1 2 12easecaps 1 united states district court southern ... · 12easecaps 1 1 united states district...

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1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

2 -----------------------------------x

3 SECURITIES AND EXCHANGE COMMISSION,

4 Plaintiff,

5 v. 10 CV 3299 (BSJ)

6 FABRICE TOURRE,

7 Defendant.

8 -----------------------------------x

9 New York, N.Y.

10 February 14, 2011 3:00 p.m.

11

12 Before:

13 HON. BARBARA S. JONES

14 District Judge

15 APPEARANCES

16 SECURITIES AND EXCHANGE COMMISSION BY: LORIN L. REISNER, ESQ.

17 RICHARD SIMPSON, ESQ. JEFFREY TAO, ESQ.

18 ALLEN & OVERY

19 Attorneys for Defendant FABRICE TOURRE BY: ANDREW RHYS DAVIES, ESQ.

20 PAMELA R. CHEPIGA, ESQ. DAVID ESSEKS, ESQ.

21

22

23

24

25

SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

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1 (In open court)

2 THE CLERK: Securities and Exchange Commission v.

3 Fabrice Tourre, 10 Civil 3299. Plaintiffs, are you ready?

4 MR. REISNER: Yes. We are ready to go forward.

5 THE CLERK: Please state your name for the record.

6 MR. REISNER: Lorin Reisner from the Securities and

7 Exchange Commission. I'm here with my colleagues Jeffrey Tao

8 and Richard Simpson.

9 THE CLERK: For the defendant?

10 MS. CHEPIGA: Yes. We're ready to go forward. Pamela

11 Chepiga of Allen & Overy. With me are my clients Fabrice

12 Tourre, my colleague David Esseks, and my colleague Andrew

13 Davies.

14 THE COURT: All right. Ms. Chepiga?

15 MS. CHEPIGA: Mr. Davies will do the argument, your

16 Honor.

17 THE COURT: OK. I wonder if you could do this for me.

18 I would like to hear the Morrison argument first and, then,

19 when you've concluded, hear from the SEC, rather than take the

20 full argument.

21 MR. DAVIES: Yes, your Honor, certainly.

22 Judge, the Supreme Court's June 24, 2010 decision in

23 Morrison swept away 40 years of Second Circuit law, under which

24 the federal securities laws used to apply to securities

25 transactions if there was some level of domestic conduct or


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1 effect.

2 THE COURT: And I agree with you that's easy, if we

3 have an exchange in the picture, foreign or American. And I

4 think I agree that the Supreme Court is telling us the purchase

5 and/or sale has to occur in the United States. How do I know?

6 MR. DAVIES: Judge, what the Supreme Court said is

7 that -- Morrison, 2884-85 -- for transactions like those in

8 this case that do not take place on domestic exchanges, the

9 exclusive focus is on domestic purchases and sales. And so

10 what the SEC needs to allege to state a claim is a fraudulent

11 domestic securities transaction.

12 And if I may, your Honor, I would like to hand up --

13 THE COURT: Would you give me that cite again.

14 MR. DAVIES: It's Morrison, your Honor, 2884-85.

15 THE COURT: Yes.

16 MR. DAVIES: Judge, what we have done for you as a

17 reference is to copy a handful of pages from our exhibits. I

18 thought it might be easier that way than trying to navigate.

19 If I may approach, your Honor.

20 THE COURT: Yes. Thank you.

21 MR. DAVIES: Judge, dealing first with the IKB note

22 purchase --

23 THE COURT: Right.

24 MR. DAVIES: As the complaint alleges, on April 27,

25 2007, IKB buys $150 million of Abacus notes, $50 million of


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1 class A-1, and $100 million of class A-2. If I could refer the

2 Court to the first page of the set of documents I just handed

3 up. On the front page, page 1, this is the copy of the class

4 A-1 note for $50 million. It says at the top "Regulation S

5 Global Class A-1 Note," and on the next page, reflecting that

6 this was the $50 million note that IKB bought.

7 Then on the next page, page 3, this is the other note

8 that IKB purchased. This is the Regulation S global class A-2

9 note. And then over the page reflecting that this is the $100

10 million A-2 note.

11 Judge, if I could ask you to turn the page once again,

12 to page 5, here is the actual trade confirm for the IKB note

13 purchase. It reflects at the bottom in the highlighted text

14 that the actual purchaser was Loreley Financing in Jersey.

15 That's an affiliate of German-based IKB, based in the British

16 Channel Islands. At the top it reflects that the seller is

17 Goldman Sachs International, has an address over on the top

18 right on Fleet Street, London, and with a notification on the

19 left side that Goldman Sachs International is authorized and

20 regulated by the Financial Services Authority, that is to say,

21 the British securities regulator.

22 THE COURT: Mr. Davies, let me ask you one thing. The

23 SEC notes that Goldman Sachs International here is just an

24 agent of Goldman Sachs. Does that matter?

25 MR. DAVIES: It doesn't, your Honor. And I will


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1 explain that if I may. Several of the cases in this district

2 that have come after Morrison have dealt with a situation where

3 an investor takes steps in the United States to make purchases

4 overseas. And I'm thinking of Judge Koeltl in the Plumbers'

5 Union case. I'm thinking of Judge Batts in the In re Royal

6 Bank of Scotland case. I'm thinking of Judge Marrero in the

7 Cornwell case and in the Austin case. And I'm thinking of

8 Judge Baer in the Porsche case.

9 And, Judge, what those cases show is the fact that one

10 party to a securities transaction is a U.S. person does not

11 make the transaction domestic for Morrison purposes. So even

12 if the SEC is right that Goldman Sachs International was acting

13 as agent for the Goldman Sachs & Co., that really doesn't

14 change the analysis, doesn't make it a domestic transaction.

15 THE COURT: So you're basically telling me that this

16 is the trade, right here, in this statement, and that this is

17 the moment of purchase or sale. They're really the same thing,

18 obviously.

19 MR. DAVIES: That's right, your Honor. If you look at

20 the IKB trade, it's a private transaction between a British

21 seller and a British Channel Islands-based purchaser, under an

22 SEC regulation that applies only to securities transactions

23 outside the United States.

24 And to come back to a question your Honor asked a

25 moment ago about whether it mattered that the SEC says Goldman


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1 Sachs International is acting as agent for Goldman Sachs & Co.,

2 it doesn't. Nothing in Reg S requires that the seller be a

3 foreign person. And that wouldn't make sense anyway, because

4 Reg S is a regulation that allows U.S. persons to sell

5 securities overseas.

6 THE COURT: Well, Judge Koeltl also goes into what a

7 purchase is. And at the end of the day, I think it's about the

8 moment in time when someone could sue someone else because

9 there is an agreement for a purchase. Is that what this is?

10 Or is this simply, there's been an agreement, and here's the

11 confirmation. This is definitely part of the transaction. No

12 doubt about it.

13 MR. DAVIES: That's right, Judge.

14 THE COURT: But do we have to pinpoint that moment in

15 time when the purchase and sale is finalized? Or, let me say

16 this, agreed to?

17 MR. DAVIES: I think we do, your Honor. Because --

18 and this comes to the SEC's entire selling-process argument,

19 what the SEC has argued is that Goldman and Mr. Tourre engaged

20 in conduct in the U.S., pretransactional conduct, and they say

21 the definitions of offer and sale are so broad that the

22 transaction should be regarded as domestic.

23 THE COURT: For the moment, I'm actually more

24 interested in whether, is there a moment where a document is

25 signed by both parties indicating, we have a purchase or sale,


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1 and where does that occur? I'm getting very literal on you,

2 and I realize in this world maybe those things don't even

3 happen.

4 MR. DAVIES: Judge, there is. And it is this

5 document.

6 THE COURT: OK. So you believe it's the confirmation

7 of trade.

8 MR. DAVIES: Your Honor, I was starting to talk about

9 the SEC's entire selling-process argument. It would be helpful

10 if I could explain --

11 THE COURT: I'm happy to hear that.

12 MR. DAVIES: I can explain why we think that that's

13 not a valid interpretation of Morrison.

14 THE COURT: I guess I'm just having trouble; why do

15 you think the confirmation of trade is the agreement? Didn't

16 something have to come before there was a trade? Some

17 agreement?

18 MR. DAVIES: Your Honor, this is the reflection that

19 the trade happened. And this is generated at the moment the

20 trade happens.

21 THE COURT: And this is it.

22 MR. DAVIES: This is it, Judge.

23 THE COURT: There is nothing previous that would

24 indicate whether the transaction might have been agreed to.

25 MR. DAVIES: That's right, your Honor.


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1 THE COURT: No other document. That's all I'm trying

2 to nail down.

3 MR. DAVIES: That's correct, your Honor.

4 THE COURT: OK.

5 MR. DAVIES: Judge, the SEC's entire selling process

6 argument, we think, is really an attempt to do an end run

7 around Morrison. First of all, the entire selling-process

8 trade is just ripped out of context from the Supreme Court's

9 33-year-old opinion in the Naftalin case, which really has

10 nothing to do with whether a transaction is domestic for

11 Morrison purposes. All that case holds is that the securities

12 laws cover the entire selling process, meaning that purchasers

13 and sellers are not only prohibited from lying to one another;

14 they mustn't lie to their brokers either. And, Judge, the

15 entire selling-process argument really fails because Morrison

16 could not have been clearer that the federal securities laws do

17 not apply simply because there is allegedly fraudulent conduct

18 here.

19 Judge, at page 2887, in the course of rejecting the

20 old conduct test that required conduct that was more than

21 merely preparatory, the quote is from Morrison: "We reject the

22 notion that the Exchange Act reaches conduct in this country

23 affecting exchanges or transactions abroad." And then again,

24 Morrison at 2884, quoting again, "We think that the focus of

25 the Exchange Act is not upon the place where the deception


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1 originated, but upon purchases and sales of securities in the

2 United States." And the Supreme Court even rejected a modified

3 version of the conduct test that the SEC had proposed that

4 would have required "significant conduct" in the U.S.

5 THE COURT: Let me move you to this. What's the

6 guidance in Morrison from the Supreme Court as to how to decide

7 whether a purchase and sale is in the United States? They

8 called this conduct in effect, sir, no longer relevant.

9 MR. DAVIES: That's right, your Honor. And the best

10 guidance that we have is in Judge Koeltl's opinion in the

11 Plumbers' Union case, where Judge Koeltl says that the

12 determination as to whether a transaction is domestic has to be

13 guided by the text of the statute and the need to ensure that

14 we bear in mind the Supreme Court's concern that there should

15 not be regulatory multiplicity. That's to say that securities

16 transactions shouldn't be governed by U.S. law simply because

17 there was some pretransactional conduct here and the law of the

18 foreign jurisdiction where the transaction actually happened.

19 And that's exactly what the SEC's test would accomplish,

20 regulatory multiplicity.

21 Judge Baer commented in the Porsche case, cited in our

22 brief, that Morrison was intended to curtail and not to expand

23 the extraterritorial effect of the U.S. securities laws, but an

24 expansion is exactly what the SEC is advocating for via its

25 entire selling-process argument.


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1 THE COURT: Judge Baer, I think, also talked about

2 looking to the assets behind a credit default swap in order to

3 determine domesticity. He found the assets were here. What

4 did you make of that?

5 MR. DAVIES: Your Honor, Judge Baer's holding in that

6 case is based on his finding that the swap at issue in that

7 case was the economic equivalent of owning shares in

8 Volkswagen, which are traded only in the German stock exchange.

9 That then became a relatively easy analysis.

10 THE COURT: So you differ with him on the premise,

11 that underlying premise, that it would be the same as owning

12 the shares on the exchange.

13 MR. DAVIES: Right. And our case is very different,

14 your Honor.

15 THE COURT: Right.

16 MR. DAVIES: That these shares are not traded

17 anywhere. And so we don't have the route that Judge Baer was

18 able to follow to find that there was a foreign transaction.

19 And so we think that we have to look to the trade confirms that

20 would show that this is a foreign seller, foreign buyer, under

21 an SEC regulation that applies only to overseas transactions.

22 THE COURT: OK.

23 MR. DAVIES: Judge, if I could address another

24 argument that the SEC has made in support of its position, they

25 say that a transaction that is foreign for Reg S purposes can


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1 nevertheless be domestic for Morrison purposes because Reg S is

2 concerned only with registration, not antifraud issues.

3 THE COURT: Right.

4 MR. DAVIES: And, Judge, the relevant Supreme Court

5 case here is not the 42-year-old Supreme Court opinion in

6 National Securities that the SEC cites; it's Morrison itself.

7 At page 2885, the Morrison Court cites Reg S as evidence that

8 the Securities Act as a whole, not just its registration

9 provisions, are to do with domestic transactions only.

10 As we show in our papers, your Honor, the Reg S

11 territorial approach and the Morrison transactional test really

12 are substantially identical. And they are based on the same

13 policy consideration, the wish to avoid exposing participants

14 in the global securities industry to overlapping and

15 conflicting regulatory requirements.

16 And the other thing the SEC says about Reg S, it

17 refers us to its own relief that accompanied Reg S 20 years

18 ago, where they said, "We're not applying Reg S, the

19 territorial approach, to the antifraud provisions," but only

20 because they were then thought to have extraterritorial end of

21 conduct and effect. If you look at the actual release, it's

22 1990 WL 311698 at p. 5. In support of that authority, the SEC

23 cites the string of Judge Friendly opinions from the early

24 '70s. In Morrison, the Supreme Court refused to defer to SEC

25 interpretations that were based on those cases. And it said,


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1 "Since they rely on cases we disapprove of, which ignored or

2 discarded the presumption against extraterritoriality, we owe

3 them no deference."

4 Just one other point, your Honor, on the Morrison

5 issues. Because the foreign nature of this transaction is

6 likely to have a very real impact on Mr. Tourre's ability to

7 defend his allegations, we have made a Hague Evidence

8 Convention request to get documents from IKB, the principal

9 purported victim of this fraud.

10 THE COURT: Yes. I saw that in your papers. And you

11 have that, an application before Judge Dolinger at the moment.

12 MR. DAVIES: That's right, your Honor.

13 Your Honor, before I leave Morrison, if I may, I'd

14 like to turn to the ABN swap, which is the other piece that has

15 a Morrison problem to it.

16 Judge, this is a private swap contract that, as is

17 typical of swaps, is made up of three contractual documents.

18 First of all, a standard form is the master agreement; second,

19 a schedule that makes the master applicable as between the two

20 parties; and third, a confirmation that confirms the terms of

21 the particular trade.

22 If I could ask your Honor to turn to page 7 of the

23 packet that I handed out, this is the confirm for the ABN swap

24 at issue in this case. It was executed on May 31, 2007, more

25 than a month after the IKB note purchase. And it shows that


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1 the parties once again are Goldman Sachs International and

2 London, and the London branch is ABN AMRO.

3 Judge, over the page, this is the schedule to the

4 master agreement between those two parties. It's dated 1996,

5 more than ten years before the Abacus transaction, confirming

6 once again that the parties are Goldman Sachs International, a

7 company incorporated under the law of England and Wales, and

8 ABN Bank NV, a bank organized under the law of the Netherlands.

9

10 Judge, the following page, page 9 of this paragraph,

11 paragraph 4.7 of the schedule, shows that the parties agreed

12 that their agreement will be governed by and construed in

13 accordance with English law.

14 And then over the page is the master agreement that

15 applied to this transaction. At paragraph 13B it shows that

16 because there was a choice of English law, the parties also

17 submitted to the jurisdiction of the English courts.

18 So, Judge, here we have a private contract between

19 English and Dutch parties, under English law, with a submission

20 to the jurisdiction of the English court. And, Judge, under no

21 reasonable interpretation of Morrison can that be a domestic

22 transaction either.

23 Judge, you asked me to deal with the Morrison issues

24 first. Unless there are any particular questions that I can

25 address at this point, I think I have made my presentation on


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1 Morrison.

2 THE COURT: You have.

3 Mr. Reisner?

4 MR. REISNER: Your Honor, the Abacus 2007 AC1

5 transaction was conceived, structured, and marketed by the

6 Goldman Sachs structured products trading desk in New York, and

7 Fabrice Tourre, sitting at that desk in New York, was the

8 Goldman Sachs employee primarily responsible for the AC1

9 transaction.

