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United States District Court

Trenton, New Jersey

3708

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

______________________________

MARY ANN SIVOLELLA, et al,

PLAINTIFFS

Vs. CIVIL NO.

11-4194 (PGS)

AXA EQUITABLE LIFE INS. CO.,

et al,

DEFENDANTS

______________________________

GLENN D. SANFORD, et al,

PLAINTIFFS

Vs. CIVIL NO.

13-312 (PGS)

AXA EQUITABLE FUNDS

MANAGEMENT GROUP,

DEFENDANT

______________________________

FEBRUARY 22, 2016

CLARKSON S. FISHER COURTHOUSE

402 EAST STATE STREET

TRENTON, NEW JERSEY 08608

B E F O R E: THE HONORABLE PETER G. SHERIDAN

U.S. DISTRICT COURT JUDGE

DISTRICT OF NEW JERSEY

TRIAL - DAY 22

Certified as true and correct as required

by Title 28, U.S.C. Section 753

/S/ Francis J. Gable

FRANCIS J. GABLE, C.S.R., R.M.R.

OFFICIAL U.S. REPORTER

(856) 889-4761

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United States District Court

Trenton, New Jersey

3709

A P P E A R A N C E S:

SZAFERMAN, LAKIND, BLUMSTEIN & BLADER, PC

BY: ARNOLD C. LAKIND, ESQUIRE

DANIEL S. SWEETSER, ESQUIRE

ROBERT L. LAKIND, ESQUIRE

MARK A. FISHER, ESQUIRE

CHRISTOPHER S. KWELTY, ESQUIRE

CHRISTOPHER S. MYLES, ESQUIRE

FOR THE PLAINTIFFS

BLANK ROME, LLP

BY: JONATHAN M. KORN, ESQUIRE

FOR THE DEFENDANTS

MILBANK, TWEED, HADLEY & McCLOY, LLP

BY: SEAN M. MURPHY, ESQUIRE

ROBERT C. HORA, ESQUIRE

JAMES N. BENEDICT, ESQUIRE

BENJAMIN REED, ESQUIRE

FOR THE DEFENDANTS

ALSO PRESENT: PATRICIA LOUIE, ESQUIRE

MANAGING DIRECTOR & ASSOCIATE GENERAL COUNSEL

AXA EQUITABLE LIFE INSURANCE CO.

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United States District Court

Trenton, New Jersey

3710

I N D E X

GARY SCHPERO 3714

CROSS-EXAMINATION OF GARY SCHPERO BY MR. A.

LAKIND

3714

E X H I B I T S

Defendant's Exhibit 1445 was marked into evidence 3875

Plaintiff's Exhibit 721 was marked into evidence 3876

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United States District Court

Trenton, New Jersey

3711

THE COURT: Good morning.

Any applications?

MR. A. LAKIND: Not from plaintiff, your Honor.

MR. MURPHY: Your Honor, just one housekeeping

matter, sort of a housekeeping matter. We have four days

left, we are supposed to finish Thursday afternoon. My

understanding from Mr. Lakind is that he plans to use very

likely all day today with Mr. Schpero on cross, so he's using

one of the four days. They've also filed two --

THE COURT: Is this for an extension of time?

MR. MURPHY: No. You'll recall, your Honor, in

chambers at one point I had mentioned that we might come to

you at some point and ask for a division of the remaining

time, so that we all have the same incentives to use the

remaining time efficiently. Just a couple of statistics, your

Honor.

So, we have gone back and looked at the transcript;

I mean plaintiffs are beating us in terms of time of

possession with the ball by not quite two to one, but getting

very close to that if they use Mr. Schpero all day. We -- the

entirety of our cross-examinations of all of their direct case

equaled about six hours; they used almost that with Mr. Joenk.

Now they are going to exceed that with our first two

witnesses.

They also -- as I mentioned briefly or about to

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United States District Court

Trenton, New Jersey

3712

discuss, they've served two subpoenas, one on JP Morgan,

you'll recall we've had some dialogue on that; they also

served a subpoena on Friday to trustees' counsel, Morgan

Lewis. I don't think the brief's been filed yet, but I saw

Morgan Lewis' response, it's a 23 page opposition brief for

motion to quash. There could be argument on these two motions

that plaintiffs are causing.

So I just see our four days evaporating and being

used by the plaintiffs. And again, we've only really put on

two witnesses and a custodian of records. I would just ask

that we kind of come up with a division of the remaining time

that's fair so that everyone has the same incentive to use the

time efficiently.

THE COURT: So, how many more witnesses do you have?

MR. MURPHY: I mean we're in the uncomfortable

position, your Honor, of cutting witnesses. We have -- we

have four experts, one is our governance expert who has -- you

know, came from the SEC Division of Investment Management, we

think she'd be an important witness on the governance process,

but she is in Antarctica. And given the fact that we are --

we're crunched on time we're thinking about dispensing with

her, which is all but a foregone conclusion at this point.

We have a number of fact witnesses where we're in

the difficult position of saying do we put them at all or try

to put them on in a half hour. We think we can get it done on

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United States District Court

Trenton, New Jersey

3713

Thursday, but I can't do it quite frankly, your Honor, if they

take two and a half of the four days and I have a day and a

half. I need to at a minimum put on my three other experts.

So, if we had something like there's four days, we

each get 50 percent of it, I could find a way to get it done.

If they're going to use the lion's share of what's left --

because right now they have no incentive to use the clock

efficiently; in fact, they have the opposite incentive. And

I'm not questioning their incentives or motives with how they

present their case, but nothing sharpens the mind like a clock

ticking, your Honor. We're going through that process, and

they don't have that pressure which is a little bit of an

unlevel playing field, in light of the fact that they've got

us on a clock on a two-to-one ratio almost.

THE COURT: All right. Does anyone wish to be

heard?

MR. A. LAKIND: Yes, your Honor. Number one, I'm

not prepared to say who spent more time --

THE COURT: What are you prepared to say, Mr.

Lakind?

MR. A. LAKIND: I'm prepared to say that with regard

to the comments they make, it took Mr. Benedict roughly two

days to examine Mr. Schpero; I think I can do it in one day.

With regard --

THE COURT: Okay.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3714

MR. A. LAKIND: With regard to their assessment that

they put six hours of cross, I mean it seemed they did Mr.

