and clearing my name with the truth. I'm toxic 21 to the investors was to screw Peny Gruss or what 21 until people bear that Zwim was the one who 22 the report said screwed Peny Gruss? 22 ordered the code red. It blows." 23 A. I think what they said screwed Perry 23 What did you mean by that? 24 Grins. Not that they issued the report 24 A. There are — Pm sure we'll get into 25 Q. So you are not taking the position 25 this -- there are several exceptions I take to 44 (Pages 170 - 173) VERITEXT REPORTING COMPANY EFTA01124916 Page 174 Page 176 1 Gnus - CONFIDENTIAL 1 Gnus - CONFIDENTIAL 2 the March 26th or -7th investor memo. What 2 whatever -- I don't recall what's in there about 3 I'm saying here is I would have liked someone to 3 the defamation. 4 come out and just state the facts. 4 Q. What are the damages from the 5 Q And what's code red mean? 5 defamation that you're seeking? 6 (Witness peruses the exhibit) 6 A. That's what I mean. I don't recall. 7 A. I don't knoW what I'm referring -- 7 Q. What are you seeking? 8 it's — code red is clearly the Jack Nicholson 8 A. What do you mean? 9 movie reference. I don't know what I meant by 9 Q. You just testified that you're not 10 that, but that's clearly what code red is. 10 seeking to get back any money for your 11 Q. What happens in the lack 11 reputation? 12 Nicholson -- 12 MR. BEECHER: Objection. 13 A. I forget the name of the movie. Few 13 A. That's not what I said. 14 Good Men. Thank you. 14 Q. What did you -- 15 Q. And is it Zwim -- what did you mean 15 A. That's not what I said. 16 by Zwim ordering code red? 16 Q. What did you say? 17 A. I don't know. 17 A I said I don't expect that to clear 18 Q. Did you mean ordering your firing? 18 my reputation. I did not link it financially at 19 A. I don't 'mow. I don't think so. 19 all. 20 Q. Did it mean Zwim ordering some of 20 Q. Do you expect to get damages for the 21 the events described in the March memo? 21 damage to your reputation? 22 A. Possibly. I don't know. 22 A. I would like to. 23 Q Why were you close to coming out — 23 Q. Take a look at the complaint, 24 withdrawn. 24 Exhibit 1. 25 How — how were you close to coming 25 A. Got it. Page 175 Page 177 1 Grass - CONFIDENTIAL 1 Chins - CONFIDENTIAL 2 out and clearing your name with the truth as of 2 Q. Take a look at paragraph 34 on 3 August of 2007? 3 page 9. 4 A. I - I don't know. 'don't want to 4 (Witness peruses the exhibit) 5 guess. 5 Q. Up until October 2006, what did you 6 Q. What do you think it was? 6 understand was your public reputation? 7 A. It's very possible by that time, I'd 7 • A. Up until 2006? 8 been contemplating filing a suit not unlike this 8 Q. October. 9 one. 9 A. Stellar. 10 Q. Is it your intention by this lawsuit 10 Q. With whom? 11 to clear your name? 11 A. I would say anybody that knew me. 12 A. No. Hopefully that will be a 12 Q. Let's talk about the financial 13 derivative o4 but no. 13 industry. 14 Q. What's the intention on your part in 14 A. Uh-huh. 15 filing this lawsuit? 15 Q. In what areas of the financial 16 A. To get what I'm owed. 16 industry did you believe you had a stellar 17 Q. And what do you see that to be? 17 reputation? 18 A. The numbers we discussed and the 18 A. That's incredibly broad. I believe 19 numbers that are in the complaint. 19 it was the opinion of bankers I've dealt with, of 20 Q. What arc the numbers -- 20 service providers I've dealt with, of advisers 21 A. I don't — I don't intend on trying 21 I've dealt with, of colleagues I've dealt with, 22 to get my reputation back. 22 of people I reported to, people who repotted to 23 Q. What are the numbers that we 23 me. 24 discussed? 24 Q. So it's your testimony, then, that 25 A. The 3 million that I think, and 25 until late October 2006, you had a stellar 45 (Pages 174 -177) VERITEXT REPORTING COMPANY EFTA01124917 Page 178 Page 180 1 Grvss - CONFIDENTIAL 1 Gross - CONFIDENTIAL 2 reputation? 2 took place? 3 A. That would be my opinion, yes. 3 A. I believe they were ongoing from 4 Q. And is there anything that you have 4 when I left straight through to at least — 5 learned that the management company would have 5 because your time frame period is October to 6 done anything to damage that reputation before 6 March, the entire period. 7 the period of late October 2006 as referenced in 7 Q. What's — 8 paragraph 34 of your complaint? 8 MR. SIFFERT: You were asking till 9 (Witness penises the exhibit.) 9 November. 10 MR. BRECHEL Objection. 10 Q. I was asking you first for the 11 A. As specifically referencing 34? 11 October/November time period. 12 Q. Yes. 12 A. Right. 13 (Witness peruses the exhibit) 13 Q. What is it that Mr. Zwim did that 14 A. I don't understand the specific 14 you blow fusthand or secondhand to damage — to 15 question. 15 defame you during October and November 2006? 16 Q. Well, what I'd like to try to just 16 A. I believe he had phone calls with a 17 understand is a starting point for when you 17 bunch of his investors. 18 believe damage to your reputation began. 18 Q. Did you — 19 A. I don't — I don't know. You can't 19 A. And employees. 20 put a date on it 20 Q. Do you understand that anybody other 21 Q. We can put a time period on it, 21 than Mr. Zwim made those phone calls? 22 can't we? 22 A. Yes. 23 A. I'll certainly say after I left D.B. 23 Q. Who? 24 Zwint 24 A. David Lee made those phone calls. I 25 Q. And what is it that you understand 25 believe Harold Kahn made those phone calls. I Page 179 Page 181 1 GIUSB - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 in October when you left D.B. Zwim that damaged 2 believe Elise Hugshirc [sic) or Hugs- — made 3 your reputation? 3 those phone calls. She was the — she was in IR. 4 A. Things that were said by Dan Zwirn 4 And there may have been -- maybe Lawrence Cutler, 5 and others at the amt to a host of people. 5 but — 6 Q. Now, I'm separating out — Pm not 6 Q. And bow do you know those phone 7 asking you about anything relating to the 7 calls were made? 8 March 2007 investor report. You understand? 8 A. I was told at the time just through 9 A. I do now, yes. 9 the grapevine that they were made. And then I 10 Q. So focusing on, the period of 10 believe it was in a — in an article in one of 11 October 2006 and November 2006, what do you I I the publications. And rve subsequently, through 12 contend as you sit here today were acts of 12 discovery — I don't know if I'm allowed to — 13 defamation by Dan Zwim or others associated with 13 there's clearly documentation that these calls 14 the management company? 14 were made. 15 A. I'm not sure I use the words in 15 Q. But what I'm asking is you as of 16 relation to 34, but I believe there was an — I 16 July 2009, when you filed the complaint — 17 believe there was a reference to Dan making a 17 A. Yes. 18 series of calls to investors alleging certain 18 Q. — what did you know about who the 19 things that bad gone on. That's the basis. 19 calls were made to? 20 Q. And when did you understand that 20 A. It was all — it was all of those 21 series of calls took place? 21 circumstances that I just explained to you, 22 A. After I left. I don't know the 22 except for the discovery. Because I didn't have 23 date. I wasn't — 23 that information. 24 Q. And for what period of time after 24 Q. What employees of the company told 25 you left do you understand these conversations 25 you that those calls were being made? 46 (Pages 178 - 181) VERITEXT REPORTING COMPANY EFTA01124918 Page 182 Page 184 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. Jim Wilk, Bob Racusin, and there may 2 Q. Eric Felton is somebody you 3 have been others. 3 identify who you spoke to at the request of Dan? 4 Q. So your testimony — 4 A. No, I don't think Felton was the 5 A. In addition to third-party, but you 5 request of Dan. I don't recall who. 6 said employees. 6 Q. You earlier testified before lunch, 7 Q. Right. 7 but just so I'm clear, you recognize and agree 8 Your testimony is that after 8 that the general partner has an obligation to 9 October 4, 2006, after you had left, and after 9 tell investors of its funds about material events 10 the so-called telephone calls from management 10 in the conduct of the funds? 11 were being made to investors, that you had II A. I don't know if that's the case. 12 conversations with Jim Wilk and Bob Racusin, who 12 Q. You don't agree that that's a fact? 13 are still at the management company, who told you 13 A. No, I don't know if that's a fact -- 14 of the fact of those calls? 14 Q. rm asking you -- IS A. I believe so. I don't know when I 15 A. — that they have the legal 16 spoke to Wilk. I don't 'mow if it was between 16 obligation. 17 October and November. So I take that back. I'm 17 Q. I'm asking you whether you 18 not sure. Not sure. 18 understand and believe that the general partner 19 Q. Is it the fact that sometime before 19 of a management company running onshore and 20 October and the March 2007 letter that Wilk and 20 offshore funds has a legal obligation to 21 Racusin told you to whom calls were being made? 21 investors to notify investors of material events 22 A. No, not specifically to whom calls 22 in the business of the management company that 23 were being made. 23 would affect the investors' funds? 24 Q. Just the fact that calls were being 24 A. I don't know if they have a legal 25 made to investors? 25 obligation. Page 183 Page 185 Gross - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. Yes. But more so I found out 2 Q. Would you understand if the law 3 through the community. The hedge fund world 3 imposed such an obligation? 4 is -- you know, ifs a small world. 4 MR. BRECHER: Objection. 5 Q. And are you referring to the hedge 5 A. I don't know. 6 fund community of investors or management company 6 Q. Is that something that sounds 7 people? 7 ridiculous to you or something that sounds like 8 A. Both. 8 it makes sense? 9 Q. What were you told and by whom? 9 MR. BEECHER: Objection. 10 A. That they were — that they were 10 A. It doesn't sound ridiculous. II having a series of calls with investors. 11 Q. You just testified earlier that you 12 Q. Did you talk to any investors? 12 considered it within the legal obligation of the 13 A. I spoke to —1 definitely spoke 13 general partner of a management company to notify 14 to -- but I don't know when, the time. I spoke 14 the investors of the onshore and offshore fund of 15 to Erie Felton at Grosvenor Capital. I believe I 15 the results of the investigation by Gibson Dunn 16 spoke to possibly two others as well on Dan's 16 and Deloitte; correct? 17 behalf. Dan wanted me to speak to an investor. 17 MR. BRECHER: Objection. 18 1 believe so. 18 A. I don't I don't believe I said 19 Q. After October 4th? 19 that they have a legal obligation. I think you 20 A. 1 believe so. yes. 20 asked the question do I take exception to it. 21 Q. Who was that? 21 thought that's what you said. 22 A. I don't recall. I also ran in to 22 Q. Okay. 23 someone on the street, literally, Staling 23 A. I absolutely don't take exception to 24 Starnes. Ashok, A-S-H-O-K, I think his last name 24 that. If they have a legal obligation, they 25 is C-H-A-C-R-A. Staling Starnes. 25 absolutely should disclose it. 47 (Pages 182 -185) VERITEXT REPORTING COMPANY EFTA01124919 Page 186 Page 188 Gruss - CONFIDENTIAL Gnus - CONFIDENTIAL 2 Q. Do you think that it was good 2 that there were violations of the relevant 3 business judgment for the general partner of a 3 agreements in respect of the financial relations 4 management entity to notify the investors of the 4 between the management company and the funds? 5 fund of material events affecting the funds that 5 A. Shulte Roth never told me that. 6 take place at the management company responsible 6 Q. But you learned that; not from 7 for running the funds? 7 Shulte Roth, but you learned that? 8 MR. BRECHER: Objection. 8 A. That it was Dyes -- 9 A. Yes. 9 Q. Decision. 10 Q. And you were in fact the CFO; 10 A. That it was — yes. 11 correct? 11 Q. His decision based on what be had 12 A. Of -- yes, correct. 12 teamed from Shulte Roth? 13 Q. The management company. 13 A. That's what he told me, yes. 14 A. Correct 14 Q. So you knew that the general partner IS Q. And like it or not, you were being 15 was taking a position based on what he learned 16 forced to leave the company because of the misuse 16 front his lawyers that there was a violation of 17 of funds, allocation of expenses as between the 17 the provisions of the agreements between the 18 management company and the funds; isn't that 18 management company and the funds that related to 19 right? 19 the financial relations between those two 20 MR. BRECHER: Objection. 20 entities; right? 21 A. I don't know if that's right. 21 A. That is what Dan told me. 22 Q. Well, you testified earlier that you 22 Q. And assuming that that were true, 23 understood that Shulte Roth investigated two 23 would you take exception to Dan Zwim believing 24 circumstances, both of which related to expenses 24 that he had an obligation to tell investors of 25 attributable to the management company in 25 that fact — Page 167 Page 189 1 Gnus - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 relation to the onshore fund and the offshore 2 MIL BRECIIER: Objection. 3 fund; correct? 3 Q. -- given the seniority of your 4 A. Yes. 4 position and the nature of the conduct? 5 Q. And the results of that Shulte Roth 5 MR. BRECHER: Objection. 6 investigation led you to leave being forced to 6 Q. You can answer. 7 leave the company; correct? 7 A. Oh, no. 8 A. Yes. 8 Q. It wouldn't have been appropriate 9 Q. There isn't any other reason that 9 for Dan to have kept that secret, in other words; 10 you left the company? 10 isn't that tight? 11 A. That's correct. 11 A. It wouldn't have been appropriate. 12 Q. It's a fact, is it not, that Shulte 12 Q. For him to keep it secret? 13 Roth concluded that there were violations of the 13 A. Yes, that's right 14 relevant agreements dealing with the financial 14 Q. So there was nothing in your mind 15 relations between the funds and the management 15 wrong, if you will, with Dan Zwirn, David Lee and 16 company? That's what the Shulte Roth 16 others picking up the phone and telling investors 17 investigation had concluded, isn't that right, as 17 of those basic facts after October 4, 2006? 18 a first step? 18 A. That's not what they said. 19 A. I don't know. 19 Q. Just, first of all, was there 20 Q. But -- 20 anything wrong in your mind with Dan Zwim, David 21 A. I don't lotow. Tve never seen any 21 Lee, and others picking up the phone and telling 22 conclusion. Pve never seen any documents. 22 investors of those basic facts after October 4, 23 Q. But didn't you learn that the reason 23 2006? 24 why Dan Zwirn had the conversation with you that 24 A. There was not. 25 he had on October 4th was because he learned 25 Q. If the facts ended up to be that Dan 48 (Pages 186 - 189) VERITEXT REPORTING COMPANY EFTA01124920 Page 190 Page 192 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 Zwirn,David Lee and others' conversations with 2 A I don't 'mow. If I did, l did. 3 investors after October 4, 2006, followed a 3 Q. What did you understand Mr. Zwim, 4 script written for them by their law firms which 4 David Lee or others said to investors other than 5 very particularly said only what I have just 5 the fact of the conduct Perry Gruss' involvement? 6 said, would you have a problem with that? 6 A. I was lead to believe they said that 7 MR. BRECHER: Objection. 7 I directed, authorized all of these activities. 8 A. If they — if they said that there 8 Q. Anything else? 9 were two issues that occurred by and between the 9 A. Probably, but I don't know. 10 management company and the funds related to fund 10 Q. Is there anything else that provides II expenses -- management company expenses being 11 the basis for this lawsuit in which you claim you 12 used with fund money to pay, no. 12 were defamed by those conversations? 13 Q. But if it was —if they said, in 13 A. Are we still within October and 14 addition, that you as CFO were being held 14 November? 15 responsible for that because of what you did and 15 Q. Yes 16 didn't do, l take it that wouldn't change your 16 A. I don't know. 17 answer in any respect? 17 Q. I want you to take the entire period 18 MR. BRECHERI Objection. 18 from October 4, 2006, up to and before the 19 A. That's not what they said. 19 publication of the March 2007 report. 20 Q. Did you sit in on any of those 20 A. Uh-huh. 21 calls? 21 Q. limit you to tell me all of the 22 A. No, I didn't. 22 kinds of things that you understand Dan Zwirn, 23 Do you have a tape recording -- 23 people agenting at his direction said to 24 A. No. 24 investors that defamed you. 25 — of any of toes calls? 25 A. From October till today? Page 191 Page 193 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. No. 2 Q. No, from October until before the 3 Q. Whatever you know about those calls 3 March '07 report was issued. 4 you know third hand; correct? 4 A. I was told that he said that I bad 5 A. Correct. 5 committed fraud; I was going to be criminally 6 Q. Or secondhand? 6 prosecuted; I was dishonest. And there are 7 A. Correct. 7 several other things that may or may not rise to 8 Q. Well go through who you learned 8 that level. 9 that from, but I'm asking you a hypothetical. If 9 Q. All of those things said between 10 the record reflected that what the investors were 10 October of '06 and before March of '07? 11 told were simply the facts of the investigation, 11 A. I believe so. 12 that you were responsible, that it was what you 12 Q. And who do you know that from? 13 did and didn't do, do you have any quibble with 13 A. In- — industry -- industry people 14 that act by the general partner? 14 reaching out and contacting me. And there's -- 15 MR. BRECBER: Objection. 15 Q. Fraud - 16 Q. Or people acting on his behalf? 16 A. One clear e-mail. 17 MR. BRECHER: Objection. 17 Q. Hold on. 18 A If they viewed in their opinion that 18 A. Sure. 19 the responsibilities fell underneath the CFO, no, 19 Q. Fraud, criminally prosecuted, 20 I do not have an objection. 20 dishonest. What did you learn -- withdrawn. 21 Q. But you testified earlier that this 21 Going back to the period of 22 conduct did fall within the CFO's responsibility, 22 October 4th until November 7, it's your 23 didn't you? 23 testimony that you learned from people in the 24 A. f don't know. 24 industry that during those five months, you were 25 Q. The record will speak for itself. 25 told that Dan Zwim or others acting on behalf of 49 (Pages 190 -193) VERITEXT REPORTING COMPANY EFTA01124921 Page 194 Page 196 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 the partnership told people that you engaged in 2 if anything you learned from them and then to 3 fraud, that you would be criminally prosecuted, 3 see, at the end of this, whether there are any 4 and that you were dishonest? 4 people that maybe are not on this list that 5 A. You're pinning me down to dates -- 5 forever whatever reason you now realize ought to 6 Q. Yes, I am. That's what the 6 be on this list 7 discovery is about. 7 A. Okay. 8 A. I understand. 8 Q. I'm not going to ask about all of 9 — that occurred six years ago or 9 them because some of them I understand the 10 five years ago or four years ago. I can't be 10 situation. 11 absolutely certain what period it is. 11 Go to number 6, David Proshan. 12 Q. You mean it's possible that these 12 After you left in October of 2006, did you have 13 comments were made after March of '07? 13 any conversation with David Proshan in which he 14 A. Yes, certainly possible. 14 told you anything that Dan Zwim was telling 15 Q. It's not possible they were made 15 investors or anybody on behalf of the management 16 before October of '06? 16 company was telling the investors? 17 A. Correct. 17 A. I have never spoken David Proshan 18 Q. Because you had a stellar reputation 18 since the day I leR 19 up until then? 19 Q. Number 7, Patricia Peters, do you 20 A. Correct. 20 know Patricia Peters? 21 MR. LEVINE: Let's mark Exhibit 20. 21 A. Sure. She used to be Dan's 22 (Gruss Bxhibit 20, Plaintiffs 22 assistant 23 Initial Disclosures, marked for 23 Q. After you left, did you talk to 24 identification.) 24 Patricia Peters? 25 25 A. I believe there may have been a Page 195 Page 197 1 Gruss - CONFIDENTIAL I Gruss - CONFIDENTIAL 2 BY MR. LEVINE: 2 completely random hi, how's things e-mail flying 3 Q. Have you ever seen this document 3 around; but no, I have not spoken to Trish 4 before? 4 Peters. 5 A. I don't believe so. 5 Q. Did Patricia Peters ever give you 6 Q. Plaintiff's Gruss 20 is what's 6 about information of the alleged defamatory 7 called plaintiffs initial disclosures. Id's 7 statements made by Mr. Zwim? 8 dated and signed December 9, 2009, by your 8 A. No, no. 9 lawyer. It's a document required to be filed 9 Q. Do you have of information of what 10 under the federal rules. Okay, Mr. Gruss? 10 she knows Mr. Zwim said or did or anybody acting 11 A. Yes. 11 on his behalf said or did after October 4, 2006? 12 Q. If you see the second sentence, it 12 A. Via Trish? No. 13 says, "The following are the names, addresses, 13 Q. Number 11, Tim Wong, did you talk to 14 phone numbers of individuals likely to have 14 Timothy would know after October 4, 2006? 15 discoverable information along with the subjects IS A. I don't —1 don't believe i did. I 16 of that information that plaintiff may use to 16 think I may have run into him at it a restaurant 17 support his claims and defenses." 17 once, but having nothing to do — we did not — I 18 So this is a document, Mr. Gress, by 18 think I see your point. We did not discuss 19 which we're given notice of all of the people 19 anything to do with any of this defamation, 20 that you can identify to answer — in answer to 20 et cetera, nothing. 21 the question that I just asked you. 21 Q. Did you learn from Mr. Wong anything 22 A. Right. 22 that Dan Zwim said about you after October 4, 23 Q. Okay. 23 2006, or that anyone on behalf of the partnership 24 So what I'd like to do is go through 24 said about you? 25 some of the names here with you to fad out what 25 A. No. 50 (Pages 194 -197) VERITEXT REPORTING COMPANY EFTA01124922 Page 19$ Page 200 1 Gross - CONFIDENTIAL I Grass - CONFIDENTIAL 2 Q. Chris Suan, S-U-A-N, have you talked 2 (Record read.) 3 to Chris Suan since October 4, 2006? 3 A. Oh, of course. Of course, yes. 4 A. I don't believe I've spoken to him 4 Q. So if Dan Zwim were telling 5 since the day I left. 5 somebody that you would be personally 6 Q. Vasan Kesavan, have you spoken to 6 prosecuted — criminally prosecuted, you 7 him since October 4, 2006? 7 appreciate that he would be expressing his own 8 A. I have not. 8 opinion? 9 Q. Susan Chen, an employee of Zwim, 9 MR. BRECHER: Objection. 10 did you talk to her since October 4th? 10 A. Unless he's implying that he was 11 A. Yes, I have. 11 told that by someone else. 12 Q. How many times? 12 Q. Well, is it your understanding that 13 A. A handful. 13 a prosecutor's office could or would actually 14 Q. Is she somebody that you maintained 14 tell somebody like Dan Zwim what a grand jury 15 a relationship with? 15 was going to do before it did it? 16 A. She's someone who, if she called, 16 MR. BRECHER: Objection. 17 I'd pick up the phone. Put that it way. She's 17 A. I have no idea. I have no idea. 18 just such a nice woman. 18 Q. Have you ever heard that? 19 Q. Did she share with you any 19 A. That he -- 20 information about what Dan Zwim or people acting 20 Q. Do you actually believe that Dan 21 on behalf of the partnership were saying to 21 Zwim — that in what you're relying on what Dan 22 investors after October 4, 2006? 22 Zwim said, that he was doing anything other than 23 A. After October 4, 2006, yes. I don't 23 expressing an opinion if in fact it happened? 24 know what the cap on that date is. I don't know. 24 A. Oh, no, Put not. Yeah, yeah, yeah, 25 Q. What did she say to you? 25 Pm not saying he had the inside track. No, not Page 199 Page 201 1 Gruss - CONFIDENTIAL 1 Grass - CONFIDENTIAL 2 A. She said also that that he said 1 2 at all. 3 was going to be criminally prosecuted. 3 Q. You agree — 4 Q. She said that? 4 A. Not at all. 5 A. Yes. 5 Q. — you agree that to the extent you 6 Q. What else did she say? 6 are complaining about those comments, that Dan 7 A. Sort of the same — it centers 7 Zwim would have only been expressing his 8 around the same issues. 8 opinion? 9 Q. What are the kinds of things she 9 A. And the opinion of the company. 10 said? 10 Q. Which is -- 11 A. She said that — she may have just 11 A. And the GP. 12 said criminally prosecuted. I don't know. I was 12 Q. — what? 13 responsible for everything and, you know, he had 13 A. And acting in his capacity as GP. 14 no idea what was going on, et cetera. And Pm 14 Q. Right. 