10 Now, Morrison did not hold that U.S. securities laws

11 do not extend to fraudulent transactions where the victims of

12 the fraud may be located overseas. The question under Morrison

13 is whether a securities transaction took place in the United

14 States. And applying the definitions of the securities laws,

15 which are really where we should be looking at to drive where

16 the offer occurred and where the sale occurred, applying those

17 definitions, right in the securities laws, the amended

18 complaint plainly alleges that the unlawful securities

19 transactions took place in the United States. The complaint

20 alleges the offer of securities in the United States in

21 violation of Section 17(a) of the Securities Act, and the

22 complaint alleges the sale of securities in the United States

23 in violation of both Section 17(a) of the Securities Act and

24 Section 10(b) of the Exchange Act.

25 Let me first focus on the marketing efforts directed


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1 by Mr. Tourre and Goldman Sachs to IKB. The amended complaint

2 alleges the offer of securities in the United States in

3 violation of Section 17(a) with respect to these activities.

4 First, it alleges that Mr. Tourre and his Goldman Sachs

5 colleagues sent false and misleading offering and marketing

6 materials for the AC1 transaction by e-mail from New York for

7 delivery to IKB. Most of these allegations are at paragraphs

8 55 through 60 of the amended complaint.

9 The amended complaint alleges that Mr. Tourre and his

10 Goldman Sachs colleagues made phone calls from New York to

11 encourage and persuade IKB to buy AC1 notes. Those allegations

12 are at paragraphs 58 and 60 of the amended complaint.

13 The amended complaint alleges that Mr. Tourre and his

14 Goldman Sachs colleagues sent e-mails from New York to

15 encourage IKB to purchase the notes.

16 Mr. Tourre even sent a blacklined copy of the offering

17 circular for the AC1 notes from New York to IKB by e-mail. And

18 that's at paragraph 60 of the amended complaint.

19 And the offering circular for the AC1 notes itself

20 expressly states that the notes were being offered by Goldman

21 Sachs and company, a U.S. broker-dealer. And that's at

22 paragraph 62 of the amended complaint.

23 THE COURT: So, Mr. Reisner, under Section 3, in the

24 definition of the purchase, is "a contract to buy, purchase, or

25 otherwise acquire," and I guess goes on to say you become a


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1 purchaser when you incur irrevocable liability to take and pay

2 for the stock. Am I supposed to be looking at when and where

3 that happened?

4 MR. REISNER: I would focus first on the definition of

5 "offer," because it's central to our claim under Section 17(a)

6 of the Securities Act.

7 THE COURT: Right.

8 MR. REISNER: And under Section 283 of the Securities

9 Act, an offer of securities is defined to include "every

10 attempt or offer to dispose of or solicitation of an offer to

11 buy a security or interest in a security for value." And it's

12 absolutely clear that Mr. Tourre and his Goldman Sachs

13 colleagues in New York attempted to dispose of, offered to

14 dispose of, and solicited offers to buy Abacus 2007 AC1 notes

15 and security-based swap agreements. And it couldn't be any

16 clearer that Mr. Tourre in New York personally solicited offers

17 to buy AC1 notes.

18 And remember, "offer" is defined to include "a

19 solicitation of an offer to buy." He personally sent messages

20 and directed that messages be sent to IKB seeking that IKB

21 purchase AC1 notes. And he spoke to IKB by phone when they

22 needed information about the AC1 notes. For example, as set

23 forth in paragraph 60 of the amended complaint, after

24 Mr. Tourre sent the offering material to IKB, he sent them an

25 e-mail, which is quoted in the amended complaint. It says,


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1 "Please let me know if you have any issue with the preliminary

2 offering circular. We can discuss on Monday or Tuesday." And

3 there are other references in the amended complaint to

4 Mr. Tourre's personal efforts to persuade IKB to purchase the

5 notes here.

6 And this is not just conduct in New York. It's not

7 just conduct. These are activities that fit the statutory

8 definition of "offer" under the Securities Act. So it's very

9 easy to determine, based on the allegations of the amended

10 complaint and the definition of "offer" in the Securities Act,

11 that there was in fact an offer, an unlawful offer of

12 securities in the United States applying the definitions set

13 forth in the statute.

14 THE COURT: What activities am I to look at that would

15 show that there was a purchase in the United States?

16 MR. REISNER: Our argument really isn't that there was

17 a purchase. Our argument is that there was a sale in the

18 United States. But first, there was an offer in the United

19 States. Second, there was a sale in the United States.

20 THE COURT: Can you tell me the difference between a

21 purchase and a sale.

22 MR. REISNER: Yes, I will. They are defined

23 differently in the statute. They are different definitions

24 within Section 2(a)(3) of the Securities Act, which defines

25 both "offer" and "sale," and the Exchange Act also defines


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1 "sale."

2 But before I get to "sale," and I promise I will, I

3 just want to point out that I never heard Mr. Tourre's counsel

4 once even attempt to refute that Mr. Tourre's New York-based

5 activities and those of his Goldman Sachs colleagues in New

6 York squarely satisfied the statutory definition of "offer" in

7 the United States. And that's really the heart of our amended

8 complaint, that there was an offer of securities in the United

9 States in violation of Section 17(a).

10 Really, their argument is that because the notes were

11 offered subject to an exemption from registration under a

12 Regulation S, relating to offshore offerings, that means there

13 was no offer of securities in the United States for purposes of

14 Section 17(a). But that's a fundamental misapplication of

15 Regulation S. Whether or not a securities offering qualifies

16 for Reg S exemption from registration has no bearing on whether

17 a securities transaction occurred in the United States for

18 purposes of Section 17(a). And all you have to do is look at

19 the initial note to Reg S, which expressly provides that the

20 regulation "relates solely to the application of Section 5 of

21 the Securities Act of 1933" -- that's the registration

22 provision -- "and not to the antifraud or other provisions of

23 the other securities laws, Section 17(a) or Section 10(b)."

24 Similarly, the issue and release for Regulation S

25 stated, "Regulation S relates solely to the applicability of


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1 the registration requirement, Section 5 of the Securities Act.

2 The regulation does not limit in any way the scope or

3 applicability of the antifraud or other provision of the

4 federal securities laws."

5 So by its own terms, Reg S is inapplicable to whether

6 an offer or sale of securities occurred in the United States

7 under Section 17(a). The Securities Act has its own

8 definition. And that's the guide to determine whether or not

9 an offer has occurred in the United States for fraud or

10 antifraud purposes.

11 And that makes sense. There are different policy

12 considerations to determine whether sales or offerings should

13 be, in the language of Rule 903 of Reg S, "deemed," "deemed" to

14 occur outside of the United States for registration purposes.

15 And Reg S reflects a willingness to relax the registration and

16 related informational requirements, but no willingness to relax

17 the fraud protection if an offer otherwise occurred in the

18 United States.

19 And the SEC v. National Securities case is spot on.

20 There, the defendant tried to make the same argument. He

21 argued that limitations in the registration provisions should

22 be read to limit the scope of the antifraud provision, and the

23 Supreme Court rejected that argument squarely.

24 So under the definition of "offer," in the securities

25 law, the amended complaint alleges the offer of securities in


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1 the United States in violation of Section 17(a). And now I

2 apologize for the delay. I will focus on "sale." But "offer"

3 is so important to our argument, I wanted to make sure that I

4 set out our position clearly.

5 So in addition to the offer of securities in the

6 United States, there also was an unlawful sale, in violation of

7 both Section 17(a) of the Securities Act and Section 10(b) of

8 the Exchange Act.

9 Now, Tourre's argument really amounts to this: that

10 because it was Goldman Sachs International and not Goldman

11 Sachs & Co. listed on the IKB trade confirmations, there wasn't

12 a sale in the United States. That argument should just be

13 rejected. First of all, he seems to acknowledge that if

14 Goldman Sachs & Co. was listed on the trade confirmation, that

15 would be a transaction in the United States. And it's

16 absolutely clear, from the allegations in the complaint, that

17 Goldman Sachs International was acting as Goldman Sachs & Co.'s

18 agent, and at Goldman Sachs & Co.'s instructions, that

19 paragraph 62 of the amended complaint clearly alleges, "Goldman

20 Sachs & Co., a New York-based broker-dealer, was offering and

21 selling the notes." And that allegation is confirmed both by

22 the marketing efforts, based in New York, of Goldman Sachs &

23 Co., and the language of the offerings circular itself. And

24 the defendant has submitted it, as Exhibit A to a declaration.

25 The offering circular says on its front cover that Goldman


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1 Sachs International was acting as Goldman Sachs & Co.'s agent.

2 And the offering circular also says, "The notes are

3 offered by the initial purchaser or its agent." And the

4 defendant hasn't given you page 154 of the offering circular.

5 We can send it to you after today. But "initial purchaser" is

6 a defined term. And it's defined as Goldman Sachs & Co.

7 The offering circular also said that the offering

8 notes would be ready for delivery in book entry form only in

9 New York, New York, and that the closing for the transaction

10 took place in New York. That's at paragraph 62 of the amended

11 complaint.

12 So I know that defendant likes to quote this "entire

13 selling process" and he calls it our entire selling process

14 argument. Well, that is part of our argument. But the core of

15 our argument is, this was a sale, as "sale" is defined in the

16 statute itself. And the selling activities took place in New

17 York, even if Goldman Sachs & Co. used its affiliated agent in

18 trade confirmations. Can you imagine if the law was, you can

19 conceive, structure, market, press, persuade, push, offer a

20 transaction in the United States, but if you use your affiliate

21 in London to put them in on the trading confirm, you're free

22 and clear from the scope of the U.S. federal securities laws?

23 I don't think that's what the Supreme Court had in mind in

24 Morrison or what anybody had in mind in an application of

25 Morrison.


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1 THE COURT: But Mr. Davies is right that this

2 transaction, this confirmation that I've seen has the

3 transaction in London, which means that there is a regulatory

4 scheme that will take care of any issues with respect to this.

5 Right?

6 MR. REISNER: Who knows. Who knows whether the London

7 regulators would say, hey, this is a New York transaction, not

8 a London transaction, Goldman Sachs in New York conceived,

9 structured, marketed this --

10 THE COURT: I think we're not talking about

11 discretion. We're talking about that there is a regulatory

12 scheme in place but it's not the American regulatory scheme.

13 MR. REISNER: There are other regulatory schemes in

14 place. But think of this, Judge. If the law was that every

15 securities transaction had to involve only domestic parties for

16 the law of the country to apply, then no jurisdiction could

17 assert antifraud authority over international securities

18 transactions, which are quite prevalent today. And a question

19 to ask is to look at the activities that took place in the

20 United States and apply the definitions that are set forth in

21 the securities laws.

22 And I would just note that all of the cases that were

23 cited by defense counsel -- Plumbers', the others -- they all

24 involved shares that were listed and traded on a foreign

25 exchange.


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1 I will only address the ACA piece insofar as it

2 applies to Morrison. And then I'll come back to the extent

3 it's necessary and address the --

4 THE COURT: Your second position.

5 MR. REISNER: Exactly.

6 The notes purchased by ACA involve the offer and sale

7 of securities in the United States. The notes were offered and

8 sold by Goldman Sachs & Co., a U.S. broker-dealer, to ACA

9 Capital, a company based in New York. Pretty straightforward

10 on this one. That's at paragraphs 71 and 67 of the amended

11 complaint.

12 And on the ABN transaction, that was a CMBS

13 transaction, again between Goldman Sachs and ABN, Goldman Sachs

14 International and ABN, but again it's clear, Goldman Sachs

15 International was acting as Goldman Sachs & Co.'s agent. You

16 can tell it based on the allegation in the complaint, including

17 those at paragraphs 69 and 70, where we allege that Mr. Tourre

18 personally sent ABN e-mails soliciting their purchase of the

19 swap, and Goldman Sachs sent ABN false and misleading marketing

20 materials for the AC1 transaction, for which ABN guaranteed or

21 intermediated the sale of protection by the ACA with respect to

22 the super senior tranche.

23 Again, the use by Goldman Sachs of an offshore

24 affiliated agent to effectuate the transaction does not

25 diminish the role of Goldman Sachs in controlling the offer and


12EASECAps24

1 sale of the swap.

2 So let me just conclude on the Morrison piece by

3 saying, there is nothing in the Morrison case or any other

4 controlling authority supporting the proposition that a major

5 U.S. broker-dealer can conceive, structure, and market a

6 fraudulent transaction involving nonexchange securities from a

7 base of operations in the United States and remain beyond the

8 reach of the antifraud provisions of the U.S. securities laws.

9 In fact, any such rule would violate the settled principle that

10 the antifraud provisions, in the words of the Supreme Court,

11 are intended to "achieve a high standard of business ethics in

12 every facet of the securities industry."

13 Here, consistent with the definitions in the

14 securities laws, Goldman Sachs and Mr. Tourre offered and sold

15 Abacus 2007 AC1 securities and security-based swap agreements

16 in the United States through false and deceptive

17 representations and their fraudulent activities are properly

18 the subject of this enforcement action.

19 THE COURT: The only thing I would ask you is, now

20 that we have a Dodd amendment, I don't think we have a policy

21 problem anymore, right, Mr. Reisner?

22 MR. REISNER: I hope not. It's our view that Dodd-

23 Frank essentially overruled Morrison with respect to actions

24 brought on behalf of the United States and the Securities and

25 Exchange Commission.


12EASECAps25

1 THE COURT: All right. Mr. Davies, I know you have

2 some things to say to me.

3 Can I ask you first of all, with respect to ACA, are

4 you maintaining that that's also not a domestic transaction?

5 MR. DAVIES: Judge, we have not moved against the ACA

6 piece.

7 THE COURT: I realized that, yes. But I thought you

8 had a footnote in there. Or perhaps that was with --

9 MR. DAVIES: We do have a footnote, your Honor. It is

10 not clear to us at the current time that in fact it is a

11 domestic transaction. We have not moved against it at this

12 point because that's not clear on the basis of arguments that

13 we could properly put before the Court at this point in the

14 litigation.

15 THE COURT: All right.

16 MR. DAVIES: Judge, to respond to some of the points

17 that Mr. Reisner raised, Mr. Reisner would like you to just

18 look purely to the definitions in the securities statutes. And

19 the one piece of the very old National Securities Supreme Court

20 case that is helpful on this point is at page 572, where the

21 Supreme Court says, "The relevant definitional sections of the

22 1934 Act are for the most part unhelpful. They only declare

23 generally that the terms 'purchase' and 'sale' shall include

24 contract, purchase, or sale." And that is why, your Honor, in

25 the Plumbers' case, Judge Koeltl said, whatever the


12EASECAps26

1 definitional sections say, they are also qualified by the

2 requirement in the definitional section itself that they be

3 construed in context. And for Morrison's purposes, they cannot

4 bend this endlessly open meaning that the plaintiffs in that

5 case were trying to apply to them, because that would result in

6 every transaction involving any U.S. person being subject to

7 the U.S. securities laws and the foreign law where the

8 transaction actually takes place. And that's Judge Koeltl in

9 the Plumbers' case at page 8 through 9.

10 Judge, Mr. Reisner said that offers are the core of

11 the SEC's case. Well, we heard a lot from Mr. Reisner about

12 the conduct of Mr. Tourre and the conduct of Goldman Sachs from

13 New York. In Morrison itself, at page 2885, the Supreme Court

14 said, the '33 Act, which of course is the only act that can be

15 relevant to offers, has the same focus on domestic transaction

16 as the '34 Act. Then we have Judge Koeltl in Plumbers' Union

17 saying, "The question whether a transaction is domestic must be

18 guided by the need to adopt clear tests that avoid regulatory

19 multiplicity."

20 And so, Judge, offers for these purposes cannot mean

21 offers made from the United States to do foreign transactions,

22 which is what Mr. Reisner seems to be suggesting.

23 THE COURT: Your position is, you can't have an

24 untethered offer.

25 MR. DAVIES: Correct, your Honor.


12EASECAps27

1 Mr. Reisner made a reference to a closing that

2 supposedly happened in New York. There's no allegation that it

3 was the closing for the IKB purchase that happened in New York.

4 But in any event, there are several cases that now hold that

5 even if you have a U.S. closing, that doesn't make a

6 transaction domestic.

7 THE COURT: I thought it was the IKB closing.

8 MR. DAVIES: That's certainly not alleged in the

9 complaint, your Honor. "A closing" is what is alleged. But as

10 the documents reflect --

11 THE COURT: It involved Goldman purchasing notes

12 from --

13 MR. DAVIES: This is the initial purchase by Goldman

14 from an issuer.