Barrett for a full day, so I'm not sure how this he come up

with six hours. They deposed -- excuse me; they crossed Mr.

Kopcke, Mr. Pomerantz. I'm -- we'll withdraw the subpoena to

Morgan Lewis, that will expedite things, and I'll proceed as

quickly as I can. Perhaps we can revisit it at the end of the

day.

THE COURT: Well, I'm sticking to the four days. I

think that everybody's had more than enough time the present

their cases now. I've extended it a number of times,

plaintiff had more than enough time, and generally the

defendants wished for eight days and I think we've extended

that by two or three days, so I think we should finish by the

end of Thursday. So we'll proceed as we are right now.

MR. A. LAKIND: Thank you, your Honor.

THE COURT: We're going to do the cross-examination

of Mr. Schpero? Mr. Schpero, you may take the stand.

(GARY SCHPERO, previously sworn, resumes witness

stand.)

THE COURT: So, you're still under oath, Mr.

Schpero. Good morning.

(CROSS-EXAMINATION OF GARY SCHPERO BY MR. A. LAKIND:)

Q. Good morning, Mr. Schpero. Are you ready to proceed?

A. Yes, I am.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3715

MR. A. LAKIND: Your Honor, may I proceed?

THE COURT: You may.

MR. A. LAKIND: Thank you.

Q. Mr. Schpero, I'd like to just give you some notice of

what I intend to do today. I'm going to --

THE COURT: No speeches.

MR. A. LAKIND: Okay.

THE COURT: Let's get to questions.

Q. Mr. Schpero, in the context of your direct testimony, you

indicated that your goal was to see that the fees are fair and

reasonable; do you recall that?

A. Yes, I do.

Q. And what is your understanding of what a fair and

reasonable fee is?

A. I think a fair and reasonable fee is one that is

reflective of a process that the Board engages in as

fiduciaries acting in good faith on behalf of the investors,

where we examine all of the data and exercise our business

judgment, each of us exercises our business judgment, to reach

a decision that we think is in the best interest of the

investors.

Q. Was it your goal to have a fee that was fair and

reasonable to FMG as well?

A. No, that is not my goal.

Q. Okay. In response to questions from the Court, you

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3716

identified the Investment Company Institute as a source of

data; is that correct?

A. That's one of many sources, yes.

Q. And are you familiar with an organization called the

Mutual Fund Directors Forum?

A. Yes, I am.

Q. And who are they?

A. They are an independent forum that, again, acts on behalf

of independent trustees as the Independent Directors Council

that I mentioned, and that is a source of both information,

education programs, things of that sort.

Q. Does your Board take advantage of any services from the

Mutual Fund Directors Board?

A. Yes, we -- we certainly have received -- my recollection

is we've received documents over the years that reflect

studies and things of that sort that have been done.

Q. Have you found the Investment Company Institute to be a

reliable source of information?

A. A -- yes, I have -- I have no reason to believe they're

not reliable.

Q. And what about the Mutual Funds Directors Board, do you

find them to be a reliable source of information?

A. No reason to believe otherwise.

Q. Mr. Schpero, you recognize that there is essentially an

inherent conflict between FMG and the Board; is that correct?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3717

A. Yes, I -- I think I've testified to that.

Q. And you recognize as well that your -- your role is one

of a watchdog to act on behalf of investor; is that correct?

A. Yes.

Q. And that means your goal is to protect the investors from

any overreaching by FMG; is that correct?

A. Yes.

Q. You were asked in the course of your direct testimony why

you don't have more input from consultants; do you recall

that?

A. I don't recall specifically, but I may have been asked

that.

Q. Do you recall testifying that you had confidence in the

integrity of the information which you received from FMG?

A. I'm sorry; say that again please?

Q. Do you recall testifying that you had confidence in the

integrity of the information that you received from FMG?

A. Yes, I do.

Q. And it has been your view that you can evaluate that

information without the assistance of outside consultants; is

that correct?

A. No, that would not be correct.

Q. Is it true that one hundred percent of all the

information the Board receives comes from FMG?

A. No, that's not correct.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3718

Q. Okay. And what other information does the Board receive

that does not come from FMG?

A. Well, as I think I testified, we receive information from

many sources, we receive information from Lipper --

Q. Excuse me; but the Lipper material comes from FMG; is

that correct?

A. So you're just asking me the technical issue of who

delivers the information to us?

Q. Yes.

A. Yes, the deliverer of information -- even that I guess I

have to disagree with you, because we certainly receive direct

information quite frequently from our counsel; I receive

direct mailings and e-mails from the Investment Company

Institute as well as the Independent Directors Council; I

receive direct information including, daily and weekly e-mails

from two of the periodicals that cover on a daily basis or

weekly base the industry, Funding Nights and Fund Directions;

those would be at least some of the items that I think of that

I get directly.

Q. In connection with the review of the management and the

administrative contracts, the 15(c) material comes one hundred

percent from FMG; is that correct?

A. All -- again, I guess the exception I clearly remember,

since you're just asking again about the manual process, the

exception I certainly remember is we receive memorandums and

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3719

documents and things from our independent counsel separately.

Q. And it's your position that -- strike that.

The information you receive from the independent

counsel, that assists you in reviewing the 15(c) material; is

that correct?

A. Yes.

Q. And if that information assists you it's conceivable it

would assist the Court as well; is that correct?

A. I guess that would be correct.

Q. And the information you receive from counsel, you did not

include that information in the two binders you provided to me

at your deposition; is that correct?

A. I believe that's correct. Obviously on the advice of

counsel.

Q. And you did not include that information in Defendant's

Exhibits 1811 or 1812, which has been moved into evidence here

as well; is that correct?

A. Well, I didn't prepare defendant's exhibit, but I don't

recall seeing anything when I was under direct testimony.

Q. Now, given your duty as a watchdog for fund investors and

the duty of loyalty to which you owe to fund investors, would

you agree that the Court can make a more reasoned decision if

it had the benefit of the information provided by your

counsel?

(Brief pause.)

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3720

A. I don't -- I guess I'm not sure how to answer that. I

mean we receive a lot of information from our counsel; I

certainly have testified that I find it important and

essential in my decisions. I guess I'm not going to pretend

to take a view as to how the Court would analyze this

material.