15 not saying she heard it only from Dan or only 15 A. I don't know if you're making a 16 from David. I don't know. 16 distinction. Fm just - 17 Q. Well, do you have any idea who she 17 Q. I'm not — 18 heard it from? 18 (Discussion off the record.) 19 A. I don't recall if she told me 19 Q. But am I correct that wearing all 20 specifically. 20 four hats — 2I Q. Do you understand that the decision 21 A. Yes. 22 about criminal prosecution is not one that Dan 22 Q. -- that you alluded to earlier, that 23 Zwim controls? 23 if Dan Zwim did use the exact words that you're 24 A. Say again. 24 talking about, that you would agree that he was 25 MR. LEVINE: Read it back. 25 only expressing an opinion? 51 (Pages 198 - 201) VERITEXT REPORTING COMPANY EFTA01124923 Page 202 •age 204 1 Caws - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 MR. BRECHER: Objection. 2 investigation determined. I may be splitting 3 A. I don't — !don't know what else he 3 hairs. Can you — 4 would be expressing because, like youYe 4 Q. Well, I'll ask the large question 5 saying -- 5 and then you'll have the large question. 6 Q. I was going to ask 6 Do I understand correctly that there 7 A. Yeah, I — 7 are basically two different kinds of defamatory 8 Q. - frankly, did you identify a statements that you complain about in this case. 9 anything else that he would be expressing if he 9 One are statements about your conduct that are 10 said that other than his opinion? 10 the product of the investigations, and two are 11 A. He's not — he is not a district 11 statements of opinion by Dan Zwirn, in 12 attorney. 12 particular, and maybe others, that you were going 13 Q. And if in fact Mr. Zwim actually 13 to be criminally prosecuted and you had engaged 14 said to somebody that you committed fraud, 14 in fraud? 15 wouldn't that be the same kind of opinion as 15 MR. BRECHER: Objection. 16 being the one that would say that you would be 16 A. I don't think that's inaccurate. 17 criminally prosecuted? 17 Q. In other words, that is what you're 18 MR. BRECHER: Objection. 18 relying on here? 19 A. It would my opinion, it would 19 MR. BRECHER: Objection. 20 certainly be in the same family, yes. 20 A. I believe so. 21 Q. And would a third party in that 21 Q. Is there any other kind of statement 22 family be the words if he said that you were 22 that you are relying on in your claim of 23 dishonest? 23 defamation? 24 A. No, I think that's diffcvsnt. 24 A. Is there any -- Fyn going — 25 Q. How is that different? Q. Let's break it down. Page 203 Page 205 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. Well, I don't think you need — I 2 A. I'm actually confused about the 3 don't think you need a district attorney to say 3 whole last time — 4 someone's dishonest or not. But it may or may 4 Q. Mr. Gruss, Let's break this down. 5 not have been his opinion, if that's where you're 5 The claim for defamation relies on -- withdrawn. 6 going. 6 The claim for defamation is based on 7 Q. If -- what I'm trying to identify 7 statements made by Dan Zwim and others about you 8 for purposes of this case is for you to separate 8 after October 4, 2006; correct? 9 the kinds of statements that you consider 9 A. Yes. 10 defamatory. 10 Q. And you contend it was defamatory 11 A. Okay. 11 for Mr. Zwim and others to report what you did 12 Q. And there are certain statements I 12 with respect to the matters that Gibson and Dunn 13 take it that you consider defamatory that related 13 investigated and Shulte investigated and — 14 to what the investigation determined; correct? 14 A. Incorrect. 15 A. Yes. 15 Q. You don't consider that to be 16 MR. BRECHEIL Objection. 16 defamatory? 17 Q. And — 17 A. That's not what you asked. 18 MR. BRECHER: Please note my 18 Q. Do you contend that to the extent 19 objection. 19 Mr. Zwim and others acting on behalf of the 20 Q. And — yes? Do I have an answer? 20 management committee reported the results of 21 A. Can you repeat the question? 21 either Shulte Roth's investigation or Gibson and 22 Q. There are certain statements that 22 Dunn's investigation to the investors and the 23 you consider defamatory that related to what the 23 investing community, that to the extent their 24 investigation determined; correct? 24 report was confined to what was found in the 25 A. Not necessarily what the 25 investigation, that that report will not be 52 (Pages 202 - 205) VERITEXT REPORTING COMPANY EFTA01124924 ►sae 206 Page 208 1 Gruss - CONFIDENTIAL 1 Grass - CONFIDENTIAL 2 defamatory as to you? 2 Q. Well, are you claiming here injury 3 MR. B1tECHER: Objection. 3 by virtue of what was in the report about what 4 A. If it was handled prudently, the 4 the report found -- 5 investigation, I would not have an issue with it. 5 A. There are aspects of that. 6 Q. Are you the judge of whether it's 6 Q. — and the aspects of the report 7 handled prudently? 7 that are defamatory of you because you don't 8 MR. BEECHER: Objection. 8 agree with the conclusions of the report? 9 A. I don't know. 9 A. Exactly. 10 Q. Are you — is it you agree, do 10 Q. Is there any other position other II you not, that Dan Zwim and others acting on II than you disagree with the conclusions of the 12 behalf of the management company properly 12 report for which you claim is defamatory in the 13 reported the results of the investigation to the 13 March letter? 14 investors and the investing public? 14 A. If the conclusions of the report I 15 A. If the results of the investigation 15 disagree with, then the way the investor letter 16 were what was reported in that investor letter, 16 was delivered I certainly disagree with. 17 no, I don't disagree. 17 Q. What you disagree with is ultimately 18 Q. You don't disagree? 18 that they held you responsible and not somebody 19 A. No, I don't 19 else? 20 Q. So they're entitled to do that? 20 A. No, I did not say that 21 A. If the results were exactly what 21 Q. What you disagree with is the fact 22 they — and they thought those results were 22 that they held you responsible; isn't that right? 23 accurate, they do not have an obligation to do 23 A. Yes. 24 it, like I said earlier, but if they did it ... 24 Q. What you're complaining about in the 25 Q. What does the shrug mean? Shrug 25 investor report was that the law firm and the P&P 202 Page 209 1 Gruss - CONFIDENTIAL 1 Gruss-CONFIDENTIAL 2 means it's acceptable and you understand 2 accounting fmn ultimately concluded that you 3 A. Yes. 3 were responsible for some of the conduct 4 Q. — they had an obligation to do it? 4 described there and not somebody else? 5 A. No. Earlier I said I can't opine 5 A. I hadn't thought about it that 6 whether or not they had a legal obligation to do 6 deeply. 7 it. Right? I said that they -- they didn't have 7 Q. Even if you thought about it 8 a legal obligation to do it. 8 casually, what you're complaining about is that 9 Q. You also said, then, that you didn't 9 they blamed this on you and not somebody else? 10 consider it inappropriate for them to do it? 10 A. Who's "they"? II A. Correct, correct. 11 Q. The people that issued the report. 12 Q. And if they did it, you didn't 12 A. Well, the people that issued the 13 believe it was being made with an intent to harm 13 investor letter, which is the company. 14 you? 14 Q. I guess what I'm getting — I want 15 A. The statements in the investor 15 to understand, Mr. Gruss, what your defamatory 16 letter? 16 case is based on. 17 Q. Right. 17 A. Right. 18 A. Correct. 18 Q. Just going to where I started here, 19 Q. If they did it and it was based on 19 apart from the investor report, apart from the 20 what the report actually found, then the 20 facts that are tcyorted in the investor report 21 statements themselves wouldn't have even been 21 and the positions that are taken in the investor 22 false, isn't that right, because it would have 22 report, are you also complaining that statements 23 been the product of their investigation? 23 were made about you to the effect that you were 24 MR. BRECHER: Objection. 24 going to be criminally prosecuted and you were 25 A. I - I don't know. !don't know. 25 dishonest? 53 (Pages 206 - 209) VERITEXT REPORTING COMPANY EFTA01124925 Page 210 Page212 Gruss - CONFIDENTIAL 1 Grass CONFIDENTIAL 2 A. Uh-huh. 2 thought that they were owed more money than they 3 Q. Yes? 3 were under their contract. 4 A. Yes. 4 Q. During any of the conversations that 5 Q. And those are statements which you 5 you had with Susan Chen after you left, did she 6 understand and recognize are statements of 6 tell you anything about what Dan Zwim or others 7 opinion of the people that made them; correct? 7 said to investors about why you left? 8 MR. BRFCHER: Objection. 8 A. Not to investors. She didn't have 9 A. No. 9 knowledge of - 10 Q. What else are they? I0 Q. What did she tell you about what Dan II A I don't know. II Zwim or others said about you and why you left, 12 Q. Well, how would you describe them if 12 anybody other than investors? 13 you wouldn't agree that they're opinions? 13 A. It was the same —it was the same 14 A I believe earlier I had said that 14 sort of issues that we discussed earlier. 15 one of the -- one of the ways is of course 15 Q. Fraud -- 16 opinion. I also said that he is not a district 16 A. Fraud, criminally prosecuted, yes. 17 attorney and neither is anybody else, to my 17 Q. Dishonest? 18 knowledge, at the firm. That doesn't mean there 18 A. Dishonest, yes. 19 aren't any other ways to go about it and ways to 19 Q. And to whom did she tell you that 20 look at it in between those two. I don't know. 20 they had said that? 21 Q. Well, as you sit here today, can you 2l A. I don't remember if she specifically 22 think of any other way that you would describe 22 said anybody, whether it was Dan or — it was the 23 it? 23 always the same 24 A No, no. 24 Q. Well, tell me the gist of the 25 Q. Is there any other kind of statement 25 conversation with Susan Chen. What did she say Page 211 Page 213 1 GAMS - CONFIDENTIAL 1 Gross - CONFIDENTIAL 2 that you're complaining of besides those two 2 to you; what did you say to her? 3 kinds of statements? By "kinds of statement,• I 3 A. That kind of was the gist of what I 4 mean the whole world of statements based on the 4 just said. It was -- she just brought it up -- 5 investigation report and the two comments that 5 she just brought up, you know, the fact that she 6 you were going to be criminally prosecuted and 6 was being shorted and blah, blab, blah. And I 7 dishonest — criminally prosecuted and engaged in 7 said that's okay. 8 fraud. 8 You have to understand something, 9 A. There would I don't believe 9 pride got in the way of me going around to 10 there's anything else, if that helps. 10 everyone and saying Hey, did you say X, Y and Z. 11 MR. LEVINE: Let's take a break. 11 They came to me. I'm sorry. 12 (Recess from the record.) 12 She said to me that — 13 BY MR. LEVINE: 13 Q. Pride is the reason you brought this 14 Q. So after October 4,2006, how many 14 lawsuit? 15 conversations did you have with Susan Chen? 15 A. No, financial — financial — and he 16 A. I had a few conversations with her 16 they owe me money. That's the reason I brought 17 about how she's doing. She was at Zwirn for a 17 the lawsuit. 18 long time after 1 left. And then 1 received a 18 So what she said to me was that she 19 call out of the blue from an attorney in Houston 19 was suing them. So she went through why she was 20 who is representing her and another individual in 20 suing them, and would I be willing to testify for 21 a lawsuit against the company. 21 her in her lawsuit. 22 Q. Who was the other individual? 22 Q. And what did you say about that? 23 A Todd Dittman. 23 A. I said I don't believe so, Cauley 24 Q. And what was that lawsuit about? 24 (Ph]. 25 A. It was about wages. Somehow they 25 Q. Was it in that conversation or 54 (Pages 210 - 213) VERITEXT REPORTING COMPANY EFTA01124926 Page 214 Page 216 Gross - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 conversations that you asked her what he had been 2 stating a fact. 3 saying about you? 3 Q. Stating a fact that you won't call 4 A. No. She — she brought it up. 4 her because of the circumstance that I just asked 5 Q In that — 5 you? 6 A. That these are the kind of things 6 A. That's not — that's not inaccurate, 7 that she heard around the office and that she 7 yes. 8 would be willing to testify to those things if I 8 Q. You love -- lawyers love double 9 call her. 9 negatives. Tve never had a witness that loved 10 Q. So this was a conversation she 10 them. 11 initiated — 11 Todd Dittman, same kind of 12 A. Yes. 12 conversation as Susan Chen? 13 Q. — in which you had told her you 13 A. I don't recall if I ever had a 14 were thinking of suing him, of Dan and the 14 conversation with Todd Dittman]; yeah. 15 company? 15 Q. Ray Chan? 16 A. I don't recall — I don't recall if 16 A. Yes. 17 I told her. 17 Q. Who is Ray Chan.? 18 Q. Well, one of your earlier 18 A. Ray Chan was in -- Ray was a deal 19 conversations — 19 guy working in the special assets group. Smart 20 A. It depends on the time. 20 guy. Good guy. Very good guy. 21 Q. In one of your earlier 21 Q. Did you talk to him after you left? 22 conversations, had you told Susan Chen that you 22 A. Yes, I've spoken to him casually. 23 were contemplating a lawsuit against Zwim? 23 Tye had lunch with him. Tye had a drink with 24 A. Prior to the — when she called me 24 him, definitely. 25 about her lawsuit? 25 Q. Has he been introduced to your Page215 Page 217 1 GrusS - CONFIDENTIAL 1 Goss - CONFIDENTIAL 2 Q. Yes. 2 lawyers? 3 A. No, I don't believe so. 3 A. No. 4 Q. So it's then in connection with her 4 Q. Have you given your lawyers his 5 lawsuit conversation that you asked her what he 5 name? 6 was saying about you or she offered it? 6 A. Yes. He phoned me. I believe the 7 A. I said I didn't ask her, I don't 7 eompanys lawyers contacted him. He phoned me 8 think. It would be she offered. 8 thinking that I contacted him and I said it 9 Q. So it's not a conversation that took 9 wasn't me; it must have been their lawyers. This 10 place before she started to talk to you about the 10 was recently. 11 lawsuit that she wanted to bring? 11 Q. But this was filed in December 2009. 12 A. That's correct. 12 A. Yes. 13 Q. And she told you that if you helped 13 Q. What has Mr. Chan said to you about 14 her, she would help you? 14 statements that Mr. Zwim made pertaining to you? 15 A. Pretty much. 15 A. Same issues -- 16 I won't be calling Susan Chen. 16 Q. And -- 17 Q. Todd Dittman — 17 A. Dan said that Pm going to be 18 MR. SIFFERT: Let's just pin that 18 criminally prosecuted. 19 down. 19 Q. Anything else? 20 Q. You won't be calling Sunni Chen as a 20 A. I don't know. 21 witness; is that what you're saying? 21 Q. At the time the statements were 22 A. Yes. 22 made, was Mr. Chan an employee of Zwim? 23 Q. Because you consider her inherently 23 A. In the beginning, yes. 24 unreliable? 24 Q. At the time that the statements were 25 A. No, that's your words. I'm just 25 made that he heard, was Mr. Chan employed at the 55 (Pages 214 - 217) VER1TEXT REPORTING COMPANY EFTA01124927 Page 218 Page 220 I Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 management company? 2 2006? 3 A. The first time he told me, yes. 3 A. Yes. 4 Q. And every time that he told you? 4 Q. And have you met with Glenn Dubin? 5 A. No, no. 5 A. Yes. 6 Q. Did he tell you that he had 6 Q. Where did you meet with Glenn Dubin? 7 conversations with Dan Zwim after he left the 7 A. At the restaurant 8 1/2 at Nine West 8 management company? 8 57th. 9 A. No, no. 9 Q. Did you have lunch with Glenn Dubin? 10 Q. That's what I'm asking. 10 A. No. It turned into dinner. 11 A. Oh. 11 Q. Who was present? 12 Q. Was Mr. Chan telling you of 12 A. Myself and Glenn. 13 conversations that he had with Dan Zwim while he 13 Q. When did it take place? 14 was employed at the management company? 14 A. Through two months ago, three 15 A. Yes. 15 months ago. 16 Q. But your testimony is that after Ray 16 Q. After December 9, 2009? 17 Chan left the employ, he met with you and 17 A. What's the distinction? I believe 18 repeated telling you what had been said at an 18 so. 19 earlier time? 19 Q. When this was filed. 20 A. Yes. He told me these things more 20 A. Yes, definitely after. 21 than once. 21 Q. What did you and Mr. Dubin talk 22 Q. What he told you was basically the 22 about? 23 same thing? 23 A. He called me out of the blue -- he 24 A. Yes. 24 just consulted me out of the blue asking how I 25 Q. And did he tell you that — what did 25 was and if NI like to get together fora drink. Page 219 Page 721 1 Onns - CONFIDENTIAL Gruss - CONFIDENTIAL 2 he tell you Mr. Zwim said at the management 2 Q. Before that -- 3 company about you? 3 A. And I said to him you obviously want 4 A. That I was going to be criminally 4 something from me, sure, when did you want to 5 prosecuted, that I had committed fraud, I was 5 meet. 6 dishonest And I don't know what ... 6 Q. Before that, had Glenn Dubin ever 7 Q. What about Rob Flowers? 7 had a conversation with you? 8 A. He was Ray's partner. 8 A. After my departure? 9 Q. Was he also employed at the 9 Q. Yes. 10 management company? 10 A. I don't believe so. I don't believe 11 A. Yes. 11 lever met with him or spoken to him. 12 Q. Did you have separate conversations 12 Q. What was the nature of your contact 13 with him? 13 with him in 2006? Did you have any contact with 14 A. Yes. Also a very good guy. 14 him? 15 Q. What did Mr. Flowers tell you about 15 A. Prior to my leaving? Yes, oh. 16 what Dan Zwim said pertaining to you? 16 Sure. 17 A. Really echoing the same — it's the 17 Q. What — 18 same theme. 18 A. Walt - 19 Q. Do you recall if all of these 19 Q. What was the nature -- 20 conversations that you learned about were 20 A. What's the date -- 21 conversations and statements made by Dan Zwim 21 Q. Before October 4, 2006. 22 before March of '07 or after March of '07? 22 A. Yes. 23 A. I have no idea. I don't know. 23 Q. Was Mr. Budin someone that you had 24 Q. Glenn Dubin, have you ever had a 24 regular contact with? 25 conversation with Glenn Dubin since October 4, 25 A. Yes. 56 (Pages 218 - 221) VERITEXT REPORTING COMPANY EFTA01124928 Pay an Page 224 Gruss - CONFIDENTIAL Gruss - CONFIDENTIAL 2 Q. And what was the nature of that 2 at dinner a few months ago? 3 contact? 3 A. I believe it was. 4 A. From the time I was employed 4 Q. And did you tell Mr. Budin that you 5 originally till the time I left, I had a lot of 5 had filed this complaint? 6 contact with Glenn. 6 A. He knew. 7 Q. And did you understand during that 7 Q. Did you talk to him about the 8 time that Mr. Budin and Mr. Zwirn had a good 8 complaint? 9 relationship? 9 A. In — in — sort of in passing. 10 A. At one point they had a good 10 Q. Did you give him a copy of it? 11 relationship. 11 A. No. 12 Q. And when did that relationship 12 Did you — 13 change? 13 A. No. 14 A. It changed -- it changed around the 14 Q. Did you tell him who your lawyers 15 time where Dan started to forget everything that 15 were? 16 Glenn had done for him over the years. So 2004. 16 A. I don't think so. 17 Q. And is what you just said what 17 Q. Did you tell him why you were suing 18 Mr. Budin has said to you — 18 Dan? 19 A. No. 19 A. He knew why I was suing Dan. 20 Q. — as to why he stopped — 20 Did you tell him why you were suing 21 A. No, that's what Fm saying to you. 21 Dan? 22 Q Is that something that Mr. Zwim has 22 A. I don't — I don't Mini( I did. 23 said to you? 23 Q. Did you tell him what you were suing 24 A. No, but it's something that Dan and 24 Dan about? 25 I have discussed. 25 A. I think he blew, but we didn't Page 223 Page 225 1 Gruss - CONFIDENT IAL Gruss - CONFIDENT IAL 2 Q. And in what way did the relationship 2 have — we did not have discussions about the 3 change? 3 lawsuit, et cetera. 4 A. Dan — Dan began to begrudge, I 4 Q. What did you talk about? 5 think is the word, Glenn for still owning a piece 5 A. We talked about his family, my 6 of the management company even though Glenn had 6 family. Glenn and I were kind of close. 7 been the one responsible for raising essentially 7 Q. You testified that when he called 8 the first S3 billion for the guy. 8 you, he told you that he wanted to get together 9 Q. And who told you that? 9 withyou? 10 A. What? 10 A. Yes. 11 Q. That he begrudged — 11 Q. And you asked him if — you asked 12 A. I'm telling you, yeah. And Dan and 12 him if he wanted something from you? 13 I discussed it. 13 A- Yes. 14 Q. So go to — 14 Q. And he said yes? 15 A. I often told Dan I don't understand 15 A. Yes. 16 why you don't show this guy a little bit more 16 Q. So what did you learn at the 17 deference, he raised you all this money. 17 beginning Mr. Budin wanted from you? 18 Q. You actually said that to Dan Zwirn 18 A. He wanted to know if in addition to 19 before October 4, 2006? 19 everything in the investor letter, if there was 20 A. Absolutely. 20 anything else at Zwim, anything else out there 21 Q. And what did Dan say? 21 untoward. And I said, first of all, I wasn't, 22 A. He always used to say I'm making him 22 but I have no idea what you mean. 23 so much money. 23 He wanted me to have a conversation 24 Q. Now, after October 4, 2006, is the 24 with one of Dan's investors who was suing Dan. 25 only conversation that you had with Glenn Dubin 25 He just wanted me to have a conversation with him 57 (Pages 222 - 225) VERITEXT REPORTING COMPANY EFTA01124929 Page 276 Page 228 1 Oruss - CONFIDENTIAL 1 Grass - CONFIDENTIAL 2 telling him that there's nothing else there, just 2 Mr. Budin was in litigation with Dan? 3 drop it. I don't know. 3 A. No. 4 Q. Which investor? 4 Q. Did you learn otherwise that 5 A. Jeffrey Epstein. 5 Mr. Budin was in litigation with Dan? 6 Q. Did Mr. Budin express support for 6 A. I had heard that he was in 7 Mr. Epstein's case? 7 litigation, but I didn't think him personally. I 8 A. I don't -- I don't think he -- he 8 thought something to do with Corbitt. 9 didn't know -- I don't think he knew the 9 Q. What do you understand Corbitt was? 10 specifies of his case because he mentioned to 10 A. It was — it waS, I believe, a 11 me -- he mentioned to me how Mr. Epstein 11 fund-to-funds underneath the Dubin and Zwirn 12 redeemed -- was told that he couldn't redeem, and 12 umbrella. It was around for a long time. 13 Glenn said he thinks that's not true. And I 13 Q. Did you understand — did you know 14 said, Well, you know, I have no idea, but — I 14 before October 4, 2006, that Dan Zwirn was an 15 don't know. 15 investor in that fund-to-funds? 16 So he said to me, Would you mind 16 A. Yes. 17 telling -- would you mind speaking to Jeffery and 17 Q. Did you know before the dinner with 18 just telling Jeffery just to get on with life, 18 Dubin that in fact Dubin through that 19 there's nothing to sue Zwim about. 19 fwd-to-funds had refused to pay Dan Zwim money 20 Q. Why would he be asking you to do 20 that was owed? 21 that? 21 A. No, I had no idea. 22 A. He's extremely close to Jeffrey 22 Q. Did you know that because of that 23 Epstein. 23 refusal to pay, there was a lawsuit about it? 24 Q. Why would Mr. -- why did Mr. Budin 24 k Yeah, yeah. 25 tell you that he wanted you to have that 25 Q. So then you knew that he bad refused Page 227 Page 229 1 Grins - CONFIDENTIAL 1 Gross - CONFIDENTIAL 2 conversation? 2 to pay? 3 MR. BRECHER: Objection. 3 A. No, you asked did I know before 4 A. I don't — 4 then. 5 Q. What did he say to you was the 5 Q. Did you 6 reason that he wanted you to have that 6 A. I thought that's what you said. 7 conversation? 7 Q. Did you know that there was a 8 A. He didn't really say I think 8 lawsuit between Dubin and Zwim over the Corbitt 9 the -- I don't know. 9 investment? 10 Q. What else did he want from you? 10 A. Yes, yes. 11 A. I was a partner with Glenn. Maybe 11 Q. Did Dubin tell you about that? 12 he thought that I was objective. I don't know. 12 A. No, he did not tell me. 13 Q. What else did Mr. Budin want from 13 Q. Did you talk about that at all at 14 you, was the question? 14 lunch — dinner? 15 A. He said to me that -- he said to me, 15 A. No. 16 I can't believe it, Dan Pd me as bad as he Pd 16 Q. Was the Epstein lawsuit filed by 17 you. And I said, Somehow I doubt that's the 17 that time? 18 case, Glenn. 18 A. I have no idea. I don't know if 19 Q. In what way did you understand that 19 there even was an Epstein lawsuit. 20 Dan — that Dan made it difficult for Mr. Budin 20 Q. Did you talk to Mr. Epstein — 21 or Pd you? 21 A. Un-un. 22 A. For Mr. Budin, I don't know. I 22 Q. -- at his request? 23 didn't get into — I didn't get into why he 23 A. Un-un. 24 thought that. 24 MR. BRECHER: You have to answer 25 Q. Did you learn from Mr. Budin that 25 audibly. 