15 THE COURT: I see.

16 MR. DAVIES: Goldman Sachs & Co. then sells to Goldman

17 Sachs International, which sells to IKB. So we're talking

18 about a different transaction.

19 THE COURT: Right. Well, maybe I should be asking

20 Mr. Reisner, but I would like to understand better the elements

21 of this closing, if I am to give them any importance. I was

22 under the impression that, at that closing, book entry

23 transfers were executed. And I would like to know if that has

24 any relevance. I'm back on my literal kick here, Mr. Reisner,

25 in terms of sale, offer, purchase -- well, not offer. Sale or


12EASECAps28

1 purchase. So I'll ask you that.

2 Mr. Davies, did you have anything else?

3 MR. DAVIES: I really didn't, your Honor. I think I

4 have covered all the points that I wanted to cover in Morrison.

5 Thank you.

6 THE COURT: All right. Thank you so much.

7 MR. REISNER: So, your Honor, the closing that's

8 alleged to have taken place in New York -- that is, the closing

9 for the Abacus 2007 AC1 transaction, which included --

10 THE COURT: In totality. Is that it?

11 MR. REISNER: In totality. But we are not alleging --

12 there is no allegation in the complaint that a representative

13 from IKB attended that closing or anything like that.

14 THE COURT: No, no. I don't think a representative

15 was at the confirmation of the trade in London either.

16 MR. REISNER: I think that's true as well, your Honor.

17 What's clear is that at the closing in New York, the

18 securities, which Goldman Sachs ultimately conveyed to IKB,

19 were conveyed from the so-called SPV, special purpose vehicle,

20 Abacus 2007 AC1, to Goldman Sachs. And they were

21 subsequently --

22 THE COURT: So I don't think that that closing

23 actually affected the trade out of IKB?

24 MR. REISNER: I think, frankly, if we were relying

25 solely on the closing that took place in New York to establish


12EASECAps29

1 the sale of securities, that doesn't sound like a winning

2 argument to me.

3 THE COURT: OK. Fair enough.

4 MR. REISNER: I think it does reflect the domestic

5 nature of this transaction. It reflects that Goldman Sachs &

6 Co., in New York, conceived, marketed, structured the

7 transaction, was responsible for all of the communication that

8 took place with IKB, directly or indirectly, offered the notes,

9 directly or through an agent acting at its direction. But if

10 we were relying solely on the closing, it doesn't sound like a

11 winner, to me.

12 I just want to say one other thing on the definitions

13 and the quote from Morrison. Remember, Morrison didn't involve

14 Section 17(a). There was no claim under Section 17(a), and

15 Morrison never had to evaluate the definition of "offer." I

16 suspect that if they had had to do it, they would have looked

17 at the statute, seen what the definition was, and applied it.

18 And we're not arguing that any time there's some

19 conduct in the United States, Morrison is satisfied. The

20 question is whether or not the alleged activities satisfy the

21 statutory definition in the securities laws.

22 There was one other point that I wanted to -- oh, I

23 think we have to be careful on use of "domestic" securities

24 transactions. It sort of means different things to different

25 people. And when the Supreme Court got around to sort of


12EASECAps30

1 defining the holding in Morrison at page 2888, 130 S.Ct. at

2 2888, they said, "Section 10(b) reaches the use of a

3 manipulative or accepted device or contrivance only in

4 connection with the purchase or sale of security listed on an

5 American stock exchange and the purchase or sale of any other

6 security in the United States."

7 So the question is, was there a purchase or sale of a

8 security in the United States under Section 10(b), and was

9 there an offer of a security in the United States under Section

10 17(a).

11 I think "domestic" can be a dangerous term, because I

12 think that it has been interpreted by some to suggest that

13 there has to be a U.S. party on both sides of the transaction.

14 And as I said before, if that definition of "domestic" applied

15 to every international transaction, that all of the

16 participants in the transaction had to be from the same

17 country, no jurisdiction would have authority to assert

18 antifraud claims against participants in international

19 securities transactions.

20 THE COURT: So we can have an offer and a sale that's

21 U.S.-based and a purchase elsewhere? Can you really unhinge

22 those two? This is what happens when you think too much about

23 something. I'm just curious.

24 MR. REISNER: It's easy to unhinge fraud, because you

25 don't need a completed sale to violate Section 17(a) of the


12EASECAps31

1 Securities Act. Section 17(a) of the Securities Act is

2 violated when there's fraud in the offering of the security,

3 whether or not there is a sale or purchase. So that's easy to

4 unhinge.

5 Can you unhinge purchase and sale? I think it

6 depends. It depends on specific allegations in the complaint

7 as applied to those definitions in the Securities Act. And,

8 here, I think it's fair to take Goldman Sachs & Co.'s

9 activities, including the offering circular, which says that

10 the securities are being sold on its behalf by an agent, and

11 find that the statutory definition is satisfied.

12 Now, I lost track of whether I'm supposed to address

13 the ACA sufficiency or --

14 THE COURT: No, you're not.

15 MR. REISNER: Not yet.

16 THE COURT: I haven't heard from Mr. Davies yet.

17 MR. REISNER: I didn't want to get ahead of myself.

18 THE COURT: Thank you.

19 MR. REISNER: Thank you, your Honor.

20 MR. DAVIES: Thank you, Judge.

21 You will recall that when the SEC initially filed

22 suit, it filed with respect to two securities transactions, the

23 IKB note purchase and the ABN swap. The ACA piece of this came

24 into the case when the SEC amended the complaint in response to

25 our motion for judgment on the pleadings. ACA's investment was


12EASECAps32

1 not pleaded in the individual complaints, because there really

2 is no plausible claim that ACA was defrauded by anyone. And we

3 think that's also why, when the SEC had the Court sign a final

4 judgment formalizing the Goldman settlement, ACA was left out

5 in the payments that were made to the purported victims here.

6 IKB got a payment. RBS, the successor to ABN AMRO, got a

7 payment. ACA got nothing. And we think that that speaks

8 loudly to the plausibility of this claim that ACA was

9 defrauded.

10 Judge, the fraud alleged in this case is the failure

11 to disclose Paulson's role alongside ACA in portfolio

12 selection. But of course ACA can't be the victim of that

13 fraud, because if Paulson & Co. selected that portfolio, ACA

14 had to know that. And so the SEC comes up with a different

15 fraud here, that Mr. Tourre misled ACA into thinking that

16 Paulson was going to be buying the $200 million equity or first

17 loss notes, the bottom layer of notes of the Abacus 2007 81

18 structure. And according to the SEC, ACA continued to believe,

19 throughout the course of the transaction, that Paulson was

20 going to buy the equity notes.

21 But, Judge, the claim fails, because although the

22 complaint pleads that something caused ACA to be confused, or

23 perhaps created a "misimpression" in mid January about whether

24 Paulson was going to buy the equity notes -- and, Judge, the

25 "misimpression," this tellingly anemic word the SEC uses to


12EASECAps33

1 describe this fraud, first of all, the SEC does not plead that

2 Mr. Tourre caused ACA's confusion, much less that he did so

3 fraudulently. And second, the claim that ACA believed that

4 Paulson was going to buy the notes at the time that ACA

5 invested is just demonstrably false on the basis of the

6 documents referenced in the complaint.

7 Judge, in the ATSI v. Shaar case, the Second Circuit

8 said fraud claims are too speculative even on motion to dismiss

9 when they're based on distorted inferences and speculation.

10 But distorted inferences and speculation really is all there is

11 to support this claim.

12 With respect first of all to the failure to comply

13 with Rule 9(b), really all the complaint has is the SEC's

14 speculation that Mr. Tourre might have made a fraudulent

15 misrepresentation that caused this misimpression. For example,

16 the SEC says that Mr. Tourre may have said something during a

17 telephone call with an unnamed person at ACA on January 12,

18 '07, that led ACA to believe that Paulson was going to buy the

19 equity notes.

20 Judge, over a two-year investigation, the SEC has

21 collected and reviewed millions of documents and taken

22 testimony from everyone involved in these transactions. So we

23 can be quite sure that if there were any evidence that

24 Mr. Tourre said something fraudulent to ACA on that call, the

25 complaint would comply with Rule 9(b) by pleading with


12EASECAps34

1 particularity what he said, to whom, and why it was misleading.

2 But in totality what the SEC pleads about this alleged call is,

3 "On January 12, 2007, Tourre spoke by telephone with ACA about

4 the proposed transaction," period.

5 Now, the SEC goes on to speculate that Mr. Tourre may

6 have said something fraudulent. But really, that speculation

7 doesn't cut it for a fraud claim. It's an extraordinarily

8 flimsy basis on which to be making such a serious claim. And

9 in the Rorech case that we cite in our reply, Judge Koeltl

10 rejected a very similar attempt by the SEC to base a fraud

11 claim on speculation about what might have happened during a

12 telephone call. So, Judge, ultimately, Iqbal tells us that

13 when considering whether a complaint plausibly suggests

14 wrongdoing, the court is to draw on extrajudicial experience

15 and common sense.

16 Judge, respectfully, human experience teaches that

17 people get confused for all kinds of reasons that have nothing

18 to do with fraud. And particularly as this complaint pleads

19 that ACA was in direct communication with Paulson, having

20 communications in which Mr. Tourre was not involved, and they

21 were talking to other people at Goldman, having conversations

22 in which Mr. Tourre was not involved, there are any number of

23 things that could have caused this momentary confusion. And

24 the SEC certainly hasn't met its burden to believe that it was

25 Mr. Tourre that was responsible, much less that he did anything


12EASECAps35

1 fraudulent.

2 But, Judge, those pleading deficiencies are almost

3 eclipsed by the fact that although the complaint is often

4 silent about everything that happened between January, when ACA

5 was supposedly confused, and the end of April, when they

6 actually invested, the documents make very clear that it was

7 clearly disclosed to ACA that Paulson was not buying the equity

8 notes. And it's not just any documents that show this; it's

9 the very documents that Mr. Tourre is supposedly responsible

10 for and that form the basis of the claim against him as to IKB.

11 THE COURT: Clearly -- I mean, that's evidence that

12 they should have or had to have known at that point and they

13 were no longer without that information. So obviously also,

14 they couldn't have relied on it. But does that matter?

15 MR. DAVIES: Judge, our argument is not that they

16 didn't rely on --

17 THE COURT: No, I realize that, yes.

18 MR. DAVIES: Our argument is that it really goes to

19 the plausibility.

20 THE COURT: It goes back to plausibility. OK.

21 MR. DAVIES: Yes, your Honor. To sustain the ACA

22 claim, the Court would need to find it plausible that to try to

23 get ACA to invest, Mr. Tourre misled them into thinking that

24 Paulson was going to buy the notes --

25 THE COURT: I understand what you're saying, but


12EASECAps36

1 you're arguing it in connection with plausibility.

2 MR. DAVIES: That's right, your Honor. While

3 repeatedly disclosing to ACA --

4 THE COURT: Right. You're not arguing that if someone

5 did mislead and then disclose, they're forgiven for the

6 original conduct. I understand that.

7 MR. DAVIES: That's not our argument, your Honor.

8 THE COURT: Thank you. I understand.

9 MR. DAVIES: Thank you, your Honor.

10 THE COURT: OK.

11 MR. REISNER: First, your Honor, not that it's

12 critical to the analysis, but both the original complaint and

13 the amended complaint in this case allege two frauds. The

14 first fraud was the false representation by Goldman Sachs and

15 Tourre that ACA selected the referenced portfolio without

16 disclosing that a hedge fund with a short adverse economic

17 interest participated in that selection.

18 The second fraud was that Mr. Tourre and Goldman Sachs

19 misled ACA into thinking that Paulson was a long equity

20 investor, when in fact he was a short investor.

21 And the allegations setting forth the manner in which

22 Tourre affirmatively misled ACA into believing that Paulson was

23 a long equity investor are focused in paragraph 48 in the

24 amended complaint, which alleges that Mr. Tourre personally

25 sent ACA a misleading e-mail describing Paulson as the, quote,


12EASECAps37

1 transaction sponsor, end quote, and stating that the equity

2 tranche had been "precommitted." And as alleged in the amended

3 complaint, "in fact, Goldman Sachs & Co. never intended to

4 market to anyone a 0 to 9 percent first loss equity tranche in

5 this transaction."

6 So Mr. Tourre engaged in affirmative acts to mislead

7 ACA, as set forth in the amended complaint. And he was also

8 aware that ACA was actually misled into thinking that Paulson

9 was a long investor.

10 Paragraph 50 of the amended complaint reflects that

11 e-mails reflecting ACA's confusion were forwarded to Tourre.

12 So at least by that time, January 12 -- pardon me, January

13 16 -- Tourre knew or was reckless in not knowing that based on

14 his e-mail, ACA had been mislead into believing that Paulson

15 was an equity investor.

16 So at the same time that he was making misleading

17 statements to ACA, he was concealing from ACA Paulson's true

18 standing as a short investor.

19 And I noticed in their brief the defendant claimed

20 that Goldman Sachs and Tourre had no duty to disclose that

21 Paulson was short. Well, that's not right as a matter of law.

22 Once Tourre made affirmative statements concerning Paulson's

23 role, the "transaction sponsor," with a "precommitted" equity

24 tranche, he had a duty to be accurate and complete, because his

25 omissions rendered the statements he made materially


12EASECAps38

1 misleading. And that principle is set forth in the Caiola v.

2 Citibank case, 295 F.3d 312, 330-31 (2d Cir. 2002).

3 And as the Court's questions were suggesting, or as

4 the Court's questions may have been reflecting, it's irrelevant

5 that later, on February 26, the offering circular didn't

6 identify an equity purchaser, didn't disclose Paulson was

7 short. And an equally plausible inference was that Paulson had

8 decided not to participate in the transaction, or that maybe

9 Paulson was one of the note purchasers listed in the offering

10 circular.

11 By that time the damage was already done. In January

12 and early in February, based on Tourre's misleading activities,

13 ACA was tricked into thinking that Paulson would be a long

14 investor, when ACA approved the transaction on February 12,

15 2007, as set forth in paragraph 52 of the amended complaint.

16 THE COURT: You think it's plausible that they were

17 surprised?

18 MR. REISNER: That's exactly where I was going. I do.

19 We are not saying and we have never said that ACA was

20 completely without fault here. But that doesn't excuse the

21 false and misleading statements made by Goldman Sachs and

22 Tourre to deceive ACA.

23 And let's remember, our Section 17(a)(2) and (3)

24 claims don't require scienter. They can be proven based on as

25 much as negligence. But we've alleged scienter here, to


12EASECAps39

1 satisfy our Section 17(a)(1) and Rule 10b5 claims against

2 Mr. Tourre. The complaint clearly sets forth what was

3 happening.

4 Tourre and his Goldman Sachs colleagues on the New

5 York trading desk knew that time was running out on Goldman

6 Sachs's ability to profit on synthetic CDOs. They knew that

7 the U.S. housing market was in serious decline and that buyers

8 of CDOs backed by subprime RMBS were becoming more reluctant to

9 purchase. And as one of Tourre's colleagues on the trading

10 desk wrote in an e-mail to Mr. Tourre, "The CDO biz is dead.

11 We don't have much time left." And as Tourre himself observed

12 in an e-mail quoted at paragraph 19 of the amended complaint,

13 "More and more leverage in the system. The whole building is

14 about to collapse any time now." And then he says, "Standing

15 in the middle of all these complex highly leveraged exotic

16 trades he created without necessarily understanding all the

17 implications of these monstrosities."

18 This was the last chance for Tourre and his Goldman

19 Sachs colleagues to earn profits on this type of transaction.

20 And they created illusions. They created illusions for the

21 purchasers of notes that an objective, independent party had

22 selected a reference portfolio when they knew that a party with

23 adverse economic interests was core in the selection process

24 and they concealed that. And they tricked ACA into thinking

25 that Paulson was long, when he actually always intended to go


12EASECAps40

1 short.

2 THE COURT: And your allegation is that ACA committed

3 to the deal with that impression and then was surprised, at

4 what juncture again?

5 MR. REISNER: That's exactly what's alleged in the

6 complaint. They were surprised, frankly, when they learned,

7 during the course of our investigation, that Paulson had been a

8 short investor. It was never disclosed to them that Paulson

9 was short. They are right; the offering circular ultimately,

10 that got distributed the first time February, I think, on

11 February 26, didn't identify --

12 THE COURT: Had no Paulson, right?

13 MR. REISNER: Right. And it didn't identify an equity

14 investor. But it didn't disclose Paulson's role as a short

15 either.