MR. A. LAKIND: Would you please supply the witness

Defendant's Exhibit 1445, please?

MR. BENEDICT: What is 1445?

MR. A. LAKIND: We're passing it over to you in a

moment.

THE WITNESS: Do I need these books that are here?

BY MR. A. LAKIND:

Q. You will shortly.

A. Okay.

Q. Mr. Schpero, can you please identify Defendant's Exhibit

1445 for us, please?

A. This is the one of the reports that had been put together

by the Mutual Fund Directors Forum which you asked about a few

moments ago, it's called Best Practices and Practical Guidance

For Mutual Fund Directors.

Q. And is this a document which the Board has received over

the years?

A. I believe it has.

Q. And is this a document --

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3721

A. I can -- I should only speak for myself; I have seen

this.

Q. And when you saw the document, did you take the time to

review it?

A. Yes, I did.

Q. If you would, turn over to -- strike that.

You were asked in the course of your direct testimony

about whether it was wise for a representative of FMG to be a

chairman of the funds' Board of Directors; do you recall that

question?

A. Yes, I do.

Q. And do you recall what your answer was?

A. I don't remember my wording; I'm happy to give you the

answer if you'd like to hear it.

Q. And your answer was in your view that was not

problematic; is that correct?

A. That would -- that would be consistent with my view, yes.

Q. If you would turn over to page 6 of Defendant's Exhibit

1445 -- I'm sorry; page 5 has a Roman Numeral III. Do you see

where that is?

A. Page 5; sorry. Page 5? I don't see a Roman Numeral

III --

Q. At the very top, sir?

A. Oh yes, yeah.

Q. Recommendations to enhance the independence of fund

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3722

independent directors; do you see where that is?

A. Right.

Q. And would you read for the Court, please, recommendation

number 2?

A. So that's on page 6?

Q. Yes.

A. Yeah: The chairman of the funds' board should be a

person who is independent of the advisor and of entities

affiliated with the advisor.

Q. And you disagree with that; is that correct?

A. I don't -- I don't disagree -- I'm sorry; I'm going to

have to change my glasses, I apologize. I think as I told the

Court on Friday, there are two I believe very acceptable

approaches that the SEC has I think -- I think actually since

this date, has made clear are acceptable practices for the

fund industry. And they are either having an independent

chair or having a lead independent trustee who serves the same

substantive purpose. And I believe both of those are very

much practices in the industry.

MR. A. LAKIND: Your Honor, motion to strike; I

asked a simple yes or no question and we'd move much more

quickly if I had a yes or no answer.

THE COURT: He answered the question, you can go to

your next one.

BY MR. A. LAKIND:

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3723

Q. If you would turn to footnote 12 on page 6. See where

that is?

A. Yes, I do.

Q. And I'm going to read it because we both apparently have

vision problems: See Investment Company Governance,

Investment Company Act Rel. No. 26323, January 15, 2004,

governance proposing release. And then it has a parentheses:

The chairman of a fund board can largely control the board's

agenda which may include matters not welcomed by the advisor;

the chairman of the board can have a substantial influence on

the fund's boardroom culture.

Did I read that accurately?

A. Yes, you did.

Q. Is that a concern that you've had about the impact of Mr.

Joenk?

A. Do you mind if I read the context the full --

Q. Absolutely.

THE COURT: You may read the whole -- you may.

A. Thank you.

(Witness reviewing.) I'm sorry; your question?

Q. Do you -- I forget what my question was. Do you disagree

with that statement in the footnote that I read to you?

A. So, your Honor, to answer that I guess -- I'm happy to

answer it, but --

THE COURT: What's the question again, Mr. Lakind?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3724

MR. A. LAKIND: I'm sorry, your Honor?

THE COURT: What's the question again?

MR. A. LAKIND: I asked him if he disagreed with

this statement that I read to him about --

THE COURT: So you can answer that yes or no, do you

disagree.

THE WITNESS: Yeah, I agree those are two accurate

statements.

BY MR. A. LAKIND:

Q. Okay. The last sentence reads: More recently Paul F.

Royce (sic) the director of the SEC's Division of Investment

Management observed in his opening statement that the

Commission on June 23, 2004, "a fund board with an independent

chairman and independent leadership is more likely to ask the

tough questions, more likely to say no when necessary, and

more likely to be an effective check on fund management."

Do you agree with that sentence?

A. Actually I do not.

Q. Turn over if you would to page 28. See where it says

recommendation 16?

A. 16, yes.

Q. It reads: A fund's board should designate a committee

consisting of some or all of the fund's independent directors

to oversee the fund review process and the committee should

have a written charter.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3725

Did you have a committee that had a written charter to

oversee the 15(c) process?

A. No, we do not.

Q. Turn over the page 29, if you would. See recommendation

18?

A. Yes.

Q. It reads: Independent directors and the contract review

committee should consider retaining unaffiliated third-party

consultants.

Did I read that accurately?

A. Yes, you did.

Q. Did the Board retain in this case any unaffiliated

third-party consultants?

A. Yes, as I think I've testified we -- Lipper is retained

to provide performance information, and certainly we receive

data from other third-party entities, I think I've listed

several of them in my direct testimony.

Q. Strategic Insights and organizations of that nature?

A. Management Practice, yes.

Q. But did the Board retain a consultant with an expertise

in the 15(c) review process --

A. I'm sorry; did we?

Q. Did the Board retain a consultant with expertise in the

15(c) process to assist it?

A. Outside of what I've testified, no.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3726

Q. If you would, turn over to page 36, footnote 81. It

reads as follows: The commission -- and that's referring to

the SEC -- staff believes that effective fund governance can

be enhanced when funds align the interests of their directors

with the interests of their shareholders; fund directors who

own shares in the funds that they oversee have a clear

economic incentive to protect the interests of fund

shareholders.

Did I read that accurately?

A. Yes, you did.

Q. Do you own any shares in any of the funds -- excuse me;

any of the funds within the EQAT Trust?

A. Mr. Lakind, I am prohibited from doing that, and if I

owned them I would be an -- I would not be deemed an

independent trustee. Because of the structure of these kinds

of funds where you have insurance policies.