58 (Pages 226 - 229) VERITEXT REPORTING COMPANY EFTA01124930 Page 230 Page 232 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. rm sorry. No. 2 have any conversations with him? 3 Q. Had you ever met Mr. Epstein? 3 A. No, I don't believe so. 4 A. No. 4 Q. Mike Fuller? 5 Q. Did you know who Mr. Epstein was? 5 A. No. 6 A. Insofar as he was an early investor, 6 Q. So these are investors; correct? 7 he was close with Glenn and that he was wrapped 7 A. Those are investors. 8 up with his own issues down in Florida, that's 8 Q. You don't know what these investors 9 all I 'mow. 9 will say as to what Dan Zwirn said to them? 10 Q. Did you ever ask Mr. Budin if he 10 A. Exactly. 11 could put you together with Mr. Epstein to find 11 Q. You've never talked to them? 12 out what Mr. Epstein would have been told in one 12 A. I've never talked to them. 13 of those investor calls? 13 Q. And you've never talked to anybody 14 A. Never. 14 that's talked to them? 15 Q. Did you ask Mr. Budin what happened 15 A. I shouldn't say that. Earlier 16 in one of the investor calls? 16 said that Dan definitely put me in touch with one 17 A. Never. 17 or two of his investors right after I left. 18 Q. Did you discuss about that at 18 don't recall -- I had earlier said I don't recall 19 dinner? 19 who it is. I don't know if it was one of those. 20 A. No. 20 I did not have any conversations 21 Q. So did you have any conversation at 21 about this lawsuit with Mike Fuller, Dave Small, 22 dinner with Glenn Dubin about what was allegedly 22 Dave Matter. 23 defamatory -- 23 Q. The question is, did you have any 24 A. No. 24 conversation with any of the investors, Item 24, 25 Q. — that Mr. Zwim said? 25 25, 26, 27, 28, 29 or 30, did you talk to any of Page 231 Page233 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. No. 2 those investors about what Dan Zwim said to any 3 Q. Is there anything else Mr. Dubin 3 of them, if anything, immediately after your 4 wanted from you at dinner? 4 departure in October 2006? 5 A. No. He just wanted me to talk to -- 5 A. No. 6 to Jeffery. 6 Q. Do you have any idea as you sit here 7 Q. And you — 7 today what any of those eight investors were told 8 A. I referred it to Ethan. Ethan told 8 by Dan Zwim or anybody speaking on behalf of Dan 9 me it's not a good idea — 9 Zwim? 10 MR. BRECHER: Well, don't say what 10 A. Individually, no. 11 we discussed. 11 Q. Go to the next page. Jeffery 12 TILE WITNESS: Sorry. 12 Epstein, Brian O'Neal, Byline Wagner, Matt Stone, 13 MR. BRECHER: I'd ask that be 13 those are four other investors. Is there any of 14 stricken from the record. 14 those investors that you have discussed what Dan 15 THE WITNESS: Strike that. 15 Zwim said to them after you left in October of 16 MR. LEVINE: Strike that. 16 2006? 17 A. No. he did not ask me anything else. 17 A. No. 18 Q. What about Henry Swieca? 18 Q. Do you have any idea as you sit here 19 A. Swieca. 19 today what any of these 12 investors would say 20 Q. Did you talk to Henry Sweica -- 20 about what was said to them by Dan Zwim or 21 A. No. 21 anyone acting on behalf of Dan Zwim as to the 22 Q. — about any statements made by Dan 22 circumstances surrounding your departure? 23 Zwim? 23 A. Fm sure they would say exactly what 24 A. No. 24 Dan said to them. 25 Q. Rafael Astmc, A-S-T-R-U-C, did you 25 Q. Apart from what you're assuming, did 59 (Pages 230 - 233) VERITEXT REPORTING COMPANY EFTA01124931 Page 234 Page 236 1 Gruss - CONFIDENTIAL 1 Owes - CONFIDENTIAL 2 you have any mason to believe that any of those 2 A. No. 3 investors were told anything other than what 3 Q. DidNed Qffitt and Offitt Hall 4 Shulte Roth or Gibson Dunn told Dan to say? 4 invest? 5 A. I don't know. 5 A. I believe they were an adviser to 6 Q. Are there any other investors whose 6 investors. 7 names you know? 7 Q. That would have been after the SEC 8 A. Yes. 8 started the investigation? 9 Q. Did you talk to any of them? 9 A. Correct. 10 A. No, except for what I said earlier, 10 Q. That would have been during your 11 Eric Felton, Ashok Chacra and this other party 11 testimony? 12 that I — 12 A. Correct 13 Q. Did Eric Felton -- or let's take 13 Q. Is there any other event other than 14 them separately. 14 that circumstance in which you learned from an 15 Did you talk to Eric Felton about 15 investor what actually Dan Zwim or someone 16 what Dan Zwim said to him after you left in 16 acting on behalf ofDan Zwim said about you? 17 October 2006? 17 A. Up to this point, no. 18 A. No. 18 Q. Did you ask any lawyer to do that 19 Q. Did you talk to Ashok Cheers about 19 for you? 20 what Dan Zwim said to him after you left in 20 MR. BRECHER: Objection. 21 October of 2006? 21 I instruct you not to answer any 22 A. No. 22 discussion with any counsel. 23 Q. Is there any investor as you sit 23 Q. Do you know whether any investor has 24 here today that you spoke to after you left in 24 been contacted on your behalf to learn what I 25 October 2006 in which you learned what Mr. Zwim 25 just asked you? Page 235 Page 237 1 Gruss - CONFIDENTIAL I Gruss - CONFIDENTIAL 2 or someone acting on his behalf said about the 2 A. I don't know. 3 circumstances of your departure? 3 Q. Is there any banker, any person 4 A. I earn recall. 4 working for a bank that was engaged in financial S Q. It's pretty important Have you 5 transactions with the management company that you 6 wracked your brain? 6 spoke to who has recited to you wind Dan Zwim 7 A. Answer the question again. 7 allegedly said to them about the circumstances 8 Q. Pm asking; you're answering. 8 under which you left? 9 A. Right 9 A. Yes. 10 Q. Is there any investor in all of the 10 Q. Who? 11 time since you left that you actually picked up ll A. Michael Hopson. 12 the phone, asked them what Dan Zwim said to you 12 Q. Where does he work? 13 and learned with your own ears what was said 13 A. He worked at Natixis. 14 about you? 14 Q. What's Natixis? 15 A. I don't believe so. 15 A. It's a French government-controlled 16 Q. Did anyone suggest that before you 16 private bank hat in the US. Theyre based in 17 filed a federal action for defamation claiming 17 the US. 18 that Dan Zwirn and others acting on his behalf 18 Q. What was their relationship? 19 acted improperly in talking to investors, that 19 A. They were the investment banker for 20 maybe you ought to find out whether that 20 all ofour — not all oL our but our largest or 21 happened? 21 his largest CLO. 22 A. The SEC showed me an e-mail from 22 Q. What's a CLO? 23 Offitt Hall, Ned Offitt, where it is recounting a 23 A. Collateralized loan obligation. 24 direct conversation with Dan. 24 Q. What are collateralized loan 25 Q. Anything other than Ned Offitt? 25 obligations? 60 (Pages 234 - 237) VERITEXT REPORTING COMPANY n4_ nen earn •• a • e• ens% n en^ EFTA01124932 Parma Page 240 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. They are similar to CMBS where you 2 Q. So the onshore fund had CLOs on its 3 package a bunch of originated assets, or it could 3 books? 4 be secondary assets, you pool them together and 4 A. Well, it was a -- careful, because 5 then you sell trenches. Although in this 5 you're not buying CLOs. You're issuing CLOs. 6 respect, they weren't publicly traded. So 6 And both the onshore fund had one and the 7 there's no secondary market for these assets. 7 offshore fund had one. 8 Q. What was the relationship of CDOs to 8 Q. So both the onshore fund and the 9 D.B. Zwim? 9 offshore hind had equity derived from the CLO as 10 A. We didn't have CDOs. It was a CLO. 10 it related to its own fund? 11 Q. I misspoke. 11 A. Exactly. 12 A. Oh. 12 Q. And the equity of each of the CLOs 13 Q. What was the relationship of CLOs to 13 had to be kept separate as between the funds? 14 D.B. Zwim & Co.? 14 A. Yes. 15 A. It was a funding vehicle for some of 15 Q. And what did Mr. Hopson tell you 16 the private assets, the private corporate 16 that Mr. Zwim said? 17 originated assets. 17 A. Again, consistent theme. Consistent 18 Q. Tell me what you mean by that. 18 theme. 19 A. We set up a vehicle and I believe -- 19 Q. When did the conversation take 20 I believe we had two-to-one leverage. So every 20 place? 21 dollar of equity I put in, the CLO would give you 21 A. I've spoken to Mike scores and 22 a dollar of debt So you were able to go out and 22 scores and scores of times. That did not come up 23 buy a $10 million loan by only putting up 23 scores and scores and scores of times, but I've 24 $5 million in equity. 24 spoken to him so often since I left. 25 Once you pooled those together, you 25 Q. What kind of relationship do you Page 239 Page 241 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 then sold those — all of the debt offend you 2 have with him? Is he a good friend? 3 retain the equity on your imbalance sheet. And 3 A. I wouldn't say he's a good friend. 4 Natixis was the banker responsible for placing 4 He's a very good guy. He's a very good guy who S the debt. 5 remains in touch with me. 6 Q. And was that CLO vehicle used by the 6 Q. Scores and scores is very difficult 7 onshore fund and the offshore fund as part of 7 What do you mean by that? 8 their investment strategy? 8 A. Once a month. 9 A. Yes, both. 9 Q. And when you say "consistent theme," 10 Q. And was that vehicle used to 10 what do you mean by that? 11 increase the liquidity of the onshore fund and 11 A. Just that Dan said -- you know, 12 the offshore fund? 12 originally had said or after the fact said that 13 A. Most definitely. 13 was, you know, responsible for all this stuff and 14 Q. Whose idea was it to develop that 14 I would be -- was dishonest and committed fraud. 15 source of liquidity? 15 It's the same theme. Apparently he echoed the 16 A. I don't recall how it originally -- 16 same thing to a lot of people. 17 but it must have been Dan. 17 Q. Did he say — did Mr. Hopson say 18 Q. Was the -- did the CLO then become 18 that Dan had said that in Dan's opinion, you 19 an asset investment of the particular fund? 19 would be criminally prosecuted? 20 A. The equity, correct. The equity 20 A. I don't know if that's — if those 21 was. 21 were his exact words. I don't know. 22 Q. The equity was unique and separate 22 Q. So Pm trying to understand exactly 23 to the particular fund? 23 what parts of the theme Mr. Hopson has told you 24 A. Yes, exactly. Well, the equity in 24 Dan said. If you don't have a memory that he 25 the CLO was an asset of the fund- 25 told you about Dan expressing the view that you 61 (Pages 238 - 241) VER1TEXT REPORTING COMPANY EFTA01124933 Page 242 Page 244 1 Crust - CONFIDENTIAL Gross - CONFIDENTIAL 2 would be criminally prosecuted, I'd like to know 2 Q. Well, did he express the view to you 3 what you do remember Mr. Hopson told you. 3 that he thought less of you because of what Dan 4 A. 1 don't -- I don't remember 4 said? 5 specifically. I don't remember specifically. 5 A. We never — we never discussed — 6 Q. So as you sit here today, it is 6 Q. Do you think if he felt less of you 7 possible that Dan Zwim only told Mr. Hopson 7 based on what Dan Zwim said, that he would 8 about the reports that were issued and not of 8 continue to see you and be with you? 9 these other comments that were Dan's opinion? 9 A. Possibly. 10 A. No, 1 believe it was — I believe 10 Q. Has he said that? 11 there was commentary behind those reports, behind 11 A. No,' said -- 12 the investment memos. 12 Q. Has he said to you notwithstanding 13 Q. And have you made an effort to do 13 all these terrible things Dan Zwim said, you're 14 business with Mr. Natixis -- 14 still my best buddy? 15 A. Yes, yes. 15 A. No, because he's not. 16 Q. — with Mr. Hopson at Natixis? 16 Q. But can you tell me in any way, 17 A. Yes. 17 shape or form that Mr. Hopson been unable to help 18 Q. And have you? 18 you in business in any way because of what Dan '19 A. No. 19 Zwim said to him? 20 Q. What kind of business did you try to 20 A. I have no idea. 21 do with Mr. Hopson? 21 Q. Okay. 22 A. We just -- we just discussed 22 A. I have no idea. 23 opportunities and leverage opportunities, 23 Q. Have you actually seen this 24 etcetera. 24 March 2007 letter? 25 Q. Did Mr. Hopson have an opportunity 25 A. Yes. Page 243 Page 243 1 Gnus - CONFIDENTIAL 1 Gross - CONFIDENTIAL 2 to employ you? 2 MR. LEVINE: And what are we up to, 3 A. I don't know. Never came up. 3 21. 4 Q. Has Mr. Hopson tried to help you 4 (Gans Exhibit 21, Bates Nos. 5 find a job? 5 DBZCO_PG 004268 through 275, 3/26/07 Memo 6 A. I've never asked. 6 to Investors from D.B. Zwim & Co., marked 7 Q. Did Mr. Hopson did you try to 7 for identification.) 8 have Babcock do business with Natixis? 8 Q. Have you seen this? 9 A. It didn't get — Ewe had — Mike 9 A. Yes. 10 was over our offices and we discussed certain 10 Q. When did you first see it? 11 investment opportunities, et cetera, but nothing 11 Shortly after it came out. 12 ever came of it 12 Q. Who gave it to you? 13 Q. Have you remained friendly with 13 More than five people, less than 14 Mr. Hopson? 14 ten. 15 A. Yes, yes. 15 Q. What five people? 16 Q. And you like him and he likes you? 16 A. Industry people. 17 A. Very good guy. 17 Q. What industry people? 18 Q. Has he told you that he didn't pay 18 I don't recall exactly who. 19 much mind to what Mr. Zwim told him about you? 19 Did you get it from any investor? 20 A. We really didn't — we really didn't 20 A. No, no investor gave it to me. 21 get into it 21 Q. Did you get it from Mr. Natixis? 22 Q. Well, has Mr. Hopson told you that 22 A. No. Hopson. But, no, I did not. 23 he considers you less worthy of a person because 23 Q. Who gave it to you? 24 of what Dan Zwim told him? 24 A. Other — dying to recall who 25 A. We would never get into that. 25 gave it to me. I may have received a copy from A 62 (Pages 242 - 245) VERITEXT REPORTING COMPANY EFTA01124934 Page 246 Page248 1 GrusS - CONFIDENTIAL I Gross - CONFIDENTIAL 2 Ivan Zinn. I forget who. 2 A. Yes. 3 Q. Who's Ivan Zinn? 3 MR. BRECHER: Objection. 4 A. He's just a person in the industry. 4 Q. And you don't know as you sit here 5 Q. Where does he work? 5 anything other than what's in the March 2007 6 A. He works at Atalaya Capital. 6 investor letter that Mr. Zinn learned Dan Zwirn 7 Q. What's their business relationship 7 said or might have said to any investor? 8 with D.B. Zwirn & Co. L.P.? 8 A. I don't know that 9 A. I believe they have crossover 9 Q. Is there anyone else that you got 10 investors. As I said, it's a very small 10 this investor letter from? II community. 11 A. I may have, but I don't recall. 12 Q. You don't need to persuade me, 12 Q. You said at least five, but less 13 Mr. truss. I'm trying to learn the facts. 13 than — I forget what number you used. Is Ivan 14 A. Okay. 14 Zinn actually the only person that you can 15 Q. So did Mr. Zinn send it to you by 15 remember gave this to you? 16 hand, walk it over to you, meet you fora drink? 16 A. That's the only person I can recall 17 How did you get it? 17 giving it to me, besides, like I said, my 18 A. 'don't — 'don't remember how I 18 counsel. 19 got it. I believe — I believe e-mail. 19 Q. When did you get a copy of this? 20 Q. And then you would have printed it 20 A. Like I said, shortly alter it came 21 out? 21 out. 22 A. My counsel may have given this to 22 Q. Who did you discuss this document 23 me. If I were to have received it by e-mail, I 23 with when you received it other than your lawyer? 24 would have printed it out. 24 A. i discussed it with Eric Felton from 25 Q. I'm asking you whether and who 25 Grosvenor. I discussed it — but the contents at Page 247 Page 249 1 Grins - CONFIDENTIAL 1 Gnus - CONFIDENTIAL 2 actually physically gave this to you at or about 2 some point or another with some of the cmployccs 3 March 26, 2007. 3 as well of Zwirn. 4 A. I don't recall who else gave it to 4 Q. And I think I asked you this, but if 5 me. I'm -- I'm -- S I didn't, did Eric Felton tell you about anything 6 Q. Who else — I haven't even heard of 6 that Dan Zwirn or anyone else said beyond what's 7 one person yet. 7 in this report? 8 A. I said Ivan Zinn. 8 A. No, no. 9 Q. You just testified, then, you're not 9 Q. Now, you met with lawyers at Gibson 10 sure whether Ivan Zinn -- 10 Dunn; correct? 11 A. No, no. 11 A. Correct. 12 Q. — or your lawyer gave it to you? 12 Q. In fact, you were interviewed on 13 A. No, Ivan Zinn gave it to me. Ivan 13 five occasions by lawyers at Gibson Dunn; isn't 14 Zinn gave it to me. 14 that right? IS Q. Where -- 15 A. I don't 'mow the number. 16 A. I was implying maybe also my lawyer. 16 Q. You were interviewed by them 17 Q. Where were you when Ivan Zinn gave 17 November 14th, December 11th, December 19th, 18 it to you? 18 December 12th, March 6th, and March 19th. 19 A. I was probably home. 19 Does that refresh your recollection? 20 Q. Did Ivan Zinn give you any 20 A. If — I met with them several times. 21 information about what Mr. Zwirn said about you? 21 Q. And on each occasion that you met 22 A. No, no. 22 with them, you had a lawyer present; correct? 23 Q. So Ivan Zinn's comments, knowledge 23 A. Correct. 24 of this case are solely confined to the March '07 24 Q. And that lawyer was there to 25 investor letter? 25 represent you; correct? 63 (Pages 246 - 249) VERITEXT REPORTING COMPANY EFTA01124935 Page 250 Page 252 1 Gums CONFIDENTIAL 1 Gress - CONFIDENTIAL 2 A. Correct. 2 Take a Look at the complaint 3 Q. And you understood that Gibson Dunn 3 again -- 4 was conducting an independent investigation on 4 A. Exhibit? 5 behalfof the management company; correct? 5 Q. It's Exhibit 1. 6 A. Correct. 6 A Yep. 7 Q. And you understood, because you'd 7 Q. Paragraphs 34, 35, 36. 8 been working for the company for a long time, 8 A. Yes. 9 that actually Gibson Dunn hadn't represented 9 Q. Other than the October report and 10 Zwirn, the management company or the funds before 10 the March report, are there any other statements 11 this investigation started; correct? 11 that you believe Mr. Zwirn made that were false 12 A. To the best of my knowledge, that's 12 statements about you? 13 correct. 13 A. Other than to the investors, 14 Q. And do you recall being interviewed 14 employees and service providers? 15 by Fried Frank in October 2007? 15 Q. Right. 16 A. I was — I don't recall the date, 16 A. I don't know. 17 but I was absolutely interviewed by Fried Frank. 17 Q. And other than -- 18 Q. And that's Mr. Witzel? 18 A. I don't know. 19 A. More than once. 19 Q. Other than you've identified 20 Q. And that's by Mr. Witzel? 20 actually no investor that has told you or that 21 A. I believe Mr. Witzel was there. 21 you have learned was told anything of the nature 22 Q. And at that time, were you shown a 22 of what you're suing for here; isn't that right? 23 copy of this investor letter front March 2007? 23 A. No, that's not right. I had said 24 A. I believe so. 24 earlier Offitt, Ned Offitt 25 Q. And weren't you asked by Mr. Witzel 25 Q. That's not an investor, is it? Page 251 Page 253 1 Gruss - CONFIDENTIAL Gruss CONFIDENTIAL 2 at that time if there were any facts or 2 A. I believe they represent investors. 3 allegations in this letter that you wanted to 3 Q. So with the -- I just want to 4 identify as inaccurate? 4 understand who all of the people are that you've 5 A. I don't know. 5 heard this from. The employees that you 6 Q. Weren't you asked in that meeting or 6 identified — 7 interview to identify for Fried Frank any events 7 A. Yes. 8 or circumstances in the letter that were 8 Q. —Ned Offitt, Mr. Hopson. Anybody 9 inaccurate? 9 else? 10 A 1 don't recall if I did. 10 A. There's more employees that I didn't 11 Q. Isn't it a fact that you were asked II identify that I just thought of. 12 that question and you didn't identify any event 12 Q. I'll get those in a second. 13 or circumstance described in this report as 13 A. Okay. 14 inaccurate? 14 Q. Any other people outside D.B. Zwirn 15 A. I don't believe that's the case. 15 & Co. L.P., besides Mr. Offitt, Mr. Hopson? 16 Q. Do you realize, as you sit here 16 A. Up to this point, no. No. 17 today, that this is the Gibson Dunn report and 17 Q. What other employees are there? 18 that's not a summary of the report? 18 A. Susan Conley. 19 A. No. 19 Q. What did she tell you? 20 Q. Do you realize that this document 20 A. She specifically had a conversation 21 doesn't summarize the report, it is the re-port? 21 about when she was leaving the management company 22 A. . No. 22 for whatever reason, David Lee took her 23 Q. Other than this report, the calls to 23 downstairs to have lunch at 8 1/2 and she said, I 24 the investors that you've described in 24 don't want to deal with this crap any more. And 25 paragraph 34, 35 — withdrawn. 25 he said to her, I assure you that Dan Zwim had 64 (Pages 250 - 253) VERITEXT REPORTING COMPANY EFTA01124936 Page254 Page 256 1 Gams - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 nothing to do with it and that Perry is going to 2 A. Yes. 3 be criminally prosecuted for this. 3 Q. So was it clear and unambiguous that 4 That was David Lee's conversation 4 the management fees were paid quarterly? 5 with her over a lunch, so said she. 5 A. Yes. 6 Q. And when did she tell you that? 6 Q. And was it clear and unambiguous 7 A. I don't recall when. I don't recall 7 that the management fees were paid after they 8 when. After she left, but I don't recall. 8 were earned, thus, after the close of a quarter? 9 MR. LEVINE: Let's mark this. 9 A. Yes. 10 (Gruss Exhibit 22, Bates Nos. 10 Q. Did you understand that because of 11 DBZSECPR-0000551859 through 912, 11 liquidity issues in the onshore fluid, that the 12 Confidential Memorandum dated May 2003, 12 management company took management fees before 13 marked for identification.) 13 they were due under this confidential memorandum? 14 (Witness penises the exhibit.) 14 A. As of what date? 15 BY MR. LEVINE: 15 Q. How about -- 16 Q. Pm showing you what's been marked 16 A. Or in general? 17 Gross 22. Can you identify it? 17 Q. In general. 18 A. It's the offering memoranda for the 18 A. Yes. 19 onshore fund, the confidential memorandum for the 19 Q. In fact -- 20 onshore fund. 20 MR. LEVINE: Mark this. 21 Q. And this is one of the documents 21 (Gross Exhibit 23, Bates Nos. DI3Z 22 that you would have had access to in your job? 22 0000247 through 261, E-mail dated 5/26/04 23 A. Correct. 23 from Wu to Myers with attachments, marked 24 Q. This is one of the documents that 24 for identification.) 25 set forth what the financial relationships were • 25 Q. Pm showing you composite exhibit Page 255 Page 257 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 between the management company and the fund and 2 identified as Gruss 23, which is a series of 3 its investors? 3 e-mails from Sylvia Wu to Greg Meyers with copies 4 A. Correct. 4 to you directing the payment ofmanagement fees 5 Q. So this was one of the madmaps that 5 for the end of the quarter? 6 you and the people working for you would need to 6 A. Yes. 7 run the financial operation side of the business; 7 Q. And there's some 20-plus examples 8 correct? 8 there, aren't there? 9 A. Correct 9 A. I didn't count them, but yes. 10 Q. And take a look at page 3. What is 10 Q. Starting sometime in May of '04 and 11 a management fee? 11 continuing up through March of'06? 12 A. It's the fee that is charged as a 12 A. Yes. 13 percentage of assets under management. 13 Q. And in fact, you knew, because you 14 Q. Paid by the fund to the management 14 were copied, that management fees were paid early 15 company; is that correct? 15 without authority? 16 A. Exactly. 16 A. Yes. 17 Q. And does this memorandum -- 17 Q. And you approved that? 18 confidential memorandum of the onshore fund 18 A. Yes. 19 provide that the fund pays a management fee to 19 Q. And that's one of the items that 20 the trading manager accrued monthly and payable 20 Shulte Roth looked at in the spring of'06? 21 quarterly? 21 A. Yes, I believe that's true. 22 A. Yes. 22 Q. And you actually admitted to the SEC 23 Q. Equal to one-twelfth of one and a 23 that that was a practice that you knew of and 24 half percent of each limited partner's month end 24 approved? 25 capital account balance? 25 A. Yes. 65 (Pages 254 - 257) VERITEXT REPORTING COMPANY EFTA01124937 Page 258 Page 260 1 Gress - CONFIDENTIAL Grump- CONFIDENTIAL 2 Q. And it was wrong? 2 Q. Who worked for you? 3 A. Yes. 3 A. Yes. She was the controller. 4 Q. And you actually admitted to Gibson 4 Q. Did you ask a lawyer whether it was 5 Dunn in one of the interviews in November '07 5 required to document the loan? 6 that you knew of the practice and that it was 6 A. I don't recall. 7 wrong? 