16 THE COURT: OK.

17 MR. REISNER: Unless there are any further questions,

18 I think that concludes our argument on this point.

19 THE COURT: OK. Thank you, Mr. Reisner. Mr. Davies?

20 MR. DAVIES: Thank you, your Honor. Just very

21 quickly, I was laughing to hear Mr. Reisner say that he's not

22 trying to allege that there was some kind of freestanding duty

23 to disclose Paulson's short position here, he was really only

24 arguing that it was because he says Mr. Tourre made it look

25 like Paulson was taking a long position that that corrective


12EASECAps41

1 disclosure would have been required. But the problem is, as I

2 outlined in our earlier argument, the complaint really doesn't

3 plead that Mr. Tourre ever told ACA that Paulson was going to

4 be buying the equity notes.

5 And, your Honor, if I could ask you to look to page 12

6 of the packet of documents that I handed up earlier, this makes

7 it even clearer why it's just absolutely implausible that this

8 allegation that Mr. Tourre tried to make ACA think that Paulson

9 was taking a long position is just contradicted by the

10 documents.

11 Judge, at page 12 of this package, here is the

12 February 26, 2010 preliminary term sheet that has a chart with

13 a column for the tranche of the transaction and then three

14 columns across the initial issued amount. In the line of first

15 loss -- this is the tranche that the SEC says Mr. Tourre tried

16 to make ACA think Paulson was buying -- it said "NA," not

17 applicable. And then the next pages, 13 and 14, are the actual

18 offering circular pursuant to which ACA and IKB bought the

19 notes.

20 On page 3 of the offering circular is a chart that

21 again makes it very clear that for the first loss notes -- it's

22 the notes in the far right-hand corner, "FL" -- the original

23 principal amount had 50 million for A-1, which is the IKB note

24 purchase, 142 million for the ACA note purchase and the IKB

25 purchase, and in the column for first loss, zero dollars.


12EASECAps42

1 And, Judge, if there were any doubt as to whether ACA

2 knew that Paulson was not buying the equity notes, at page 17

3 through 18 of this package is ACA's 10-Q disclosure for the

4 second quarter of 2007, where it discloses each of the CDOs in

5 which it had invested. And here we have the Abacus CDO. And

6 it discloses that the total deal size is $192 million, that is

7 to say, the IKB 150 plus its own 42. And it also discloses the

8 collateral is all investment grade, so clearly excluding the

9 equity notes that Mr. Tourre supposedly made them think Paulson

10 was buying.

11 So, Judge, there is no plausible claim of fraud on

12 ACA.

13 Unless the Court has other questions at this point --

14 THE COURT: No.

15 MR. DAVIES: -- under Morrison, the SEC has to show

16 fraudulent domestic transaction. It's pled three allegedly

17 fraudulent transactions. Two of them are clearly foreign and

18 one has no plausible claim of fraud. And that's why we move

19 that the complaint be dismissed.


21 Mr. Reisner, do you have --

22 MR. REISNER: Just very quickly, your Honor.

23 THE COURT: -- further comments? Mm-hmm.

24 MR. REISNER: I would just point out that the

25 documents that the Court was just directed to on the ACA issue,


12EASECAps43

1 they start February 26. As I said, the damage was already done

2 by February 26. The misleading statement had already been made

3 by Tourre in early January. There is an e-mail at paragraph 48

4 of the amended complaint in which Tourre refers to Paulson as

5 the transaction sponsor and says the equity tranche has been

6 precommitted. The amended complaint alleges that ACA, on

7 February 12, approved going forward with the transaction. The

8 amended complaint alleges that ACA at no relevant time

9 understood that Paulson was a short investor. The amended

10 complaint alleges that had ACA known the truth that Paulson was

11 a short investor, they wouldn't have participated in the

12 transaction.

13 So the fraud on ACA is clearly pled and plausible as

14 set forth in the amended complaint.

15 THE COURT: Mr. Davies?

16 MR. DAVIES: Sorry, your Honor. One point I intended

17 to make last time I was standing here. We see in the complaint

18 no allegation that ACA was committed to invest at any time

19 before it actually did in April.

20 THE COURT: OK. I'd like to detain you for a few more

21 moments just to take a break and flesh in my thoughts if you

22 have any further questions. It will take about literally ten

23 minutes.


25 (Recess)


12EASECAps44

1 THE COURT: Mr. Reisner, I would like to hear from you

2 with respect to the solicitations to unnamed American

3 investors, as a 17(a) claim.

4 MR. REISNER: Sure. To be candid, your Honor, I think

5 we're going to have to wait for discovery to put a little bit

6 more meat on that bone. What we know now is that the syndicate

7 desk in New York, at Goldman Sachs, the structured product

8 syndicate desk, sent out the e-mail blast to a number of

9 financial institutions, domestic and foreign, promoting the AC1

10 transaction and setting forth the terms of the transaction, and

11 solicited offers to purchase the notes. But precisely what

12 follow-up meetings, conversations, etc., took place after that,

13 we'll find out more hopefully during the course of discovery.

14 That's what we can allege now. We think it satisfies Section

15 17(a). It constitutes an offer of securities, a solicitation

16 of an offer to buy AC1 notes.

17 And I was thinking more about the Court's question

18 about the closing in New York, and it's sort of related to this

19 point. Under the securities laws, under Section 10(b), the

20 in-connection-with requirement has generally been read to

21 require that a securities transaction tack place incident to

22 the fraud. The actual false or misleading statement doesn't

23 have to be in the precise communication that led to the

24 transaction. So both with respect to the offers made from the

25 syndicate trading desk in New York and with respect to the


12EASECAps45

1 issuance of securities from the SPV to Goldman Sachs, which was

2 critical to the transaction -- the transaction could not have

3 gone forward without the issuance of shares from the SPV to

4 Goldman Sachs, which were subsequently conveyed to IKB. And

5 under the Zandford, Perez-Rubio, and other cases that are cited

6 in our brief, I think that would be sufficient to establish a

7 securities transaction relating to the fraud here. But we

8 don't have to go there, because of all of the other facts

9 allege in the complaint with respect to the marketing

10 activities, e-mails, telephone calls, offering circulars,

11 flipbook offering memorandum sent from New York to IKB.

12 THE COURT: I think I know the answers to the next two

13 questions that Mr. Davies will give me, but I need to know from

14 you, if there is an answer: When was the IKB deal? When was

15 there a binding contract? And the same question for ABN.

16 MR. REISNER: You know, I think there's an allegation

17 at paragraph 59 of the amended complaint that after receiving

18 offering and marketing materials from Goldman Sachs in New

19 York, IKB sent Tourre and Goldman Sachs an e-mail indicating

20 its approval of the transaction. And paragraph 59 of the

21 amended complaint quotes an e-mail from Mr. Tourre to IKB that

22 says, "Stay tuned and thanks for getting your approval so

23 quickly on this."

24 So I think an argument can be made that as of March

25 27, when Mr. Tourre confirmed by e-mail that IKB had approved


12EASECAps46

1 entering this transaction, there may have been a binding

2 agreement. But, again, I think that we need to know more facts

3 than are alleged in the complaint to reach a final conclusion.

4 And that will also be the focus of discovery as we move

5 forward.

6 THE COURT: All right. Thank you.

7 Mr. Davies, my questions to Mr. Reisner have inspired

8 you?

9 MR. DAVIES: Yes, your Honor. With respect to the

10 last point that Mr. Reisner was addressing, he says in

11 paragraph 59, it says that IKB committed. What paragraph 59

12 says is that IKB indicated that it intended to recommend

13 purchase of the notes. It doesn't say that it committed. It

14 doesn't say that it committed to anyone to actually buy them.

15 And in addition, I don't know whether Mr. Reisner has in court

16 a copy of the e-mail. I think that we do. But it is expressed

17 to be tentative and non-binding.

18 THE COURT: And I assume that your date for a binding

19 contract is the confirmation date.


21 THE COURT: Is that correct?


23 THE COURT: And with ABN, how about that?

24 MR. DAVIES: The same date, your Honor, the date on

25 confirmation, which was May 30.


12EASECAps47

1 THE COURT: That confirmation letter.

2 MR. DAVIES: Yes, your Honor.

3 THE COURT: All right. Thank you. Anything else?

4 MR. REISNER: I would just add that -- it's my turn?

5 MR. DAVIES: Your Honor, I was going to come back on

6 the other "domestic offers" fund, if that would be helpful. Or

7 if the Court has no questions on that, I have no need to.

8 THE COURT: No. Fair enough. Good.

9 MR. DAVIES: Judge, Mr. Reisner said that we're going

10 to have to wait for discovery to find out what these offers

11 are. Judge, the SEC is in a two-year investigation and has a

12 two-year standard that it has to comply with here. All it has

13 is this vague assertion that identifies Goldman salespeople --

14 and Mr. Tourre is not a salesperson -- may have mailed some

15 undefined material to some unknown number of unidentified

16 potential investors. It was just as in the SEC v. Pons case

17 that we cite in our brief; under the Rule 9(b) requirement they

18 had to make sure that the defendant has fair notice to enable

19 preparation of a reasonable defense. And there is no

20 particularity here and no ability to mount a defense to this

21 vague allegation.

22 So, Judge, who are these potential investors? What

23 was said to them? Who said it? What involvement did

24 Mr. Tourre have in what was said? Are they foreign or

25 domestic? What was their level of sophistication? What would


12EASECAps48

1 they have found material? We can't possibly defend this

2 impossibly vague allegation. And Mr. Reisner says we have to

3 wait for discovery. Well, of whom should we take discovery to

4 find out the answers to these questions? Because we don't even

5 know who the potential investors were.

6 Judge, this paragraph just doesn't plead a claim

7 against Mr. Tourre.

8 THE COURT: Fair enough.

9 MR. DAVIES: And then finally, your Honor, Mr. Reisner

10 was talking about the supposedly domestic transaction whereby

11 Goldman acquired the securities from the issuer before selling

12 them to Goldman Sachs International, which sold them to IKB,

13 and suggests that the line of cases cited in his brief somehow

14 allows these transactions to be aggregated. So you take a

15 domestic nonfraudulent transaction and aggregate it with a

16 foreign, allegedly fraudulent transaction to satisfy Morrison.

17 But none of those cases stand for that proposition. Those are

18 all about whether particular misconduct is sufficiently related

19 to a securities transaction to violate 10(b). For example, in

20 Zandford, the issue is, when a broker sells his clients

21 securities and steals the proceeds, is that sufficiently

22 related to or in "in connection with" a securities transaction

23 that violates 10(b), or if not, is it just a state law

24 conversion claim? So those cases are so far off point that

25 they really don't support the SEC's position. The only case


12EASECAps49

1 that does address the SEC's argument has rejected it, the Banco

2 Santander case out the Southern District of Florida. The Judge

3 said, if you're going to aggregate domestic transactions with

4 foreign transactions in this way, you're going to end up

5 subjecting many foreign transactions to the U.S. securities

6 law. You're going to result in regulatory multiplicity, which

7 is particularly inappropriate when someone has deliberately

8 invested overseas. And you're going to eliminate the doctrinal

9 clarity that the Morrison court provided. For all those

10 reasons, the SEC's argument that was just made should fail.


12 MR. REISNER: And I promise to be real quick.

13 THE COURT: OK, Mr. Reisner.

14 MR. REISNER: On learning the facts with respect to

15 the syndicate's offers of AC1 notes, Mr. Davies referred to it

16 as a two-year investigation. Let's be a little bit fair here.

17 Morrison was decided after we filed our complaint in this

18 action. It frankly wasn't the focus of our investigation pre

19 filing the complaint. And we have limited investigative

20 abilities after a complaint is filed.

21 Second, on the pleadings standard, I don't think there

22 is any need to plead with particularity, you know, precisely

23 who received these offering materials. There's no surprise as

24 to what we allege the fraud is in the offering materials. And

25 similarly, although I can certainly understand the issue of


12EASECAps50

1 when there was a binding contract as between IKB and Goldman to

2 be a relevant issue, again, I don't think that there is any

3 pleading requirement to demonstrate when there was a binding

4 contract under Rule 8 of the Federal Rules of Civil Procedure.

5 Certainly Rule 9(b) wouldn't apply. And that's why I referred

6 to discovery being the method to try to learn more precisely

7 about what the intent of the parties was with respect to when

8 they were bound. That's all.

9 THE COURT: OK.

10 MR. DAVIES: Judge --

11 THE COURT: You can stay right there. Go ahead.

12 MR. DAVIES: Thank you, your Honor. Just to address

13 very quickly, the idea that the SEC doesn't have to plead what

14 these offerings are is just contradicted by Rule 9(b) and this

15 Court's opinion in the Verus Pharmaceuticals case. Rule 9(b)

16 requires pleading of where, when, and to whom a fraudulent

17 statement has been made.

18 Finally, your Honor, with respect to discovery,

19 depositions have begun to have taken place and have both been

20 held open so that we can conduct our cross when we have the

21 documents that are outstanding. Judge, Fromley teaches us that

22 where a complaint is deficient, that should be exposed with the

23 earliest possible opportunity, with the minimum expenditure of

24 time and resources to the party, and, we might add, to third

25 parties. We respectfully request your Honor to stay cover


12EASECAps51

1 discovery and further depositions pending a resolution of this

2 motion.

3 THE COURT: What is your current schedule? You know

4 what, I can speak to Judge Dolinger about this and find out

5 exactly what the current schedule is going forward.

6 MR. DAVIES: Currently, your Honor, depositions are

7 due to close May 31.

8 THE COURT: OK. Thanks.

9 Anything further?

10 MR. REISNER: Nothing further, your Honor.

11 THE COURT: All right. Then I'll reserve decision,

12 with respect to the pleadings as well as the motion to stay

13 discovery. Thank you.


15 o0o

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$$100 [2] 4/1 4/9$150 [1] 3/25$192 [1] 42/6$200 [1] 32/16$50 [3] 3/25 4/4 4/6

''07 [1] 33/18'33 [1] 26/14'34 [1] 26/16'70s [1] 11/24'purchase' [1] 25/23'sale' [1] 25/23

------------------------------------x [2] 1/2 1/8

110 [10] 1/5 2/3 14/24 18/23 20/7 30/2 30/8 44/19 48/19 48/2310-Q [1] 42/310b5 [1] 39/112 [7] 33/17 34/3 37/12 38/14 41/5 41/11 43/713 [1] 41/17130 [1] 30/113B [1] 13/1514 [2] 1/10 41/17142 [1] 41/24150 [1] 42/7154 [1] 21/416 [1] 37/1317 [21] 14/21 14/23 15/3 16/5 18/9 18/14 18/18 18/23 19/7 20/1 20/7 29/14 29/14 30/10 30/25 31/1 38/23 39/1 42/2 44/3 44/1518 [1] 42/319 [1] 39/121933 [1] 18/211934 [1] 25/221990 [1] 11/221996 [1] 13/4

220 [1] 11/172002 [1] 38/22007 [11] 3/25 12/24 14/4 16/14 24/15 28/9 28/20 32/17 34/3 38/15 42/42010 [2] 2/22 41/122011 [1] 1/1024 [1] 2/2226 [5] 38/5 40/11 41/12 43/1 43/227 [2] 3/24 45/25283 [1] 16/82884 [1] 8/242884-85 [2] 3/7 3/142885 [2] 11/7 26/132887 [1] 8/192888 [2] 30/1 30/2295 [1] 38/22d [1] 38/2

330 [1] 46/2531 [3] 12/24 38/2 51/7311698 [1] 11/22312 [1] 38/23299 [2] 1/5 2/333-year-old [1] 8/9

330-31 [1] 38/23:00 [1] 1/10

44.7 [1] 13/1140 [1] 2/2342 [1] 42/742-year-old [1] 11/548 [2] 36/23 43/3

550 [2] 37/10 41/2352 [1] 38/1555 [1] 15/8572 [1] 25/2058 [1] 15/1259 [4] 45/17 45/20 46/11 46/11