Q. Now, you are a trustee for the Blackstone funds as well;

is that correct?

A. That's correct.

Q. And you own shares in the Blackstone funds; is that

correct?

A. Because there it is not sold through an insurance policy

so I'm able to buy them, and I would have here if I could.

Q. You own shares in the Blackstone funds?

A. I just said yes, yeah.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3727

Q. If you would turn over the page 44. And if you would

read the third bullet down, which begins, a detailed analysis

of the advisor's cost structure. I'll read it so --

A. You have to give me a minute, I haven't even gotten

there.

Q. Yeah. Essentially it deals with suggested information to

be made part of the Section 15(c) request, and it requests a

detailed analysis of the --

A. I'm sorry; just tell me where you are.

THE COURT: He needs to take a look at it, Mr.

Lakind.

MR. A. LAKIND: I'm sorry, your Honor.

THE COURT: He's only seen the document for two

minutes; right?

A. So we're on page 44; where you would like me to look?

Q. The third bullet.

A. And do you want me to read it, or are you going to read

it to me?

Q. Why don't you read it to yourself.

(Witness reviewing.)

A. All right. I've read it.

Q. Did the Board receive a detailed analysis of FMG's cost

structure identifying the amount spent on portfolio management

decisions?

A. No, we had not seen that.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3728

Q. The amount spent on research?

A. I don't recall seeing that.

Q. The amount spent on trading and product development?

A. Same answer, no.

Q. What about cash management?

A. No.

Q. You can feel free to put that aside if you would.

Mr. Schpero, you would agree that in order to fill your

role to achieve an arms-length bargain, it was important that

the Board have accurate information as to the legal standards

which it was to apply; is that correct?

A. Yes, that would be correct.

Q. And in order to fill your role to achieve an arms-length

bargain, it was important that the information you received

about the investment management and administrative fees

charged by FMG in comparison to the fees charged by other

funds was accurate; is that correct?

A. That the comparative fee data be accurate, yes.

Q. And that's the Lipper data that you testified about; is

that correct? That is the Lipper data you testified about

yesterday?

A. That sounds right.

Q. I'm sorry, on Friday. And it's also important that the

information you received about performance of the funds is

accurate; is that correct?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3729

A. Yes.

Q. And the information you received about the profits of the

funds -- excuse me. The profit of the investment advisor was

accurate; is that correct?

A. Yes.

Q. You wanted to be sure that when FMG said it was passing

along economies of scale it was in fact doing that; is that

correct?

A. Well, as I've testified we certainly consider economies

of scale, yes.

Q. And it was important to you that the information you have

with regard to economies of scale was accurate; is that

correct?

A. Yes.

Q. And it was important to you that the Board properly

understood the nature of services provided by FMG and the

nature of services provided by the sub-advisors and by the

sub-administrator; is that correct?

A. Yes, it is.

Q. And it's important that the Board understood how the cost

allocation methodology worked; is that correct?

A. Yes.

Q. And it's important that the Board had the correct

definition of fallout benefits; is that correct?

A. Yes, that we had -- certainly that we had an

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3730

understanding of fallout benefits.

Q. The question I asked you was whether it was important

that the Board had the correct definition of fallout benefits.

A. Yes, that would be -- I would agree with that.

Q. Did you ever have a concern that the sheer magnitude of

information received from FMG might overwhelm the Board?

A. No.

Q. Do you ever have a concern that the --

A. I guess -- your Honor, I guess I'd like to try the

explain the no, but --

THE COURT: Your lawyer will have a chance on

redirect.

THE WITNESS: Fine.

BY MR. A. LAKIND:

Q. Did you ever have a concern that the sheer magnitude of

information you receive would prevent you from distinguishing

the important information from the unimportant?

A. Could you ask me that again please?

Q. Sure. Did you ever have a concern that the magnitude of

information you received, would make it difficult to

distinguish the important information from the unimportant

information?

A. No.

Q. Did you ever have a concern that the information you

receive from FMG was untruthful?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3731

A. No.

Q. Did you ever have a concern that important information

might be missing from the 15(c) packages?

A. No, I mean on all of these things I think I need to say

that understanding the nature of the inherent conflicts that I

-- I'm not going to speak for the whole board; are always

diligent and thoughtful in questioning. We never assume that

anything is -- is -- you know, that the full picture is there,

and that's why we have the kind of discussions, that's why we

have independent counsel there at our side reviewing

everything.

So I don't go into any of this assuming that the

materials we have are sufficient, or that there aren't

additional things we need to do when they think it's the

appropriate exercise of our reasonable judgment.

Q. Do you have a recollection of any specific item of

information given to you by FMG as being inaccurate?

A. I'm struggling to remember anything specifically.

Q. You have no recollection.

A. I mean I do -- I do -- I mean I definitely have

recollections of particularly in the performance area where

there have been mistakes made where we the Board has pointed

out data and presentations that are inconsistent with other

presentations, and there were errors made; I can -- sorry;

there was another one coming to mind, but there have certainly

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3732

been a number of times, there have been minutes where the

Board has -- you know, has pointed out that things that needed

to be corrected. So there are certainly have been any number

of times where I or others have identified things.

In fact, I was reviewing the long -- another example I

guess is what you're asking me for, another example; I was

reviewing the long sheets for the at-issue funds in

preparation for this deposition, and I noticed that one of the

long sheets I think incorrectly summarized the number of

sub-advisors. So certainly there are any number of occasions

where errors are going to occur.

Q. Do you ever receive information from FMG that you thought

was misleading?

A. No, I cannot think of an occasion.

Q. Now, you sit on a fund board for Blackstone; is that

correct?

A. There are three separate closed-end funds, but it's a

single board meeting, yes.

Q. And how much are you paid by Blackstone?

A. I receive in total, because I'm also the chairman of the

governance committee, approximately 90,000 a year.

Q. And how much do you see receive for your services to the

EQAT?

A. So I receive 285,000 as retainer, and 40,000 as the lead

independent trustee.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3733

Q. Are you reimbursed for expenses, travel and the --

A. And I'm reimbursed for any expenses.

Q. Now, in the role that you fulfilled for Blackstone does

that -- do those funds go through the 15(c) process?

A. Yes, they do.

Q. And do you consider the same Gartenberg factors that you

consider in connection with FMG?