7 Q. Did you ask anybody senior to you 8 A. Yes. 8 whether if this practice was going to proceed, 9 Q. And one of the problems, if not the 9 interest should be paid to the fund? 10 problem, with the practice was that the fund was 10 A. No, I don't think I did. 11 then not earning income on the expenses that were 11 Q. Would you agree with me that if the 12 paid earlier than they were obligated to be paid; 12 fund was paying hundreds of thousands of dollars 13 cottcre? 13 for expenses to the management company before the 14 A. I was not aware of that. 14 fund was obligated to pay that money, that it 15 Q. Well, if they're paid early, what 15 should have been paid interest on the use of its 16 did you understand was wrong about it if it 16 money? 17 wasn't taking funds away from the investors 17 A. Yes, it should have been paid 18 before they were obligated to pay them? 18 interest. 19 A. You just said it was the interest 19 Q. And you took no steps while you were 20 I'm saying that based on the offering memorandum, 20 CFO to be sure that that happened; isn't that 21 they should not have been collected early, but 21 tight? 22 they were. 22 A. No, that's not right. 1asked the 23 Q. And that the investors, thus, were 23 question of the controller whose responsibility 24 deprived ofhundreds of thousands of dollars 24 it is to collect the management fees. I asked 25 before they were obligated to pay them? 25 her whether or not she needed to paper a loan, Page 259 Pagc 261 1 Gruss - CONFIDENTIAL 1 Oruss - CONFIDENTIAL 2 A. Yes. 2 and she said no. 3 Q. So it's like the management company 3 Q. Paper a loan is different than 4 prepaid its expenses — withdrawn. 4 paying interest? 5 The management company caused the 5 A. If you're going to paper a loan, it 6 investors to prepay their expenses without giving 6 means you have to charge interest. Its not an 7 them any benefit for doing it? 7 interest fee loan. 8 A. No. They prepaid the expenses. You 8 Q. You never asked that, did you? 9 said "without giving them interest." 9 A. Whether or not we had to paper a 10 Q. Did — was interest paid for the 10 loan? 11 prepayment? 11 Q. You never asked whether the funds 12 A. I don't know. 12 were entitled to receive interest for the money 13 Q. Not under your watch; isn't that 13 that it was prepaying; isn't that right? 14 right? 14 A. I don't recall whether or not I 15 A. No, I don't know. I'm told — 15 asked that 16 Q. ISn't it a fact — 16 Q. In fact, in all of the documents — 17 A. I'm told now that there wasn't. 17 withdrawn. 18 Q. Did you ever inquire at the time you 18 In any of the documents that we have 19 approved any of these payments what the interest 19 produced to your lawyer, have you found or seen 20 rate was that the funds were receiving from the 20 an e-mail from you in which you expressed the 21 management company? 21 view that the fund should receive interest on the 22 A. No. But I did inquire whether or 22 use ofits money? 23 not we should be papering a loan for these. 23 A. I didn't ford any e-mails like that. 24 Q. And who did you inquire of that? 24 Q. In fact, you never asked that 25 A. Sylvia Wu. 25 question; isn't that right? 66 (Pages 258 - 261) VERITEXT REPORTING COMPANY • Ma 4% /NMI ••es es% re e ••••••• oft aaA EFTA01124938 Page 262 Page 264 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 A. No, that's not right 2 Q. There isn't anything in this e-mail 3 Q. Are you referring -- 3 or any of the other e-mails seeking your 4 MR. LEVINE: Lees mark this 24. 4 approval, any reference by you to making sure S (Gruss Exhibit 24, Bates Nos. DBZ 5 that the fund was paid interest on the use of its 6 0009065 through 67, E-mail Chain, marked 6 money? 7 for identification.) 7 A. I have not seen that in an e-mail. 8 (Witness peruses the exhibit.) 8 Q. And would you agree with me that it 9 BY MR. LEVINE: 9 is one thing to keep record of the early payment 10 Q. Do you see this e-mail -- 10 of fees by creating a loan for it and another 11 A. Yes. 11 thing all together to actually cause interest to 12 Q. — in or about June of 2004, which 12 be paid? 13 we've marked as Exhibit 24? 13 A. No. 14 A. Yes. 14 Q. Well, you could have still, without 15 Q. And this is an e-mail exchange in 15 any record of a fact of early payment, caused at 16 response to a standard request for authority to 16 the end of the year a payment to be made for the 17 wire the management fees early? 17 early payment of fees; isn't that right? 18 A. Yes. I believe the first time it 18 A. Absolutely. 19 was ever done. 19 Q. You didn't need a loan to cause that 20 Q. And in fact, this was used as a form 20 interest payment to be made; isn't that right? 21 of liquidity for the onshore fund; isn't that 21 A. Correct 22 right? 22 Q. And you didn't tell Sylvia Wu that 23 A. No, that's not right It was used 23 she needed to be sure that she caused interest to 24 as a form of liquidity for the management 24 be paid whether she papered it as a loan or not, 25 company. 25 did she — did you? Page 263 Page 265 1 Gnus - CONFIDENTIAL 1 Gross -CONFIDENTIAL 2 Q. I'm sony. Yes? 2 A. I don't know if I did or I didn't. 3 A. Yes, for the management company. 3 Q. The fact it is didn't even occur to 4 Q. And your response was, We need to 4 you to do that, did it? 5 paper a loan to the management company, don't we? 5 A. No, that's not the fact. 6 A. Yes. 6 Q. So you actually knew that you were 7 Q. And she said, No, just prepay 7 using their money early, depriving them of 8 management fee ahead of schedule? 8 interest and not making sure that they got paid 9 A. Yes. 9 for the use of their money? 10 Q. You don't say in this, do we need to 10 A. No, I said I don't recall whether or 11 pay the — do we need to pay interest to the 11 not I asked her to do so. 12 limited -- to the onshore timd, do you? 12 Q. As you sit here today, you can't 13 A. No, not in this e-mail. 13 testify to any event or circumstance that you 14 Q. And in fact, you approved the 14 recall with Sylvia Wu in which you directed her 15 transaction; isn't that right? 15 to cause interest to be paid to the fund for the 16 A. Correct. 16 early withdrawal of the management fees? 17 Q. Isn't that okay, body of the memo 17 A. I don't recall whether I did or 18 from you to Sylvia Wu? 18 whether I didn't 19 A. Correct. 19 Q. And in Eve interviews with Gibson 20 Q. And there isn't anything in this 20 Dunn -- 21 document -- this exchange in which you asked or 21 A. Yes. 22 directed Sylvia Wu to determine whether interest 22 Q. — and three, maybe four depositions 23 was due the funds for the early payment of the 23 with the SEC, you didn't tell any of them that 24 fees? 24 either, did you? 25 A. Say again. 25 A. I didn't tell them whether I did or 67 (Pages 262 - 265) VERITEXT REPORTING COMPANY EFTA01124939 Page 266 Page 268 Gross -CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 didn't I don't recall, that's correct. 2 Q. The calculation -- withdrawn. 3 Q. The fact of the matter is, whether 3 Am I correct that the calculation of 4 you said something to her or not, under your 4 the rate of return was done by Li Anne Law or by 5 watch interest was never paid; isn't that right? 5 Sylvia Wu? 6 A. I was not aware of that until Gibson 6 A. Or — or others that they may have 7 and Dunn or Deloitte & Touche came up with that. 7 delegated it to, but yes. 8 Q. Came up with that or learned that? 8 Q. Do you recall if it was a monthly 9 A. Learned that 9 report or a less frequent report? 10 Q. Did you ever have a conversation 10 A. It was monthly. I I with Dan Zwim in which you understood that it Q. And did investors in the onshore 12 was the management company's — withdrawn? 12 fund get a report of the monthly return for 13 MR. LEVINE: Let's take a break for 13 investors in the offshore fund? 14 five minutes. 14 A. No, I don't believe so. 15 (Recess from the record.) 15 Q. And did investors of any of the 16 MR. LEVINE: We are up to 25. 16 managed accounts get the report of the return for 17 (Gross Exhibit 25, Bates Nos. DBZ 17 the investors in the onshore or the offshore 18 0009009 through 9013, E-mail Chain, marked 18 fund? 19 for identification.) 19 A. No, I don't believe so. 20 BY MR. LEVINE: 20 Q. So the only people or entity that 21 Q. Du showing you what's been marked 21 understood how the returns compared as between 22 Giros 25. 22 funds was the management company? 23 A. Okay. 23 A. No. 24 (Witness penises the exhibit) 24 MR. BRECHER: Objection. 25 Q. Is this a series of e-rnails between 25 A. No, that's incorrect. Page 267 Page 269 Gruss - CONFIDENTIAL I Gruss - CONFIDENTIAL 2 you and Li Anne Law — 2 Q. Who knew? 3 A. Yes. 3 A. If you were an investor in both the 4 Q. — from March of '06? 4 onshore and the offshore, you would know 5 A. Yes. 5 individually. So you could be a fund-to-funds 6 Q. Please go to the last two pages. 6 and have an offshore vehicle and an onshore 7 A. Okay. 7 vehicle, you were invested in both, and if you 8 Q. Did the management company issue 8 were the CIO of that fund, you would know the 9 reports to the investors on the respective rates 9 difference. 10 of returo? 10 Q. And aro I correct that because of tax 11 A. Yes. II laws and other rules relating to -- what's it 12 Q. How regularly? 12 called — ECI -- 13 A. I don't know if it vras the 13 A. (Witness nods head in the 14 management company on behalf of the funds or it 14 affirmative.) 15 was actually the funds; but the funds' returns 15 Q. E capital, C capital, 1. 16 were produced in e-mail every month to the 16 — that the onshore fund and the 17 investors. 17 offshore fund didn't always invest in the same 18 Q. And the communication sent on behalf 18 assets or in the same amounts? 19 of the fund, it nonetheless was prepared by the 19 A. That's accurate. 20 management company? 20 Q. Am I also correct that by virtue of 21 A. Yes. 21 those kinds of tax laws and related laws that 22 Q. And it was prepared by employees who 22 apply to the treatment of income and expenses, 23 worked and reported directly or indirectly to 23 that there was — it would have been simply 24 you? 24 coincidence if the onshore fund and the offshore 25 A. Yes. 25 fund actually earned the equivalent amount for 68 (Pages 266 - 269) VERITEXT REPORTING COMPANY .••••••• a wag% EFTA01124940 Page 270 Page 272 Grass - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 any particular time period? 2 Q. — so that you didn't make a liar 3 MR. BRECHER: Objection. 3 out of Dan? 4 A. I think because of the differences 4 A. No, no. 5 in the amount of capital available, the EC! S Q. Okay. So it's a fact, is it not, 6 issues, that it would be -- coincidence is not 6 that to the extent that Dan felt that there was a 7 the right word, but it would be very seldom that 7 fiduciary obligation not to be -- withdrawn. 8 they would be exactly the same. 8 Isn't it a fact that what Dan was 9 Q. And there wasn't any business reason 9 saying to the investors is he had a fiduciary 10 to make them identical; isn't that right? I0 duty not to treat one group of investors better 11 A. No business reason or -- well -- 11 to the disadvantage of the other group of 12 Q. There was no business reason to make 12 investors? 13 them equivalent, was there? 13 A. That's -- that's probably accurate. 14 A. Yes. Dan would constantly tell 14 Q. Dan understood that he had a 15 investors that the two funds would have similar 15 fiduciary duty to treat all of the investors in 16 returns. 16 the same way, correct? 17 Q. Did Dan tell — did you ever hear 17 MR. BRECHER: Objection. 18 those conversations? 18 A. That should have been his thought 19 A. Yes. 19 process. 20 Q. Did Dan tell the investors that 20 Q. And consistent with that fiduciary 21 the — 21 duty, the management company tried to maximize 22 A. He frequently — 22 the return of each fund to the extent that it 23 MR. BRECHER: Wait. 23 could? 24 THE WITNESS: Sorry. 24 A. Yes. Dan spent a vast majority of 25 Q. Did Dan tell the investors why 25 time trying to make sure that delta between the Page 271 Page 273 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 withdrawn. 2 onshore fund and the offshore fund was as small 3 You said Dan would constantly tell 3 as possible. And we used to have arguments to 4 investors that the two funds would have similar 4 that effect all the time. 5 returns; is that your testimony? 5 Q. Did Dan ever tell you -- 6 A. Yes. 6 A. Not all the time. That's an 7 Q. Did you understand by his statement 7 exaggeration. 8 to that effect that the management company had an 8 Q. Did Dan ever tell you to change 9 obligation to make them similar? 9 information relating to one of the fund's 10 A. Yes. He used — he used to say 10 investments in order to falsely portray their 11 that — and I'm paraphrasing — something to the 11 rate ofreturn of that fund? 12 effect he has a fiduciary responsibility to make 12 A. Said slightly differently, Dan would 13 sure, on a risk-adjusted basis -- the returns of 13 absolutely tell me to overweight certain 14 both funds would be similar on a risk-adjusted 14 investments to the offshore fund. 15 basis. He used the wrong term. 15 Q. By overweight the investments, what 16 Q. Did you understand that to mean that 16 did you mean that to be? 17 the investors should be told that their returns 17 A. If there was - for instance, there 18 were different than they actually were so that it 18 was a 5W50 split between the two funds and there 19 looked like Dan lived up to that obligation? 19 was one investment that should have been split 20 A. Repeat that, please. 20 50/50, he would absolutely tell me to overstuff 21 Q. Did you understand that to mean, as 21 the offshore fund. 22 an instruction to you, that, therefore, the 22 Q. What are you overstuffing with? 23 investors should be told that the returns were 23 A. An investment, an asset. 24 different than they actually were 24 Q. So he would tell you to allocate the 25 A. No. 25 investman more to the offshore fund than to the 69 (Pages 270 - 273) VERITEXT REPORTING COMPANY EFTA01124941 Page 274 Page 276 1 Gruss - CONFIDENTIAL Gruss - CONFIDENTIAL 2 onshore fund? 2 "FYI, the returns include the effects of Ynun 3 A. Exactly. 3 promote. Manually put in for Summerville 600K 4 Q. And would the actual investment 4 L.P., 400K Ltd.? 5 reflect what the adjustment was? 5 A. Yes. 6 A. I'm sorry, say again. Q. What does a 1MM promote relate to? 7 Q. Did the actual adjustment follow the 7 A. A $1 million promote. 8 actual dollars? 8 Q. What's a promote? 9 A. The yes. If it should have been A. In a general sense, it is when you 10 50/50, and there was $100 of P&L, he would say 10 have a JV — a joint venture partner — you're 11 put in 80 to the offshore flutd, 20. So the P&L 11 funding the joint venture. The joint venture 12 would be associated with the 80 to 20. I don't 12 partner is the one that's actually making the 13 blow if - 13 investment. For that, he gets a, quote-unquote, 14 Q. Is there a document that reflects 14 promote. 15 that? 15 So whether it he gets 10 percent 16 A. That he would — 16 allocation over a 20 percent return back to us, 17 Q. Are you saying that he told to you 17 he gets compensated for that. 18 falsely allocate expenses as between the onshore 18 I have no idea what the promote 19 fund and the offshore fund? 19 structure was here, et cetera. 20 A. No, not -- he didn't I didn't say 20 Q. But promotes are in the nature of 21 expenses. I said assets. And falsely, I didn't 21 expenses or reductions of the profit or return 22 say falsely. 22 for a fund for the particular time? 23 I said he would have us overallocate 23 A. Unless you're receiving the promote, 24 certain investments to the offshore fund. 24 yes. 25 Q. And when you did that, did the 25 Q. And did you review with Dan on a Page 275 Pagc 271 1 Gruss - CONFIDENTIAL Gruss - CONFIDENTIAL 2 dollars follow the allocation? 2 regular basis the monthly returns of the 3 A. Yes, yes. 3 different finds? 4 Q. Did he ever tell you to allocate 4 A. Yes. 5 expenses different between the onshore fund and 5 Q. And would you go in and talk to him 6 the offshore fuod? 6 and show him information like what is on the last 7 A. I don't — I don't recall. 7 page of Exhibit 25, which was the list of the 8 Q. Isn't it a fact that that's not 8 particular funds and the rate of returns for the 9 something that you would have asked him for 9 time period? 10 permission to do or gotten a direction from him 10 A. Yes. He would probably have I I to do? 11 received this. This is March 15th. I'm to 12 A. I don't know. I don't know. 12 take this to say that the returns have not been 13 Q. So Exhibit 25, page 4 — 13 released yet, which is kind of long; but — he 14 A. Yes. 14 would have received this similar return analysis 15 Q. — were you responding to the 15 several times up until this date. 16 difference between the rate of return in the 16 Q. And — 17 onshore fund and the offshore fund when you wrote 17 A. Almost daily. 18 "Why is the spread growing, BT, uar 18 Q. And you responded to her, "Ahhh -- 19 A. That's what it looks like. 19 A-H-H-H — "please back it out. Pm going 20 Q. And did she respond to you that it 20 through all right now with Dr. Death." 21 was, quote, -The effect of increase in New Comm 21 A. Right. 22 mark, although, has larger absolute impact on 22 Q. First of all, is Dr. Death Dan? 23 Ltd; has smaller impact on Ltd's return"? 23 A. Oh. Yeah. 24 A. Yes. 24 Q. And by "please back it out," are you 25 Q. And then is Li Anne Law telling you 25 instructing her to take the promote out of the 70 (Pages 274 - 277) VERITEXT REPORTING COMPANY et. • 4". n en a' • I an. /a • PG EFTA01124942 Page 278 Page 280 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 calculation for both returns? 2 there could have been - someone could have made 3 A. I don't know what -- it appears that 3 an error. 4 way. 4 Q. Didn't the report in March of 2007 5 Q. And does that have the effect of 5 refer to such a finessing that was done 6 increasing the returns in the respective funds? 6 improperly, on page 2, referring to February -- 7 A. Hold on. 7 March of 2006 and an attribution of expenses of 8 (Witness penises the exhibit.) 8 some three and a half million dollars? 9 A. It depends on -- again, it depends 9 A. Where are you? Hold on. 10 on which way the promote was going. 10 (Witness peruses the exhibit) 11 Q. Well -- 11 MR. SIEFERT: It's Exhibit 1 on the 12 A. I don't !mow. 12 record. 13 Q. Well, if you look at page 5 -- 13 MR. O'BRIEN: Exhibit 21. 14 A. Right. 14 A. Okay. 15 Q. — the return for L.P. is 15 Q. Isn't that what the report found? 16 1.28 percent. 16 A. Yes, that's what it's saying. 17 A. Right. 17 Q. Didn't you have knowledge and 18 Q. And then it goes to 1.32 percent and 18 approve of the particular instance finessing the 19 then after she backs it out, according to your 19 returns as between the onshore fund and offshore 20 instruction, it goes to 1.37 percent -- 20 fund in February and March of 2006 as it's 21 A. Right. 21 reflected in the memo? 22 Q. -- correct? 22 A. I don't know if I did. 23 Right? 23 MR. LEVINE: We'll adjourn for 24 A. Yea. 24 today. Next time we will return to this 25 Q. And she told you that once she did 25 subject. Page 279 Page 281 1 Gruss - CONFIDENTIAL 1 Gruss - CONFIDENTIAL 2 that, the next comment was "but the spread 2 MR. SIFFERT: The record should 3 widens"? 3 reflect that we're supposed to have two 4 A. Correct. 4 seven-hour deposition dates. So we'll have 5 Q. So is it fair to say that you arc 5 to take this up again. 6 talking with her and engaging with her in a 6 (The examination adjourned. The 7 discussion to literally finesse the returns that 7 time is 4:22 p.m.) 8 are going to be reported? 8 9 A. This is -- this process goes on just 9 10 about everyday several times a day from the date 10 11 that the P&L is closed — I'm sorry — the date 11 12 the month is closed and the date that the P&L is 12 13 actually released. 13 14 Q. And the process of finessing the 14 15 returns is something that went on monthly; isn't 15 16 that right? 16 17 A. Finesse - 17 18 MR. BRECIIER: Objection. 18 19 A. Finesse -- not finesse. Updating, 19 20 allocating, et cetera, yes. 20 21 Q. And there's allocating that can be 21 22 done properly and there's allocating that might 22 23 have been done improperly; isn't that right? 23 24 MR. BRECHER: Objection. 24 25 A. [don't — I don't disagree that 25 71 (Pages 278 - 281) VERITEXT REPORTING COMPANY EFTA01124943 P 282 Page 284 1 1 2 STATE OF NEW YORK ) 2 (Continued) 3 ss: 3 EXHIBITS 4 COUNTY OF WESTCHESTER ) 4 5 Exhibit 7 Bates Nos. PG0402 through 420, 70 6 6 Confidentiality, Noncompetc 7 I, PERRY GRUSS, the witness herein, 7 and Nonsolicit Agreement 8 having read the foregoing testimony of the pages 8 Exhibit 8 Bates Nos. 790 through 791, 101 9 of this deposition, do hereby certify it to be a 9 E-mail Chain 10 true and correct transcript, subject to the 10 Exhibit 9 Bates No. JSB0158, E-mail 140 11 correction, if any, shown on the attached page. 11 Chain 12 12 Exhibit 10 Bates Nos. PG 00595 through 148 13 oOo 13 600, 11/26107 Letter to Gruss 14 14 from Cambra 15 15 Exhibit II Bates No. PG 00585 through 149 16 16 604, 2007 Form 1040 17 17 Exhibit 12 Bates Nos. PG00605 through 150 18 PERRY GRUSS 18 612, 2008 Font 1040 19 19 Exhibit 13 Bates Nos. PG0613 through 621, 151 20 20 2009 Form 1040 21 Subscribed and sworn before me 21 Exhibit 14 Bates No. OG0622, Earnings 152 22 this day of 2010. 22 Statement 23 23 Exhibit 15 Bates No. 729, Wage and Income 153 24 24 Transcript 25 25 Page 283 Page 255 1 1 2 June 28, 2010 2 (Continued) 3 INDEX 3 EXHIBITS 4 WITNESS EXAMINATION BY PAGE 4 5 5 Exhibit 15 Bates No. 729, Wage and Income 156 PERRY GROSS 6 Transcript 6 7 13/tidbit 16 Bates Nos. JSB0126 through 161 7 MR. LEVINE 4 8 128, E-mail Chain 8 9 Exhibit 17 Bates Nos. JSB0101 through 162 9 EXHIBITS 10 103, E-mail Chain 10 GRUSS PAGE 11 Exhibit 18 Bates No. JSBO112, E-mail 163 11 Exhibit 1 Complain and Jury Demand 18 12 Chain 12 Exhibit 2 Bates Nos. DBZ 0000038 through 21 13 Exhibit 19 E-mail Chain 164 13 39, 6/7/02 Letter to CrruSs 14 Exhibit 20 Plaintiffs Initial 194 14 from Zwim 15 Disclosures 15 Exhibit 3 Answer and Counterclaims of 39 16 Defendants D.B. Zwim & Co., 16 Exhibit 21 Bates Nos. DBZCO PG 004268 245 17 L.P. and D.B. Zwirn Partners, 17 through 275, 3/26/07 Memo to 18 LLC 18 Investors from D.B. Zwim 19 Exhibit 4 Plaintiffs Reply to 52 19 Co. 20 Defendants' Counterclaims 20 Exhibit 22 Bates Nos. DBZSECPR-0000551859 254 21 Exhibit 5 Bates Nos. DBZ 0000173 through 61 21 through 912, Confidential 22 206, limited Partnership 22 Memorandum dated May 2003 23 Agreement 23 Exhibit 23 Bates Nos. DBZ 0000247 through 256 24 Exhibit 6 Bates Nos. PG00388 through 69 24 261, E-mail dated 5/26/04 from 25 401, Supplementary Agreement 25 Wu to Myers with attachments 72 (Pages 282 - 285) VERITEXT REPORTING COMPANY a • a a :I. al /a /a • e ./Ae• a en" EFTA01124944 Page 286 Page 288 1 (NOTARY PUBLIC) MY COMMISSION EXPIRES: 2 (Continued) 288 3 EXHIBITS 2 STATE OF NEW YORK ) 4 3 es: 5 Exhibit 24 Bates Nos. DBZ 0009065 through 262 4 COUNTY OF NEW YORK ) 6 67, E-mail Chain 5 7 Exhibit 25 Bates Nos. DBZ 0009009 through 266 6 I, Eileen Mulvertna, Notary Public 8 9013, E-maiI Chain 7 within ad for the State of New York, do hereby 9 8 certify: 10 9 11 10 That I reported the proceedings in 12 II the within entitled matter, and that the within 13 12 transcript is a true record of said proceedings. 14 13 15 14 I further certify that I am not 16 15 related to any of the parties to the action by 16 blood or marriage, am; that 1aro in no way 17 17 interested in the outcome of this matter. 18 18 19 19 IN WITNESS WHEREOF, I have hereunto 20 20 set my hand this 30th day of June, 2010. 21 21 22 22 23 23 Eileen MnIvenna, CSR/RMR 24 24 25 25 Page 287 2 ERRATA SHEET VESUTEXT/NEW YORK REPORTING, INC. 3 1.800.727.6396 4 200 OLD COUNTRY ROAD 1250 BROADWAY-SUITE 2400 MINEOLA, NEW YORK 11501 NEW YORK, N13W YORK 10001 S 6 NAME OP CASE: GRUSS V. ZWIRN DATE OF DEPOSITION: JUNE 28, 21010 7 NAME! OP DEPONENT: PERRY GRUSS 8 9 PAGE LJNE(S) CHANGE REASON 10 l I I1 I I 12 I I 13 I I 14 1 I IS I 1 16 I 1 17 _j I 18 I I 19 I I 20 21 PERRY GRUBS 22 Subscribed sod swan to Bebe me 23 tbs. day of 2010. 24 25 73 (Pages 286 - 288) VERITEXT REPORTING COMPANY • ••• wee Om• EFTA01124945 [& - 2006] Page 1 07726 4:11 11th 249:17 1:13 148:3 & 1:8 2:4,10,18 5:6 09 1:3 12 53:11 117:6,18 lm 160:10 096441 5:10 150:15,16 151:15 1mm 276:6 5:19 17:8,12 39:8 39:14 46:3,7 64:5 1 233:19 284:17 1st 77:11 81:5 145:5,8 148:16 1 18:13,14 64:22 122 41:22 2 148:22 150:7 151:2 1250 287:4 72:5,15 82:19 2 21:9,10 115:18 152:11,23 160:21 128 156:20 285:8 133:12,17 160:9,15 149:10 154:2,16 163:14 167:17 12th 249:18 160:18 176:24 156:17 161:I7 168:12 170:17 13 151:7,8,11,16 252:5 276:7 280:11 163:2 173:17 280:6 238:14 245:6 246:8 284:19 283:11 283:12 253:15 266:7 131 40:5,8 43:10 1400-727-6396 2.02 78:25 80:11 283:16 285:18 14 152:6,7,10 287:3 81:3 120:20 284:21 0 1.03 121:3 2.6 108:15 140 284:10 0000038 21:11 1.2 155:17 2.63 135:9 148 284:12 283:12 1.2. 