660 [4] 15/8 15/12 15/18 16/2362 [3] 15/22 20/19 21/1067 [1] 23/1069 [1] 23/17

770 [1] 23/1771 [1] 23/10

881 [1] 32/1785 [2] 3/7 3/14

9903 [1] 19/13

AA-1 [4] 4/1 4/4 4/5 41/23A-2 [3] 4/1 4/8 4/10Abacus [9] 3/25 13/5 14/4 16/14 24/15 28/9 28/20 32/17 42/5abilities [1] 49/20ability [3] 12/6 39/6 47/20able [1] 10/18ABN [14] 12/14 12/23 13/2 13/8 23/12 23/13 23/14 23/18 23/19 23/20 31/23 32/6 45/15 46/23about [26] 5/25 6/7 6/12 7/8 10/1 11/16 16/22 22/10 22/11 26/11 27/18 30/22 32/23 34/2 34/3 34/11 35/4 39/14 43/22 44/17 44/18 46/23 48/10 48/18 50/7 51/4abroad [1] 8/23absolutely [3] 16/12 20/16 41/7AC1 [17] 14/4 14/8 15/6 15/11 15/17 15/19 16/14 16/17 16/21 16/22 23/20 24/15 28/9 28/20 44/9 44/16 49/15ACA [58] ACA's [4] 31/25 33/2 37/11 42/3accepted [1] 30/3accompanied [1] 11/17accomplish [1] 9/19accordance [1] 13/13according [1] 32/18accurate [1] 37/24achieve [1] 24/11acknowledge [1] 20/13acquire [1] 15/25acquired [1] 48/11across [1] 41/14

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could [13] 2/17 4/1 4/11 6/8 7/10 8/16 10/23 12/22 22/16 25/13 34/23 41/5 45/2couldn't [2] 16/15 35/14counsel [2] 18/3 22/23country [3] 8/22 22/16 30/17course [6] 8/19 26/14 32/12 32/19 40/7 44/13court [28] 1/1 2/1 3/4 3/6 4/2 9/2 9/6 11/4 11/5 11/7 11/24 13/20 19/23 21/23 24/10 25/13 25/19 25/21 26/13 29/25 32/3 34/14 35/22 42/13 42/25 46/15 47/7 49/9Court's [7] 2/22 8/8 9/14 38/3 38/4 44/17 50/15courts [1] 13/17cover [4] 8/12 20/25 28/4 50/25covered [1] 28/4created [4] 32/23 39/16 39/20 39/20credit [1] 10/2critical [2] 36/12 45/2cross [1] 50/20curious [1] 30/23current [3] 25/10 51/3 51/5Currently [1] 51/6curtail [1] 9/22cut [1] 34/7CV [1] 1/5

Ddamage [2] 38/11 43/1dangerous [1] 30/11date [4] 46/18 46/19 46/24 46/24dated [1] 13/4DAVID [2] 1/20 2/12DAVIES [13] 1/19 2/13 2/15 4/22 22/1 25/1 28/2 31/16 40/19 43/15 45/13 46/7 49/15day [1] 6/7dead [1] 39/10deal [4] 13/23 40/3 42/6 45/14dealer [4] 15/21 20/20 23/8 24/5dealing [1] 3/21dealt [1] 5/2deceive [1] 38/22deception [1] 8/25deceptive [1] 24/16decide [1] 9/6decided [2] 38/8 49/17decision [2] 2/22 51/11declaration [1] 20/24declare [1] 25/22decline [1] 39/7deemed [2] 19/13 19/13default [1] 10/2defend [2] 12/7 48/1defendant [9] 1/7 1/19 2/9 19/20 20/24 21/4 21/12 37/19 47/18defense [3] 22/23 47/19 47/20defer [1] 11/24deference [1] 12/3deficiencies [1] 35/2deficient [1] 50/22defined [6] 16/9 16/18 17/22 21/6 21/6 21/15defines [2] 17/24 17/25defining [1] 30/1definitely [1] 6/11definition [12] 15/24 16/4

Ddefinition... [10] 17/8 17/10 18/6 19/8 19/24 29/15 29/17 29/21 30/14 31/11definitional [3] 25/21 26/1 26/2definitions [10] 6/21 14/14 14/17 17/12 17/23 22/20 24/13 25/18 29/12 31/7defrauded [2] 32/2 32/9delay [1] 20/2deliberately [1] 49/7delivery [2] 15/7 21/8demonstrably [1] 33/5demonstrate [1] 50/3depends [2] 31/6 31/6depositions [3] 50/19 51/1 51/6describe [1] 33/1describing [1] 36/25desk [7] 14/6 14/7 39/5 39/10 44/7 44/8 44/25detain [1] 43/20determination [1] 9/12determine [4] 10/3 17/9 19/8 19/12device [1] 30/3did [8] 10/4 14/10 28/2 33/2 34/25 36/5 43/19 47/23didn't [10] 7/15 28/3 29/13 31/17 35/16 38/5 38/6 40/11 40/13 40/14differ [1] 10/10difference [1] 17/20different [7] 10/13 17/23 19/11 27/18 29/24 29/24 32/14differently [1] 17/23diminish [1] 23/25direct [1] 34/19directed [3] 14/25 16/20 42/25direction [1] 29/9directly [2] 29/8 29/9disapprove [1] 12/1discarded [1] 12/2disclose [6] 32/11 36/5 37/20 38/6 40/14 40/23disclosed [2] 35/7 40/8discloses [3] 42/4 42/6 42/7disclosing [2] 36/3 36/16disclosure [2] 41/1 42/3discovery [10] 44/5 44/13 46/4 47/10 48/3 48/3 50/6 50/18 51/1 51/13discretion [1] 22/11discuss [1] 17/2dismiss [1] 33/8dismissed [1] 42/19dispose [3] 16/10 16/13 16/14distorted [2] 33/9 33/10distributed [1] 40/10district [5] 1/1 1/1 1/14 5/1 49/2do [20] 2/15 2/17 3/5 3/8 6/14 6/17 7/14 8/6 8/10 8/16 11/9 14/11 18/18 25/9 26/21 29/16 34/18 38/18 42/21 46/16doctrinal [1] 49/8document [3] 6/24 7/5 8/1documents [13] 4/2 12/8 12/17 27/10 33/6 33/21 35/6 35/8 35/9 41/6 41/10 42/25 50/21Dodd [2] 24/20 24/22does [9] 4/24 5/10 7/1 19/2

23/24 29/4 33/1 35/14 49/1doesn't [15] 4/25 5/13 5/14 6/2 27/5 29/1 29/10 34/7 38/20 41/2 44/22 46/13 46/14 48/6 50/13Dolinger [2] 12/11 51/4dollars [1] 41/25domestic [29] 2/25 3/8 3/9 3/11 5/11 5/14 6/22 8/10 9/12 11/1 11/9 13/21 22/15 25/4 25/11 26/15 26/17 27/6 29/4 29/23 30/11 30/14 42/16 44/9 47/6 47/25 48/10 48/15 49/3domesticity [1] 10/3don't [15] 7/2 10/17 21/23 24/20 28/14 28/22 30/25 38/24 39/11 45/8 46/15 48/4 48/25 49/21 50/2done [3] 3/16 38/11 43/1doubt [2] 6/12 42/1down [1] 8/2draw [1] 34/14drive [1] 14/15due [1] 51/7during [4] 33/16 34/11 40/7 44/13Dutch [1] 13/19duty [3] 37/20 37/24 40/22

Ee-mail [13] 15/6 15/17 16/25 36/25 37/14 39/10 39/12 43/3 44/8 45/19 45/21 45/25 46/16e-mails [4] 15/14 23/18 37/11 45/10each [1] 42/4earlier [2] 41/2 41/6earliest [1] 50/23early [3] 11/23 38/12 43/3earn [1] 39/19easier [1] 3/18easy [5] 3/2 10/9 17/9 30/24 31/3eclipsed [1] 35/3economic [3] 10/7 36/16 39/23effect [4] 3/1 9/8 9/23 11/21effectuate [1] 23/24efforts [3] 14/25 17/4 20/22either [4] 8/14 13/22 28/15 40/15elements [1] 27/20eliminate [1] 49/8else [3] 6/8 28/2 47/3elsewhere [1] 30/21employee [1] 14/8enable [1] 47/18encourage [2] 15/11 15/15end [6] 6/7 8/6 11/20 35/5 37/1 49/4endlessly [1] 26/4enforcement [1] 24/18engaged [2] 6/19 37/6England [1] 13/7English [6] 13/13 13/16 13/17 13/19 13/19 13/20enough [3] 29/3 47/8 48/8ensure [1] 9/13entering [1] 46/1entire [9] 6/18 7/9 8/5 8/7 8/12 8/15 9/25 21/12 21/13entry [2] 21/8 27/22equally [1] 38/7equity [17] 32/16 32/20 32/24 33/19 35/7 36/19 36/23 37/1 37/4 37/15 37/23 38/6 40/13

41/4 42/2 42/9 43/5equivalent [1] 10/7ESQ [6] 1/16 1/17 1/17 1/19 1/20 1/20ESSEKS [2] 1/20 2/12essentially [1] 24/23establish [2] 28/25 45/6etc [1] 44/12ethics [1] 24/11evaluate [1] 29/15even [10] 5/11 7/2 9/2 15/16 18/4 21/17 27/5 33/8 41/7 48/4event [1] 27/4ever [1] 41/3every [5] 16/9 22/14 24/12 26/6 30/15everyone [1] 33/22everything [1] 35/4evidence [4] 11/7 12/7 33/23 35/11exactly [6] 9/19 9/24 23/5 38/18 40/5 51/5example [3] 16/22 33/15 48/19exchange [15] 1/3 1/16 2/2 2/7 3/3 8/22 8/25 10/8 10/12 14/24 17/25 20/8 22/25 24/25 30/5exchanges [2] 3/8 8/23excluding [1] 42/8exclusive [1] 3/9excuse [1] 38/20executed [2] 12/24 27/23exemption [2] 18/11 18/16Exhibit [1] 20/24exhibits [1] 3/17exotic [1] 39/15expand [1] 9/22expansion [1] 9/24expenditure [1] 50/23experience [2] 34/14 34/16explain [3] 5/1 7/10 7/12exposed [1] 50/22exposing [1] 11/13expressed [1] 46/16expressly [2] 15/20 18/19extend [1] 14/11extent [1] 23/2extrajudicial [1] 34/14extraordinarily [1] 34/7extraterritorial [2] 9/23 11/20extraterritoriality [1] 12/2

FF.3d [1] 38/2FABRICE [5] 1/6 1/19 2/3 2/11 14/7facet [1] 24/12fact [7] 5/9 17/11 24/9 25/10 35/3 36/20 37/3facts [3] 45/8 46/2 49/14fail [1] 49/10fails [2] 8/15 32/21failure [2] 32/10 33/12fair [6] 29/3 31/8 47/8 47/18 48/8 49/16false [7] 15/5 23/19 24/16 33/5 36/14 38/21 44/22far [2] 41/22 48/24fault [1] 38/20February [10] 1/10 38/5 38/12 38/14 40/10 40/11 41/12 43/1 43/2 43/7federal [5] 2/24 8/16 19/4 21/22 50/4

Ffew [1] 43/20filed [4] 31/21 31/22 49/17 49/20filing [1] 49/19final [2] 32/3 46/3finalized [1] 6/15finally [2] 48/9 50/18financial [2] 4/20 44/9Financing [1] 4/14find [7] 10/18 31/11 35/22 44/13 47/10 48/4 51/4finding [1] 10/6first [22] 2/18 3/21 4/2 8/7 12/18 13/24 14/25 15/4 16/4 17/18 20/13 25/3 32/16 33/1 33/12 36/11 36/14 37/4 40/10 41/14 41/21 41/25fit [1] 17/7FL [1] 41/22Fleet [1] 4/18flesh [1] 43/21flimsy [1] 34/8flipbook [1] 45/11Florida [1] 49/2focus [8] 3/9 8/24 14/25 16/4 20/2 26/15 46/4 49/18focused [1] 36/23follow [2] 10/18 44/12follow-up [1] 44/12following [1] 13/10footnote [2] 25/8 25/9foreign [17] 3/3 6/3 9/18 10/18 10/20 10/20 10/25 12/5 22/24 26/7 26/21 42/17 44/9 47/24 48/16 49/4 49/5forgiven [1] 36/5form [3] 12/18 21/8 35/10formalizing [1] 32/4forth [10] 16/23 17/13 22/20 36/21 37/7 38/1 38/15 39/2 43/14 44/10forward [6] 2/4 2/10 43/7 45/3 46/5 51/5forwarded [1] 37/11found [2] 10/3 48/1Frank [1] 24/23frankly [3] 28/24 40/6 49/18fraud [22] 12/9 14/12 19/9 19/17 30/24 31/2 32/10 32/13 32/15 33/1 33/8 34/7 34/10 34/18 36/14 36/18 42/11 42/18 43/13 44/22 45/7 49/24frauds [1] 36/13fraudulent [13] 3/10 8/17 14/11 24/6 24/17 33/14 33/24 34/6 35/1 42/16 42/17 48/16 50/16fraudulently [1] 33/3free [1] 21/21freestanding [1] 40/22Friendly [1] 11/23Fromley [1] 50/21front [2] 4/3 20/25full [1] 2/20fund [2] 36/16 47/6fundamental [1] 18/14further [6] 40/17 42/23 43/22 51/1 51/9 51/10

Ggenerally [2] 25/23 44/20generated [1] 7/19German [2] 4/15 10/8German-based [1] 4/15

get [5] 12/8 18/2 31/17 34/17 35/23getting [2] 7/1 45/22give [3] 3/13 27/21 45/13given [1] 21/4global [3] 4/5 4/8 11/14go [5] 2/4 2/10 39/25 45/8 50/11goes [5] 6/6 15/25 34/5 35/18 35/20going [17] 32/16 32/20 32/24 33/4 33/18 35/24 38/18 41/3 43/7 44/5 47/5 47/9 49/3 49/4 49/6 49/8 51/5Goldman [70] gone [1] 45/3Good [1] 47/8got [5] 29/25 32/6 32/6 32/7 40/10governed [2] 9/16 13/12grade [1] 42/8guaranteed [1] 23/20guess [2] 7/14 15/25guidance [2] 9/6 9/10guide [1] 19/8guided [2] 9/13 26/18

Hhad [26] 9/3 21/23 21/24 22/15 25/8 29/15 29/16 29/16 30/16 32/3 32/14 35/12 37/2 37/14 37/20 37/24 38/7 39/21 40/7 40/12 41/23 42/5 43/2 43/10 45/25 47/18Hague [1] 12/7hand [2] 3/12 41/22handed [3] 4/2 12/23 41/6handful [1] 3/17happen [1] 7/3happened [7] 7/19 9/18 16/3 27/2 27/3 34/11 35/4happening [1] 39/3happens [2] 7/20 30/22happy [1] 7/11has [33] 3/5 4/17 6/19 8/9 9/12 10/24 12/14 18/16 19/7 19/9 20/24 22/2 26/15 27/23 30/12 30/13 33/13 33/20 41/12 42/13 42/15 42/18 43/5 44/20 46/15 47/7 47/11 47/12 47/12 47/18 49/1 49/7 50/17hasn't [2] 21/4 34/24have [73] haven't [1] 31/16having [3] 7/14 34/19 34/21he [22] 10/3 16/19 16/21 16/24 19/20 20/13 21/13 33/2 34/1 34/25 36/20 37/7 37/16 37/17 37/24 37/25 39/14 39/16 39/25 40/23 40/24 46/10he's [1] 40/21hear [5] 2/18 2/19 7/11 40/21 44/1heard [3] 18/3 26/11 31/16heart [1] 18/7hedge [1] 36/16held [1] 50/20helpful [3] 7/9 25/20 47/6here [25] 2/7 4/12 4/23 5/16 8/18 9/17 10/3 11/5 13/18 17/5 24/13 27/24 31/8 32/5 32/15 38/20 38/25 40/23 41/11 42/5 43/17 45/7 47/12 47/20 49/16here's [1] 6/10hey [1] 22/7

high [1] 24/11highlighted [1] 4/13highly [1] 39/15him [2] 10/10 35/10himself [1] 39/11his [13] 10/6 12/7 15/4 15/9 15/13 16/12 18/5 37/14 37/24 39/4 39/18 48/13 48/20hmm [1] 42/23hold [2] 14/10 27/4holding [2] 10/5 30/1holds [1] 8/11HON [1] 1/13Honor [54] hope [1] 24/22hopefully [1] 44/13housing [1] 39/7how [3] 3/5 9/6 46/23human [1] 34/16