A. Yes, we do.

Q. And do you receive a 15(c) package in connection with

those funds?

A. That's correct.

Q. And how large is the 15(c) package you receive? How many

pages?

A. I could not tell you the number of pages.

THE COURT: Are you looking at one particular

meeting, or is this just a general statement as to --

MR. A. LAKIND: Well, to be more precise -- thank

you, your Honor.

Q. For the last meeting, do you know how many pages you

would have received?

A. I do not know the number of pages, no, sir.

Q. Was it anywhere near the 15,000 that you received from

FMG?

A. These are three very relatively small funds, so no, it

would not be anywhere near.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3734

Q. More than 200 pages?

A. Probably more, yes, I would suspect more than 200.

Q. Do you find that the services you provide to FMG is

helpful -- excuse me; the education you get working on behalf

of the EQAT helps you fulfill the duties you perform in

connection with Blackstone?

A. Yes, and vice versa.

Q. Now, counsel for FMG early on in your examination asked

you about a few exhibits, one dealing with the resumes of the

Board members; do you recall that?

A. Yes, I do.

Q. And you testified that those resumes were prepared by

independent counsel; is that correct -- excuse me; counsel for

the independent trustees. Is that correct?

A. That exhibit was prepared by counsel of the independent

trustees.

Q. And --

A. It's another case of a page that had some mistakes,

that's going to happen.

Q. Who is paying counsel to the independent trustees to

prepare an exhibit that FMG used in this case?

A. Who is -- can you ask that again?

Q. Sure. Who is paying counsel to the independent trustees

for the time devoted to prepare the exhibit used in this case?

THE COURT: With regard to the resumes?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3735

MR. A. LAKIND: With regard to the resumes, your

Honor, yes, sir.

THE WITNESS: I guess I can only, your Honor, give

my general understanding of -- because I approve their bills,

and their bills -- certainly all of the bills that I see are

to -- as you would expect are to our -- are directed to me in

the first case, and then they are paid for -- they're really

separated; one is regular fund business, which is then passed

on to fund personnel to pay; and the second category would be

any matters having to do with the litigation, and that's

broken out separately as a separate monthly bill. And those

bills are I believe passed on to the -- to the insurance

company, for reimbursement over the insurance.

THE COURT: All right.

BY MR. A. LAKIND:

Q. In response to a question from defendants you

testified -- strike that.

In Defendant's Exhibit 2064 there was a footer at the

bottom that listed the --

A. I don't know what exhibit you're referring to.

Q. It's the resumes, the resumes.

THE COURT: So, do you have a copy you can show --

MR. A. LAKIND: Yes, I'm going to go through this

very quickly, your Honor.

THE COURT: Well if you're asking him to answer

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3736

questions on the exhibit, he should have access to the

exhibit.

Unless you can read on it the Board there.

THE WITNESS: That's going to be a mistake.

THE COURT: Okay.

BY MR. A. LAKIND:

Q. Let me move on. In the course of that -- your testimony,

you indicated that the exhibits that were used to prepare the

resume were provided to plaintiffs' counsel. How did you know

that?

A. I'm sorry; you need to ask me again.

Q. Sure. In the course of your testimony you indicated that

the exhibits referred to at the bottom of 2064, upon -- that

were used to prepare 2064, were provided the plaintiffs'

counsel, and I was just wondering how knew that.

THE COURT: What is Exhibit 2064?

MR. A. LAKIND: It's the resumes, your Honor, the

qualifications.

THE COURT: If you recall.

THE WITNESS: You're confusing me. I testified that

the -- oh, I understand, I think I know what your reference

is.

THE COURT: Well, if you don't understand the

question, he can rephrase it.

So will you rephrase, please?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3737

BY MR. A. LAKIND:

Q. On the bottom of 2064 --

A. Which I still haven't seen.

Q. Can you see it from over there?

THE COURT: It's hard to read.

MR. A. LAKIND: All right. I'll move on to another

area.

Q. In the course of this litigation, have you had occasion

to meet with counsel to FMG?

A. Yes, I have.

Q. And on how many occasions?

A. Well, counsel came to a number of meetings of the Board

to -- obviously along with FMG personnel, and along with --

these are Board meetings so clearly our counsel was at our

side; but they came as part of the process I testified to the

other day in terms of assisting us and being informed on and

monitoring the litigation. So how many times that happened?

I would be guessing a number.

I mean the litigation has been going on for how many

years since 2011, and each time there is a significant

development the Board has asked -- and again, your Honor, when

I say the Board I mean the independent trustees; but each time

there's been a significant development we naturally have asked

for an opportunity to fully discuss that with all relevant

personnel. So it would be any number much of times that

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3738

they've come to discuss what has occurred.

Q. Did counsel to FMG -- were they present when you were

prepared for your deposition?

A. They were --

THE COURT: What counsel, you mean --

MR. A. LAKIND: Milbank Tweed, your Honor.

Q. Was Milbank Tweed present when you were preparing for

your deposition?

A. I would separate things out. I did have preparation

with -- for this litigation with my counsel alone; there was a

stage back in December where Milbank Tweed asked through my

counsel if I would be willing to be interviewed, as I had

understood it for the purpose of them having a sense for how I

would be responding in the litigation, and my counsel said

that given the -- I'm forgetting the technical term for the --

it's not a joint defense, but given the common interest

defense with respect to the allegations -- sorry, I wasn't a

litigator.

THE COURT: That's okay.

THE WITNESS: But I think that's what it was called.

But that given that they thought it was perfectly appropriate

to let them ask questions. I met with them with my counsel

present, and I made it clear that -- at that session I made it

clear that I was only interested in responding to questions, I

did not have any -- I did not want to hear their reactions to

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3739

questions or responses or any suggestions on their part.

BY MR. A. LAKIND:

Q. Did you at any time in this litigation reach out the

plaintiffs' counsel to inquire about their view of this

litigation?

A. No, I did not.

Q. Did you at any time reach out to plaintiffs and ask if

they would make their experts available to the Board to

explain the basis of their claims?

A. I did not.

Q. Did you at any time in this litigation ask that somebody

provide a summary -- excuse me; that plaintiffs provide a

summary of the discovery developed to date?