156:12 20 5:9 40:4 73:9 149 284:15 1.28 278:16 89:4 147:19 194:21 0000173 61:18 14th 249:17 283:21 1.32 278:18 194:22 195:6 257:7 15 153:21,22 284:23 0000247 256:22 1.37 278:20 274:11,12 276:16 285:5 285:23 1.6 154:6,15 155:9 285:14 150 284:17 1.8 155:17,18 200 287:4 0000551859 254:11 151 284:19 285:20 1/2 220:7 253:23 2000 165:16 152 284:21 0009009 266:18 10 148:4,14238:23 2002 10:17 16:23 153 284:23 286:7 276:15 284:12 17:10,21,23 21:21 156 285:5 0009065 262:6 100 274:10 21:23 22:3,17,21 15th 277:11 286:5 100,000 152:14 23:5,17 24:17,24 16 72:3,19 77:15 004268 245:5 10001 287:4 25:25 34:16,18 41:5 156:14,18,19,22 285:16 10022 2:6 45:7 54:15 285:7 00585 149:18 10036 2:19 2003 57:4 254:12 161 285:7 284:15 101 284:8 285:22 162 53:16 117:18 00595 148:5 284:12 10110 2:12 285:9 2004 154:20 156:10 02 60:8 103 161:8 285:10 222:16 262:12 163 285:11 03 59:1960:5 1040 149:18,25 2005 154:14 155:11 164 285:13 04 60:5 257:10 150:17 151:9,12 155:15 161:3 17 161:6,7 163:3 05 165:24 284:16,18,20 165:11 164:5 285:9 1040s 150:22 2006 45:7 64:21,22 06 60:8 165:24 18 162:15,16,20 10th 140:12 75:23 77:10,11 79:6 193:10 194:16 163:21 164:6 257:11,20 267:4 11 149:16,17,24 79:8 80:21 84:2,5,8 283:11 285:11 07 101:22 102:22 153:14 197:13 85:5,8 86:15 88:7 19 164:10,12 173:17 146:24 148:25 284:15 88:11 91:3 92:2,18 173:18 285:13 149:4,7 164:13,17 11/26/07 148:5 93:6 103:24 122:17 194 285:14 165:23,23 166:23 284:13 123:7 132:23 1989 7:6,22 135:19 168:3,7 193:3,10 1114 1:192:19 133:11,16 140:12 1994 7:23 9:4 194:13 219:22,22 11501 287:4 154:2,5,9,9,13,17,18 19th 162:21 249:17 247:24 258:5 154:19 155:20 249:18 VERITEXT REPORTING COMPANY 212-267-6868 www.veritextcom 516-608-2400 EFTA01124946 Page 2 [2006 - 7th] 156:24 157:5 22 254:10,17 285:20 30th 288:20 5/26/04 256:22 165:11 177:5,7,25 225,000 154:11 32 83:4 88:24112:2 285:24 178:7 179:11,11 23 256:21 257:2 112:5 50 16:10 180:15 182:9 285:23 33 82:23 83:2 50,000 150:3 189:17,23 190:3 24 157:4 232:24 100:15,23 50/50 273:18,20 192:18 196:12 262:4,5,13 286:5 34 177:2178:8,11 274:10 197:11,14,23 198:3 2400 287:4 179:16 251:25 500 2:11 198:7,22,23205:8 245 285:16 252:7 52 283:19 211:14 220:2 25 232:25 266:16,17 35 251:25 252:7 55 4:10 221:13,21 223:19 266:22 275:13 36 252:7 57th 220:8 223:24 228:14 277:7 286:7 360 54:6,11 6 233:4,16 234:17,21 250,000 153:9 37 44:16 6 69:13,14,24 71:7 234:25 280:7,20 254 285:20 375 153:6,15 78:6,11,11 112:19 2007 101:12 109:6 256 285:23 39 21:11283:13,15 136:23 196:11 145:25 147:16 26 148:15 149:4 3rd 101:25 283:24 148:15 149:18,25 150:5,12 232:25 4 6.01 73:11,16 75:8 150:5,5,8,12 151:5 247:3 4 52:19,20,24 78:9 80:17 82:13 121:9 151:21 152:24 260 44:16 49:20 6/7/02 21:11 283:13 78:23 117:5,9,14 161:13 162:21 53:21,24 54:9,11,12 123:7 182:9 189:17 600 148:5 284:13 165:8 167:14,20,23 115:23,25117:20 189:22 190:3 600k 276:3 169:18 173:7 175:3 117:25 118:7,13,24 192:18 197:11,14 604 149:18 284:16 179:8 182:20 261 256:22 285:24 197:22 198:3,7,22 61 283:21 192:19 244:24 262 286:5 198:23 205:8 612 150:17 284:18 247:3 248:5 250:15 266 286:7 211:14 219:25 621 151:9284:19 250:23 280:4 26th 174:2 221:21 223:19,24 6441 1:3 284:16 27 232:25 67 262:6 286:6 228:14 275:13 2008 145:23 150:17 275 245:5 285:17 283:7,19 69 283:24 150:22 151:5,18 28 1:13 232:25 400k 276:4 6th 249:18 284:18 283:2 287:6 401 69:15 283:25 2008-2009 151:16 287,000 150:25 7 420 70:14 284:5 7 70:12,13,18,21,25 2009 5:9 151:9,12 288 288:1 4:22 281:7 151:17 152:19 29 232:25 71:9 72:2,8,11,12 4th 139:3,19 183:19 181:16 195:8 3 77:13,23 78:3 187:25 193:22 217:11 220:16 112:20 193:22 3 39:6,7,12 78:22 198:10 196:19 284:5 284:20 101:12 115:18,18 5 70 284:5 2010 1:13 152:12,15 120:20 155:22 152:20 282:22 5 61:16,17,20 63:23 729 153:22 284:23 161:18,21 162:2 283:2 287:23 70:10 71:6 73:7 285:5 175:25 223:8 288:20 78:21,23 79:9 80:14 75,000 150:9 255:10 283:15 206 61:18 283:22 112:18 117:10,11 790 101:5 284:8 3/26/07 245:5 117:14 120:16,17 791 101:6 284:8 21 73:7 245:3,4 285:17 133:8 154:22,23 7th 174:2 280:13 283:12 30 82:22 83:2 238:24 278:13 285:16 100:15,23 232:25 21010 287:6 283:21 VER1TEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124947 [8 - allegations] Page 3 8 133:11,16 268:16 adjourned 281:6 agreement 21:21 8 82:21 101:4,5,11 accrual 156:5 adjusted 41:20 61:19 64:4,14 69:15 156:12,15 220:7 accrued 255:20 271:13,14 70:4,6,9,10,15,25 253:23 284:8 accumulating 13:11 adjustment 274:5,7 71:6,7,9 73:12 80 274:11,12 accuracy 19:22 20:3 administer 3:15 74:21,24 75:2,15 800 2:5 accurate 19:12,14 administrative 27:2 76:13,18 77:5,13,17 20:16,19,22 21:6 116:2 167:3 78:7,10,22 80:11 800,000 156:15 107:16 119:6 admits 53:20 117:19 81:10,12 82:3,7,10 9 132:11 165:12 admitted 47:19,23 94:15,22 112:12,13 9 82:21 140:5,6,11 206:23 269:19 54:5 257:22 258:4 112:13,18,19,20 177:3 195:8220:16 272:13 advice 62:2,3 98:21 118:25 120:22 284:10 accurately 50:9,17 98:24 99:12 100:5 121:18 122:19 900,000 151:17 50:25 51:14,22 52:9 103:9 118:14 122:9 124:2,12 127:9 9013 266:18 286:8 117:2 149:8 advisable 121:5 134:23 135:2,4,5,6 90s 16:9 acknowledged adviser 26:25 236:5 135:11 136:5,10,25 912 254:11 285:21 164:25 advisers 177:20 137:4,24 138:9 94 13:18 act 191:14 advisory 31:19 143:10 148:19,25 95 121:8 acted 169:10 235:19 affairs 50:8,16,24 151:5 152:3,22,24 975 149:11,11 acting 130:12,14 51:13,21 116:6 283:23,25 284:7 975,000 152:2 131:5,20,24 148:24 affect 184:23 agreements 28:20 9:30 1:13 191:16 193:25 affirm 77:4 29:3 46:18,23 47:7 a 197:10 198:20 affirmative 44:23 47:8,15,21 48:12 a.m. 1:13 201:13 205:19 104:15 269:14 71:2,10,14,19 72:16 abide 129:5 206:11 233:21 affirmatively 76:2,16 113:4,21 abilities 114:22 235:2,18 236:16 126:21 114:11,24 115:3,11 ability 67:12 165:7 action 1:3,17 18:19 agencies 11:6 12:19 116:12,16 125:14 able 238:22 120:24 235:17 agency 11:25 12:16 126:5,10,15,24 absolute 275:22 288:15 agenting 192:23 127:4,21 128:3,16 absolutely 18:7 actions 99:17 aggregate 12:7 129:5 135:24 163:10,12,13 activities 134:2 133:9,14 136:20 143:21 185:23,25 194:11 192:7 ago 31:5 76:5 144:4,15 187:14 223:20 250:17 acts 121:3 179:12 109:18 194:9,10,10 188:3,17 264:18 273:13,20 actual 18:9 33:23 220:14,15 224:2 ahead 124:16 263:8 acceptable 207:2 156:5 274:4,7,8 agree 42:5,24 52:7 ahhh 277:18 access 31:8 254:22 add 142:3 117:22118:4,21 aig 7:18 135:21 account 22:25 40:23 adding 69:3,4 126:13 129:9 airplane 86:19,20 55:7 255:25 addition 40:14 143:20 165:7 93:2,3 94:21 113:16 accountant 7:12 182:5 190:14 173:12 184:7,12 114:3 118:5 36:18 54:21 225:18 201:3,5,24 206:10 Alan 2:20 5:5 accounting 7:13,15 address 4:8 208:8 210:13 alec 2:15 45:24 55:2 58:2 addresses 37:4 260:11 264:8 alevine 2:20 209:2 195:13 agreed 3:2,7,12 allegation 116:21 accounts 15:14 adhering 114:17 136:6,11 144:2,13 allegations 20:9,12 61:15 62:3,7 116:15 adjourn 280:23 agreeing 167:10 53:20 117:20 251:3 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124948 Page 4 [allege - awn] allege 83:4 112:4 answering 235:8 152:14 154:5 238:3,4,7,16,17 alleged 142:18 anybody 18:3 37:25 april 153:9 255:13 269:18 197:6 38:13,21 45:10 area 14:19 54:18 274:21 allegedly 230:22 56:15 59:24 88:5 57:5,8,23 59:10 assigned 116:4 237:7 122:25 128:5 91:20 assignment 13:17 alleging 179:18 166:16 177:11 areas 117:25 118:6 assistance 166:8 allocate 273:24 180:20 196:15 145:13 177:15 assistant 196:22 274:18 275:4 197:10 210:17 argue 4:23 assisting 11:6 allocated 40:16 212:12,22 232:13 argument s 273:3 associated 86:19 allocating 279:20,21 233:8 253:8 260:7 arrangement 179:13 274:12 279:22 apart 46:21 51:9,16 150:13 151:2 assume 36:19,20 allocation 30:20 69:17 209:19,19 arranging 42:16 45:11 49:16 51:20 186:17 275:2 233:25 article 181:10 157:14 276:16 apologize 19:9 ashok 183:24 assumed 135:10 allowed 142:5 138:11 234:11,19 assuming 188:22 181:12 apparently 241:15 asked 13:25 50:14 233:25 alluded 201:22 appears 21:16,19 86:22 87:11,16,18 assure 46:15 47:5 american 7:8 278:3 93:16 124:20 48:9,16 49:25 50:7 americas 1:19 2:19 applied 13:15 21:21 126:20 185:20 50:11,15 51:12 52:8 amount 103:23 24:12 33:23 34:23 195:21 205:17 253:25 104:3 132:25 35:15 36:8 37:7 214:2 215:5 216:4 assured 48:13 151:25 152:17 38:7 71:2,10,23 225:11,11229:3 assuring 47:13 269:25 270:5 72:8 75:8,10,16 235:12 236:25 48:1450:23 114:18 amounts 269:18 77:5,17 81:4,20,23 243:6 249:4 250:25 115:10 116:10,13 analysis 10:25 11:3 112:14 135:6 251:6,11 260:22,24 astruc 231:25 277:14 137:25 261:8,11,15,24 atalaya 246:6 analyst 13:5,7 applies 77:23 78:3 263:21 265:11 attached 72:11 analyzing 15:7 78:18 275:9 282:11 andrew 2:14 apply 34:3 38:3 75:3 asking 35:21,22 attachments 256:23 anne 57:19 60:14 75:12,19 98:4 37:16,17 87:15 285:25 61:4,9 63:14 267:2 112:21 135:24 110:18 122:13 attesting 19:22 268:4 275:25 269:22 179:7 180:8,10 attorney 202:12 announced 65:23 applying 89:18 181:15 184:14,17 203:3 210:17 answer 6:6,8,9,22 apportion ment 191:9 218:10 211:19 11:13 19:8 22:4 32:13 220:24 226:20 attorneys 2:5,11,18 39:7,13 51:7 53:24 appreciate 200:7 235:8 246:25 3:3 67:24 115:19 appropriate 32:16 aspects 106:24 attributable 27:19 120:11,14 140:15 127:8 150:11 189:8 208:5,6 29:8,16 186:25 146:20160:2,3 189:11 asserted 19:6 attributed 29:20 189:6 190:17 approval 264:4 asset 32:15,17,21,22 attribution 280:7 195:20,20 203:20 approve 280:18 55:9 239:19,25 audibly 229:25 229:24235:7 approved 257:17,24 273:23 august 164:13,17 236:21283:15 259:19 263:14 assets 27:8 32:8 175:3 answered 87:17 approximately 55:20 60:24,25 awn 156:6 15:20 57:3 150:9 172:21 216:19 VERTTEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124949 Eaustralla - blows] Page 5 australia 146:13 banker 237:3,19 becoming 65:11,20 180:3,16,25 181:2 australian 145:9,10 239:4 66:19 181:10 182:15 153:18 bankers 177:19 began 137:4178:18 183:15,18,20 authority 79:2 bankrupt 145:15 223:4 184:18 185:18 80:10,15,22 81:4 bankruptcy 145:18 beginning 38:19,23 192:6193:11 195:5 82:6,11 118:22 149:14 151:24 103:24 120:20 196:25 197:15 120:23 121:17 barr 139:21 140:11 132:23 217:23 198:4 200:20 122:18 123:2,9,14 140:18 141:2,8 225:17 204:20 207:13 123:19 129:10 144:18,20,21,25 begrudge 223:4 210:14 211:9 130:20 169:10 146:5 147:2,14 begrudged 223:11 213:23 215:3 217:6 257:15 262:16 156:23 157:4,22 behalf 10:14 19:14 220:17 221:10,10 authorized 3:14 159:9 160:10 22:19 23:2 27:8 224:3 227:16 192:7 161:15 164:22,25 31:19 39:25 53:6 228:10 232:3 234:2 available 24:20 barr's 166:8 54:4 96:8 107:12 235:15 236:5 143:4 270:5 base 150:25 153:15 120:23,24 130:14 238:19,20 242:10 avenue 1:19 2:5,11 154:6,18,24155:5 131:6 132:8,17 242:10 246:9,19,19 2:19 based 35:6 36:4,19 157:10 183:17 250:21,24 251:15 aware 52:16 258:14 36:22 99:17 103:16 I91:16 193:25 252:11 253:2 266:6 188:11,15 205:6 196:15 197:11,23 257:21 262:18 b 207:19 209:16 198:21 205:19 268:14,19 211:4 237:16 244:7 206:12 233:8,21 believes 108:13 babcock 145:5,8 258:20 235:2,18 236:16,24 believing 188:23 148:15,22 150:7,25 basic 189:I7,22 250:5 267:14,18 benedict 85:9 152:11,23 160:21 basically 79:24 80:4 believe 5:16,24 benefit 259:7 163:14 164:18 80:8 111:23 154:17 14:23 18:10 19:12 benefits 149:9 167:17 243:8 160:20 204:7 21:2 23:6 26:10 best 20:15 86:2 93:8 back 13:914:14,14 218:22 29:4 31:14 34:25 102:3,14,15,18 16:11,11,22 22:8 basis 30:24 31:4 46:20 64:9 67:17 109:6,9110:5,25 46:12 59:4 73:6 156:5 164:18 68:2,3 69:8,22 114:22 244:14 78:20,21 109:5 179:19 192:11 70:11 71:4,12 76:9 250:12 118:17 128:4 271:13,15 277:2 79:11,16 80:24 better 107:12 140:23 148:12 bates 21:10 61:17 81:25 87:3 91:8,25 272:10 175:22 176:10 69:14 70:13 101:5 92:10 94:3 95:14,18 beyond 36:9 249:6 182:17 193:21 140:6 148:4 149:17 96:6,16 103:12 big 140:24 199:25 276:16 150:16 151:8 152:7 108:14,15 109:11 billion 133:5,7,8,12 277:19,24 153:22 156:19 111:24 114:5 133:17 223:8 backed 8:24 9:3,12 -161:7162:16 122:25 123:8 131:3 bit 81:11 223:16 10:9 12:4 15:10,11 163:21 245:4 133:5 135:10 blab 213:6,6,6 background 8:12 254:10 256:21 138:14 139:14,20 blame 89:25 backs 278:19 262:5 266:17 144:17 145:23 blamed 83:6 209:9 bad 65:17 171:17 283:12,21,24 284:5 147:9 149:7 150:6 blaming 106:15 173:13 227:16 284:8,10,12,15,17 151:6 153:6 155:3 blanket 76:25 balance 255:25 284:19,21,23 285:5 160:8 168:17 169:2 blood 288:16 bank 237:4,16 285:7,9,11,16,20,23 171:11 177:16,18 blows 173:22 286:5,7 178:18 179:16,17 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.00m 516-608-2400 EFTA01124950 Page 6 [blue - cdos[ blue 211:19 220:23 122:14,21 123:4,20 225:17 226:6,24 181:13,19,25 220:24 124:13 125:17,22 227:13,20,22,25 182:10,14,21,22,24 board 145:14 126:6,18 127:11,15 228:2,5 230:10,15 183:11 190:21,25 bob 9:10 16:15,16 127:17,23 128:8,17 bulk 155:8 191:3 230:13,16 16:18 54:16 60:6,12 128:25 129:7 130:9 bull 166:5 251:23 163:19 182:2,12 130:17 131:17 bullet 108:10129:14 cambra 148:6 body 263:17 132:10 134:7 129:17,22 130:3,13 284:14 bonds 15:9 140:15 142:8 144:6 132:8,20 candidate 157:15 bonus 151:4,18,23 144:23 146:20 bunch 180:17 238:3 cap 198:24 152:18 153:5,9 160:3 165:20,25 business 10:23 capable 48:14 85:11 154:6,13,20 155:11 166:13,15,20 167:8 15:22 16:2,5,8 86:10 160:23 169:13 170:11 45:17 48:25 49:5,6 capacities 10:19 book 55:19 171:6,14 172:5,10 59:10 129:21 capacity 10:20 books 62:16,19 172:14,18,22 173:3 145:11 167:6 201:13 240:3 173:10 176:12 184:22 186:3 capital 18:10 21:17 bottom 72:18 178:10 185:4,9,17 242:14,20 243:8 21:25 22:11,13,18 160:10161:21,23 186:8,20 189:2,5 244:18 246:7 255:7 22:22 23:2 31:15 163:2 190:7,18 191:15,17 270:9,11,12 40:11 183:15 246:6 box 108:7 200:9,16 202:2,18 businesses 15:7 255:25 269:15,15 brain 235:6 203:16,18 204:15 buy 238:23 270:5 brains 8:11 204:19 206:3,8 buying 240:5 capped 80:16,17 breach 126:16 207:24 210:8 227:3 captioned 1:17 break 82:16147:18 229:24 231:10,13 career 5:21 calculate 8:18 54:25 204:25 205:4 236/0 248:3 careful 240:4 calculated 8:7 15:13 211:11266:13 268:24 270:3,23 carry 120:25 156:7 breaking 147:21 272:17 279:18,24 case 99:16 100:11 calculating 9:25 brecher 2:6 4:18 brim' 233:12 103:20 111:24 10:7 51:24 52:4,6 11:12 14:8 15:23 bring 215:11 169:9 184:11 203:8 55:11 19:7 20:6,23 23:23 broad 177:18 204:8 209:16 226:7 calculation 52:13 25:4,20 28:9,16 broadway 287:4 226:10 227:18 268:2,3 278:2 29:9 30:10 31:6 broker 11:21 247:24 251:15 calendar 152:18 33:10,17 34:8,14 brooks 101:16,25 287:6 call 17:1191:22 35:16 36:17,20 37:3 102:21 110:4,7,9,18 casually 209:8 211:19 214:9 216:3 37:6,9 40:24 43:15 brought 62:2 66:16 216:22 called 26:4,8,12 47:22 48:5 49:8,17 66:18 84:16 213:4,5 cauley 213:23 43:7 73:17 84:25 49:22 51:2,15 52:10 213:13,16 214:4 253:18 147:7 163:25 164:7 54:9 56:5 67:23 brown 145:6,8 cause 264:11,19 182:10 195:7 68:7 73:2 74:10 148:16,22 150:8 265:15 198:16 214:24 84:11 85:13,18 86:5 151:2 152:11,23 caused 172:7,25 220:23 225:7 86:13 88:17 90:17 160:21 163:14 173:4,8 259:5 269:12 93:21 97:14 99:19 167:17 264:15,23 calling 215:16,20 107:15,20 113:11 bt 275:18 causing 126:13 calls 140:23 179:18 114:14115:8 buddy 244:14 caveat 45:19 179:21 180:16,21 118:16 119:2,18,25 budln 221:23 222:8 cdos 238:8,10 180:24,25 181:3,7 120:6,11,14 121:21 222:18 224:4 VERITEXT REPORTING COMPANY 212-267-6868 www.veritextcom 516-608-2400 EFTA01124951 [celebration - company[ Page 7 celebration 65:14 challenge 30:14 claims 195:17 collectively 43:5 center 103:19 chan 216:15,17,18 clarification 40:25 college 7:3,13,16 centers 199:7 217:13,22,25 clarify 76:20 coining 173:19 ceo 43:16 49:3,7 218:12,17 clear 22:2,15 47:20 174:23,25 51:3 59:14 131:8 change 190:16 55:18 56:7 61:13 comm 275:21 certain 49:18 98:3 222:13 223:3 273:8 62:24 63:14175:11 comment 279:2 138:8 179:18 287:9 176:17 184:7 commentary 242:11 194:11 203:12,22 changed 222:14,14 193:16 256:3,6 comments 194:13 243:10 273:13 chapter 153:14 cleared 139:12 201:6 211:5 242:9 274:24 charge 58:7 62:3 clearing 173:20 247:23 certainly 166:3 124:6 261:6 175:2 commercial 11:5,15 178:23 194:14 charged 28:15 clearly 36:9 37:14 12:4,7 13:2,14 202:20 208:16 255:12 42:11 79:15 137:7 15:10 certified 1:21 charlotte 18:6 165:21 174:8,10 commission 288:1 certify 282:9 288:8 chen 198:9 211:15 181:13 committed 193:5 288:14 212:5,25 214:22 client 166:10 202:14 219:5 cetera 13:12 197:20 215:16,20 216:12 do 237:21,22 238:10 241:14 199:14 225:3 chief 35:23 83:16 238:21239:6,18,25 committee 114:20 242:24 243:11 115:25 116:2 240:9 171:2 205:20 276:19 279:20 chris 64:25 65:2,3,5 dos 238:13 240:2,5 communication cfo 16:17 17:13 66:13,16,24 67:11 240:5,12 267:18 22:23 29:5,18,24 69:8 198:2,3 close 83:14 104:13 community 129:20 40:10 43:12,20 44:3 do 269:8 173:19 174:23,25 183:3,6 205:23 44:8,11 45:6,11,23 circle 4:10 225:6 226:22 230:7 246:11 46:11,15 48:25 circumstance 69:19 256:8 company 22:14 49:12,16,25 58:6 216:4 236:14 closed 279:11,12 26:19 27:3,5,7 60:9 62:16 68:24 251:13 265:13 crab 11:10 29:17 41:19 43:19 69:2,4 114:4,13,21 circumstances dubs 8:22,23 10:23 46:2,8,16 47:6 115:6,14 118:11 74:21 75:3 83:10 12:4 238:2 48:10 50:2 58:3 138:20 143:5 87:4,7,12 88:24 code 173:22 174:5,8 60:2 61:10,13 62:5 153:14,16,19 158:4 90:7,16 91:7,13,24 174:10,16 62:6,9,13,14,17 159:16 162:24 94:2,10 95:4 97:5 coffee 157:17 63:2,8,16,21 64:14 167:4,18 186:10 103:23 105:6,15 coincidence 269:24 64:17,20,24 65:4,12 190:14 191:19 113:8,19 119:15 270:6 65:16,19 66:2,8,15 260:20 125:8 159:19 collateralized 8:24 68:15,25 70:7 71:3 cfo's 91:20 191:22 181:21 186:24 9:3,12 10:8 237:23 83:7,11,14 84:19,22 cheers 234:11,19 233:22 235:3 237:7 237:24 86:6 94:16,23 chain 101:6 140:7 251:8 colleagues 177:21 104:12 112:6 113:2 156:20 161:8 civ 1:3 5:10 collect 260:24 113:22 114:12 162:17 163:22 civil 1:3 4:14,16,20 collected 258:21 115:4,12 116:3,6,7 164:10 262:6 claim 192:11 204:22 collection 86:17 116:11 117:24 266:18 284:9,11 205:5,6 208:12 89:20 94:14 113:14 118:10 119:5 285:8,10,12,13 claiming 208:2 114:2,8,10 115:5 129:16 137:17,18 286:6,8 235:17 117:23 137:22 143:22 144:5,16 145:21 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124952 Page 8 (company - confined] 147:7 149:13 107:9,11 116:22 14:1 15:1 16:1 17:1 170:1 171:1 172:1 168:21 169:24 142:18 175:19 18:1 19:1 20:1 21:1 173:1 174:1 175:1 170:4,8 172:8 173:2 176:23 178:8 22:1 23:1 24:1 25:1 176:1 177:1 178:1 173:8 178:5 179:14 181:16 224:5,8 26:1 27:1 28:1 29:1 179:1 180:1 181:1 181:24 182:13 252:2 30:1 31:1 32:1 33:1 182:1 183:1 184:1 183:6 184:19,22 completely 140:24 34:1 35:1 36:1 37:1 185:1 186:1 187:1 185:13 186:6,13,16 197:2 38:1 39:1 40:1 41:1 188:1 189:1 190:1 186:18,25 187:7,10 compliance 83:16 42:1 43:1 44:1 45:1 191:1 192:1 193:1 187:16 188:4,18 114:18 115:10,16 46:1 47:1 48:1 49:1 194:1 195:1 196:1 190:10,11 196:16 complied 31:13 50:1 51:1 52:1 53:1 197:1 198:1 199:1 201:9 206:12 complying 34:12 54:1 55:1 56:1 57:1 200:1 201:1 202:1 209:13 211:21 component 150:25 58:1 59:1 60:1 61:1 203:1 204:1 205:1 214:15 218:2,8,14 components 154:17 62:1 63:1 64:1 65:1 206:1 207:1 208:1 219:3,10 223:6 composite 256:25 66:1 67:1 68:1 69:1 209:1 210:1 211:1 237:5 250:5,8,10 computation 155:23 70:1 71:1 72:1 73:1 212:1 213:1 214:1 253:21 255:2,15 155:24 74:1 75:1 76:1 77:1 215:1 216:1 217:1 256:12 259:3,5,21 concept 155:5 78:1 79:1 80:1 81:1 218:1 219:1 220:1 260:13 262:25 concern 90:8 82:1 83:1 84:1 85:1 221:1 222:1 223:1 263:3,5 267:8,14,20 concert 40:18 44:15 86:1 87:1 88:i 89:1 224:1 225:1 226:1 268:22 271:8 conclude 113:9 90:1 91:1 92:1 93:1 227:1 228:1 229:1 272:21 115:6 118:22 94:1 95:1 96:1 97:1 230:1 231:1 232:1 company's 41:20 119:23 98:1 99:1 100:1 233:1 234:1 235:1 45:23 46:12 217:7 concluded 105:14 101:1 102:1 103:1 236:1 237:1 238:1 266:12 113:7 114:23 115:2 104:1 105:1 106:1 239:1 240:1 241:1 comparable 159:11 137:23 138:6 107:1 108:1 109:1 242:1 243:1 244:1 159:13 187:13,17 209:2 110:1 111:1 112:1 245:1 246:1 247:1 compared 268:21 conclusion 187:22 113:1 114:1 115:1 248:1 249:1 250:1 compensated conclusions 208:8 116:1 117:1 118:1 251:1 252:1 253:1 276:17 208:11,14 119:1 120:1 121:1 254:1,12,19 255:1 compensation conditions 166:2 122:1 123:1 124:1 255:18 256:1,13 154:16,18 155:10 conduct 129:17,25 125:1 126:1 127:1 257:1 258:1 259:1 155:14 160:23 184:10 189:4 128:1 129:1 130:1 260:1 261:1 262:1 competency 68:5 191:22 192:5 204:9 131:1 132:1 133:1 263:1 264:1 265:1 competent 38:18,22 209:3 134:1 135:1 136:1 266:1 267:1 268:1 68:3,11,14 conducted 168:12 137:1 138:1 139:1 269:1 270:1 271:1 competing 167:11 conducting 96:8 140:1 141:1 142:1 272:1 273:1 274:1 complain 18:14 132:7 250:4 143:1 144:1 145:1 275:1 276:1 277:1 204:8 283:11 confi 70:22 146:1 147:1 148:1 278:1 279:1 280:1 complaining 124:15 confidence 38:5 149:1 150:1 151:1 281:1 285:21 124:19,22,23 201:6 67:12 152:1 153:1 154:1 confidentiality 208:24 209:8,22 confident 167:15,22 155:1 156:1 157:1 70:14 71:8 77:13 211:2 confidential 1:1,1 158:1 159:1 160:1 112:13,20135:5 complaint 18:18 1:142:1,1 3:1,1 4:1 161:1 162:1 163:1 149:21 284:6 19:12,20,25 39:24 5:1 6:1 7:1 8:1 9:1 164:1 165:1 166:1 confined 205:24 100:13,22 104:11 10:1 11:1 12:1 13:1 167:1 168:1 169:1 247:24 VERITEXT REPORTING COMPANY 212-267-6868 www.veritextcom 516-608-2400 EFTA01124953 [conformity - counsel] Page 9 conformity 121:18 contents 248:25 93:15 95:7 98:16 123:24 124:3,12 124:11 contingent 134:22 99:23 104:7 142:24 126:24 127:5 128:7 confronted 23:18 continue 244:8 179:25 182:12 128:13,16,20 confused 135:3 continued 284:2 190:2 192:12 129:24 130:6 205:2 285:2 286:2 211:15,16 212:4 131:I1,13 133:18 confusion 79:13 continuing 257:11 214:2,19,22 218:7 133:20,23,24 139:9,11 contract 76:12,24 218:13 219:12,20 136:15,18 137:21 connect 123:21 76:25 212:3 219:21 232:2,20 139:11 141:25 connecting 125:3 contracts 76:10 270:18 142:18,19 143:6,16 connection 100:18 121:4 coo 45:21 158:3 145:7 146:4 148:16 100:25 215:4 control 116:5 167:4,16,18 152:4,13 157:12,19 consciously 74:8 controlled 31:16 cooky 1:19 2:17 159:3 164:24 170:5 consequences 87:6 79:21 237:15 cooley.com 2:20,21 170:6 172:17,21,23 consider 65:8 controller 8:4 9:8 2:22 173:15,15 185:16 135:21 203:9,13,23 58:13 60:15 61:6,10 copied 257:14 186:11,12,14 187:3 205:15 207:10 62:19 260:3,23 copies 24:15 257:3 187:7,11 191:4,5,7 215:23 controls 4:21 59:10 copy 18:18 101:10 194:17,20 201:19 considered 127:4 199:23 224:10 245:25 203:14,24 205:8 185:12 convenience 28:19 248:19 250:23 207:11,11,18 210:7 considers 243:23 36:7,10 37:13 corbitt 228:8,9 215:12 232:6 236:9. consistent 142:20 convenient 37:5 229:8 236:12 239:20 150:12 151:4 conversation 66:24 corporate 15:9 249:10,11,22,23,25 240:17,17 241:9 83:17,19,20 88:13 238:16 250:2,5,6,11,13 272:20 89:13 91:10 92:8 correct 6:12 10:5 254:23 255:4,8,9,15 constantly 270:14 93:6,24 95:7,21 12:18 14:7 16:3,4 258:13 263:16,19 271:3 96:19 99:23 103:15 17:2,24 20:10,13,14 264:21 266:2 268:3 constitutes 126:15 106:6,7,14,19,23 21:4,7 29:12,18 269:10,20 272:16 consulted 220:24 107:2,6,13,18 108:2 30:2,6 31:15 34:4,7 278:22 279:4 consulting 149:6 130:20,24 131:5 45:8,9 46:8,9 47:17 282:10 150:4 164:18 134:10 136:16,18 48:7 49:2,7,13,14 corrected 128:3 cont'd 148:10 137:8 138:18 139:2 49:21 52:14,15 155:4 contact 221:12,13 139:16,17,25 144:2 57:14 63:4 68:13 correction 282:11 221:24 222:3,6 144:12,13 187:24 75:19,20,24 77:22 corrections 18:25 contacted 217:7,8 196:13 212:25 78:19 82:15 83:3 19:16 236:24 213:25 214:10 84:23,24 86:4 87:13 correctly 19:19,24 contacting 193:14 215:5,9 216:12,14 87:14 100:3 101:23 29:20 30:21 51:25 contained 53:20 219:25 221:7 102:17,19 103:2 67:22 204:6 117:20 223:25 225:23,25 104:9,16,18 105:6 corroboration contemplating 67:6 227:2,7 230:21 107:4,8 110:15,17 110:22 175:8 214:23 232:24 235:24 110:20,24111:3,18 counsel 35:20 46:21 contend 119:15 240:19 253:20 112:6,9 113:16,17 84:21 88:12 101:17 171:16 179:12 254:4 266:10 113:22,23 114:4 122:3 123:22 137:6 205:10,18 conversations 88:19 115:7 116:23 117:3 236:22 246:22 contending 136:14 88:19,22 89:5,10 117:20,21 121:10 248:18 136:17 90:21 92:10,12 121:15 122:10 VER1TEXT REPORTING COMPANY 212-267-6868 www.vaitext.com 516-608-2400 EFTA01124954 Page 10 [count - decided) count 257:9 99:24,24 100:5,17 183:17 184:3,5 dated 148:15 195:8 counterclaim 100:24 103:10,15 187:24 188:21,23 254:12 256:22 117:13,17 103:16 104:17,18 189:9,15,2 0,25 285:22,24 counterclaims 39:8 104:20,21 105:4,9 192:22 193:25 dates 57:2 194:5 39:13 52:21 53:2,25 106:7,14,20 108:17 196:14 197:22 281:4 115:19 283:15,20 130:23 139:16 198:20 199:15,22 dave 232:21,22 country 287:4 181:4 200:4,14,20,21 davld 88:10,11,14 county 282:4 288:4 d 201:6,23 204:11 88:19 101:16,25 couple 6:5 38:14 205:7 206:11212:6 180:24 189:15,20 d.b 81:5 190:2 192:4 196:11 95:6 96:21 99:23 212:10,22 214:14 d.b. 1:8,9 2:18,18 196:13,17 199:16 116:9 217:17 218:7,13 5:6,7,18 17:8,12,15 253:22 254:4 course 6:21 58:21 219:16,21 222:15 18:8 39:8,9,14,14 96:3 200:3,3 210:15 222:24 223:4,4,12 davis 46:3,6,7 64:5 courses 7:15 223:15,18,21 day 8:15 30:24,24 178:23 179:2 238:9 31:4,4 69:18 77:5,8 court 1:2 