II'd [2] 12/13 43/20I'll [3] 23/2 28/1 51/11I'm [13] 2/7 5/4 5/5 5/6 5/7 6/23 7/1 7/11 7/14 8/1 27/24 30/23 31/12I've [1] 22/2idea [1] 50/13identical [1] 11/12identifies [1] 47/13identify [3] 38/6 40/11 40/13if [40] 2/17 2/25 3/2 3/12 3/19 4/1 4/11 5/1 5/12 5/19 7/10 10/23 11/21 12/13 12/22 17/1 19/17 20/13 21/17 21/18 21/20 22/14 27/5 27/21 27/23 28/24 29/9 29/16 30/14 32/13 33/23 36/4 41/5 42/1 43/21 45/14 47/6 47/7 48/23 49/3ignored [1] 12/1IKB [44] 3/21 3/25 4/6 4/8 4/12 4/15 5/20 12/8 12/25 15/1 15/7 15/11 15/15 15/17 16/20 16/20 16/21 16/24 17/4 20/11 27/3 27/7 27/17 28/13 28/18 28/23 29/8 31/23 32/6 35/10 41/18 41/23 41/24 42/7 45/4 45/11 45/14 45/19 45/21 45/25 46/11 46/12 48/12 50/1illusions [2] 39/20 39/20imagine [1] 21/18impact [1] 12/6implausible [1] 41/7implications [1] 39/17importance [1] 27/21important [1] 20/3impossibly [1] 48/2impression [2] 27/22 40/3in [248] in-connection-with [1] 44/20inapplicable [1] 19/5inappropriate [1] 49/7incident [1] 44/21include [3] 16/9 16/18 25/23included [1] 28/9including [2] 23/16 31/9incorporated [1] 13/7incur [1] 16/1independent [1] 39/21indicate [1] 7/24indicated [1] 46/12indicating [2] 6/25 45/19indirectly [1] 29/8individual [1] 32/1industry [2] 11/14 24/12

Iinference [1] 38/7inferences [2] 33/9 33/10information [2] 16/22 35/13informational [1] 19/16initial [5] 18/19 21/3 21/5 27/13 41/14initially [1] 31/21insofar [1] 23/1inspired [1] 46/7institutions [1] 44/9instructions [1] 20/18intended [6] 9/22 24/11 37/3 39/25 43/16 46/12intent [1] 50/7interest [2] 16/11 36/17interested [1] 6/24interests [1] 39/23intermediated [1] 23/21international [17] 4/17 4/19 4/23 5/12 6/1 13/1 13/6 20/10 20/17 21/1 22/17 23/14 23/15 27/17 30/15 30/18 48/12interpretation [2] 7/13 13/21interpretations [1] 11/25interpreted [1] 30/12into [10] 6/6 31/24 32/15 35/23 36/19 36/22 37/8 37/14 38/13 39/24invest [2] 35/23 43/18invested [4] 33/5 35/6 42/5 49/8investigation [5] 33/20 40/7 47/11 49/16 49/18investigative [1] 49/19investment [2] 31/25 42/8investor [12] 5/3 36/20 36/20 36/23 37/9 37/15 37/18 38/14 40/8 40/14 43/9 43/11investors [4] 44/3 47/16 47/22 48/5involve [3] 22/15 23/6 29/13involved [5] 22/24 27/11 33/22 34/20 34/22involvement [1] 47/23involving [2] 24/6 26/6Iqbal [1] 34/12irrelevant [1] 38/4irrevocable [1] 16/1is [166] Islands [2] 4/16 5/21Islands-based [1] 5/21isn't [1] 17/16issuance [2] 45/1 45/3issue [8] 10/6 12/24 17/1 18/24 42/25 48/20 49/25 50/2issued [1] 41/14issuer [2] 27/14 48/11issues [4] 11/2 12/5 13/23 22/4it [87] it's [30] 3/14 5/20 6/7 7/6 11/6 11/21 13/4 16/5 16/11 17/6 17/8 20/15 21/6 22/12 23/3 23/14 24/22 30/24 31/8 34/7 35/8 35/8 36/11 38/4 38/16 41/7 41/21 42/16 44/18 47/4its [14] 9/24 10/24 11/8 11/17 19/5 19/7 20/25 21/3 21/17 29/9 31/10 34/24 42/7 45/20itself [6] 11/6 15/19 20/23 21/16 26/2 26/13

JJanuary [8] 32/23 33/17 34/3 35/4 37/12 37/12 38/11 43/3JEFFREY [2] 1/17 2/7Jersey [1] 4/14JONES [1] 1/13Judge [64] judgment [2] 31/25 32/4juncture [1] 40/4June [1] 2/22jurisdiction [5] 9/18 13/17 13/20 22/16 30/17just [31] 4/2 4/23 7/14 8/8 11/8 12/4 17/6 17/7 18/3 20/12 22/22 24/2 25/17 29/12 30/23 33/5 35/8 40/20 41/7 41/9 42/22 42/24 42/25 43/21 47/4 47/16 48/6 48/23 49/10 50/12 50/14

Kkick [1] 27/24kind [1] 40/22kinds [1] 34/17knew [5] 37/13 39/5 39/6 39/22 42/2know [15] 3/5 17/1 21/12 25/1 27/23 32/14 44/6 45/12 45/13 45/16 46/2 46/15 48/5 49/22 51/3knowing [1] 37/13known [2] 35/12 43/10knows [2] 22/6 22/6Koeltl [7] 5/4 6/6 9/11 25/25 26/8 26/16 34/9Koeltl's [1] 9/10

Llanguage [2] 19/13 20/23last [3] 39/18 43/17 46/10later [1] 38/5laughing [1] 40/21law [16] 2/23 9/16 9/17 13/7 13/8 13/13 13/16 13/19 19/25 21/18 22/14 22/16 26/7 37/21 48/23 49/6laws [16] 2/24 8/12 8/16 9/23 14/10 14/14 14/17 18/23 19/4 21/22 22/21 24/8 24/14 26/7 29/21 44/19layer [1] 32/17learn [1] 50/6learned [1] 40/6learning [1] 49/14least [1] 37/12leave [1] 12/13led [2] 33/18 44/23left [3] 4/19 32/4 39/11less [2] 33/2 34/25let [6] 4/22 6/15 9/5 14/25 17/1 24/2let's [2] 38/23 49/16letter [1] 47/1level [2] 2/25 47/25leverage [1] 39/13leveraged [1] 39/15liability [1] 16/1lie [1] 8/14like [13] 2/18 3/7 3/12 12/14 25/17 27/20 27/23 28/13 29/1 29/10 40/25 43/20 44/1likely [1] 12/6likes [1] 21/12limit [2] 19/2 19/22limitations [1] 19/21

limited [1] 49/19line [2] 41/14 48/13listed [5] 20/11 20/14 22/24 30/4 38/9literal [2] 7/1 27/24literally [1] 43/22litigation [1] 25/14little [2] 44/5 49/16located [1] 14/12London [8] 4/18 13/2 13/2 21/21 22/3 22/6 22/8 28/15long [7] 36/19 36/23 37/9 38/13 39/25 40/25 41/9longer [2] 9/8 35/13look [9] 5/19 10/19 11/21 17/14 18/18 22/19 25/18 40/24 41/5looked [1] 29/16looking [3] 10/2 14/15 16/2Loreley [1] 4/14LORIN [2] 1/16 2/6loss [5] 32/17 37/4 41/15 41/21 41/25lost [1] 31/12lot [1] 26/11loudly [1] 32/8lying [1] 8/13

Mmade [19] 10/24 12/7 12/17 13/25 15/10 26/21 27/1 32/5 33/14 37/22 37/25 38/21 40/24 42/9 43/2 44/24 45/24 49/10 50/17mail [13] 15/6 15/17 16/25 36/25 37/14 39/10 39/12 43/3 44/8 45/19 45/21 45/25 46/16mailed [1] 47/14mails [4] 15/14 23/18 37/11 45/10maintaining [1] 25/4major [1] 24/4make [13] 5/3 5/11 5/14 6/3 10/4 19/20 20/3 27/5 35/6 41/8 41/16 43/17 47/18makes [4] 12/19 19/11 41/6 41/21making [2] 34/8 37/16manipulative [1] 30/3manner [1] 36/21many [1] 49/5March [1] 45/24market [4] 21/19 24/5 37/4 39/7marketed [3] 14/5 22/9 29/6marketing [6] 14/25 15/5 20/22 23/19 45/9 45/18Marrero [1] 5/6master [4] 12/18 12/19 13/4 13/14material [3] 16/24 47/15 48/1materially [1] 37/25materials [5] 15/6 23/20 45/18 49/23 49/24matter [3] 4/24 35/14 37/21mattered [1] 5/25may [13] 3/12 3/19 5/1 12/13 12/24 14/12 33/16 34/5 38/4 46/1 46/25 47/14 51/7maybe [3] 7/2 27/19 38/8me [17] 2/11 2/17 3/13 4/22 5/15 6/15 9/5 13/23 14/25 17/1 17/20 24/2 25/2 29/2 29/11 37/12 45/13mean [2] 26/20 35/11

Mmeaning [2] 8/12 26/4means [3] 18/12 22/3 29/24meat [1] 44/6meetings [1] 44/12memorandum [1] 45/11merely [1] 8/21messages [2] 16/19 16/20met [1] 34/24method [1] 50/6mid [1] 32/23middle [1] 39/15might [5] 3/18 7/24 33/14 34/11 50/24million [10] 3/25 3/25 4/1 4/4 4/6 4/10 32/16 41/23 41/24 42/6millions [1] 33/21mind [3] 9/14 21/23 21/24minimum [1] 50/23minutes [1] 43/23misapplication [1] 18/14misconduct [1] 48/18misimpression [3] 32/23 32/25 33/15mislead [3] 36/5 37/6 37/14misleading [10] 15/5 23/19 34/1 36/25 37/16 38/1 38/12 38/21 43/2 44/22misled [5] 32/15 35/23 36/19 36/22 37/8misrepresentation [1] 33/15Mm [1] 42/23Mm-hmm [1] 42/23modified [1] 9/2moment [8] 5/17 5/25 6/8 6/14 6/23 6/24 7/19 12/11momentary [1] 34/23moments [1] 43/21Monday [1] 17/2monstrosities [1] 39/17month [1] 12/25more [13] 6/23 8/20 12/24 13/5 39/8 39/13 39/13 43/20 44/6 44/13 44/17 46/2 50/6Morrison [44] 2/18 2/23 3/7 3/14 5/2 5/11 7/13 8/7 8/11 8/15 8/21 8/24 9/6 9/22 11/1 11/6 11/7 11/11 11/24 12/4 12/13 12/15 13/21 13/23 14/1 14/10 14/12 21/24 21/25 23/2 24/2 24/3 24/23 26/13 28/4 29/13 29/13 29/15 29/19 30/1 42/15 48/16 49/9 49/17Morrison's [1] 26/3most [2] 15/7 25/22motion [4] 31/25 33/8 51/2 51/12mount [1] 47/20move [3] 9/5 42/18 46/4moved [2] 25/5 25/11Mr [1] 35/23Mr. [74] Mr. Davies [11] 2/15 4/22 22/1 25/1 28/2 31/16 40/19 43/15 45/13 46/7 49/15Mr. Reisner [22] 14/3 15/23 24/21 25/17 25/17 26/10 26/11 26/22 27/1 27/20 27/24 40/19 40/21 42/21 44/1 46/7 46/10 46/15 47/9 48/2 48/9 49/13Mr. Tourre [37] 6/19 15/1 15/4 15/9 15/13 15/16 16/12 16/16 16/24 23/17 24/14 26/12 32/15 33/2 33/14 33/16 33/24

34/5 34/20 34/22 34/25 35/9 36/18 36/24 37/6 39/2 39/10 40/24 41/3 41/8 41/15 42/9 45/21 45/25 47/14 47/24 48/7Mr. Tourre's [4] 12/6 17/4 18/3 18/4Ms. [1] 2/14Ms. Chepiga [1] 2/14much [6] 28/6 30/22 33/2 34/25 38/25 39/11multiplicity [4] 9/15 9/20 26/19 49/6must [1] 26/17mustn't [1] 8/14my [9] 2/7 2/11 2/12 2/12 13/25 27/24 43/21 46/7 47/4myself [1] 31/17

NN.Y [1] 1/9NA [1] 41/16Naftalin [1] 8/9nail [1] 8/2name [1] 2/5National [3] 11/6 19/19 25/19nature [2] 12/5 29/5navigate [1] 3/18necessarily [1] 39/16necessary [1] 23/3need [8] 9/13 26/18 30/25 35/22 45/13 46/2 47/7 49/22needed [1] 16/22needs [1] 3/10negligence [1] 38/25Netherlands [1] 13/8never [5] 18/3 29/15 37/3 38/19 40/8nevertheless [1] 11/1NEW [35] 1/1 1/9 14/6 14/7 15/6 15/10 15/14 15/17 16/13 16/16 17/6 18/4 18/5 20/20 20/22 21/9 21/9 21/10 21/16 22/7 22/8 23/9 26/13 27/2 27/3 28/8 28/17 28/25 29/6 39/4 44/7 44/18 44/25 45/11 45/18next [4] 4/5 4/7 41/17 45/12no [32] 6/11 8/1 9/8 12/3 13/20 18/13 18/16 19/16 22/16 27/2 28/12 28/14 28/14 29/14 30/17 31/14 32/2 35/13 35/17 37/20 40/12 42/11 42/14 42/18 43/8 43/18 47/7 47/7 47/8 47/19 47/20 49/23non [1] 46/17non-binding [1] 46/17none [1] 48/17nonexchange [1] 24/6nonfraudulent [1] 48/15not [61] note [15] 3/21 4/4 4/5 4/6 4/7 4/9 4/10 4/12 12/25 18/19 22/22 31/23 38/9 41/23 41/24notes [39] 3/25 4/23 15/11 15/15 15/17 15/19 15/20 16/14 16/17 16/21 16/22 17/5 18/10 20/21 21/2 21/8 23/6 23/7 27/11 29/8 32/17 32/17 32/20 32/24 33/4 33/19 35/8 35/24 39/21 41/4 41/19 41/21 41/22 42/2 42/9 44/11 44/16 46/13 49/15nothing [7] 6/2 7/23 8/10 24/3 32/7 34/17 51/10notice [1] 47/18

noticed [1] 37/19notification [1] 4/18notion [1] 8/22now [10] 14/10 20/1 20/9 24/19 27/4 31/12 34/5 39/14 44/6 44/14number [3] 34/22 44/8 47/15NV [1] 13/8

Oo0o [1] 51/15objective [1] 39/21observed [1] 39/11obviously [2] 5/18 35/13occur [3] 3/5 7/1 19/14occurred [6] 14/16 14/16 18/17 19/6 19/9 19/17off [1] 48/24offer [37] 6/21 14/16 14/20 15/2 16/5 16/9 16/10 16/10 16/18 16/19 17/8 17/10 17/11 17/11 17/18 17/25 18/6 18/8 18/13 19/6 19/9 19/17 19/24 19/25 20/2 20/5 21/19 23/6 23/25 26/24 27/25 27/25 29/15 30/9 30/20 44/15 44/16offered [7] 15/20 16/13 18/11 21/3 23/7 24/14 29/8offering [24] 15/5 15/16 15/19 16/24 17/2 18/15 20/20 20/25 21/2 21/4 21/7 21/7 31/2 31/9 38/5 38/9 40/9 41/18 41/20 45/10 45/11 45/18 49/23 49/24offerings [4] 18/12 19/12 20/23 50/14offers [11] 16/14 16/16 26/10 26/15 26/20 26/21 44/11 44/24 47/6 47/10 49/15offshore [2] 18/12 23/23often [1] 35/3oh [1] 29/22OK [13] 2/17 7/6 8/4 10/22 29/3 35/20 36/10 40/16 40/19 43/20 49/13 50/9 51/8old [4] 8/9 8/20 11/5 25/19omissions [1] 37/25on [87] once [5] 4/11 13/1 13/6 18/4 37/22one [12] 4/22 5/9 8/13 12/4 23/10 25/19 29/12 29/22 38/9 39/9 42/18 43/16only [16] 5/22 8/13 10/8 10/21 11/2 11/9 11/19 21/8 22/15 23/1 24/19 25/22 26/14 30/3 40/23 48/25open [3] 2/1 26/4 50/20operations [1] 24/7opinion [4] 8/9 9/10 11/5 50/15opinions [1] 11/23opportunity [1] 50/23or [53] order [1] 10/2organized [1] 13/8original [3] 36/6 36/12 41/22originated [1] 9/1other [19] 4/7 8/1 11/16 12/4 12/14 17/3 18/22 18/23 19/3 22/13 24/3 29/12 29/22 30/5 34/21 42/13 45/5 45/8 47/6others [1] 22/23otherwise [2] 15/25 19/17our [29] 3/17 9/21 10/13