A. I did not. I'm happy to explain why, but I did not.

Q. Now, Mr. Schpero, I reached out to you, did I not, or

your counsel, to ask if the Board would entertain a meeting

with me to discuss this litigation; do you recall that?

A. My understanding is that there was an effort on your

part, I believe it was probably about a month or month and a

half ago, very late in the process, to ask for some kind of

meeting with conditions connected with it.

Q. And the conditions connected were that the conversation

we had would not be disclosed to Milbank Tweed, counsel to

FMG; is that correct?

A. I believe there were a number of conditions connected; I

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3740

know it went through a process -- I'm not entirely sure where

it ended up, but I did discuss this with my counsel, I should

say the Board discussed it with our counsel, and in light of

the fact that there were conditions and that you would have to

opportunity to spend three long days with three of the

independent trustees, in the end with guidance from our

counsel we -- actually now that I think about it, with

guidance with our counsel we still awaited -- I think in the

end I guess with guidance of our counsel we chose not to meet

with you if I can remember the way the conditions evolved over

that period.

Q. Was it your view that you could obtain no information

that would be helpful to the Board as a consequence of that

type of meeting?

A. It was my view that given my careful reading of what had

appeared in the documents that you -- you and your experts had

filed over time, and the extent to which from my personal

perspective I saw misleading -- misleading statements and

mischaracterizations, and statements that were simply not

consistent with the reality of the industry, I personally --

and having spent a full day being deposed, I personally no saw

benefit in an additional meeting just before this trial began.

Q. Okay, fine. You understood that in that the Board was

required to essentially review the -- excuse me -- the

investment management/administrative fee separately for each

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3741

portfolio; is that correct?

A. Yes, that's correct.

Q. And you also understood that each category of fee was to

be separately evaluated; is that correct?

A. I guess I don't know what you mean by category.

Q. That the investment management fee was to be evaluated

without consideration of distribution costs; is that correct?

A. Yes, I certainly understood that.

Q. And the investment management fee was to be evaluated

without consideration of transfer agency costs; is that

correct?

A. Yes, the investment management fee needed to be

considered as an investment management fee, for the services

that were being provided.

Q. For investment management.

A. When we examine the investment management fees, yes, we

are examining the -- we are examining the services provided in

connection with those fees.

Q. And when you're examining the administrative fees you're

examining the services provided in connection with those fees

as well; is that correct?

A. Yes, when we're examining the administrative -- the fees

under that contract, we are examining the services provided

under that contract.

Q. Now, transfer agency costs, they were treated as part of

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3742

the distribution fees; is that correct?

A. No, I don't think that is correct.

Q. Now, you received advice from your legal counsel Bingham;

is that correct?

A. Well, they're -- now they merged so they're now Morgan

Lewis, but we do receive extensive advice from our -- our

independent counsel.

Q. And am I correct to say among the advice you received was

a recommendation that the Board record in the minutes of the

meetings, the bases for the various decisions it makes to

approve fees; is that correct?

A. Yeah, I don't -- I don't recall that that was specific

advice from my counsel if that's your question.

Q. Is that consistent with what you would view as the best

practices for a fund board?

A. To do what again?

Q. To record the product of your deliberations in board

minutes.

A. Yes. As I think you know it's really become kind of a

divided process, because the SEC has mandated rather fulsome

disclosure to the investors of that process. And so there are

the minutes and there are also the annual shareholder

disclosure where the investors are walked through the analysis

and factors the Board considered.

MR. A. LAKIND: Chris, would you provide the witness

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3743

with Exhibit 721, please?

Q. If you take a moment to review that exhibit, please.

A. Sure.

(Witness reviewing.) I assume you don't want me to

read --

Q. No, no, I'll point you to what --

A. I'm familiar with what this is.

Q. This is a memorandum from the Bingham law firm dated May

18 to Ms. Williams and a Mr. Walker; is that correct?

A. Correct.

Q. And they are members of the Board of Trustees of the

EQAT; is that correct?

A. Yeah, this would have been I believe in the context of

the education process where they were joining the Board.

Actually at the time they were probably not full members of

the Board.

Q. If you would turn over to Bates page ending in 2038.

Just tell me when you're there.

A. Okay.

Q. And I'd like to read to you the sentence on the bottom of

the first paragraph: Because the actions of boards and

independent directors may be questioned in hindsight, it is

all the more important to ensure that your deliberations and

decisions are documented in a way that demonstrates the care

and attention with which you have discharged your duties.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3744

Did I read that accurately?

A. Yes, you did.

Q. And do you believe the Board fulfilled that goal?

A. Yes, I do.

Q. Okay. Let's move on to the third bullet. Which reads:

Articulate the reasons for your decisions; if you decide to

take a specific action such as renewing an advisory agreement,

agree on the specific reasons for your decision and make sure

that they are recorded in the minutes of your meeting; satisfy

yourself that if the decision were challenged your reasons

would support a robust defense of your decision; play devil's

advocate and consider the arguments that might be made by

someone challenging your decision and how you would rebut

those arguments.

Did I read that accurately?

A. Yes, you did.

Q. Do you believe the Board fulfilled that goal?

A. Yes, I do.

Q. And the -- what document would I look to to satisfy

myself that that goal was achieved?

THE COURT: Do you understand that question?

THE WITNESS: I think it ought to be rephrased or

given to me again.

Q. Sure. Did the Board fulfill those goals in its

preparation of minutes of Board meetings?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3745

(Brief pause.)

A. The only thing I'm struggling with is minutes by their

nature have limitations, so I -- I'm not -- I certainly can

represent to you that I think the minutes were appropriately

done, I have read them and I think they serve their purpose.

But I also will readily tell you that minutes are just that,

they are summaries, they're certainly not a transcript of

what's occurred at a meeting.

Q. Okay. I'm going to move into another area right now. In

connection with your role as a member of the Board, you had to

undertake review of a number of Investment Management

Agreements between FMG and the EQAT; is that correct?

A. Yes.

Q. And do you have any reason to believe that any aspect of

those agreements was inaccurate?

A. Of the Investment Management Agreements?

Q. Yes, sir.

A. No, I do not.

Q. And you also undertook the review a variety of

Sub-Advisory Agreements; is that correct?

A. Yes.

Q. And do you have any reason to believe that any of those

agreements were inaccurate?