5:8 224:18,19,21,24 238:14 245:6 246:8 131:11,15 134:11 crap 253:24 225:24 227:16,20 253:14 283:16,17 137:5 196:18 198:5 created 32:20 227:20 228:2,5,14 285:18 creating 264:10 228:19 231:22 279:10 282:22 daily 277:17 287:23 288:20 credit 12:16 232:9,16 233:2,8,8 damage 172:8,25 dbz 21:1061:17 criminal 199:22 233:14,20,21,24 176:21 178:6,18 116:3 256:21 262:5 criminally 193:5,19 234:4,16,20 235:12 180:14 266:17 283:12,21 194:3 199:3,12 235:18,24 236:15 damaged 179:2 285:23 286:5,7 200:6 202:17 236:16 237:6 damages 176:4,20 dbzco 245:5 285:16 204:13 209:24 239:17 241:11,18 dan 17:17 22:25 dbzsecpr 254:11 211:6,7 212:16 241:24,25 242:7 26:23 31:21,25 285:20 217:18 219:4 243:24 244:3,7,13 40:18 43:3,5,9,12 241:19 242:2 254:3 244:18 248:6 249:6 de 1:3 43:14,22,24 44:2,15 deal 65:8 160:20 criteria 36:5 41:20 253:25 266:11 49:11,15 64:25 216:18 253:24 68:24 270:14,17,20,25 65:22,25 66:6 67:5 dealer 11:21 criticisms 69:20 271:3,19 272:3,6,8 67:11 69:8 79:12,16 dealing 63:7,8 81:23 crossed 126:7 272:14,24 273:5,8 79:21 80:2,6,11,15 187:14 crossover 246:9 273:12 276:25 82:2 85:9,25 93:13 86:8 csr 1:20 288:23 277:22 dealings 94:21 95:15,16 dealt 62:10 85:4,8 cup 157:17 dam's 86:19,20 102:7,8,10,12 108:3 177:19,20,21,21 currently 145:15 113:16 129:15 109:13,16 111:13 death 277:20,22 152:23 183:16 188:8 111:18,22 118:5 debt 238:22 239:2,5 customary 76:6,8 196:21 225:24 122:17 123:13,14 cutler 83:15 87:21 241:18 242:9 december 195:8 125:4 129:12 217:11 220:16 87:23 88:14,21,23 daniel 1:8 2:11,12 130:12 131:7,14 249:17,17,18 89:13 90:20 91:10 date 77:9 139:5,9 133:21 134:11 decide 12:19 119:20 91:11 92:3 93:4 178:20 179:23 138:13,18 139:2,17 121:18,24 122:5,19 94:5 95:2,10,12,16 198:24 221:20 139:25 143:10,19 123:2,9 95:21 96:20,23 97:2 250:16 256:14 143:25 144:11,11 97:16,24 98:7,16,21 277:15 279:10,11 decided 83:5 97:3 155:22 179:4,13,17 103:16 127:21 98:24 99:3,6,11,16 279:12 287:6 VER1TEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124955 [decided - dittmannj Page 11 141:7 143:12 delta 154:13 272:25 21:24 23:3 32:23 discretion 120:8 decision 13:14 65:23 demand 18:15 33:9 58:16 59:5 127:14 66:19,21,22 93:24 283:11 63:13 76:12,17 discuss 197:18 108:8 123:13,15,17 department 59:22 107:18 124:2 230:18 248:22 123:19 124:23 departure 221:8 152:24 165:9 discussed 88:6 128:11,14,21 129:3 233:4,22 235:3 202:24,25 204:7 135:8 175:18,24 188:9,11 199:21 depend 160:14 261:3 271:18,24 212:14 222:25 decisions 31:19 87:9 depends 214:20 275:5 277:3 223:13 231:11 120:24 278:9,9 differently 273:12 233:14 242:22 deem 121:5 deponent 287:7 difficult 108:4,6 243:10 244:5 deeply 209:6 deposed 5:13 109:21 111:20 248:24,25 defamation 176:3,5 deposition 1:16 3:13 227:20 241:6 discussing 143:11 179:13 197:19 3:17 106:3 281:4 difficulty 166:19 discussion 31:17 204:23 205:5,6 282:9 287:6 dinner 220:10 224:2 54:17 98:6 120:15 235:17 depositions 265:22 228:17 229:14 134:20,22 138:13 defamatory 197:6. deprive 6:16 230:19,22 231:4 140:8 201:18 203:10,13,23 204:7 deprived 258:24 direct 55:21 60:24 236:22 279:7 205:10,16 206:2 depriving 265:7 62:23 235:24 discussions 143:18 208:7,12 209:15 derivative 175:13 directed 192:7 225:2 230:23 derived 240:9 263:22 265:14 dishonest 193:6,20 defame 180:15 describe 210:12,22 directing 257:4 194:4 202:23 203:4 detained 192:12,24 described 14:3 16:2 direction 192:23 209:25 211:7 defendant 2:11,18 43:10 75:15 80:17 275:10 212:17,18 219:6 defendants 1:11,18 82:12 117:2 118:13 directly 59:19 60:5 241:14 39:8,14 52:21 53:2 121:9 131:22 60:11 61:23 267:23 dispute 77:22,24,25 53:25 116:22 174:21 209:4 director 14:18 16:12 78:18 81:7,10,14 117:13,17 283:16 251:13,24 16:21 82:14 108:22 283:20 deserved 66:14 directs 6:24 109:14,18 155:21 defending 5:7 desire 149:22 disadvantage 170:13,24 defenses 195:17 detail 10:25 11:2 272:11 disputing 170:15 deference 223:17 determine 44:4 disagree 118:15 disrespect 105:18 defined 79:4 80:16,22 82:11 130:7 206:17,18 106:2 definitely 88:3 89:8 121:8 263:22 208:11,15,16,17,21 distinct 27:12 183:13 216:24 determined 35:10 279:25 distinction 59:8 220:20 232:16 35:10 203:14,24 disagreement 62:8,25 79:18 131:7 239:13 204:2 128:21 129:3 201:16 220:17 definition 72:15 determining 40:12 disappointed 119:7 distressed 17:14 74:5 77:15 107:17 40:15 44:8,9,11 disclose 185:25 distribution 154:19 degree 160:13 develop 239:14 disclosing 104:6 distributions 154:25 delegate 44:2 difference 23:10 169:4 district 1:2,2 5:9 delegated 268:7 165:21 269:9 disclosures 194:23 202:11 203:3 delivered 208:16 275:16 195:7 285:15 210:16 deloitte 168:8,12 differences 270:4 discoverable 195:15 dittmann 211:23 170:17 185:16 different 10:19 13:2 discovery 181:12,22 215:17 216:11,14 266:7 13:14,21 14:3 15:14 194:7 VER1TEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124956 Page 12 [division - entity's) division 15:8 drop 226:3 257:14 258:15,21 employee 198:9 document 21:13 drum 20:7 262:17 263:23 217:22 39:19,23 52:25 53:5 drybsg 167:5 264:9,15,17 265:7 employees 180:19 53:12 64:8,11 75:23 dubin 17:17 67:6,11 265:16 181:24182:6 249:2 77:19 81:6 117:8 69:8,20 219:24,25 earned 65:21,23 252:14 253:5,10,17 137:11,11,12,12,13 220:4,6,9,21 221:6 152:18 154:14 267:22 137:14,19 195:3,9 223:25 228:11,18 256:8 269:25 employer 18:9 195:18 248:22 228:18 229:8,11 earning 258:11 employers 141:9,15 251:20 260:5 230:22 231:3 earnings 152:8 141:25 143:4 263:21 274:14 due 256:13 263:23 284:21 employment 21:20 documentation duly 4:3 ears 235:13 41:13 74:24 76:9,12 181:13 dunn 168:8,11,23 easily 166:4 76:18 148:19 151:2 documented 50:4 169:5 170:17 171:4 ebrecher 2:7 152:2,22 documents 46:18 172:4,24 185:15 echoed 241:15 ended 134:12,13 96:14 114:16,17 205:12 234:4 echoing 219:17 189:25 116:13,17 187:22 249:10,13 250:3,9 eci 269:12 270:5 engaged 194:2 254:21,24 261:16 251:17 258:5 economic 165:15 204:13 211:7 237:4 261:18 265:20 266:7 economy 164:25 engaging 279:6 doing 7:1013:20 dunn's 205:22 165:9,10 england 163:7,9 24:17 31:3 38:15 duties 13:6 27:6 effect 3:16 73:23 enormous 172:8,16 43:10 52:13 67:22 45:22 113:10 116:7 108:16,20 136:20 172:25 68:20 69:2,5,9,11 118:13 138:19 143:8 160:17 enormously 119:12 69:17,21 74:19 87:2 170:3 209:23 271:8,12 entail 8:6 87:6 91:15 96:24 duty 29:6 33:4 273:4 275:21 278:5 enter 121:3 125:4,4,6 128:6 47:18 48:3,8 116:4 effective 64:21 entered 148:21 200:22 211:17 126:16,22 127:5 effects 276:2 entire 107:6 140:23 259:7 170:9 272:10,15,21 effort 18:4 242:13 155:24 180:6 dollar 132:24 e eight 10:18 146:2 192:17 238:21,22 159:18 160:7 233:7 entities 9:24 33:7,8 earlier 12:15 28:21 dollars 133:4154:15 eileen 1:20 4:3 22:7 35:24 39:24 40:2 47:19,24 84:5,6,6 258:24 260:12 54:11 288:6,23 55:3 84:19 86:4 89:22 113:18 274:8 275:2 280:8 either 37:22 58:12 133:22 188:20 126:21 134:8 166:7 domestic 23:14 35:8 170:2 184:6 185:11 63:13 91:24 94:9 entitled 6:22 52:25 domestically 36:12 113:19 155:16 66:7 117:12 119:16 186:22 191:21 dots 125:3 156:11,12 158:2 206:20 261:12 201:22 206:24 double 11:17 12:14 205:21 265:24 288:11 207:5 210:14 216:8 else 181:2 entity 26:4 31:25 212:14 214:18,21 doubt 79:13 81:2,16 emerging 14:24 32:3,19,23 79:18,19 218:19 232:15,18 81:18,19,21,22,25 employ 218:17 79:20,20 80:9 96:9 234:10 252:24 227:17 243:2 125:4 151:25 258:12 downstairs 253:23 employed 7:8 16:7 153:12 157:9 early 86:17 89:20 dr 277:20,22 31:25 32:3 58:19,24 162:23 163:25 91:3,5 94:14 113:14 dreynolds 2:13 60:9 145:16 153:14 164:7 186:4 268:20 113:25 114:7,10 drink 216:23 220:25 217:25 218:14 entity's 121:14 115:5 122:17 230:6 246:16 219:9 222:4 VERITEXT REPORTING COMPANY 212-267-6868 www.veritextcom 516-608-2400 EFTA01124957 Iepstein - facts] Page 13 epstein 226:5,11,23 57:11 63:19,22 163:20,21 164:10 explore 41:21 229:16,19,20 230:3 65:13 82:5,9 93:7 164:15 165:5 174:6 express 226:6 244:2 230:5,11,12 233:12 102:11 109:4 176:24 177:4 178:9 expressed 166:6 epstein's 226:7 134:13 144:10 178:13 194:21,22 261:20 equal 255:23 145:20 151:19,22 245:4 252:4,5 expressing 200:7,23 equity 238:21,24 155:3,13 164:20 254:10,14 256:21 201:7,25 202:4,9 239:3,20,20,22,24 206:21 208:9 256:25 262:5,8,13 241:25 240:9,12 232:10 233:23 266:17,24 275:13 expressly 120:21 equivalent 269:25 239:24 240:11 277:7 278:8 280:10 extent 19:20,25 38:7 270:13 241:22 245:18 280:11,13 283:11 48:13 52:3,5 201:5 eric 183:15184:2 255:16 270:8 274:3 283:12,15,19,21,24 205:18,23 272:6,22 234:11,13,15 exaggeration 273:7 284:5,8,10,12,15,17 extremely 108:4 248:24 249:5 examination 4:6 284:19,21,23 285:5 226:22 errata 5:3 287:2 148:10 281:6 283:4 285:7,9,11,13,14,16 eyes 129:20 error 280:3 examined 4:5 285:20,23 286:5,7 f esq 2:6,7,12,13,14 example 12:7,15 exhibits 149:22 fd 227:16,16,21 2:20,21,22 42:16 164:5 face 142:7,7 essence 33:15 examples 257:7 existed 23:25 168:2 fact 67:17 85:15 essentially 32:22 exception 185:20,23 exists 137:12 90:8 111:22,25 61:12 223:7 188:23 expect 65:18 155:19 112:10,16 114:7,9 estate 8:5 11:4,5 exceptions 173:25 176:17,20 118:9 119:4 123:12 13:12 14:22 15:5 exchange 101:11 expectation 156:2 127:7 132:4,14 et 13:12 197:20 262:15 263:21 expected 155:21 133:6,9,14 138:25 199:14 225:3 exclusive 63:20 expense 27:25 28:4 144:8 158:12,14 242:24 243:11 excuse 119:22 120:4 28:22,23 163:11,13 165:13 276:19 279:20 executed 81:6,8 expensed 28:2,5,22 165:18 167:19 ethan 2:6 231:8,8 executive 139:22 28:24 29:2 168:25 169:3,17 event 69:19 72:19 146:7,15 expenses 27:18,21 172:12 182:14,19 72:22,24 75:15 exercised 124:16 27:22,23 28:8,11,12 182:24 184:12,13 77:16 80:16,22 exhibit 18:14 21:10 28:15,19 29:8,16,16 186:10 187:12 82:12 113:5 118:24 39:7,12 40:6 42:3 29:20 30:20 86:19 188:25 192:5 121:8,19,25 122:5 44:20 52:20 53:13 126:14 186:17,24 200:23 202:13 122:19 123:3,10 61:17 63:24 69:14 190:11,11 258:11 208:21 213:5 216:2 130:25 131:2 138:7 69:25 70:13,19 72:4 259:4,6,8 260:13 216:3 228:18 236:13 251:12 78:13 79:3,10 82:19 269:22 274:18,21 241:12 249:12 265:13 82:24 100:20 101:5 275:5 276:21 280:7 251:11 256:19 events 73:17 94:2 101:8 112:18,19,20 expert 34:15 257:13 259:16 170:7 174:21 184:9 115:21 136:22 expertise 77:3 261:16,24 262:20 184:21 186:5 251:7 137:2 140:6 148:4 expires 288:1 263:14 264:15 eventual 154:12 148:14 149:17 explain 11:8 62:8 265:3,5 266:3 272:5 everybody 166:18 150:16,19 151:8 151:16 171:15 272:8 275:8 everyday 279:10 152:7 153:22 154:8 explained 181:21 facts 105:23 174:4 exact 201:23 241:21 156:19,22,25 explanation 11:10 189:17,22,25 exactly 5:19 9:20 158:19 161:7,10,19 125:21,22 191:11 209:20 14:5 30:23,25 57:10 162:5,12,15,16 VERITEXT REPORTING COMPANY 212-267-6868 www.vcritext.com 516-608-2400 EFTA01124958 Page 14 [facts - fraud] 246:13 251:2 fifth 2:11 firing 174:18 187:6 failed 74:3 113:10 file 145:18 firm 43:19 84:16,18 foregoing 282:8 115:6 filed 5:8,11 18:19,23 88:12 90:24 109:21 foreign 23:15 failing 118:12,23 19:2,17 39:23,25 114:23 115:2 forever 143:20 failure 118:23 129:5 53:6,9 107:9,11 119:23 145:9,10 196:5 fair 49:14 103:22 117:5,18 181:16 179:5 208:25 209:2 forever's 143:23 104:3 166:8 279:5 195:9 217:11 210:18 forfeiting 72:19,21 faith 67:15 220:19 224:5 firm's 60:24,25 72:24 73:17 75:15 fall 191:22 229:16 235:17 firms 85:16 86:3 77:16 80:16,22 false 207:22 252:11 filing 3:4 175:8,15 190:4 82:12 113:5 118:24 falsely 273:10 final 66:22 83:19 first 9:2 23:17 34:18 121:8,19,25 122:5 274:18,21,22 92:10,12 38:9,14 41:2 64:6 122:19 123:3,10 familiar 18:16 24:11 finance 42:16 45:17 64:10 83:20,21 138:7 47:8 45:23 54:20,23 87:24 88:2,3,15 forget 174:13 family 202:20,22 57:12 58:2 166:3 94:12,18 106:3,10 222:15 246:2 225:5,6 financed 48:17 106:11 152:11,15 248:13 far 85:11 166:16 financial 35:23 152:19 155:10 form 3:8 149:18,24 february 147:16 46:16,24 47:5,14,20 180:10 187:18 150:17,21 151:9,11 161:13 162:21 48:10,24 49:4,6 189:19 218:3 223:8 244:17 262:20,24 280:6,20 50:2,7,15,23 51:12 225:21 245:10 284:16,18,20 federal 4:14,16,20 51:21 55:2 59:10 262:18 277:22 formal 39:23 5:8 34:12,23 195:10 114:19115:11,25 firsthand 180:14 forth 78:23 113:3 235:17 116:6,10,14 165:2 five 89:3 149:6 121:2 137:6 149:4 fee 89:21 156:7,8 165:10 177:12,15 193:24194:10 254:25 255:11,12,19 261:7 187:14 188:3,19 245:13,15 248:12 fortress 101:17,20 263:8 213:15,15 237:4 249:13 265:19 110:2,13,14,16,21 feel 38:18 39:2 254:25 255:7 266:14 110:25 111:4 fees 86:18 94:14 financially 176:18 fixed 14:23 15:8 141:16,18 142:21 113:15 114:2,8,10 financing 60:23,25 florida 230:8 142:25 146:17,23 115:5 117:23 150:4 find 139:25 144:18 flowers 219:7,15 147:3 172:21 256:4,7,12 257:4,14 144:20,22,25 145:3 flying 197:2 found 86:9 183:2 260:24 262:17 164:22 195:25 focusing 179:10 205:24 207:20 263:24 264:10,17 230:11 235:20 follow 82:2 274:7 208:4 261:19 265:16 243:5 261:23 275:2 280:15 fell 191:19 fine 159:19 followed 135:11 four 5:16 131:21 felt 65:21 119:10 finesse 279:7,17,19 190:3 156:11 194:10 129:25 244:6 272:6 279:19 following 83:5 106:7 201:20 233:13 felton 183:15 184:2 finessing 279:14 195:13 265:22 184:4 234:11,13,15 280:5,18 follows 4:5 148:9 frame 59:17 180:5 248:24 249:5 finish 14:8 force 3:15 34:7 frank 250:15,17 fiduciary 29:6 33:4 fire 99:7 111:13 124:24 251:7 47:18,24 48:3,8 fired 73:24 74:3,9 forced 83:7,11,14 frankly 202:8 126:16,22 127:5 74:14 99:13 110:22 104:12 112:2,5 fraud 193:5,15,19 170:3,9 271:12 111:5,7,8 112:8 119:5 124:20 194:3 202:14 272:7,9,15,20 125:6 141:10 186:16 204:14 211:8 VER1TEXT REPORTING COMPANY 212-267-6868 www.ventextcom 516-608-2400 EFTA01124959 [fraud - going] Page 15 212:15,16 219:5 268:18 269:5,8,16 267:15 268:22 gist 89:12 109:13 241:14 269:17,24,25 269:5 270:15 271:4 212:24 213:3 free 140:24 272:22 273:2,2,11 271:14 273:18 give 8:14 11:9 12:20 french 237:15 273:14,21,25 274:2 277:3,8 278:6 31:2 56:20 84:3 frequent 268:9 274:11,19,19,24 further 3:7,12 148:9 98:21 100:5 157:21 frequently 270:22 275:5,6,17,17 288:14 158:5,15 197:5 freshman 11:9 276:22 280:19,20 fyi 276:2 224:10 238:21 fried 250:15,17 fund's 273:9 g 247:20 251:7 funded 40:13 44:5 given 5:20 189:3 general 35:20 46:21 friend 108:5146:11 44:13 195:19 217:4 79:2,8,25 80:5,10 241:2,3 funding 41:17 42:17 246:22 81:23 82:11 88:12 friendly 243:13 42:22 43:3 238:15 giving 118:14157:8 101:17 113:9 front 8:8,16,19 276:11 248:17 259:6,9 118:11,21 119:16 53:14 142:22 funds 10:1422:15 glenn 17:17 67:6,11 119:22,23 120:7,22 154:11 22:24 23:3,5,9 24:5 69:8 219:24,25 121:15 122:4,8 frustrating 173:19 24:9,13,22 26:15,25 220:4,6,9,12 221:6 123:2,9,18,22 124:3 frustration 166:7 27:2,14,16,23 29:17 222:6,16 223:5,6,25 124:6,9 127:8,14 fuller 232:4,21 31:20 32:15 33:16 225:6 226:13 128:2,22 129:4,10 functioned 10:21 34:11 37:22 40:17 227:11,18 230:7,22 129:16 130:2,16,19 functions 9:21 41:4 40:20 46:17,25 47:6 go 13:917:7,10 131:6,9 132:2,17 fund 22:13,17 23:8 47:14 48:3,9,11,17 39:21 40:7 44:16 133:22 137:22 23:11,12 26:8 27:19 50:3,3,8,16,24 53:16 59:4 61:20 138:6 164:25 28:3,4,5,8,14,15 51:13 57:13 58:2 73:6 78:21 82:19 168:13 169:7,10,18 29:21 32:18,21 33:5 61:15 62:6,12 63:2 85:16 92:23 93:12 170:10 171:3 172:2 33:9,25 34:20,20,24 63:9,12 84:22 85:16 97:18,23 98:7 99:4 184:8,18 185:13 34:24 36:2,4,13 86:18 94:16,20,22 99:25 105:10 186:3 188:14 43:19 55:6,14 58:8 113:15,21 114:3,11 106:13 108:8,17,22 191:14 256:16,17 58:9 62:10,10 70:7 114:19 115:4,12 109:14,19 111:19 276:9 86:6 133:10,11,15 116:7,11,15 117:24 115:23 116:9 generally 19:10 133:15 156:6,6,7 118:5,10126:9,14 129:13 145:24 24:11,14 26:20,21 158:4,4,6 165:3,16 126:17,23 127:2,5 147:21 157:17 34:16 44:8,11,14 166:11 167:3 169:6 128:4 132:15,24,25 163:9 191:8 195:24 47:3 67:3 71:15 169:6 183:3,6 133:9,14,23 134:3 196:11 210:19 124:14 165:9 185:14 186:5 187:2 138:8 143:21 144:5 223:14 233:11 generic 147:13 187:3 190:10,12 144:16 166:22 238:22 267:6 277:5 gentleman 96:3 228:11,15,19 239:7 167:5 168:22 getting 146:6 147:2 goes 28:3 278:18,20 239:7,11,12,19,23 169:12 170:9 171:4 279:9 209:14 239:25 240:2,6,7,8 184:9,10,20,23 going 6:6,9 22:23 gibson 168:8,11,23 240:9,10 254:19,20 186:5,7,17,18 77:12 92:23 93:9,14 169:5 170:17171:4 255:2,14,18,19 187:15 188:4,18 97:22 98:9,12,18 172:3,24 185:15 256:11 258:10 190:10 228:11,15 99:25 107:17 109:5 205:12,21 234:4 260:9,12,14 261:21 228:19 240:13 110:14 111:14 249:9,13 250:3,9 262:21 263:12 250:10 258:17 122:3 136:4,9,21 251:17 258:4 264:5 265:15 259:20 261:11 141:7 157:3,16,17 265:19 266:6 267:19 268:12,13 263:23 267:14,15 158:22 159:3,5 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124960 Page 16 [going - handful] 167:6 193:5,21 21:1,9,10,11 22:1 142:1 143:1 144:1 250:1 251:1 252:1 196:8 199:3,14 23:1 24:1 25:1 26:1 145:1 146:1 147:1 253:1 254:1,10,17 200:15 202:6 203:6 27:1 28:1 29:1 30:1 148:1,4,5,7,13,14 255:1 256:1,21 204:12,24 209:18 31:1 32:1 33:1 34:1 149:1,16,17,24 257:1,2 258:1259:1 209:24 211:6 213:9 35:1 36:1 37:1 38:1 150:1,15,16 151:1,7 260:1 261:1 262:1,5 217:17 219:4 254:2 39:1,6,7,12 40:1 151:8,11,15 152:1,6 263:1 264:1 265:1 260:8 261:5 277:19 41:142:1,8,21 43:1 152:7,10 153:1,21 266:1,17,22 267:1 278:10 279:8 44:1 45:1 46:1 47:1 153:22 154:1 155:1 268:1 269:1 270:1 good 4:24 17:25 48:1 49:1 50:1 51:1 156:1,14,18,19,22 271:1 272:1 273:1 18:2 85:24 174:14 51:6 52:1,19,20,24 157:1 158:1 159:1 274:1 275:1 276:1 186:2 216:20,20 53:1 54:1 55:1 56:1 160:1 161:1,7 162:1 277:1 278:1 279:1 219:14 222:8,10 57:1 58:1 59:1 60:1 162:16,20 163:1,3 280:1 281:1 282:7 231:9 241:2,3,4,4 61:1,16,17,20 62:1 163:21 164:1,5,10 282:18 283:5,10,13 243:17 63:1,23 64:1 65:1 164:12 165:1 166:1 284:13 287:6,7,21 gotten 165:8 167:16 66:1 67:1 68:1 69:1 167:1 168:1 169:1 gruss's 41:17 167:24 275:10 69:13,14,17,24 70:1 170:1,23,23 171:1 guarantee 152:2 government 237:15 70:10,12,13,18,21 171:18,21,22,24 160:15 gp 130:14 135:12,14 70:25 71:1,6,7,9 172:1 173:1,14,18 guaranteed 151:20 201:11,13 72:1,2,8,11,12 73:1 174:1 175:1 176:1 guess 6:8 7:23 25:20 graduate 7:3 73:7 74:1 75:1 76:1 177:1 178:1 179:1 79:23 84:11 134:16 graduated 7:7 77:1,13,23 78:1,3,6 180:1 181:1 182:1 158:24 175:5 grand 200:14 78:11,21 79:I,9 183:1 184:1 185:1 209:14 grapevine 181:9 80:1 81:1 82:1,19 186:1 187:1 188:1 guessing 84:4,9 gratuitous 171:12 83:1,6,6 84:1 85:1 189:1 190:1 191:1 145:23 great 67:9 163:18 86:1 87:1 88:1 89:1 192:1,5 193:1 194:1 guy 65:8 216:19,20 greenwkh 162:9,24 90:1 91:1 92:1 93:1 194:22 195:1,6,10 216:20,20 219:14 164:2,8 94:1 95:1 96:1 97:1 195:18 196:1 197:1 223:8,16 241:4,4 greg 257:3 98:1 99:1 100:1 198:1 199:1 200:1 243:17 grew 62:4 108:5 101:1,4,5,11 102:1 201:1 202:1 203:1 gym 89:8 92:11 93:6 gross 150:3 103:1 104:1 105:1 204:1 205:1,4 206:1 93:24 95:7 98:16,17 grosvenor 183:15 105:24 106:1 107:1 207:1 208:1 209:1 105:8 248:25 108:1 109:1 110:1 209:15 210:1211:1 h ground 6:5 111:1 112:1,18,19 212:1 213:1 214:1 habit 142:10 group 7:9,19,21 8:5 112:20113:1 114:1 215:1 216:1 217:1 hairs 204:3 9:22 13:18,18,21,23 115:1,18,18,18 218:1 219:1220:1 hal 45:20 14:2,2,23,23 17:14 116:1,3 117:1,5 221:1 222:1223:1 half 147:20 255:24 164:13 216:19 118:1 119:1 120:1 224:1 225:1 226:1 280:8 272:10,11 120:16 121:1 122:1 227:1 228:1 229:1 hall 235:23 236:3 growing 275:18 123:1 124:1 125:1 230:1 231:1 232:1 hallways 89:7 grass 1:4,16 4:1,2 126:1 127:1 128:1 233:1 234:1 235:1 hampered 166:9 4:10 5:1,5 6:1 7:1 129:1 130:1 131:1 236:1 237:1 238:1 hand 191:4246:16 8:1 9:1 10:1 11:1 132:1 133:1 134:1 239:1 240:1 241:1 288:20 12:1 13:1 14:1 15:1 135:1 136:1,23 242:1 243:1 244:1 handful 198:13 16:1 17:1 18:1,13 137:1 138:1 139:1 245:1,4 246:1,13 18:14 19:1 20:1 140:1,5,6,11 141:1 247:1 248:1 249:1 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124961 [handing - income] Page 17 handing 148:13 helped 144:18,22,25 host 179:5 262:7 266:19 handled 206:4,7 215:13 hour 147:20 281:4 identified 23:11,12 happen 58:14 98:10 helping 13:10 houston 211:19 41:19,22 63:3 86:9 98:13,18 110:3 helps 211:10 how's 197:2 132:6 252:19 253:6 128:6 162:14 henry 231:18,20 hugs 181:2 257:2 happened 19:5 hereto 121:6 hugshire 181:2 identify 56:22 63:25 102:6 119:8 200:23 hereunder 120:25 huh 16:13 100:2 69:24 70:18 151:13 230:15 235:21 hereunto 288:19 101:13,15 140:13 184:3 195:20 202:8 260:20 hey 213:10 141:21 146:19 203:7 251:4,7,12 happens 174:11 hi 197:2 157:11 160:12,16 253:11 254:17 happy 91:12 hierarchy 59:22 161:14 166:24 identifying 42:15 hard 6:7 high 11:10 177:14 192:20 imbalance 239:3 hardest 106:9 highbridge 17:12,13 210:2 immediately 93:16 harm 207:13 18:10 21:17,25 hundreds 133:3 233:3 harold 180:25 22:11,13,21,24 23:2 258:24 260:12 impact 275:22,23 harry 96:3 23:4,7,8 31:15 husar 54:16 55:22 imply 112:7 hats 131:16,21 40:11,23 55:5,6 57:7 61:8 implying 200:10 201:20 higher 108:15 husar's 54:18 57:10 247:16 head 13:1144:22 highest 68:20 hymie 233:12 important 47:20 60:18 104:14 hire 45:13 55:22 hypothetical 191:9 106:24 158:25 269:13 56:18,25 57:15,18 235:5 headhunter 141:24 58:25 59:2 71:16 imposed 185:3 idea 8:14 87:8 143:3,13,16 hired 17:22 56:14 improperly 235:19 118:20 157:9 hear 173:21 270:17 56:23 57:16 86:2 279:23 280:6 161:22 165:19 heard 6:15 90:12 163:14 164:19 inaccurate 21:3 199:14,17 200:17 140:20 147:10 hiring 35:2 204:16 216:6 251:4 200:17 219:23 199:15,18 200:18 hit 140:24 251:9,14 225:22 226:14 214:7 217:25 228:6 hold 78:24 115:20 inappropriate 228:21 229:18 247:6 253:5 115:20,20 120:5 207:10 231:9 233:6,18 heck 93:14 127:8 128:5,15,22 inappropriately 239:14 244:20,22 hedge 22:13,15,17 129:4 154:7 162:4 127:3 276:18 62:6,10,10,12 63:2 193:17 278:7 280:9 incentive 156:8 identical 105:20 63:9,12 85:16 158:4 holding 95:3,11 incidental 121:6 270:10 158:4,6 165:3,16 105:5 include 40:11,15 identification 18:15 166:11,22 167:3,5 home 247:19 41:3 42:15 45:23 21:12 39:10 52:22 183:3,5 honest 86:12 47:13 151:17 276:2 61:19 69:16 70:16 held 1:18 118:12 hope 67:16 145:3 included 41:8 57:13 101:7 140:7 148:6 119:11 125:8,13 hopefully 175:12 75:2 116:8 126:22 149:19 150:18 126:4 144:4,14 hoping 164:22 includes 72:15 151:10 152:9 190:14 208:18,22 hopson 237:11 152:17 155:9 153:24 156:21 hell 108:25 240:15 241:17,23 including 24:8 161:9 162:18 help 139:25 145:3 242:3,7,16,21,25 49:19 78:3 121:6 163:23 164:11 146:15 164:22 243:4,7,14,22 167:4 194:24 245:7 215:14 243:4 244:17 245:22 income 14:23 15:8 254:13 256:24 244:17 253:8,15 150:7 151:17 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124962 Page 18 [income - investors] 153:23 154:5 infrastructure interviews 258:5 41:18 42:16 43:4 156:10 159:6,9 145:10,12 265:19 44:5,12 48:16 55:12 258:11 269:22 inherently 215:23 introduced 216:25 62:11,13 101:18,20 284:23 285:5 Initial 17:19 194:23 introduction 147:15 273:10,14,15 incompetent 39:2 195:7 285:14 invest 23:14 32:20 274:24 incomplete 107:23 initiated 214:11 33:24,24 36:2,4,13 investor 26:2,4,7 inconsistent 142:17 injury 173:9 208:2 236:4 269:17 27:17 35:7,8,8,11 incorporated 72:11 inquire 259:18,22 invested 23:15 26:3 35:11,12,25 36:3 incorrect 143:7 259:24 32:5,8,17 269:7 37:22 55:13 86:18 144:24 205:14 inside 200:25 investigate 87:12 94:20 113:15 114:3 268:25 Insofar 30:23 32:16 investigated 125:9 118:5 126:14127:2 increase 239:11 230:6 186:23 205:13,13 129:20 143:20 275:21 instance 11:14 24:2 investigating 86:16 173:8 174:2 179:8 increasing 278:6 52:12 87:24 273:17 87:2 91:7 94:13,19 183:17 206:16 incredibly 177:18 280:18 113:14 207:15 208:15,25 incur 28:10 instances 34:5,9 investigation 83:22 209:13,19,20,21 Incurred 27:25 institution 165:10 83:25 84:25 87:7 225:19 226:4 28:11 institutions 19:21 88:7,15 90:8,12 228:15 230:6,13,16 independent 43:9 instruct 236:21 91:19 92:19 96:8 234:23 235:10 43:21 250:4 instructing 277:25 105:11 168:8,12,14 236:15,23 245:19 indicating 136:22 instruction 271:22 168:23 169:5,11 245:20 247:25 indirectly 267:23 278:20 170:20 171:5 172:4 248:6,7,10 250:23 individual 12:12 instructions 157:21 185:15 187:6,17 252:20,25 269:3 43:18 130:12 131:8 intend 111:16 191:11 203:14,24 investors 22:19 211:20,22 175:21 204:2 205:21,22,25 23:13,14,15 24:5,13 individually 121:13 Intent 207:13 206:5,13,15 207:23 25:3,14,22 27:9,11 133:21 233:10 intention 175:10,14 211:5 236:8 250:4 27:12 28:6,14 29:6 269:5 interest 131:23,25 250:11 34:11 48:3,9 126:9 individuals 15:3 258:19 259:9,10,19 investigations 126:16,23 129:20 25:9,16,18 29:23 260:9,15,18 261:4,6 204:10 132:5,15 143:12 30:16,19,23 33:6 261:7,12,21 263:11 investing 32:15 144:3,14 167:7 40:3 43:6 50:19 263:22 264:5,11,20 205:23 206:14 168:4,7,15,22 169:5 51:17,19,23 195:14 264:23 265:8,15 investment 13:11 169:12,19 170:5,7 industry 165:2 266:5 21:24 23:18 26:25 171:3,9,10,12,17,21 166:4,12,17,18 interested 288:17 31:19 32:13 33:23 172:4179:18 177:13,16 193:13 internal 170:18 55:11,13,13 133:10 180:17 182:11,25 193:13,24 245:16 international 7:9 133:15 170:16 183:6,11,12 184:9 245:17 246:4 interpreted 131:24 2291 237:19 239:8 184:21,21,23 inform 41:17 42:21 interrupt 6:7 239:19 242:12 185:14 186:4 43:3 interview 96:15 243:11 273:19,23 188:24 189:16,22 Information 110:21 162:8 251:7 273:25 274:4 190:3 191:10 192:4 181:23 195:15,16 interviewed 91:13 276:13 192:24 196:15,16 197:6,9 198:20 91:24 96:18 249:12 investments 22:19 198:22 205:22 247:21 273:9 277:6 249:16 250:I4,17 27:17 29:7,8 32:5 206:14 212:7,8,12 33:4,6,8 40:13,16 225:24 232:6,7,8,17 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124963 (investors - knowf Page 19 : 232:24 233:2,7,13 Jason 60:13 jsb0158 140:6 257:13,23 258:6 233:14,19 234:3,6 Jeffery 226:17,18 284:10 265:6 269:2 235:19 236:6 245:6 231:6 233:11 jsiffert 2:14 know 12:21 16:6 246:10 251:24 Jeffrey 226:5,22 judge 206:6 26:13 28:17 33:14 252:13 253:2 255:3 jennifer 2:7 judgment 186:3 34:15 35:13,14 36:5 258:17,23 259:6 jersey 4:11 July 5:9 22:3,17,21 36:14,14,21 43:11 267:9,17 268:11,13 jim 60:12 182:2,12 23:5,17 24:24 25:25 46:23 47:23 56:6 268:15,17 270:15 job 8:6 10:24 13:4 34:16,18 41:4 45:7 57:3 58:15 64:12 270:20,25 271:4,17 22:20 24:17 27:4 149:7 181:16 67:21 68:8 73:18 271:23 272:9,10,12 29:19,22 30:2,6,15 jump 6:15 75:17 76:4,8 77:20 272:15 285:18 30:19 32:11 38:8,18 June . 