Oour... [26] 11/10 16/5 17/16 17/17 18/7 20/3 20/4 21/13 21/14 21/15 24/22 31/25 34/9 35/15 35/18 36/7 38/23 39/1 40/7 40/18 41/2 45/6 47/17 49/17 49/18 50/20out [14] 8/8 12/23 18/3 20/4 28/23 32/4 39/5 42/24 44/8 44/13 47/10 48/4 49/2 51/4outlined [1] 41/2outside [2] 5/23 19/14outstanding [1] 50/21over [6] 4/9 4/17 13/3 13/14 22/17 33/20overlapping [1] 11/14overruled [1] 24/23overseas [5] 5/4 6/5 10/21 14/12 49/8OVERY [2] 1/18 2/11owe [1] 12/2own [4] 11/17 19/5 19/7 42/7owning [2] 10/7 10/11

Pp.m [1] 1/10package [2] 41/11 42/3packet [2] 12/23 41/6page [25] 4/2 4/3 4/3 4/5 4/7 4/7 4/9 4/11 4/12 8/19 11/7 12/22 13/3 13/10 13/10 13/14 21/4 25/20 26/9 26/13 30/1 41/5 41/11 41/20 42/2pages [2] 3/17 41/17PAMELA [2] 1/20 2/10papers [2] 11/10 12/10paragraph [18] 13/10 13/11 13/15 15/18 15/22 16/23 20/19 21/10 36/23 37/10 38/15 39/12 43/3 45/17 45/20 46/11 46/11 48/6paragraphs [4] 15/7 15/12 23/10 23/17pardon [1] 37/12part [3] 6/11 21/14 25/22participants [3] 11/13 30/16 30/18participate [1] 38/8participated [2] 36/17 43/11particular [3] 12/21 13/24 48/18particularity [3] 34/1 47/20 49/22particularly [2] 34/18 49/7parties [11] 6/25 12/20 13/1 13/4 13/6 13/11 13/16 13/19 22/15 50/7 50/25party [5] 5/10 30/13 39/21 39/22 50/24Paulson [32] 32/13 32/16 32/19 32/24 33/4 33/18 34/19 35/7 35/24 36/19 36/22 36/25 37/8 37/14 37/21 38/6 38/7 38/9 38/13 39/25 40/7 40/8 40/12 40/25 41/3 41/8 41/16 42/2 42/9 43/4 43/9 43/10Paulson's [5] 32/11 37/17 37/22 40/14 40/23pay [1] 16/1payment [2] 32/6 32/7payments [1] 32/5pending [1] 51/1people [3] 29/25 34/17 34/21percent [1] 37/4Perez [1] 45/5

Perez-Rubio [1] 45/5perhaps [2] 25/8 32/23period [1] 34/4person [4] 5/10 6/3 26/6 33/17personal [1] 17/4personally [4] 16/16 16/19 23/18 36/24persons [1] 6/4persuade [3] 15/11 17/4 21/19Pharmaceuticals [1] 50/15phone [2] 15/10 16/21picture [1] 3/3piece [6] 12/14 23/1 24/2 25/6 25/19 31/23pinpoint [1] 6/14place [16] 3/8 8/25 14/13 14/19 21/10 21/16 22/12 22/14 22/19 26/8 28/8 28/25 29/8 44/12 44/21 50/19plainly [1] 14/18Plaintiff [1] 1/4plaintiffs [2] 2/3 26/4plausibility [4] 32/8 35/19 35/20 36/1plausible [7] 32/2 35/22 38/7 38/16 42/11 42/18 43/13plausibly [1] 34/13plead [5] 33/1 41/3 48/6 49/22 50/13pleaded [1] 32/1pleading [4] 33/25 35/2 50/3 50/16pleadings [3] 31/25 49/21 51/12pleads [3] 32/22 34/2 34/18Please [2] 2/5 17/1pled [2] 42/16 43/13Plumbers' [6] 5/4 9/11 22/23 25/25 26/9 26/16plus [1] 42/7point [15] 12/4 13/25 18/3 25/12 25/13 25/20 29/22 35/12 40/18 42/13 42/24 43/16 44/19 46/10 48/24points [2] 25/16 28/4policy [3] 11/13 19/11 24/20Pons [1] 47/16Porsche [2] 5/8 9/21portfolio [4] 32/11 32/13 36/15 39/22position [8] 10/24 20/4 23/4 26/23 40/23 40/25 41/9 48/25possible [1] 50/23possibly [1] 48/1potential [3] 47/16 47/22 48/5pre [1] 49/18precise [1] 44/23precisely [3] 44/11 49/22 50/6precommitted [3] 37/2 37/23 43/6preliminary [2] 17/1 41/12premise [2] 10/10 10/11preparation [1] 47/19preparatory [1] 8/21presentation [1] 13/25press [1] 21/19presumption [1] 12/2pretransactional [2] 6/20 9/17Pretty [1] 23/9prevalent [1] 22/18previous [1] 7/23

primarily [1] 14/8principal [2] 12/8 41/23principle [2] 24/9 38/1private [3] 5/20 12/16 13/18problem [3] 12/15 24/21 41/1Procedure [1] 50/4proceeds [1] 48/21process [10] 6/18 7/9 8/5 8/7 8/12 8/15 9/25 21/13 21/13 39/23product [1] 44/7products [1] 14/6profit [1] 39/6profits [1] 39/19prohibited [1] 8/13promise [2] 18/2 49/12promoting [1] 44/9properly [2] 24/17 25/13proposed [2] 9/3 34/4proposition [2] 24/4 48/17protection [2] 19/17 23/21proven [1] 38/24provided [1] 49/9provides [1] 18/19provision [3] 18/22 19/3 19/22provisions [6] 11/9 11/19 18/22 19/21 24/8 24/10purchase [37] 3/4 3/22 4/13 5/17 6/7 6/9 6/15 6/25 9/7 12/25 15/15 15/24 15/24 16/21 17/4 17/15 17/17 17/21 23/18 25/24 27/3 27/13 27/25 28/1 30/4 30/5 30/7 30/21 31/3 31/5 31/23 39/9 41/24 41/24 41/25 44/11 46/13purchased [2] 4/8 23/6purchaser [6] 4/14 5/21 16/1 21/3 21/5 38/6purchasers [3] 8/12 38/9 39/21purchases [3] 3/9 5/3 9/1purchasing [1] 27/11purely [1] 25/18purported [2] 12/9 32/5purpose [1] 28/19purposes [10] 5/11 8/11 10/25 11/1 18/13 18/18 19/10 19/14 26/3 26/20pursuant [1] 41/18push [1] 21/19put [3] 21/21 25/13 44/5

Qqualified [1] 26/1qualifies [1] 18/15quarter [1] 42/4question [8] 5/24 14/12 22/18 26/17 29/20 30/7 44/17 45/15questions [10] 13/24 38/3 38/4 40/17 42/13 43/22 45/13 46/7 47/7 48/4quick [1] 49/12quickly [4] 40/21 42/22 45/23 50/13quite [2] 22/18 33/23quote [5] 8/21 21/12 29/13 36/25 37/1quoted [2] 16/25 39/12quotes [1] 45/21quoting [1] 8/24

Rraised [1] 25/17rather [1] 2/19

RRBS [1] 32/6re [1] 5/5reach [2] 24/8 46/3reaches [2] 8/22 30/2read [2] 19/22 44/20ready [4] 2/3 2/4 2/10 21/8real [2] 12/6 49/12realize [2] 7/2 35/17realized [1] 25/7really [21] 5/13 5/17 8/6 8/9 8/15 11/11 14/15 17/16 18/7 18/10 20/9 28/3 30/21 32/1 33/10 33/13 34/6 35/18 40/23 41/2 48/25reasonable [2] 13/21 47/19reasons [2] 34/17 49/10recall [1] 31/21received [1] 49/23receiving [1] 45/17Recess [1] 43/25reckless [1] 37/13recommend [1] 46/12record [1] 2/5refer [1] 4/1reference [3] 3/17 27/1 39/22referenced [2] 33/6 36/15references [1] 17/3referred [2] 49/15 50/5refers [2] 11/17 43/4reflect [2] 27/10 29/4reflecting [4] 4/5 4/9 37/11 38/4reflection [1] 7/18reflects [5] 4/13 4/16 19/15 29/5 37/10refused [1] 11/24refute [1] 18/4Reg [14] 6/2 6/4 10/25 11/1 11/7 11/10 11/16 11/17 11/18 18/16 18/19 19/5 19/13 19/15regarded [1] 6/22registration [9] 11/2 11/8 18/11 18/16 18/21 19/1 19/14 19/15 19/21regulated [1] 4/20regulation [11] 4/4 4/8 5/22 6/4 10/21 18/12 18/15 18/20 18/24 18/25 19/2regulator [1] 4/21regulators [1] 22/7regulatory [9] 9/15 9/20 11/15 22/3 22/11 22/12 22/13 26/18 49/6REISNER [24] 1/16 2/6 14/3 15/23 24/21 25/17 25/17 26/10 26/11 26/22 27/1 27/20 27/24 40/19 40/21 42/21 44/1 46/7 46/10 46/15 47/9 48/2 48/9 49/13reject [1] 8/21rejected [5] 9/2 19/23 20/13 34/10 49/1rejecting [1] 8/19related [4] 19/16 44/18 48/18 48/22relates [2] 18/20 18/25relating [2] 18/12 45/7relatively [1] 10/9relax [2] 19/15 19/16release [2] 11/21 18/24relevance [1] 27/24relevant [6] 9/8 11/4 25/21 26/15 43/8 50/2

relied [1] 35/14relief [1] 11/17reluctant [1] 39/8rely [2] 12/1 35/16relying [2] 28/24 29/10remain [1] 24/7remember [3] 16/18 29/13 38/23rendered [1] 37/25repeatedly [1] 36/3reply [1] 34/9representation [1] 36/14representations [1] 24/17representative [2] 28/12 28/14request [2] 12/8 50/25require [2] 38/24 44/21required [3] 8/20 9/4 41/1requirement [5] 19/1 26/2 44/20 47/17 50/3requirements [2] 11/15 19/16requires [2] 6/2 50/16reserve [1] 51/11resolution [1] 51/1resources [1] 50/24respect [16] 15/3 22/4 23/21 24/23 25/3 31/22 33/12 44/2 44/24 44/25 45/9 46/9 49/14 50/7 50/18 51/12respectfully [2] 34/16 50/25respond [1] 25/16response [1] 31/24responsible [4] 14/8 29/7 34/25 35/9result [2] 26/5 49/6reviewed [1] 33/21RHYS [1] 1/19RICHARD [2] 1/17 2/8right [33] 2/14 3/23 4/18 5/12 5/16 5/19 6/13 7/25 9/9 10/13 10/15 11/3 12/12 14/17 16/7 22/1 22/5 24/21 25/1 25/15 27/19 28/6 36/2 36/4 37/21 40/9 40/12 40/13 41/22 46/6 47/3 50/11 51/11right-hand [1] 41/22ripped [1] 8/8RMBS [1] 39/8role [4] 23/25 32/11 37/23 40/14Rorech [1] 34/9route [1] 10/17Royal [1] 5/5Rubio [1] 45/5rule [10] 19/13 24/9 33/13 33/25 39/1 47/17 50/4 50/5 50/14 50/15Rules [1] 50/4run [1] 8/6running [1] 39/5

SS.Ct [1] 30/1Sachs [61] Sachs's [1] 39/6said [22] 3/6 11/18 11/25 21/7 25/25 26/10 26/14 30/2 30/14 33/8 33/16 33/24 34/1 34/6 38/19 41/16 43/1 47/9 47/23 47/23 47/24 49/3sale [34] 3/5 5/17 6/15 6/21 6/25 9/7 14/16 14/22 17/17 17/19 17/21 17/25 18/1 18/2 19/6 20/2 20/6 20/12 21/15 21/15 23/6 23/21 24/1 25/24 27/25 27/25 29/1 30/4 30/5

30/7 30/20 30/25 31/3 31/5sales [3] 3/9 9/1 19/12salespeople [1] 47/13salesperson [1] 47/14same [9] 5/17 10/11 11/12 19/20 26/15 30/16 37/16 45/15 46/24Santander [1] 49/2satisfied [3] 18/6 29/19 31/11satisfies [1] 44/14satisfy [3] 29/20 39/1 48/16saw [1] 12/10say [14] 4/20 6/15 6/20 9/15 10/25 15/25 22/7 25/2 26/1 29/12 40/21 42/7 46/13 46/14saying [4] 24/3 26/17 35/25 38/19says [19] 4/4 5/25 9/11 11/16 16/25 20/25 21/2 25/21 31/9 33/16 39/14 40/24 41/15 43/5 45/22 46/10 46/11 46/12 48/2schedule [5] 12/19 13/3 13/11 51/3 51/5scheme [3] 22/4 22/12 22/12schemes [1] 22/13scienter [2] 38/24 38/25scope [3] 19/2 19/22 21/22Scotland [1] 5/6SEC [34] 2/19 3/10 4/23 5/12 5/22 5/25 6/19 9/3 9/24 10/21 10/24 11/6 11/16 11/22 11/24 19/19 31/21 31/24 32/3 32/14 32/18 32/25 33/1 33/16 33/20 34/2 34/5 34/10 34/24 41/15 42/15 47/11 47/16 50/13SEC's [9] 6/18 7/9 8/5 9/19 26/11 33/13 48/25 49/1 49/10second [9] 2/23 12/18 17/19 23/4 33/3 33/7 36/18 42/4 49/21section [31] 14/21 14/23 14/24 15/3 15/23 16/5 16/8 17/24 18/9 18/14 18/18 18/20 18/23 18/23 19/1 19/7 20/1 20/7 20/7 26/2 29/14 29/14 30/2 30/8 30/9 30/25 31/1 38/23 39/1 44/14 44/19sections [2] 25/21 26/1securities [85] security [9] 16/11 16/11 16/15 24/15 30/4 30/6 30/8 30/9 31/2security-based [2] 16/15 24/15see [2] 27/15 43/17seeking [1] 16/20seems [2] 20/13 26/22seen [2] 22/2 29/17selected [3] 32/13 36/15 39/22selection [3] 32/12 36/17 39/23sell [1] 6/4seller [4] 4/16 5/21 6/2 10/20sellers [1] 8/13selling [12] 6/18 7/9 8/5 8/7 8/12 8/15 9/25 20/21 21/13 21/13 21/16 48/11selling-process [5] 6/18 7/9 8/7 8/15 9/25sells [3] 27/16 27/17 48/20send [1] 21/5senior [1] 23/22sense [3] 6/3 19/11 34/15