A. I do not.

Q. You also undertook to review Administrative Agreements

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3746

between FMG and the EQAT; do you have any reason to believe

that any of those were inaccurate?

A. I do not.

Q. You also -- you did not undertake review of the

Sub-Administration Agreement; is that correct?

A. That's correct.

Q. And you're familiar with a document called the Shared

Services Agreement; is that correct?

A. I have -- I have seen it, yes.

Q. Have you ever reviewed it?

A. Yes, I reviewed it.

Q. And do you have any reason to believe any aspect of that

agreement is inaccurate?

A. Well, as you know, that agreement was not subject to

Board approval; I saw it in the context of it coming up in

this litigation. I am not an insurance lawyer, but -- so I

would be reluctant to tell you whether the wording of that

agreement is appropriately written or not. I certainly --as I

think I testified on direct, I certainly understand what the

purpose of that agreement was, and I am comfortable that it's

not inconsistent with my -- what have been my understanding of

the nature of the arrangements in place.

MR. A. LAKIND: Chris, would you please hand the

witness and his Honor Defendant's Exhibit 449, please.

MR. KWELTY: P-273.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3747

MR. A. LAKIND: Or P-273 is the same document.

BY MR. A. LAKIND:

Q. Have you had -- strike that.

Would you please identify Plaintiff's Exhibit 273?

A. Yeah, this is the service agreement between AXA and FMG,

I guess entered into in 2011.

Q. Now, the first paragraph, do you see where that is,

paragraph 1?

A. I do.

Q. And I'll read that to you, if I might: AXA Equitable

from time to time may provide as available to FMG the

personnel, property and services reasonably necessary to

perform its management, administrative and other non-insurance

related functions.

Did I read that accurately?

A. Yes, you did.

Q. Then it goes on to say: The services to be fund may

include, without limitation, management, corporate, finance,

and strategic planning -- and I'll go on after that. Did FMG

provide those -- strike that.

Did AXA to your knowledge provide those services to

FMG?

A. My understanding is that AXA does provide from our review

of the profitability allocation analysis. You just stopping

where?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3748

Q. At strategic planning.

A. I think those -- I believe those are in the list of

services that AXA provides to FMG.

Q. And in connection -- it goes on to say -- administration,

office and general supplies, financial, treasury and cash

management. Are those services AXA supplies to FMG to your

knowledge?

A. I believe that would be in the list.

Q. And it goes on to say: Printing, actuarial and

accounting. Are those services FMG -- or excuse me; AXA

provides to FMG?

A. Again, I certainly haven't memorized all the services,

but I think that's within the spirit of my sense of the

understanding.

Q. Tax -- the agreement continues: Tax, auditing, legal and

regulatory, human resources.

Again, is that provided by AXA to FMG?

A. I believe so.

Q. Corporate and financial communications, public relations

and advertising. Is that provided?

A. I believe so. Again, I -- it's been a while since I've

reviewed at our annual --at our annual July meetings there is

a review with the independent trustees of the services that

AXA provides, in the -- that are part of the cost allocation

process. It's a long list, so I'm not going to represent that

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3749

I remember these specifically, but I think a number of them

are.

Q. To your knowledge, does AXA provide risk management

technology and corporate secretarial services?

A. Again, I think that's within the spirit of the kinds of

things I remember.

Q. Go on the paragraph 5 if you would, please. And that

reads -- are you there, sir?

A. Yes, I am.

Q. Within 45 days after the end of each calendar quarter and

more often if desired, AXA Equitable shall submit to FMG a

statement of apportioned expenses showing the basis for the

apportionment for each item.

Did I read that accurately?

A. Yes, you did.

Q. Do you know if AXA submitted such a statement to FMG?

A. I do not, no.

Q. Now, there was a fairly large apportionment of expenses

in connection with the approval of the advisory and

administrative fees; is that correct?

A. You need to be more specific what you are talking about.

Q. Sure. Are you familiar with a document called a cost

allocation methodology?

A. Yes, I am.

Q. And that document is used to allocate AXA expenses;

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3750

correct?

A. Correct.

Q. And to whom are those expenses allocated?

A. They're allocated to FM -- the costs that you're

referring to are allocated and reflected as part of the

profitability analysis that's done for FMG.

Q. And the Board considered that profitability analysis in

approving FMG's fees; is that correct?

A. That's correct.

Q. In connection with the consideration of that

profitability analysis, did the Board ever ask for a copy of

the quarterly statement showing that allocation?

A. My hesitation is I think -- I think we're confusing two

different things here. Because I do not believe that what

is -- what you've just been reading to me has anything to do

with the cost allocation numbers and services that are in that

cost allocation study.

So I wouldn't have -- I wouldn't -- I've seen this

agreement once, I think I understand what it's about, but I

don't think it has anything to do with what you just referred

to, which is the cost allocation process that allocates all of

the various corporate services that are provided by AXA to FMG

or to the funds.

Q. So let me make sure I understand what you are telling me.

The Shared Services Agreement has nothing to do with the cost

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3751

allocation methodology?

A. That's correct.

Q. Okay.

A. That is my understanding.

Q. I misunderstood your earlier testimony. What is it --

what type of services then does that agreement refer to or

those services directly --

A. My understanding -- why don't you ask the question again.

Q. Sure. Are the services that are the subject of the

Shared Service Agreement, are those the services that AXA

provides to FMG that we've generally called direct costs or

direct services?

MR. BENEDICT: Objection.

THE COURT: I'm sorry?

MR. BENEDICT: Objection to form. No foundation to

what he's referring to as direct services.

THE COURT: Frank, can you repeat the question?

(Question read back by the reporter.)

THE COURT: All right. You may answer if you

understand the question.

THE WITNESS: Yeah, I think there is some confusion

in the question, your Honor, because Mr. Lakind is referring

to direct costs, and those -- I recall the profitability study

there are direct costs that are at the FMG level, but they're

not -- it's not how they're referenced at the AXA level. So

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3752

I'm a little mystified as to the way the question is being

asked.

THE COURT: So you have to rephrase the question,

Mr. Lakind.

MR. A. LAKIND: Yes, your Honor.

BY MR. A. LAKIND:

Q. Are the services that are referred to in the Shared

Services Agreement, are those services ultimately provided to

the EQAT?