1:13 21:21,23 85:21 88:2 90:11 invests 32:22 145:12 38:22 39:3 40:10 22:3 262:12 283:2 93:13,22 99:2 145:13 41:3 43:10 47:2,4,9 287:6 288:20 104:24 106:11,19 Involve 10:24 30:5 49:15 50:20 54:22 jury 18:14 200:14 107:21 108:4,18 54:22 55:15,17 55:15,17 58:16,17 283:11 111:11 I13:12 involved 12:22,25 59:5,6 60:22 62:4 jv 276:10 119:3 120:13 62:25 62:15,25 63:11 65:5 k 125:20 126:19 Involvement 192:5 67:22 68:20 69:2,5 131:18 134:13 kahn 45:20 180:25 ir 181:3 69:10,11,17,21 74:4 138:2,21,24 143:23 keep 18:433:437:4 Irish 4:10 74:8,14,19 85:5 147:12 160:13,19 37:12 47:20 189:12 Issue 128:11 169:17 90:9 115:6 118:23 166:21 168:16,19 264:9 169:19 170:25 126:22 128:6,15 169:8 171:7 172:6 keeping 33:6,16 171:9 206:5 267:8 129:16 140:2 172:15,19 173:4 34:10,10 36:15 Issued 169:18 144:19,20,22 145:2 174:7,9,17,19,22 kept 27:15,24 32:12 170:16 171:24 145:4 146:6,9,10,18 175:4 178:19 87:8 89:15 168:21 193:3 209:11,12 146:24 158:25 179:22 180:14 189:9 240:13 242:8 165:8,14,22 167:16 181:6,12,18 182:15 kesavan 76:24 198:6 issues 83:6 84:17 167:18 243:5 182:16183:4,14 kind 5:23 8:21 11:2 87:19 89:21 190:9 254:22 184:11,13,24 185:5 11:2 23:19 27:22 199:8 212:14 jobs 14:4 51:24 58:6 186:21 187:19,21 108:25 157:24 217:15 230:8 166:4 167:3,4,4 191:3,4,24 192:2,9 202:15 204:21 256:11 270:6 joe 143:18 192:16 193:12 210:25 213:3 214:6 Issuing 173:12 240:5 John 2:13 196:20 197:14 216:11 225:6 item 232:24 joined 13:18 18:8 198:24,24 199:12 240:25 242:20 items 54:5 257:19 22:3 56:16 199:13,16 201:15 277:13 Ivan 246:2,3 247:8 joint 276:10,11,11 202:3 206:9 207:25 kinds 192:22 199:9 247:10,13,13,17,20joseph 139:21 207:25 210:11,20 203:9 204:7 211:3,3 247:23 248:13 156:23 166:7 213:5 217:20 219:6 269:21 j jrodrlquez 2:8 219:23 225:18 knew 31:7,9 35:17 jsb0101 161:8 285:9 226:3,9,14,15 227:9 Jack 174:8,11 36:24 52:3,6,12 january 64:22 77:10 jsb0112 162:17 69:9 74:12 84:24 227:12,22 228:13 77:11 79:6,8 80:21 163:22 285:11 228:17,22 229:3,7 85:23,25 177:11 jsb0126 156:20 229:18 230:5,9 80:21 188:14 224:6,19,25 285:7 232:8,19 234:5,7 226:9 228:25 236:23 237:2 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124964 Page 20 [know - levine] 241:11,13,20,21 114:23 115:2 197:21 225:16 122:18 123:14 242:2 243:3 248:4,8 119:23 185:2 190:4 227:25 228:4 126:10134:23 249:15 251:5 208:25 267:2 268:4 236:24 246:13 135:2,24 136:19 252:16,18 259:12 275:25 learned 34:19 65:10 170:25 171:8 259:15 265:2 law's 58:16 59:5 65:19 66:20 87:6 184:15,20,24 267:13 269:4,8 61:4 88:15 90:6 94:13,19 185:12,19,24 207:6 274:13 275:12,12 lawrence 83:15 95:2,9,10,16 98:17 207:8 278:3,12 280:22 87:20,23 88:14,21 106:20,21 122:24 legally 119:16120:5 knowing 159:20 88:22 89:13 90:20 178:5 187:25 188:6 124:11 144:2,13 165:14 91:10,11 92:3 93:4 188:7,12,15 191:8 lending 55:21 knowledge 20:15 95:21 96:20 108:17 193:23 196:2 letter 21:11,16 59:8 75:23 90:16,19 108:20 130:23 219:20 234:25 109:25 148:5,14 210:18 212:9 135:16 139:16 235:13 236:14 149:4 182:20 247:23 250:12 181:4 248:6 252:21 266:8 206:16 207:16 280:17 laws 34:6,12,23 266:9 208:13,15 209:13 knowledgeable 35:14,18 36:7 leave 83:7,11,14 225:19 24:24 38:12 269:11,21,21 104:12 109:20 247:25 248:6,10 known 85:15 lawsuit 5:8,11,25 112:6 119:5 124:21 250:23 251:3,8 knows 197:10 175:10,15 192:11 124:24 186:16 283:13 284:13 1 211:21,24 213:14 187:6,7 letting 111:19128:6 213:17,21 214:23 leaving 221:15 129:13 Lp. 5:6 23:8,11,13 214:25 215:5,11 253:21 level 68:21 75:22 25:3 26:3 32:8 39:9 225:3 228:23 229:8 led 94:2 104:22 159:6,10 193:8 39:14 46:3,7 64:5 229:16,19 232:21 122:24 123:7 187:6 leverage 238:20 70:7 81:5,10 132:25 lawyer 6:14,22 lee 2:14 180:24 242:23 169:6 246:8 253:15 35:22 36:19 71:16 189:15,21 190:2 levine 2:20 4:7,15 275:18 276:4 77:2 104:7,8 118:14 192:4 253:22 4:22 5:4,5 21:8 22:7 278:15 283:17 195:9 236:18 lee's 254:4 39:5,11 49:10 52:19 Lp.'s 27:14 247:12,16 248:23 left 16:24,24 17:4,9 52:23 54:11,13 language 74:23 75:2 249:22,24 260:4 17:24 110:19 137:5 61:16 69:12 70:12 76:6 78:11 261:19 138:13 146:3 70:17 82:16,18 lankier 2:10 lawyers 53:6,9 54:5 155:25 178:23 101:3,9 125:20,23 large 15:22 16:5 85:4,11 96:5 107:12 179:2,22,25 180:4 126:2 140:4,9 59:7 160:13 204:4,5 117:18 118:9 182:9 187:10 147:18 148:11 larger 275:22 188:16 216:8 217:2 196:12,18,23 198:5 149:20,23 150:20 largest 237:20,21 217:4,7,9 224:14 211:18 212:5,7,11 152:5 153:20 late 169 84:10 249:9,13 216:21 218:7,17 156:13,18 161:6,11 93:10,11,20 97:10 97:11,17,21,22 lay 59:16 222:5 232:17 162:11,15,19 layman's 124:5 233:15 234:16,20 194:21 195:2 122:16 177:25 lead 135:9 192:6 234:24 235:11 199:25 211:11,13 178:7 learn 9:2,5 23:21 237:8 240:24 254:8 231:16 245:2 254:9 law 36:12 37:7 64:23 83:13,24 legal 29:3 39:23 254:15 256:20 57:19 58:18,25 59:2 84:13 86:15,21 46:23 52:25 74:5 262:4,9 266:13,16 59/5 60:14 61:9 87:16,20 91:5 94:4 78:2 117:19 118:22 266:20 280:23 63:14 84:16,18 86:2 187:23 193:20 120:4 121:17 122:9 283:7 VERITEXT REPORTING COMPANY 212-267-6868 www.veritextcom 516-608-2400 EFTA01124965 [li - management] Page 21 li 57:19 60:14 61:4,9 264:10,19,24 lunch 147:19148:12 managed 22:15,25 63:14 267:2 268:4 loans 11:5,5,24 12:7 166:7 184:6 216:23 40:16,20,23 46:17 275:25 13:2,9,9,10,12,15 220:9 229:14 47:6 48:17 50:3,3,8 liar 272:2 14:13 253:23 254:5 50:16,24 51:13 55:7 liddle 2:4 lobby 65:25 luncheon 147:22 61:15 62:7,12,13 liddlerobinson.com logistics 40:12 44:4 m 116:6,7,11,15 2:7,8 44:9,12 133:11,16 268:16 m.b.a. 77:2 lie 142:5 london 163:3,6,13 management 18:11 mail 101:6,11,24 life 226:18 163:15,17 21:25 22:12,14,14 102:16,17,23 109:5 liked 174:3 long 7:20 10:16 110:10 140:7,11 22:22 23:2 26:19 limitation 121:6 16:21 33:11 124:10 141:23 142:2,3 27:3,5,7 29:17 limitations 41:18 143:23 163:3,17 31:16 40:11 43:19 143:17 156:20 42:22 43:3 82:7 211:18 228:12 46:8 47:11,12 58:3 157:4 161:8 162:17 limited 26:3,4,9 250:8 277:13 60:2 61:10,13 62:5 162:21 163:22 27:11 61:18 64:4,13 look 40:452:24 164:10 193:16 62:6,9,13,14,17 70:10 71:5 78:22 53:11 63:23 71:16 63:2,8,15,21 64:14 197:2 235:22 255:24 263:12 72:2 78:6,9 82:21 64:17,20,24 65:4,11 246:19,23 256:22 283:22 84:16 87:18 115:18 65:15,19 66:2,8,14 261:20 262:6,I0,15 line 62:23 150:24 120:16,16,19 132:7 68:15,25 70:7 71:3 263:13 264:2,7 157:22 287:9 145:21 151:7,15 266:18 267:16 84:19,22 86:6,17 lines 42:17 116:9 160:9 161:17 87:11 89:21 94:14 284:9,10 285:8,10 link 176:18 163:20 164:12 94:16,23 113:15,21 285:11,13,24 286:6 liquidity 239:11,15 165:22 173:17 114:2,8,10,12,20 286:8 256:11 262:21,24 176:23 177:2 mails 142:5,6,12 115:4,5,12 117:23 list 196:4,6 277:7 210:20 252:2 117:24 118:10 156:23 157:22 listen 51:6 255:10 278:13 161:12 163:24 126:14 129:16 literally 166:22 looked 39:18 132:19 132:25 143:22 164:13 257:3 167:4,5 183:23 257:20 271:19 144:5,16 156:7 261:23 264:3 279:7 looking 17:13 69:23 167:12 168:21 266:25 litigation 228:2,5,7 87:3 110:21 157:25 maintain 29:6 62:16 169:23 170:4,8 little 33:19 80:14 looks 141:4 275:19 62:19 171:2 172:8,25 160:24 161:3 loss 10:4,7 173:8 178:5 179:14 maintained 198:14 223:16 lot 20:9 45:13 182:10,13 183:6 maintaining 28:18 live 132:16 108:25 109:2 184:19,22 185:13 majority 272:24 lived 271:19 132:12,21 134:5 186:4,6,13,18,25 making 30:5 31:19 living 36:12 222:5 241:16 187:15 188:4,18 32:11 51:20 67:6 1k 1:9 2:18 5:7 39:9 lots 132:15 190:10,11 196:15 68:6 123:13 159:11 39:15 40:11 116:3 love 216:8,8 205:20 206:12 159:14 169:11 283:18 loved 216:9 218:2,8,14 219:2,10 179:17 201:15 llcs 25:17 1p 1:8 2:18 223:6 237:5 250:5 223:22 264:4 265:8 Ilp 1:19 2:4,10,17 Iswlaw.com 2:13,14 276:12 250:10 253:21 loan 11:9 237:23,24 2:15 255:2,11,13,14,19 manage 27:8 29:22 238:23 259:23 ltd's 275:23 256:4,7,12,12 257:4 30:3,16,22 260:5,25 261:3,5,7 ltd.'s 27:16 257:14 259:3,5,21 261:10 263:5 260:13,24 262:17 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124966 Page 22 [management - month] 262:24 263:3,5,8 256:23 262:6,13 meaning 173:16 mike 232:4,21 265:16 266:12 266:18,21 means 68:11 113:12 240:21 243:9 267:8,14,20 268:22 market 9:16 10:8 207:2 261:6 million 108:15 271:8 272:21 140:24 143:4 166:2 meant 72:22,25 154:6,15 155:17,17 manager 26:15,20 166:5 167:20,23 174:9 155:18,22 156:17 27:2 255:20 238:7 meet 17:15 220:6 159:18,22 160:7,15 managing 15:3 30:5 marketer 153:18 221:5 246:16 160:18,24 161:3 30:19 43:16 45:23 markets 14:24 meeting 43:7 251:6 175:25 238:23,24 47:11 131:8 170:8 marking 151:11 meetings 17:19 91:2 276:7 280:8 manalapan 4:11 156:18 91:6 millions 133:3 manner 48:18 marriage 288:16 member 66:7 116:3 mind 75:18 79:14 manually 276:3 material 23:24 memo 167:25 168:4 81:2,16,19,22 90:14 march 101:12,22,25 170:7,19 184:9,21 168:6 174:2,21 125:2,5,7,12 126:3 102:22 109:6 168:3 186:5 245:5 263:17 126:7 132:6 138:23 168:7 169:18 173:7 materials 24:7,16,20 280:21 285:17 139:9 170:24 174:2,21 179:8 math 8:12 50:20,22 memoranda 24:4,8 189:14,20 226:16 180:6 182:20 51:10,19,25 52:4 24:12 254:18 226:17 243:19 192:19 193:3,10 matt 54:16,18 57:7 memorandum mine 76:24 194:13 208:13 61:8 233:12 37:18,21 170:16 mineola 287:4 219:22,22 244:24 matter 5:18 6:3 254:12,19 255:17 minimal 158:6 247:3,24 248:5 36:12 37:13 65:14 255:18 256:13 minus 55:12 249:18,18 250:23 126:11 232:22 258:20 285:22 minutes 31:5 76:5 252:10257:11 266:3 288:11,17 memorandums 31:8 109:18 266:14 267:4 277:11 280:4 mattered 37:12 memory 107:13,18 miscommunication 280:7,20 matters 5:17 19:5 107:21 241:24 42:12 mark 18:13 21:8 49:6,18,19 90:7 memos 13:11242:12 misspoke 117:15 39:5 52:19 61:16 91:19 117:22 men 174:14 238:11 69:12 70:12 101:3 205:12 mentioned 87:19 mistake 52:13,14,16 140:4 149:15 152:5 maximize 272:21 89:22 226:10,11 misuse 186:16 153:20 156:13 maxine 2:22 merit 1:21 modified 77:16 161:6 162:11 mean 11:8,22 25:6,8 messrs 55:22 modifying 78:11 194:21 254:9 54:9 55:10,13 58:22 met 17:17 50:11 moment 44:18 256:20 262:4 58:23 81:8,9 89:23 218:17 220:4 money 126:9 134:20 275:22 103:19 105:13 221:11 230:3 249:9 134:22 135:8,16,17 marked 18:12,15 112:7 129:19 249:20,21 136:10 154:12 21:12 39:10,12 132:18 135:12 meyers 257:3 176:10 190:12 52:21 61:19 69:16 156:15 158:21 michael 237:11 212:2 213:16 69:23 70:15 101:6 159:18 162:13 michelle 61:25 223:17,23 228:19 140:7,10 148:6,14 169:23 173:23 62:15,22 63:7,11,18 260:14,16 261:12 149:18 150:17 174:5,15,18,20 ralcromanage 30:25 261:22 264:6 265:7 151:9 152:8 153:23 176:6,8 194:12 mid 57:4 86:15 88:7 265:9 156:20 161:8 206:25 210:18 88:11 92:2 165:16 month 54:25 84:3 162:17,20 163:22 211:4 225:22 middle 6:7 145:25 241:8 255:24 164:11 194:23 238:18 241:7,10 173:18 267:16 279:12 245:6 254:13,16 271:16,21 273:16 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124967 (monthly - objee.tionj Page 23 monthly 156:4 nay 54:25 55:4,8 14:6,11 15:24 16:3 o'hara's 62:15 255:20 268:8,10,12 156:6 16:8,24 17:4,10,25 o'neal 233:12 277:2 279:15 necessarily 68:22 18:4 oath 3:15 20:18 77:4 months 38:10,14 125:11 127:12,16 noncompete 70:14 119:14 146:2 149:6 155:11 142:11 203:25 70:23 71:8 284:6 object 6:15 165:20 193:24 220:14,15 necessary 41:21 nonpartner 159:16 objection 4:24 11:12 224:2 121:5 nonrecourse 42:17 15:23 19:7 20:6,23 morning 139:18 neck 163:18 nonsollcit 70:15,23 23:23 25:4 28:9,16 morphed 62:4 ned 235:23,25 236:3 71:9 284:7 29:9 30:10 31:6 mortgage 8:24 9:3 252:24 253:8 nos 21:10 61:17 33:10,17 34:8,14 9:12 10:9 12:4 need 4:22 8:9 29:15 69:14 70:13 101:5 35:16 36:17 37:3,6 15:10,11 45:2 47:2,7137:10 148:4 150:16 151:8 37:9 43:15 47:22 mortgages 11:15 203:2,3 246:12 156:19 161:7 245:4 48:5 49:8,9,17,22 motive 171:17 172:2 255:6 263:4,10,11 254:10 256:21 51:2,15 52:10 56:5 173:13 264:19 262:5 266:17 67:23 68:7 73:3 mouth 6:11 106:10 needed 46:22 48:9 283:12,21,24 284:5 74:10 85:13,18 86:5 106:12 129:17,19 130:3 284:8,12,17,19 86:13 88:17 90:17 moved 18:5 132:16,19 159:21 285:7,9,16,20,23 93:21 97:1499:19 movie 174:9,13 260:25 264:23 286:5,7 107:15,20 113:11 moving 166:19 needs 108:8 notary 1:22 4:4 114:14 115:8 msleeper 2:22 negatives 216:9 288:1,6 118:16 119:2,18,25 muivenna 1:20 4:3 negotiated 76:24 note 49:8 203:18 120:6121:21 288:6,23 137:4 notice 195:19 122:21 123:4,20 rivers 256:23 negotiating 137:5 notify 184:21 124:13 125:17 285:25 neither 41:14 103:8 185:13 186:4 126:6,18 127:11,15 n 210:17 notwithstanding 127:17,23 128:8,17 net 55:9 153:11,13 244:12 128:25 129:7 130:9 name 4:8 5:5 25:6 new 1:2,19,20,22 november 148:15 130:17 131:17 26:18 57:18 61:21 2:6,6,12,12,19,19 148:25 149:4 150:5 132:10 134:7 142:8 147:13 173:20 4:4,11 5:9 7:4 42:15 150:12 151:5,20 144:6,23 165:25 174:13 175:2,11 183:24 217:5 287:6 163:4 275:21 282:2 179:11 180:9,11,15 166:13,15,20 167:8 287:2,4,4,4 288:2,4 182:17 192:14 169:13 170:11 287:7 288:7 193:22 249:17 171:6,14 172:5,10 named 96:3 news 140:19,20 258:5 172:14,18,22 173:3 names 57:17 195:13 nice 198:18 number 108:14 173:10 176:12 195:25 234:7 nicholson 174:8,12 196:11,19197:13 178:10 185:4,9,17 medals 237:13,14 nine 155:10,23 248:13 249:15 186:8,20 189:2,5 239:4 242:14,16 220:7 numbers 108:17 190:7,18 191:15,17 243:8 245:21 nodding 6:12 44:24 137:7 175:18,19,20 191:20 200:9,16 nature 13:6 15:6 25:13,15 154:19 128:12 166:25 175:23 195:14 202:2,18 203:16,19 189:4 221:12,19 167:9 0 204:15,19 206:3,8 nods 44:22104:14 o'brien 2:21 280:13 207:24 210:8 227:3 222:2 252:21 269:13 236:20 248:3 276:20 o'hara 61:22,24,25 nomura 7:25 8:2 9:6 268:24 270:3 62:22 63:7,11,18 9:11 10:14,16,21 272:17 279:18,24 VERTTEXT REPORTING COMPANY 212-267-6868 WWW. veritext. com 516-608-2400 EFTA01124968 Page 24 [objections - owning] objections 3:8 4:23 offer 21:16 91:23 okay 4:17 6:17 200:23 201:8,9,25 objective 227:12 offered 147:15 78:24 82:25 102:20 202:10,15,19 203:5 obligated 82:2 169:7 162:8 215:6,8 149:12 155:7 204:11 210:7,16 258:12,18,25 offering 24:4,7,8,12 173:19 185:22 241:18 242:9 260:14 31:8 37:18,21 195:10,23 196:7 opinions 210:13 obligation 52:14 254:18 258:20 203:11 213:7 opportunities 17:14 96:12 129:25 office 8:8,16,19 244:21 246:14 22:24 23:7,11 168:13 171:8 184:8 14:14 16:11,22 253:13 263:17 242:23,23 243:11 184:16,20,25 185:3 24:16 46:12 89:7 266:23 267:7 272:5 opportunity 5:2 185:12,19,24 140:23 200:13 280:14 6:17 23:5,9 55:6 188:24 206:23 214:7 old 287:4 93:17 95:12,17 207:4,6,8 237:23 officer 3:14,17 once 13:8 60:14 83:5 242:25 271:9,19 272:7 35:24 83:16116:2 108:3 119:23 opposed 79:19 obligations 132:16 officers 170:4 168:11 197:17 options 41:21 237:25 offices 1:18 138:13 218:21 238:25 order 68:21 273:10 observe 116:2 138:15 243:10 241:8 250:19 ordered 173:22 obviously 135:9 official 77:10 81:9 278:25 ordering 174:16,18 137:5 221:3 offitt 235:23,23,25 one's 118:23,23 174:20 occasion 249:21 236:3,3 252:24,24 oneonta 7:4 original 18:20 59:4 occasions 249:13 253:8,15 ones 10:11,12 65:4 152:24 occur 265:3 offshore 23:15 26:8 ongoing 180:3 originally 88:8 occurred 58:11 27:19 28:4,5,8,15 onshore 23:13 26:3 222:5 239:16 80:18 82:13 90:4 28:23,24 29:21 27:20 28:2,3,7,10 241:12 121:9,19,25 122:20 32:18,21 33:25 28:14,22,23 29:21 originated 10:12 190:9 194:9 34:20,24 35:8,11 32:17,20 33:20,24 55:20 238:3,17 october 45:7 103:24 36:3,4,13 58:9 34:20,23 35:11,25 originator 9:18 122:17 123:7 133:10,15 168:22 36:2 58:8133:10,15 oshinsky 85:9 132:23 133:11,16 184:20 185:14 168:22 184:19 ought 196:5 235:20 139:3,19 140:12 187:2 239:7,12 185:14 187:2 239:7 outcome 288:17 156:23 157:4 177:5 240:7,9 268:13,17 239:11 240:2,6,8 outside 84:21 177:8,25 178:7 269:4,6,17,24 273:2 254:19,20 255:18 253:14 179:2,11 180:5,11 273:14,21,25 256:11 262:21 overallocate 274:23 180:15 182:9,17,20 274:11,19,24 275:6 263:12 268:11,17 overstuff 273:20 183:19 187:25 275:17 280:19 269:4,6,16,24 273:2 overstuffing 273:22 189:17,22 190:3 og0622 152:7 274:2,18 275:5,17 overweight 273:13 192:13,18,25 193:2 284:21 280:19 273:15 193:10,22194:16 oh 18:219:9 29:10 000 282:13 owe 213:16 196:12 197:11,14 42:7,10 50:18 56:21 operated 81:17 owed 47:19 108:19 197:22 198:3,7,10 57:9 58:23 67:2,25 operation 255:7 135:16,25 175:16 198:22,23 205:8 68:16 83:21 120:10 operations 45:17,24 212:2 228:20 211:14 219:25 140:17 160:5 162:2 55:16 60:18 owes 108:14 221:21223:19,24 189:7 200:3,24 opine 170:21 207:5 owned 79:21 228:14233:4,15 218:11 221:15 opinion 106:24 owning 223:5 234:17,21,25 238:12 277:23 170:23 177:19 250:15 252:9 178:3 191:18 200:8 VERITEXT REPORTING COMPANY 212-267-6868 www.veritextcom 516-608-2400 EFTA01124969 [p&I - people) Page 25 p 115:23 117:17,20 113:2,9 116:2 partnerships 25:17 p&1 8:7,18,19 9:25 117:25 118:7,13,24 118:11,22 119:16 parts 107:2 241:23 10:3 13:20,22 15:4 177:2 178:8 251:25 119:22,24 120:7,22 party 182:5 202:21 15:4,7,13 54:24 paragraphs 82:22 121:10,15,20 122:4 234:11 55:4 274:10,11 83:2 100:15,23 122:9,20 123:2,9,18 passed 164:3,8 . 279:11,12 252:7 124:6,10,10 127:8 passing 224:9 p&Is 14:15 paraphrasing 109:3 127:14128:2,22 patricia 196:19,20 p.m. 148:3 281:7 271:11 129:4,10,16 130:2 196:24 197:5 package 11:2412:3 pardon 93:14 130:16,19 131:6,9,9 pay 28:7,7 33:8 238:3 134:17 132:2,17 133:22 58:20 90:14152:10 packaged 9:14 part 30:7,14,19 135:7 137:23 138:6 190:12 228:19,23 packaging 11:4,9 32:11 33:3 34:11 154:19,21 155:6,10 229:2 243:18 page 40:4 44:16 41:11 42:14,18 155:12,20 159:15 258:18,25 260:14 53:11 72:3,19 73:7 44:14,15 46:10,14 161:4 168:13 169:7 263:11,11 73:9 77:15 78:9,21 47:4,9 48:8,15,19 169:10,18,23 payable 62:3 153:9 78:22 80:14 82:21 48:21 49:24 50:6,14 170:10 171:3 172:3 154:13 156:8 117:6,18 120:17,20 51:11,2452:7 54:6 184:8,18 185:13 255:20 121:8 148:19 63:17 70:25 71:19 186:3 188:14 paying 128:4 260:12 149:10 157:3 160:9 87:11 102:2 114:20 191:14 219:8 261:4 161:17,18,21 162:2 115:12 143:12 227:11 276:10,12 payment 154:10 163:2 173:17 177:3 150:4 169:9 170:9 partner's 124:3 257:4 263:23 264:9 233:11 255:10 171:13 175:14 255:24 264:15,16,17,20 275:13 277:7 239:7 partners 1:9 2:18 payments 259:19 278:13 280:6 participating 13:13 5:7 39:9,15 65:4 pays 255:19 282:11 283:4,10 particular 32:21 85:7 86:2,9 91:23 pearly 108:10 287:9 157:9 158:5 204:12 147:8,11,16 154:18 129:14,17,21 130:3 pages 149:24 267:6 239:19,23 270:2 161:25 162:9,24 130:13 132:8,20 282:8 276:22 277:8 164:2,7 283:17 pecora 60:13 paid 27:20 151:5,24 280:18 partnership 27:11 pecora's 60:19 255:14 256:4,7 particularly 165:2 61:18 64:4,13 70:4 pendency 153:13 257:14 258:12,12 171:2 190:5 70:6,10,22 71:2,6 people 15:15,17 258:15 259:10 parties 3:4136:6,12 73:12 74:24 75:2 16:7,18 17:18 19:21 260:9,15,17 264:5 288:15 76:2,13,16,25 77:5 20:13 31:2 32:12 264:12,24 265:8,15 partner 26:5,9 77:17 78:22 79:9 33:8,20 37:8 45:13 266:5 43:16 64:16,19,24 80:11 91:2,6 112:12 45:16 47:11,13 paper 260:25 261:3 65:7,11,15,18,20 112:18 113:3 54:14 56:19,20,22 261:5,9 263:5 66:2,7,14,20 67:7 118:25 120:23,25 58:4,7,7 60:4,10 papered 264:24 68:2,6,15,21,25 121:2 122:18 124:2 88:3 132:6,19 papering 259:23 69:18 71:8,11,14,21 124:7,12,21,25 135:25 141:8 142:5 paragraph 40:5,8 73:4,13,20,21 75:9 132:9 135:4 136:5 166:3,11 167:12 41:22 43:10 44:16 75:11 76:3,22,23 136:10 137:22,24 173:21 177:22,22 44:19 49:20 53:16 77:6 79:2,8,25 80:5 138:9 154:10 194:2 179:5 183:7 191:16 53:21,24 54:6 72:3 80:10,18 81:4,23 197:23 198:21 192:23 193:13,23 83:4 88:24 112:2,5 82:11,13 90:24 283:22 194:2 195:19 196:4 97:25 98:4 108:5 198:20 209:11,12 VERITEXT REPORTING COMPANY 212-267-6868 www.veritesttcom 516-608-2400 EFTA01124970 Page 26 [people - problems) 210:7 241:16 100:20 101:8 220:13 240:20 273:3 245:13,15,16,17 115:21 137:2 places 139:7 possibly 17:18 36:25 253:4,14 255:6 150:19 154:8 placing 239:4 88:10 89:7 100:9 268:20 156:25 158:19 plaintiff 1:6,17 2:5 142:9 174:22 percent 255:24 161:10,19 162:5 195:16 183:16 244:9 276:15,16 278:16 164:15 165:5 174:6 plaintiff's 52:20,25 potential 141:9,15 278:18,20 177:4 178:9,13 117:12,16 194:22 141:25143:3 percentage 172:17 254:14 262:8 195:6,7 283:19 power 121:7 255:13 266:24 278:8 285:14 practice 257:23 perform 49:15 280:10 pleading 117:5 258:6,10 260:8 113:10 121:3,4 peters 196:19,20,24 please 4:9 6:8 22:4 preferred 127:20,25 138:19 160:14 197:4,5 39:21 40:4 51:6 premises 95:25 performing 68:20 pg 148:4 149:17 63:23 82:19,22 prepaid 259:4,8 period 42:9 60:8 245:5 284:12,15 112:15 117:16 prepared 20:18 165:17 178:7,21 285:16 125:25 151:16 39:23 143:2,3 179:10,24 180:5,6 pg00388 69:14 203:18 267:6 267:19,22 180:11 192:17 283:24 271:20 277:19,24 prepay 259:6 263:7 193:21 194:11 pg00605 150:17 plus 55:11 156:6 prepaying 261:13 270:2 277:9 284:17 160:11,11 257:7 prepayment 259:11 permanently 149:5 pg0402 70:13 284:5 point 15:15,17 present 89:9 220:11 permission 275:10 pg0613 151:8 41:12 50:20 67:10 249:22 permit 126:10 284:19 96:22 135:22 pretty 215:15 235:5 perry 1:4,164:2,10 ph 213:24 146:16 156:16 previously 87:19 148:7 170:23,23 phlilipe 85:9 170:23 178:17 148:8 171:18,21,22,23 phone 91:22 180:16 197:18 222:10 prick 157:16 173:14 192:5 254:2 180:21,24,25 181:3 236:17 249:2 pride 143:14 213:9 282:7,18 283:5 181:6 189:16,21 253:16 213:13 287:7,21 195:14 198:17 pointing 127:18 principal 54:14 person 36:11 61:21 235:12 pool 11:15 22:18 56:20,22 79:25 80:5,9,9 88:2 phoned 217:6,7 238:4 printed 246:20,24 106:3 131:4 237:3 physically 247:2 pooled 238:25 prior 85:7 214:24 243:23 246:4 247:7 pick 91:22 198:17 poorly 69:21 221:15 248:14,16 picked 235:11 portion 150:8 private 55:20 personally 5:25 picking 189:16,21 151:18 152:17 237:16 238:16,16 58:23 79:19 128:5 piece 103:19 223:5 154:10 probably 107:16 132:7,18,20 200:5 pin 215:18 portray 273:10 119:6 132:11 228:7 pinning 194:5 position 16:25 56:15 140:22 158:3 192:9 persons 127:9 pipeline 43:7 94:6 143:5 153:17 247:19 272:13 persuade 246:12 place 17:20 80:23 157:24 158:3 277:10 pertaining 217:14 83:18 89:6 92:6,9 171:25 188:15 problem 128:4 219:16 92:11 113:20 122:6 189:4 208:10 160:11 190:6 peruses 40:6 42:3 123:3,10 139:2,18 positions 209:21 258:10 44:20 53:13 63:24 152:23 165:16 possible 62:12 problems 94:7 69:25 70:19 72:4 166:11 179:21 135:17 175:7 258:9 78:13 79:3,10 82:24 180:2 186:6 215:10 194:12,14,15 242:7 VER1TEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124971 [procedure - reason] Page 27 procedure 4:14,21 196:17 quarterly 255:21 random 197:2 proceed 260:8 prospects 165:14 256:4 range 157:15 158:15 proceedings 288:10 protect 109:3 question 3:9 4:25 158:18 288:12 132:13,21 134:5 6:19,23 14:9 22:4 rate 11:25 259:20 process 12:22 protection 145:19 29:11,13,14 30:8,11 268:4 273:11 272:19 279:9,14 provide 153:2,4 30:13,14,17,18 275:16 277:8 produce 8:18 168:14 255:19 33:19 42:4 43:11 rates 50:8,11,16,24 produced 8:20 provided 46:24 48:2 50:12 51:7,7 51:13,21 52:6,8 261:19 267:16 47:15 73:12 74:21 56:12,13 59:475:18 267:9 product 8:4 168:7 82:7 120:21 138:8 99:20 100:21 rating 11:6,2512:16 173:13 204:10 providers 177:20 105:19,21 110:8,11 12:19,20 207:23 252:14 125:18,19,24 ratings 12:17 production 10:22 provides 4:16 144:21 169:15 rattle 57:16 14:12 192:10 178:15 185:20 ray 216:15,17,18,18 profit 10:3,7 276:21 provisions 75:8 195:21 203:21 218:16 promote 276:3,6,7,8 76:16 78:2,12 136:9 204:4,5 227:14 ray's 219:8 276:14,18,23 137:24 188:17 232:23 235:7 reaching 193:14 277:25 278:10 prudently 206:4,7 251:12 260:23 reaction 90:13 promoted 16:12 public 1:22 4:4 261:25 read 22:8,9 24:2,7 17:3 145:21 169:12 question's 6:9 32:25 33:13 37:17 promotes 276:20 177:6 206:14 288:1 questions 6:6,16 37:23 41:24 44:19 proof 108:10129:14 288:6 24:21 120:12,15 45:3,4 72:23 75:7,7 129:17,22 130:3,13 publication 173:7 quibble 191:13 75:25 83:2 100:13 132:8,20 192:19 quibbling 169:16 100:19 118:2,17,19 proper 28:14 46:17 publications 181:11 quit 99:4 128:24 199:25 47:6 48:11,17 publicly 238:6 quote 83:11,14 200:2 282:8 116:11,15 purchase 86:18 104:12,13 109:18 reading 23:24 78:17 properly 50:4,9,17 94:20 113:16 114:3 112:2,5 117:19 reads 41:16 42:20 50:25 51:14,22 52:9 118:5 132:13 134:5 115:25 206:12 279:22 purport 19:21 140:18,19 157:8,14 real 8:5 11:4,5 13:12 proposed 162:23 purpose 31:25 173:18 275:21 14:22 15:5 157:16 proposing 161:22 purposes 77:16 276:13 realize 196:5 251:16 proprietary 10:13 79:25 80:5 92:19 quotes 19:20 251:20 10:15 15:14 16:2,8 121:2 203:8 r really 38:14 66:3,5 prosecuted 193:6,19 put 97:6,8 108:7 90:14 108:18 racusin 54:16 55:23 194:3 199:3,12 149:20 178:20,21 134:20 165:13 60:6,12 163:19 200:6,6 202:17 198:17 230:11 219:17 