Ssent [13] 15/5 15/14 15/16 16/19 16/20 16/24 16/24 23/18 23/19 36/25 44/8 45/11 45/19serious [2] 34/8 39/7Services [1] 4/20set [9] 4/2 16/22 17/12 20/4 22/20 37/7 38/1 38/15 43/14sets [1] 39/2setting [2] 36/21 44/10settled [1] 24/9settlement [1] 32/4several [2] 5/1 27/4Shaar [1] 33/7shall [1] 25/23shares [5] 10/7 10/12 10/16 22/24 45/3sheet [1] 41/12short [12] 36/16 36/20 37/18 37/21 38/7 40/1 40/8 40/9 40/14 40/23 43/9 43/11should [11] 6/22 9/14 14/15 19/12 19/21 20/12 27/19 35/12 48/3 49/10 50/22shouldn't [1] 9/16show [6] 5/9 10/20 11/10 17/15 35/8 42/15shows [3] 12/25 13/11 13/15side [1] 4/19sides [1] 30/13sign [1] 32/3signed [1] 6/25significant [1] 9/4silent [1] 35/4similar [1] 34/10similarly [2] 18/24 49/25simply [3] 6/10 8/17 9/16SIMPSON [2] 1/17 2/8Since [1] 12/1sir [1] 9/8sitting [1] 14/7situation [1] 5/2size [1] 42/6so [46] 3/9 5/11 5/15 6/21 7/6 10/10 10/17 10/19 13/18 15/23 17/8 19/5 19/24 20/3 20/5 21/12 24/2 26/20 27/17 28/1 28/6 28/7 28/19 28/22 30/7 30/20 31/3 32/14 33/2 33/22 34/12 35/13 37/6 37/12 37/16 42/8 42/11 43/13 44/24 45/22 45/24 47/22 48/14 48/24 48/24 50/20so-called [1] 28/19sold [4] 23/8 24/14 31/10 48/12solely [4] 18/20 18/25 28/25 29/10solicitation [3] 16/10 16/19 44/15solicitations [1] 44/2solicited [3] 16/14 16/16 44/11soliciting [1] 23/18some [10] 2/25 7/16 9/17 25/2 25/16 29/18 30/12 40/22 47/14 47/15somehow [1] 48/13someone [4] 6/8 6/8 36/4 49/7something [6] 7/16 30/23 32/22 33/16 33/24 34/6sophistication [1] 47/25Sorry [1] 43/16sort [3] 29/24 29/25 44/18sound [2] 29/1 29/10

SOUTHERN [2] 1/1 49/2speak [1] 51/4speaks [1] 32/7special [1] 28/19specific [1] 31/6speculate [1] 34/5speculation [5] 33/9 33/10 33/14 34/6 34/11speculative [1] 33/8spoke [2] 16/21 34/3sponsor [3] 37/1 37/23 43/5spot [1] 19/19SPV [3] 28/19 45/1 45/3squarely [2] 18/6 19/23stand [1] 48/17standard [4] 12/18 24/11 47/12 49/21standing [3] 37/18 39/14 43/17start [1] 43/1starting [1] 7/8state [3] 2/5 3/10 48/23stated [1] 18/25statement [4] 5/16 43/2 44/22 50/17statements [4] 37/17 37/22 37/25 38/21states [40] 1/1 3/5 5/3 5/23 9/2 9/7 14/14 14/19 14/20 14/22 15/2 15/20 17/12 17/15 17/18 17/19 17/19 18/7 18/9 18/13 18/17 19/6 19/9 19/14 19/18 20/1 20/6 20/12 20/15 21/20 22/20 23/7 24/7 24/16 24/24 26/21 29/19 30/6 30/8 30/9stating [1] 37/1statute [5] 9/13 17/13 17/23 21/16 29/17statutes [1] 25/18statutory [4] 17/7 18/6 29/21 31/11stay [4] 45/22 50/11 50/25 51/12steals [1] 48/21steps [1] 5/3stock [3] 10/8 16/2 30/5straightforward [1] 23/9Street [1] 4/18string [1] 11/23structure [3] 21/19 24/5 32/18structured [5] 14/5 14/6 22/9 29/6 44/7subject [3] 18/11 24/18 26/6subjecting [1] 49/5submission [1] 13/19submitted [2] 13/17 20/24subprime [1] 39/8subsequently [2] 28/21 45/4substantially [1] 11/12successor [1] 32/6such [2] 24/9 34/8sue [1] 6/8sufficiency [1] 31/13sufficient [1] 45/6sufficiently [2] 48/18 48/21suggest [1] 30/12suggesting [2] 26/22 38/3suggests [2] 34/13 48/13suit [1] 31/22super [1] 23/22support [4] 10/24 11/22 33/11 48/25supporting [1] 24/4supposed [2] 16/2 31/12

supposedly [5] 27/2 35/5 35/9 42/9 48/10Supreme [17] 2/22 3/4 3/6 8/8 9/2 9/6 9/14 11/4 11/5 11/24 19/23 21/23 24/10 25/19 25/21 26/13 29/25sure [4] 20/3 33/23 44/4 47/18surprise [1] 49/23surprised [3] 38/17 40/3 40/6suspect [1] 29/16sustain [1] 35/21swap [10] 10/2 10/6 12/14 12/16 12/23 16/15 23/19 24/1 24/15 31/23swaps [1] 12/17swept [1] 2/23syndicate [3] 44/6 44/8 44/25syndicate's [1] 49/15synthetic [1] 39/6system [1] 39/13

Ttack [1] 44/21take [9] 2/19 3/8 16/1 22/4 31/8 43/21 43/22 48/3 48/14taken [3] 28/8 33/21 50/19takes [2] 5/3 26/8taking [2] 40/25 41/9talk [1] 7/8talked [1] 10/1talking [5] 22/10 22/11 27/17 34/21 48/10TAO [2] 1/17 2/7teaches [2] 34/16 50/21telephone [4] 33/17 34/3 34/12 45/10tell [2] 17/20 23/16telling [2] 3/4 5/15tellingly [1] 32/25tells [1] 34/12ten [2] 13/5 43/22tentative [1] 46/17term [3] 21/6 30/11 41/12terms [5] 12/20 19/5 25/23 27/25 44/10territorial [2] 11/11 11/19test [4] 8/20 9/3 9/19 11/11testimony [1] 33/22tests [1] 26/18text [2] 4/13 9/13than [6] 2/19 3/18 8/20 12/25 13/5 46/3Thank [18] 3/20 28/5 28/6 31/18 31/19 31/20 36/8 36/9 40/19 40/20 42/20 43/24 46/6 47/3 49/11 50/12 51/13 51/14thanks [2] 45/22 51/8that [364] that's [40] 3/2 4/15 5/19 6/13 7/12 7/25 8/1 8/3 9/9 9/15 9/19 12/12 15/18 15/21 18/7 18/14 18/21 19/8 21/10 21/23 23/10 25/4 25/12 26/8 27/8 28/7 28/16 30/20 31/3 32/3 35/11 36/2 36/7 37/21 38/18 40/5 42/18 44/14 50/5 50/8their [7] 8/14 13/12 18/10 23/18 24/17 37/19 47/25them [13] 12/3 16/24 21/21 26/5 27/21 35/23 40/8 42/9 42/17 46/14 47/23 48/12 48/12then [18] 2/18 4/7 4/9 8/23

Tthen... [14] 10/9 11/20 13/14 22/16 23/2 26/16 27/16 36/5 39/14 40/3 41/13 41/17 48/9 51/11there [57] there's [6] 6/10 27/2 29/18 31/2 45/16 49/23these [14] 10/16 15/3 15/7 17/7 26/20 33/22 39/15 39/17 47/10 47/22 48/4 48/14 49/23 50/14they [44] 6/20 8/14 9/7 10/24 11/12 11/18 11/20 12/1 16/21 17/22 17/23 22/23 25/22 26/1 26/2 26/3 28/20 29/16 29/16 30/2 34/20 35/5 35/12 35/12 35/14 35/15 38/16 38/24 39/6 39/20 39/20 39/22 39/24 39/24 40/6 40/6 40/9 43/1 43/11 47/17 47/24 48/1 48/25 50/8they're [3] 5/17 33/9 36/5thing [5] 4/22 5/17 11/16 24/19 29/12things [4] 7/2 25/2 29/24 34/23think [44] 3/4 6/7 6/17 7/12 7/15 8/6 8/24 10/1 10/19 13/25 21/23 22/10 22/14 24/20 28/3 28/14 28/16 28/22 28/24 29/4 29/23 30/11 30/12 30/22 31/5 31/8 32/3 32/7 38/16 40/10 40/18 41/8 41/16 42/9 44/4 44/14 45/6 45/12 45/16 45/24 46/2 46/16 49/21 50/2thinking [11] 5/4 5/5 5/6 5/7 32/15 35/23 36/19 37/8 38/13 39/24 44/17third [2] 12/20 50/24this [89] those [16] 3/7 5/9 7/2 11/25 13/4 14/16 15/11 18/5 23/17 30/22 31/7 35/2 48/17 48/17 48/24 49/9thought [4] 3/18 11/20 25/7 27/7thoughts [1] 43/21three [3] 12/17 41/13 42/16through [5] 15/8 24/16 26/9 29/9 42/3throughout [1] 32/19time [16] 6/8 6/15 25/10 29/18 33/4 37/12 37/16 38/11 39/5 39/11 39/14 40/10 43/8 43/17 43/18 50/24today [2] 21/5 22/18told [1] 41/3too [2] 30/22 33/8took [8] 14/13 14/19 21/10 21/16 22/19 28/25 29/8 44/12top [3] 4/4 4/16 4/17total [1] 42/6totality [3] 28/10 28/11 34/2TOURRE [57] Tourre's [7] 12/6 17/4 18/3 18/4 20/9 38/12 39/9track [1] 31/12trade [16] 4/12 5/16 5/20 7/7 7/15 7/16 7/19 7/20 8/8 10/19 12/21 20/11 20/14 21/18 28/15 28/23traded [3] 10/8 10/16 22/24trades [1] 39/16trading [5] 14/6 21/21 39/5

39/9 44/25tranche [7] 23/22 37/2 37/4 37/24 41/13 41/15 43/5transaction [76] transactional [1] 11/11transactions [20] 2/25 3/7 5/22 8/23 9/16 10/21 11/9 14/11 14/19 22/18 26/21 29/24 30/19 31/22 33/22 42/17 48/14 49/3 49/4 49/5transfers [1] 27/23tricked [2] 38/13 39/24tried [3] 19/20 41/8 41/15trouble [1] 7/14true [2] 28/16 37/17truth [1] 43/10try [2] 35/22 50/6trying [4] 3/18 8/1 26/5 40/22Tuesday [1] 17/2tuned [1] 45/22turn [4] 4/11 12/14 12/22 47/4two [11] 12/19 13/4 30/22 31/22 33/20 36/13 42/17 45/12 47/11 47/12 49/16two-year [4] 33/20 47/11 47/12 49/16type [1] 39/19typical [1] 12/17

UU.S [18] 5/10 6/4 6/20 9/4 9/16 9/23 14/10 15/21 21/22 23/8 24/5 24/8 26/6 26/7 27/5 30/13 39/7 49/5U.S. [1] 30/21U.S.-based [1] 30/21ultimately [3] 28/18 34/12 40/9undefined [1] 47/15under [25] 2/23 5/21 10/20 13/7 13/8 13/19 13/20 14/12 15/23 16/5 16/8 17/8 18/11 19/7 19/24 27/22 29/14 30/8 30/9 42/15 44/19 44/19 45/5 47/17 50/4underlying [1] 10/11understand [5] 27/20 35/25 36/6 36/8 49/25understanding [1] 39/16understood [1] 43/9unhelpful [1] 25/22unhinge [4] 30/21 30/24 31/4 31/5unidentified [1] 47/15Union [3] 5/5 9/11 26/16UNITED [39] 1/1 3/5 5/3 5/23 9/2 9/7 14/13 14/19 14/20 14/22 15/2 17/12 17/15 17/18 17/18 17/19 18/7 18/8 18/13 18/17 19/6 19/9 19/14 19/18 20/1 20/6 20/12 20/15 21/20 22/20 23/7 24/7 24/16 24/24 26/21 29/19 30/6 30/8 30/9unknown [1] 47/15unlawful [3] 14/18 17/11 20/6Unless [3] 13/24 40/17 42/13unnamed [2] 33/17 44/2untethered [1] 26/24up [7] 3/12 4/3 12/17 32/14 41/6 44/12 49/4upon [2] 8/25 9/1us [5] 3/4 11/17 25/10 34/12 50/21

use [4] 21/20 23/23 29/23 30/2used [2] 2/24 21/17uses [1] 32/25

Vvague [3] 47/13 47/21 48/2valid [1] 7/13value [1] 16/11vehicle [1] 28/19version [1] 9/3Verus [1] 50/15very [12] 7/1 10/13 12/6 17/8 25/19 34/10 35/6 35/9 40/20 41/21 42/22 50/13via [1] 9/24victim [2] 12/9 32/12victims [2] 14/11 32/5view [1] 24/22violate [3] 24/9 30/25 48/19violated [1] 31/2violates [1] 48/23violation [6] 14/21 14/23 15/3 18/9 20/1 20/6Volkswagen [1] 10/8

Wwait [3] 44/5 47/10 48/3Wales [1] 13/7want [3] 18/3 29/12 31/17wanted [3] 20/3 28/4 29/22was [127] wasn't [2] 20/11 49/18way [3] 3/18 19/2 49/4we [66] we'll [1] 44/13we're [8] 2/10 11/18 22/10 22/11 27/17 29/18 44/5 47/9we've [1] 38/25well [9] 6/6 21/14 26/11 27/19 27/25 28/16 37/21 48/3 51/12were [27] 10/3 11/20 11/25 15/20 18/10 22/22 22/24 23/7 26/5 27/23 28/19 28/20 28/24 29/10 32/5 33/23 34/21 35/13 37/11 38/3 38/16 39/8 40/6 42/1 45/4 48/5 50/8what [39] 3/6 3/10 3/16 5/9 6/6 6/9 6/19 9/19 9/24 10/3 17/14 21/23 21/24 26/22 27/9 29/17 30/22 34/1 34/2 34/11 35/25 39/2 40/4 44/6 44/11 44/14 46/11 47/10 47/22 47/23 47/24 47/25 47/25 49/24 50/7 50/13 51/3 51/4 51/5what's [3] 9/5 28/17 40/5whatever [1] 25/25when [31] 2/19 6/8 6/15 16/1 16/2 16/21 29/25 30/22 31/2 31/21 31/24 32/3 33/9 34/13 35/4 35/5 36/20 38/14 39/22 39/25 40/6 45/14 45/14 45/25 48/20 49/7 50/1 50/3 50/7 50/16 50/20where [19] 5/2 6/24 7/1 8/25 9/11 9/18 11/18 14/11 14/15 14/15 14/16 16/2 23/17 25/20 26/7 38/18 42/4 50/16 50/22whereby [1] 48/10whether [22] 5/25 6/24 7/24 8/10 9/7 9/12 14/13 18/15 18/16 19/5 19/8 19/12 22/6 26/17 29/20 31/3 31/12 32/23 34/13 42/1 46/15 48/18which [32] 2/23 8/9 10/8 12/1

Wwhich... [28] 12/14 14/15 16/25 17/24 18/19 22/3 22/18 23/20 26/14 26/22 27/17 28/9 28/18 31/9 34/8 34/20 34/22 36/21 36/24 41/18 41/23 42/5 43/4 45/1 45/4 46/25 48/12 49/6While [1] 36/2who [6] 22/6 22/6 47/22 47/23 48/5 49/23whole [2] 11/8 39/13whom [3] 34/1 48/3 50/16why [8] 7/12 7/14 25/24 32/3 34/1 41/7 42/18 50/5will [12] 2/15 4/25 13/12 17/22 18/2 20/2 22/4 23/1 31/21 43/22 45/13 46/4willingness [2] 19/15 19/16winner [1] 29/11winning [1] 29/1wish [1] 11/13within [1] 17/24without [5] 35/13 36/15 38/20 39/16 45/3WL [1] 11/22wonder [1] 2/17word [1] 32/25words [1] 24/10world [1] 7/2would [33] 2/18 3/12 3/13 7/9 7/23 9/4 9/19 10/11 10/20 16/4 17/14 20/15 21/8 22/7 22/22 24/9 24/19 25/17 26/5 27/20 27/23 29/16 30/17 33/25 35/22 38/13 41/1 42/24 44/1 45/6 47/4 47/6 47/25wouldn't [3] 6/3 43/11 50/5wrongdoing [1] 34/14wrote [1] 39/10

Yyear [6] 8/9 11/5 33/20 47/11 47/12 49/16years [3] 2/23 11/17 13/5yes [12] 2/4 2/10 2/21 3/15 3/20 12/10 17/22 25/7 35/17 35/21 46/9 47/2yet [2] 31/15 31/16YORK [35] 1/1 1/9 14/6 14/7 15/6 15/10 15/14 15/17 16/13 16/16 17/6 18/4 18/6 20/20 20/22 21/9 21/9 21/10 21/17 22/7 22/8 23/9 26/13 27/2 27/3 28/8 28/17 28/25 29/6 39/5 44/7 44/18 44/25 45/11 45/19York-based [2] 18/4 20/20you [75] you're [10] 5/15 21/21 31/14 35/25 36/1 36/4 49/3 49/4 49/6 49/8you've [1] 2/19your [63]

ZZandford [2] 45/5 48/20zero [1] 41/25

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