227:8 182:2,12,21 204:13 209:24 232:16 238:21 243:20,20 racusin's 55:15 211:6,7 212:16 274:11 276:3 reason 35:4 36:9,15 rafael 231:25 217:18 219:5 putting 238:23 37:2 67:20,25 69:7 raised 223:17 241:19 242:2 254:3 q 187:9,23 196:5 raising 223:7 prosecution 199:22 213:13,16 227:6 qualified 37:21 ran 22:25 29:17 prosecutor's 200:13 234:2 253:22 270:9 quarter 152:11,15 183:22 proshan 88:10,11 270:11,12 287:9 152:19 256:8 257:5 88:14,20 196:11,13 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124972 Page 28 [recall - reply] recall 10:2 15:19 245:25 246:23 redeeming 167:6 48:10 114:19 16:20 17:5 19:3,18 248:23 277:11,14 redemption 172:17 115:11 116:10,13 21:22 22:10 25:5,12 receivership 145:14 reductions 276:21 116:14,17 187:15 25:13,19,22 26:16 receiving 140:22 refer 24:16 53:24 188:3,19 26:17,18,19,21 259:20 276:23 117:16 121:7 280:5 relationship 198:15 31:11 32:2 33:2 recess 82:17 147:22 reference 158:18 222:9,11,12 223:2 35:5,17 36:23 37:10 211:12 266:15 174:9179:17 264:4 237:18 238:8,13 37:15,23 38:16,18 recited 31:4 237:6 referenced 70:11 240:25 246:7 41:6,7 53:10 56:9 recites 20:2 178:7 relationsh ips 57:2 59:3 60:6 reciting 136:18 referencing 178:11 254:25 65:10,13,24 66:12 recognize 21:13 referred 231:8 released 277:13 67:2,3 71:22 72:9 53:5 169:22 184:7 referring 46:3 80:14 279:13 72:13,23,24 73:5 210:6 115:18 132:14 relevant 187:14 74:5,11 75:22 77:9 recognized 127:20 134:6 138:4 163:6 188:2 77:21 78:17 81:13 recollection 91:15 168:3 174:7 183:5 relied 51:19,23 77:3 81:15 83:21 85:10 154:4 156:9 162:7 262:3 280:6 relies 205:5 86:23 88:6,13,18 162:22 163:25 reflect 274:5 281:3 relocate 158:8,13 89:11 90:22 92:16 164:6 249:19 reflected 191:10 rely 49:15 93:4,7,8 96:4 97:6 recommended 280:21 relying 50:21 51:9 98:20,23 99:5,9,10 100:17,24 104:19 reflects 274:14 51:16 99:16 100:10 99:14 100:8 101:2 118:11 119:24 refresh 162:7,22 100:16,23 200:21 102:9,11 103:18 reconcile 54:24 163:24 164:6 204:18,22 104:20 105:3,4,7 reconciling 55:3 249:19 remain 108:10 106:17,22,23 109:4 record 4:9 6:23 22:9 refusal 228:23 129:14 110:6 111:15 31:17 32:25 33:13 refused 228:19,25 remained 243:13 123:11 133:2 54:17 82:17 106:4 regard 167:13 remains 241:5 138:16 139:15 118:19 128:24 regarding 96:19 remember 89:12 145:20 155:15 140:8 147:22 registered 1:21 90:15,18 94:8 158:11,16,17,20 148:12 191:10,25 regular 221:24 100:12 106:6 107:3 159:17 176:2,6 200:2 201:18 277:2 107:6,25 134:15 183:22 184:5 211:12 231:14 regularly 267:12 139:5 140:3 147:14 199:19 214:16,16 264:9,15 266:15 regulating 116:13 158:23 212:21 216:13 219:19 280:12 281:2 relate 276:6 242:3,4,5 246:18 232:18,18 235:4 288:12 related 91:19 248:15 239:16 2A5:18,24 recording 190:23 186:24 188:18 repeat 19:23 22:5 247:4 248:11,16 records 29:7 190:10 203:13,23 32:24 144:10 250:14,16 251:10 recounting 235:23 240:10 269:21 203:21 271:20 254:7,7,8 260:6 recruiter 17:11 288:15 repeated 218:18 261:14 265:10,14 139:22,23 146:8 relating 46:18 repeats 19:25 265:17 266:2 268:8 recruiters 146:16 116:17 117:22 rephrase 4:25 6:20 275:7 red 173:22 174:5,8 179:7 269:11273 :9 49:10 129:2 receipts 150:3 174:10,16 relation 179:16 replaced 57:7 receive 261:12,21 redeem 226:12 187:2 replacement 18:6 received 13:8 redeemed 226:12 relations 46:16,19 reply 52:20,25 154:12 211:18 46:25 47:5,14,20 117:12,17 283:19 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124973 [report - tight] Page 29 report 16:14 26:22 requests 172:17 29:25 30:3,7,2/ 51:21 52:7,9 138:15 56:10 60:2 169:18 required 28:20 29:3 41:12,15,17 42:14 267:10 268:4,12,16 169:20 171:3,8,10 47:4 195:9 260:5 42:21 43:2 46:15 272:22 273:11 171:12,16,22,24 requirement 159:9 48:16,22 49:5,25 275:16,23 276:16 172:7,25 173:8,13 reserved 3:9 50:7,10,15,18,23 276:21 277:14 179:8 192:19 193:3 residential 15:9 51:4,12,20 52:8 278:15 280:24 205:11,24,25 resign 102:3,14,19 54:7,19 57:6,8 returns 55:12 207:20 208:3,4,6,8 103:4,7 104:19 60:15,20,24 62:18 267:15 268:21 208:12,14,25 109:7,10 110:5 63:15,17,21 91:20 270:16 271:5,13,17 209:11,19,20,22 111:8,14 113:25 114:4,13,20 271:23 276:2 277:2 211:5 249:7 251:13 resignation 109:24 115:13,13 116:4 277:8,12 278:2,6 251:17,18,21,21,23 109:25 117:25 118:7 159:2 279:7,15 280:19 252:9,10 268:9,9,12 resigned 102:2 170:25 191:22 reverse 15:12 268:16 280:4,15 110:23 111:2 112:7 260:23 271:12 review 5:2 18:22 reported 16:18 140:20 141:3,9,13 responsible 31:3 53:8 71:13 77:19 26:23 45:20 50:9,17 141:15,20 143:5,9 41:15 43:18 44:8,11 82:22 170:18 50:25 51:14,22 52:9 143:13 47:10 48:23 50:19 276:25 54:15 56:4,8 60:3,5 resigning 111:5 57:12,25 58:8 59:9 reviewed 54:2 156:4 61:2 62:20 80:2,6 respect 9:12 46:24 59:11 60:23 61:6 reynoids 2:12 177:22,22 205:20 80:18 82:13 121:10 62:5 93:25 94:6 ridiculous 93:2 206:13,16 209:20 121:19 122:20 95:3,11 97:4105:5 185:7,10 267:23 279:8 127:10,22 188:3 105:15 113:7 right 6:14 13:24 288:10 190:17 205:12 118:12 I19:11 25:7 30:9 33:7 reporter 1:21,22 238:6 120:5 125:13 126:4 34:13 42:8,9 48:4 4:12,17 respective 3:3 267:9 127:9 128:5,15,22 59:15 68:6 69:5 reporting 45:18 278:6 129:4 133:22 144:4 77:11 82:4,8 103:20 49:6 51:10 59:19 respects 126:5 128:3 144:15 147:2 170:8 103:25 104:4,13 60:10 61:21 62:16 129:6 172:12 186:6 190:15 105:11,22 107:14 62:19 171:20172:3 respond 39:24 191:12 199:13 107:19 110:9,14 287:2 275:20 208:18,22 209:3 111:9 115:14 reports 8:16,17,18 responded 277:18 223:7 239:4 241:13 123:19,23 124:17 242:8,11 267:9 responding 275:15 rest 5:19 125:10,11 130:16 repos 15:12,12 response 108:24 restaurant 197:16 130:21,22 132:2 represent 5:6 19:4 116:22 160:10 220:7 133:12,19 134:6,23 86:3 150:4 249:25 262:16 263:4 result 105:10 135:7,25 137:9 253:2 responsibilities 41:9 results 168:14,23 143:9 144:9 155:7 represented 79:9 42:18 43:9,2144:3 169:4,11 170:19 157:23 159:18 250:9 44:15 45:11,22 171:4 172:3,24 160:21 165:6 representing 211:20 46:11 47:24 48:20 185:15 187:5 166:19,23 168:9 reputation 175:22 49:16 55:2 57:24 205:20 206:13,15 169:24,25 170:10 176:11,18,21 177:6 60:17 61:5,7 116:8 206:21,22 172:13 173:2 177:17 178:2,6,18 117:2 121:14 resumed 148:8 180:12 182:7 179:3 194:18 191:19 retain 18:7 239:3 186:19,21 187:17 request 184:3,5 responsibility 14:16 return 41:20 50:8 188:20 189:10,13 229:22 262:16 14:20,22 15:2 29:23 50:11,16,24 51:13 195:22 201:14 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124974 Page 30 [right - shooters] 207:7,17,22 208:22 rules 4:14,16,20 6:5 screw 171:21 seniority 189:3 209:17 232:17 31:4,7,10,13 33:23 screwed 171:22,23 sense 4:24 185:8 235:9 249:14 33:23 34:3,6 38:3,6script 190:4 276:9 252:15,22,23 98:3 195:10269:11 sealing 3:4 sent 267:18 259:14 260:21,22 run 17:14 197:16 sec 5:18 139:6,13 sentence 41:16 42:6 261:13,25 262:2,22 255:7 235:22 236:7 42:20,23 53:23 83:5 262:23 263:15 running 184:19 257:22 265:23 195:12 264:17,20 266:5 186:7 second 10:20 157:3 separate 27:12,15 270:7,10 277:20,21 195:12 253:12 28:19 29:7 32:19 278:14,17,21,23 secondary 9:15 10:8 33:16 34:10,11 35:4 salaries 149:9 279:16,23 238:4,7 36:16 37:5,13 43:8 150:24 rightly 77:2 salary 58:20 150:25 secondhand 180:14 43:21 47:21 58:6 rights 112:23 113:2 191:6 203:8 219:12 153:5,6,15 154:25 123:25 124:3 135:6 secret 189:9,12 239:22 240:13 158:15,18 135:12,13 138:8 section 73:11,16 separated 102:9 sat 43:6 rise 193:7 78:11,25 80:11,17 143:12 satisfying 41:19 risk 12:11 41:20 81:3 82:12 120:20 separately 27:24 saturday 101:25 271:13,14 saw 19:16 64:10 121:3,9 33:5 234:14 rmr 1:20 288:23 securities 7:25 8:3 separating 179:6 128:2 road 287:4 8:25 9:3,11,13 10:9 separation 37:2 saying 12:6 20:25 roadmaps 255:5 11:17 12:5,11 15:10 I36:24 137:3 66:11 78:14 87:25 rob 219:7 15:11 17:25 18:6 september 84:5 92:7 89:15 93:19 125:15 robinson 2:4 securitize 11:16,22 92:18 93:6 103:24 125:16 129:15 robust 165:15 securitized 9:14 122:17 136:15 137:10 rodriquez 2:7 14:12 series 156:22 179:18 165:18 170:17 role 162:24 securitizing 10:23 179:21 183:11 174:3 198:21 room 96:4130:15 security 12:8,9,10 257:2 266:25 199:15 200:25 roth 83:22,24 84:14 seeking 176:5,7,10 serious 126:11 202:5 213:10 214:3 84:15,18,21 85:5,7 264:3 132:15 215:6,21 222:21 85:15 86:16,21,25 seen 64:8 75:25 service 177:20 258:20 272:9 87:6,11 88:7,15 187:21,22 195:3 252:14 274:17 280:16 90:13 91:6,23 92:19 244:23 245:8 set 8:9 29:19 55:19 says 6:22 22:2 82:10 94:5,13,19 95:2,9 261:19 264:7 78:23,25 113:3 102:2,23 104:11,11 95:11,13,17,19,20 segregated 27:15 121:2,13 137:5 120:20 121:23 95:23 96:2,19,24 seldom 270:7 238:19 254:25 122:7 195:13 97:3,12,18 98:17 selecting 12:25 288:20 schedule 72:5,7,10 105:5,11,14 106:15 selective 157:16 sets 149:4 72:15 78:3 150:4 108:7 113:7,14 158:22 159:3,6 setup 106:22 263:8 125:9 186:23 187:5 self 131:23,25 seven 281:4 school 11:10 187:13,16 188:5,7 sell 11:2012:2 238:5 shape 244:17 scope 148:25 188:12 234:4 semimillion 155:9 share 198:19 scores 45:15 47:11 257:20 47:13 56:19 240:21 send 246:15 sheet 5:3 239:3 roth's 205:21 senior 48:25 56:15 287:2 240:22,22,23,23,23 rottman 9:10 16:15 167:12 260:7 shooters 86:12 241:6,6 16:16,19 18:3,5 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124975 [shorted - statement] Page 31 shorted 213:6 sign 5:3 81:12 125:5,7 126:3 131:5 splitting 204:2 shorthand 1:21 137:19 170:22 184:2 spoke 131:10,14 shortly 26:2 139:24 signature 21:18 198:14 200:5,14 182:16 183:13,13 245:11 248:20 148:18 202:14 208:18 183:14,16 184:3 show 18:12 96:14 signed 3:13,16 209:4,9 234:24 237:6 163:16 223:16 81:14,14 137:14,15 someone's 203:4 spoken 196:17 277:6 137:16 195:8 somewhat 154:15 197:3 198:4,6 showed 137:8 similar 56:15 238:2 166:9 216:22 221:11 235:22 270:15 271:4,9,14 sorry 14:10 19:9 240:21,24 showing 101:10,11 277:14 22:5,6 29:10 32:24 spread 275:18 279:2 140:10 149:15 simple 62:11 42:11 73:9 80:3 spreading 12:11 150:15 156:4 simpler 33:19 93:10 109:15 spreadsheets 156:3 162:20 254:16 simply 36:7 110:23 122:15 135:2 137:3 spring 84:10,10 256:25 266:21 191:11 269:23 138:10146:22 85:5,8 146:24 shown 250:22 single 11:18 12:14 164:4213:11 230:2 257:20 282:11 sit 7521 81:3 88:6 231:12 263:2 ss 282:3 288:3 shows 54:10 136:25 99:10 104:25 107:3 270:24 274:6 stamos 183:24,25 shrug 206:25,25 158:18 168:17 279:11 stand 55:8 148:9 shulte 83:22,24 169:3 173:6 179:12 sort 137:6 199:7 155:4 84:13,15,18,21 85:4 190:20 210:21 212:14 224:9 standard 68:5,8 85:7,15 86:16,21,25 233:6,18 234:23 sound 185:10 74:23 76:11,18 87:6,11 88:7,14 242:6 248:4 251:16 sounds 185:6,7 262:16 90:13 91:6,23 92:19 265:12 source 239:15 stands 10:3 138:22 94:5,13,19 95:2,9 situation 32:14 sources 42:15 staring 123:5 95:11,13,17,19,20 196:10 southern 1:2 5:9 start 140:22 147:20 95:23 96:2,19,23 six 146:2 155:23 speak 183:17191:25 149:3,3 97:3,12,18 98:17 194:9 speaking 4:22 started 14:15 38:2,6 105:5,11,14 106:15 size 132:24 158:6 131:15,19226:17 38:9 41:2,4 83:23 108:7 113:6,13 skill 8:9 233:8 8325 85:2 149:5 125:9 186:23 187:5 sleeper 2:22 special 17:14 22:24 209:18 215:10 187:12,16 188:5,7 slightly 273:12 23:4,7,8,11 55:5 222:15 236:8 188:12 205:13,21 slowed 165:3 216:19 250:11 234:4 257:20 small 157:16 183:4 specific 26:18 37:24 starting 54:15 shutting 166:23 232:21 246:10 40:12 44:4,12 57:2 159:14 178:17 sic 11:10 54:6 125:8 273:2 88:18 178:14 257:10 126:10 181:2 smaller .275:23 specifically 86:24 starts 120:19 side 10:22 45:17 smart 216:19 178:11 182:22 state 1:22 4:4,8 7:4 48:24 49:4 54:20,23 sold 9:14 12:8 199:20 212:21 149:8 174:4 282:2 55:16 57:13 58:18 172:20 239:2 242:5,5 253:20 288:2,7 58:18 108:20 255:7 sole 41:14 48:22 specifics 99:9 stated 134:8 sfffert 2:10,13 4:13 63:20 226:10 statement 19:4,11 4:20 159:25 180:8 solely 41:15 48:23 speculate 134:14 20:4 117:19 152:8 215:18 280:11 62:5 247:24 spent 104:7 272:24 154:2,16 204:21 281:2 somebody 38:17 split 273:18,19 210:25 211:3 271:7 50:21 51:9 123:8 284:22 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124976 Page 32 [statements - telling) statements 19:13,16 subjects 195:15 182:18,18 193:18 198:2 225:5 232:11 21:2,5 197:7 203:9 subscribed 282:21 196:21 221:4,16 232:12,13,14 203:12,22 204:8,9 287:22 233:23 247:10 talking 101:19 204:11 205:7 subsequent 143:18 260:20 264:4,23 104:8 110:13 133:3 207:15,21 209:22 subsequently 265:8 271:13 143:15 163:18,19 210:5,6 211:3,4 181:11 272:25 201:24 235:19 217:14,21,24 substance 92:4 surprises 6:10 279:6 219:21 231:22 111:13 surrounding 233:22 tape 190:23 252:10,12 substantial 132:14 survives 153:12 taught 9:7 states 1:2 34:7 53:19 173:9 susan 198:9 211:15 tax 34:3,12,15,23 stating 216:2,3 substantially 165:3 212:5,25 214:22 36:18,19,21 269:10 stay 10:16 16:21 sue 226:19 215:16,20 216:12 269:21 stellar 177:9,16,25 suggest 95:12 253:18 team 15:18 194:18 235:16 swear 20:21 telephone 182:10 step 187:18 suing 213:19,20 sweica 231:20 tell 6:19 37:25 38:13 steps 31:12 99:7 214:14 224:17,19 swieca 231:18,19 38:21 65:22 66:13 260:19 224:20,23 225:24 sworn 3:14,16 4:3 89:17 90:4 91:11 sterling 183:23,25 252:22 5:20 148:8 282:21 96:12 97:2199:3,6 stip 149:21 suit 175:8 287:22 103:6,10 106:5 stipulated 3:2,7,12 suite 287:4 sylvia 56:24 58:12 107:25 141:2,8,12 stipulations 4:12,18 summarize 251:21 58:19,19 60:3,11 143:3,19,2 0,25 stone 233:12 summary 251:18 61:7 62:2 63:13,14 144:2,12,14 158:10 stopped 222:20 summer 17:21,23 257:3 259:25 159:9,21 160:6 straight 86:12 180:4 84:7 165:8,23 263:18,22 264:22 184:9 188:24 strategic 147:8,10 stumnerville 276:3 265:14 268:5 192:21 200:14 147:15 161:24 superb 69:2 syhia's 62:2 212:6,10,1 9,24 162:8,23 164:2,7 supervise 46:11 system 29:19 55:19 218:6,25 219:2,15 strategy 239:8 116:5 systems 7:12,19,21 224:4,14,17,20,23 street 135:18,19,21 supervising 63:18 t 226:25 229:11,12 167:12,13 183:23 supplementary 238:18 240:15 taken 1:18 3:18 70:9 stricken 231:14 69:15 71:7 78:7,10 244:16 249:5 99:7 122:5 130:7 strike 231:15,16 112:12,19 135:5 253:19 254:6 209:21 structure 21:24 283:25 264:22 265:23,25 talk 95:13,17,18,20 23:18,22 276:19 support 195:17 270:14,17,20,25 95:23 96:2,23 97:18 structuring 10:23 226:6 271:3 273:5,8,13,20 147:7 157:9 177:12 11:7 13:11 supposed 22:21 273:24 275:4 183:12 196:23 stub 152:10 281:3 telling 67:5 97:16 197:13 198:10 stuff 241:13 sure 5:19 14:24 24:5 100:6,18,25110:2,6 215:10 216:21 suan 64:25 65:2,3 24:10 29:25 30:6,20 129:24 132:5 220:21 224:7 225:4 66:13,16,25 67:11 31:9,12 32:11 40:9 136:15 142:11 229:13,20 231:5,20 69:8,20 198:2,3 41:25 50:19 51:4,8 143:8,11,13 170:7 232:25 234:9,15,19 suan's 65:5 51:20 68:12 76:21 189:16,21 196:14 277:5 subject 6:21 88:23 85:19 91:14 132:19 talked 97:12 146:17 196:16 200:4 139:6 140:19 140:19143:17 218:12,18 223:12 146:23 161:24 280:25 282:10 173:24 179:15 226:2,17,18 275:25 VER1TEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124977 (tells - told] Page 33 tells 97:2 thanks 42:2 206:22 209:5,7 times 5:15 44:6 ten 11:14,2412:7 theme 219:18 212:2 227:12,24 47:16 59:16 63:13 13:9,10 15:21 240:17,18 241:9,15 228:8 229:6 244:3 96:18 126:20 147:20 245:14 241:23 253:11 272:18 I98:12 240:22,23 term 153:18 271:15 thing 65:17 106:9 thousand 16:10 249:20 277:15 terminate 124:10 111:20 218:23 thousands 258:24 279:10 127:21 130:4 241:16 264:9,11 260:12 timothy 197:14 terminated 73:21 things 44:3 73:16 three 67:15,21 89:3 title 14:17 16:12 74:22 75:4 111:23 86:22 87:2 90:12 149:21 154:17 49:11 159:2 138:7 109:21 116:5,9 220:14 265:22 tkt 140:24 terminating 112:11 131:11 142:6 144:7 280:8 today 37:16 81:3 112:17 131:2 144:9 173:18 179:4 till 180:8 192:25 88:6 99:10 104:25 termination 73:13 179:19 192:22 222:5 107:3,14 126:21 76:17 78:12 113:3 193:7,9 197:2 199:9 tim 197:13 142:15 158:18 terms 17:25 24:12 214:6,8 218:20 time 3:9 9:8 14:17 168:18 169:4 173:7 24:21 59:22 72:15 244:13 16:9,17 17:13 23:6 179:12192:25 74:21 118:25 124:5 think 22:3 28:18 23:17 24:18 25:10 210:21 233:7,19 128:4 153:4 156:5 35:19 36:25 37:12 25:14 26:16 34:19 234:24 242:6 terrible 244:I3 59:13 67:21 69:6 34:25 37:10,14,18 251:17 265:12 testified 4:5 49:20 74:18 84:9 104:25 38:11,25,25 40:21 280:24 49:23 76:5 98:19 115:15 122:11 40:22,25 45:10 todd 211:23 215:17 99:22 105:9 109:17 154:24 155:17 56:14 59:16 60:12 216:11,14 113:8,18,24 116:25 159:19,25 160:14 60:12,13,13,14 toes 190:25 121:12126:21 165:12 171:7,23 61:11 64:6,10 67:11 told 38:4 64:25 128:10 139:17 173:15 174:19 67:14,19 73:2 76:22 83:16 86:23 87:23 148:9 170:2 I76:9 175:6,25 183:24 78:17 79:11 85:17 88:2,4 92:3,21 184:6 185:11 184:4 185:19 186:2 89:14,17 90:23 91:9 99:11,17,24 100:10 186:22 191:21 197:16,18 202:24 92:2 94:4,25 95:24 102:21 103:17 225:7 247:9 203:2,3 204:16 96:22 101:19,21 10422 105:4,10 testify 173:6 213:20 210:22 215:8 223:5 104:8 111:9 138:10 110:8,25 111:4,4,19 214:8 265:13 224:16,22,25 226:8 143:24 147:21 132:12 141:16,17 testifying 106:25 226:9 227:8 228:7 166:11,14 175:7 141:18 142:20 107:5,14 244:6 249:4 260:10 178:21 179:24 143:15 158:12 testimony 5:21 270:4 180:5,11 181:8 160:17 168:20,24 51:18 78:16 87:10 thinking 214:14 183:14 205:3 181:8,24 182:13,21 92:17 97:3,17,19 217:8 211:18 214:20 183:9 188:5,13,21 102:24 103:13 thinks 226:13 217:21,24218:3,4 191:11 193:4,25 115:17 125:12 third 2:5 61:9 182:5 218:19 222:4,5,8,15 194:2 196:14 139:6,12 142:15 191:4 202:21 228:12 229:17 199:19 200:11 151:23 161:2 thought 13:25 37:11 235:11 250:8,22 214:13,17,22 177:24 182:4,8 79:12,22 80:24 251:2 259:18 215:13 218:3,4,20 193:23 218:16 85:14 87:17 103:22 262:18 270:2 218:22 223:9,15 236:11271:5 282:8 104:3 117:14 272:25 273:4,6 225:8 226:12 thank 21:7174:14 119:21 127:24 276:22 277:9 230:12 231:8 233:7 128:9 153:7 185:21 280:24 281:7 234:3,4 241:23,25 VERITEXT REPORTING COMPANY 212-267-6868 www.veritextcom 516-608-2400 EFTA01124978 Page 34 [told - vasan] 242:3,7 243:18,19 trish 197:3,12 underneath 191:19 271:7,16,21 243:22,24 252:20 true 141:5,22 142:6 228:11 understan ding 252:21 259:15,17 143:16 188:22 understand 6:12,18 22:16 35:22,23 271:17,23 274:17 226:13 257:21 6:19,25 19:19,24 75:22 170:3 200:12 278:25 282:10 288:12 20:25 22:20 24:24 understood 38:6 top 157:4 162:2 trusted 67:15 25:2,25 26:7,11,14 46:22 47:18 48:7 touch 232:16 241:5 truth 96:12 142:11 26:24 27:4,6,10,14 52:2,3,5 68:13,17 touche 168:9,12 142:14,16 143:15 27:18,23 28:6,13 68:19 71:23 74:7 170:17 266:7 173:20 175:2 29:5 31:18,22,24 85:12 92:18 98:7 tough 166:3 try 6:7 105:20 32:4,7 33:3,22 109:17 113:13,19 town 86:3 144:25 178:16 34:22 35:3 36:6,7 113:25 122:8 toxic 173:20 242:20 243:7 36:11 37:20 38:2,15 123:25 124:5,9 track 32:12 33:6 trying 20:8 105:23 39:22 43:17,20,24 134:21 135:24 200:25 166:11 175:21 44:7,10 46:4,23 168:6,11 186:23 trade 8:17 9:15 203:7 241:22 47:3 51:11 53:23 250:3,7 266:11 traded 15:8,9 238:6 245:24 246:13 56:3 63:6 67:10,14 268:21272:14 trader 9:19 272:25 67:19 68:10,23 70:5 undertakings 121:4 trades 8:21,22,23 turn 78:20,22 70:8,24 71:5,20 unfairly 119:10 10:7,13,14 55:18,19 139:24 72:7,10,21 73:6,11 unique 239:22 55:20 turned 220:10 73:15,19,2 3 74:2,13 united 1:2 34:7 trading 15:14 16:8 twelfth 255:23 74:16,20,25 75:6,14 university 7:4 255:20 type 25:8 27:21 76:11,15 77:12,20 unquote 132:13 tranche 11:16 12:13 92:12 78:10,20 79:5,7,24 276:13 13:14 80:4,8,15,20 86:25 unreliable 215:24 trenches 12:12,20 87:5 91:18 93:23 unsuccessful 145:4 uh 16:13 100:2 untoward 225:21 13:2 238:5 94:9,12,18 96:7,11 101:13,15.140:13 transaction 263:15 99:20 105:13,25, 25 unwilling 137:19 141:21 146:19 158:13 163:9 transactions 10:6 106:15 108:21 157:11 160:12,16 updating 279:19 50:2 237:5 109:2 112:10,16,23 161:14 166:24 upset 123:12,16 transcript 5:2 47:25 112:25 113:6 177:14 192:20 use 86:18 94:20 153:23 282:10 122:12,16 126:8 210:2 284:24 285:6 129:15 131:20 113:15 114:2 118:4 ultimate 49:5 50:22 126:23 179:15 288:12 136:3,8 137:18,21 115:13 195:16 201:23 transferred 172:21 138:3,5 159:8,24 ultimately 29:24 260:15 261:22 treasurer 60:21,22 169:4,14 177:6 83:15 89:24 137:19 61:2 178:14,17,25 179:8 264:5 265:9 137:23 172:20 4:12 treasuries 15:11 179:20,25 180:20 usual 208:17 209:2 treasury 45:24 184:18 185:2 192:3 utter 45:2 umbrella 228:12 treat 272:10,15 192:22 194:8 196:9 un 159:23,23 229:21 treatment 269:22 199:21 204:6 207:2 value 55:9 69:3,4 229:21,23,23 trial 3:10 209:15 210:6 213:8 147:8,10,15 162:9 unable 244:17 tried 18:7 145:3 222:7 223:15 162:23 164:2,7 unambiguous 256:3 243:4 272:21 227:19 228:9,13 vasan 76:23,25 256:6 triple 11:17 12:14 241:22 253:4 198:6 256:10 258:16 VERITEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124979 [vast - worried] Page 35 vast 272:24 waiving 136:20 walk's 60:16 215:21 216:9 vehicle 238:15,19 walk 246:16 willfully 74:3 231:12,15 254:14 239:6,10 269:6,7 walked 102:2,8,17 113:10 262:8 266:24 vehicles 21:24 110:4 141:20 william 2:21 269:13 270:24 venture 276:10,11 wall 135:18,19,21 willing 91:12 158:8 278:8 280:10 282:7 276:11 want 7:22 22:7 213:20 214:8 283:4 288:19 verified 8:19 57:16 79:23 96:21 wiped 172:13 wilzel 250:18,20,21 verifying 20:3 21:6 120:8 125:20 wire 262:17 250:25 veritext 287:2 134:13 153:7,8 withdrawal 73:13 wobrien 2:21 versa 36:13 154:7 155:16 76:17 78:12 265:16 wohl 2:10 version 81:7,8,10 158:24 175:4 withdrawn 15:25 woman 57:18 vice 36:13 192:17,21 209:14 17:6 24:3,25 27:5 198:18 view 120:4 170:24 221:3,4 227:10,13 31:16,23 32:6 33:21 wong 197:13,21 171:20 241:25 253:3,24 34:17 39:21 43:25 word 6:10 46:2 244:2 261:21 wanted 122:10 44:9 45:5 46:6 52:4 68:10 129:15 223:5 viewed 191:18 183:17 215:11 58:5 59:24 63:5 270:7 violated 114:11 225:8,12,17,18,23 64:7 65:9 68:4 79:6 words 45:2 66:10 127:9 143:21 144:3 225:25 226:25 83:12 84:14 88:21 72:19 92:3 102:9,13 violating 126:5 227:6 231:4,5 251:3 91:10 94:11 96:17 102:16 106:10,11 144:4,15 wants 157:9 170:22 104:17 107:10 109:14 111:12 violation 94:15,21 watch 259:13 266:5 110:12112:3,24 116:18 157:17 113:20 114:15,24 ways 126:9 143:13 114:8,25 125:6 179:15 189:9 115:3 125:14 210:15,19,19 129:23 132:22 201:23 202:22 126:15 127:4,20 we've 262:13 136:16 138:17 204:17 215:25 128:2,16 188:16 wearing 131:15,21 155:8 169:2 174:24 241:21 violations 187:13 201:19 193:20 205:5 work 6:17 7:20 188:2 went 14:14 16:11 251:25 259:4 13:20,22 17:7 31:3 virtually 172:13 30:12 38:1192:25 261:17 266:12 38:2 41:4 59:25 virtue 69:4 139:12 105:3 106:8 124:16 268:2 271:2 272:7 86:7 91:19 110:14 208:3 269:20 149:13 156:3 witness 14:10 33:11 145:24 237:12 vis 173:14,14 163:14 165:22 40:6 42:3 44:20,22 246:5 w 213:19 279:15 53:13 54:10,12 worked 7:19,25 west 220:7 63:24 69:25 70:19 10:22 14:12 15:15 wachovla 18:5 westchester 282:4 72:4 78:13 79:3,10 32:12 237:13 260:2 wage 153:23 284:23 whatsoever 171:9 82:24 84:12 100:20 267:23 285:5 whereof 288:19 101:8 104:14 working 9:22 15:18 wages 150:24 white 108:10129:14 115:21 118:17 26:24 101:20 145:5 211:25 129:18,22 130:3,13 120:2 122:I5 164:17,21 216:19 wagner 233:12 wait 221:18 270:23 132:8,20 125:25 137:2 237:4 250:8 255:6 widens 279:3 140:17150:19 works 246:6 waive 135:13 137:23 wife 151:12 154:8 156:25 world 67:20 157:17 waived 3:5 135:12 wife's 150:21 158:19 160:5 165:3,11,15,22,23 137:9 wilk 60:12 182:2,12 161:10,19 162:5,13 183:3,4 211:4 waiver 136:4,9 182:16,20 164:15 165:5 174:6 worried 90:2,6 137:6 177:4 178:9,13 VER1TEXT REPORTING COMPANY 212-267-6868 www.veritext.com 516-608-2400 EFTA01124980 Page 36 [worry - zwirn's] worry 89:16,18,23 z 197:7,10,22 198:9 90:4 92:4,20,22 198:20 199:23 zero 146:7 worrying 90:21 200:4,14,21,22 zinn 246:2,3,15 worthy 243:23 201:7,23 202:13 247:8,10,13,14,17 wracked 235:6 204:11 205:7,11,19 247:20 248:6,14 wrapped 230:7 zinn's 247:23 206:11 211:17 write 109:12 212:6,11 214:23 zwirn 1:8,8,9 2:11 writing 136:6,11 217:14,22218:7,13 2:18,18 5:6,7,19 written 42:23 190.4 219:2,16,21 222:8 • 17:8,10,12,12,15,17 wrong 124:18 222:22 223:18 18:8 21:12 22:24 189:15,20 258:2,7 225:20 226:19 23:4, 7,8 26:23 '25 258:16 271:15 228:11,14,19 229:8 31:21,25 39:2,8,9 wrongly 77:2 230:25 231:23 39:14,14 40:11,19 wrote 112:4 142:11 232:9 233:2,8,9,15 41:17 42:21 43:3,9 275:17 233:20,21 234:16 43:14,22,24 44:2 wu 56:24,25 58:12 234:20,25 235:12 46:3,6,7 49:11,15 58:25 59:18 60:3 235:18 236:15,16 55:5 64:5,25 65:22 61:7 62:2 63:14 237:6 238:9,14 65:25 66:6 67:11 256:23 257:3 240:16 242:7 69:19 80:12 81:5 259:25 263:18,22 243:19,24 244:7,13 82:2 83:5 85:25 264:22 265:14 244:19 245:6 246:8 95:15,16 102:7,8,10 268:5 285:25 247:21 248:6 249:3 102:12,25 103:3,6 wa's 57:5 58:17 249:6 250:10 103:11,14 104:23 59:5 252:11 253:14,25 106:6,19 107:17 266:11 283:14,16 Y 109:16110:19 283:17 285:18 yeah 85:24 200:24 111:5,13,19,22 287:6 200:24,24 202:7 112:11,17 118:6 zwirn's 107:21 216:14 223:12 121:13,13,17 228:24,24 277:23 122:17 123:13,14 year 7:5 145:22 124:16 125:4 150:8 152:19 153:9 127:20 129:12 155:11,24 159:16 130:13 133:21 264:16 134:11 136:19 years 10:18 135:23 138:13,19 139:2,17 194:9,10,10 222:16 139:25 143:5,19,25 yep 38:20 96:25 144:11,11 146:3 102:5 141:19 252:6 159:12,14 161:3 ymm 276:2 167:25 173:21 yo 140:19 174:15,16,20 york 1:2,20,20,23 178:24 179:2,4,13 2:6,6,12,12,19,19 180:13,21 187:24 4:4 5:9 7:4 163:4 188:23 189:15,20 282:2 287:2,4,4,4 190:2 192:3,22 288:2,4,7 193:25 196:14 VERITEXT REPORTING COMPANY 212-267-6868 www.vcritext.com 516-608-2400 EFTA01124981