A. I'm not sure -- I think the only way I can answer that is

to tell you my understanding of what this agreement is. I

don't know how else to respond.

Q. Sure.

A. I believe this agreement -- when we learned about it --

because it's not an agreement the fund is subject to; we the

Board certainly had extensive discussions with the help of our

counsel, with management, and my understanding is this is an

agreement that was entered into when FMG as a division in 2011

was moved over to be a subsidiary.

And I'm not an insurance lawyer, I'm actually a retired

lawyer so I'm not any kind of lawyer, but my understanding --

I certainly know very little about insurance law, but my

understanding is that there were insurance regulations that

required that in the context of moving from a subsidiary to a

-- sorry; from a division to a subsidiary, that there

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3753

apparently had to be a shared servicing arrangement. And that

arrangement was intended to simply reimburse AXA for the

direct costs that had already been -- that had been

traditionally incurred at the division level.

So that if you -- it's effectively reimbursing AXA for

the direct costs that were being already provided by FMG when

it was a division, and that it's now as a subsidiary is paying

cash back for that amount. But it is effectively the amount

that shows up as the direct expenses line on the profitability

study, and as I understand it, is unrelated to the AXA

corporate type services that are allocated in the

profitability study.

Q. Mr. Joenk --

THE COURT: Excuse me, Mr. Lakind, so with regard to

this subpoena to Morgan Lewis, you said you're withdrawing

that?

MR. A. LAKIND: Yes, your Honor.

THE COURT: So, any of the people that are here that

may be involved with that subpoena can be relieved to move

forward, because we're not going to have any arguments.

Right?

MR. A. LAKIND: That is correct, your Honor.

THE COURT: So if there's any folks here with regard

to the Morgan Lewis subpoena, the plaintiff has withdrawn

that. Thank you.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3754

MR. A. LAKIND: Thank you, your Honor.

BY MR. A. LAKIND:

Q. Mr. Schpero, Mr. Joenk testified in this case about the

Shared Services Agreement several days ago. And the following

colloquy occurs at page 2918 of his testimony, the Court,

referring to the agreement: And then what about services,

what do they mean by that under this agreement? Referring to

the Shared Services Agreement.

Witness: Well, you know, I have a telephone and a

computer in my office.

The Court: That kind of thing. So your FMG would be

part of the same telephone system as AXA Equitable.

The witness: Correct.

The Court: So someone calls and asks for FMG. So how

about computers, are all your computers linked in the same

fashion?

The witness: We are all on the network to -- actually

the servers are in France now to AXA's groups system.

The Court: But this also includes like your utility

bills and things of that nature.

The witness: Yes, the lights and heat.

The Court: Okay, thank you. Is there anything else

outside of those basic services?

The witness: Those are the basic services that I

budget for every year, and that's what this was designed to

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3755

cover. In addition, there's a processing of some, you know,

delivery of mail, things like that.

Now, the language that we read in the Shared Services

Agreement is considerably broader than the description

provided by Mr. Joenk in his trial testimony. Is that

correct?

A. Yeah, I'm not entirely sure I could follow all that, but

I would certainly agree that the language is -- is much

broader.

Q. And it's inconsistent with the testimony of Mr. Joenk; is

that correct?

A. I'm not prepared to say that, because I really had

trouble understanding what that testimony said. You're at a

level that is not -- that I'm not going to claim particularly

familiarity with in terms of the telephone systems and

computers at that level.

Q. Okay. I want you to define some terms and then we'll

move on from there. An index fund, what is an index fund?

A. An index fund is a fund that is intended to be managed in

a way that it tracks as closely as reasonable, taking into

account any fees that are in place, but the actual benchmark

or index that's been identified.

Q. And an actively managed fund, what is that?

A. Actively managed would be a fund or a sleeve that is

managed by one or more specific managers to ideally meet some

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3756

investment objective which often would be trying to meet --

often beat some kind of benchmark.

Q. And a pactive fund, does that have a meaning to you?

A. Yes, it does.

Q. And what is that?

A. A pactive is a hybrid, as I think I said in my direct

testimony, that would be where you have a combination

typically -- the typical pactive fund in -- in AXA's complex

would have a passive or an index sleeve that might be 60

percent of the portfolio, thereabouts, and/or 70 percent

actually I think; and then it would have an active sleeve that

might be about 20 percent or 30 percent; there might be an ETF

sleeve, but it is a hybrid and it's the combination of active

and index typically. Again, these are not carefully defined

terms, but I think that's the concept.

Q. In this case there are a number of pactive or plus funds;

is that correct?

A. The at-issue funds?

Q. Yeah.

A. Yes, there are a number of pactive.

Q. And generally the index component of those funds hovers

around 60 to 80 percent; is that correct?

A. I think that's right.

Q. And what is known by the term benchmark?

A. Benchmark might be some kind of independent -- let me

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3757

restate that. It would be some kind of index or combined

index, but it's -- it's reflecting usually some kind of -- I

can give you examples. S&P 500 is an index, there are bond

indexes, there are equity indexes, but they are -- they are

some kind of combination of fixed -- fixed set of securities

that as I said you would be trying to either track if you're

an index fund, or ideally beat if you were an active fund,

assuming that was the relevant benchmark you were trying to

track.

Q. Have you ever heard the term broad based security index?

A. I don't remember it specifically, but it doesn't sound

unfamiliar.

Q. Do you know what that means?

A. I think that would be referring to an index that --

that -- again, I think it's been used in different ways. In

my mind broad based would probably be covering an index that

covers a number of different sectors. So it might be an index

that's -- that would include value and growth, for example, or

some kind of combination of a number of different sectors.

MR. A. LAKIND: Chris, would you hand his Honor and

the witness Plaintiff's Exhibit 239, please?

THE WITNESS: Your Honor, could I use a five

minute --

THE COURT: Sure, let's take a break. We'll be back

out in 15 minutes and we'll go to like 1 o'clock.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3758

THE WITNESS: Thank you.

MR. A. LAKIND: Thank you, your Honor.

(Recess.)

THE COURT: Please be seated.

Mr. Schpero, you can take the stand.

MR. A. LAKIND: Your Honor, may I proceed?

THE COURT: You may.

MR. A. LAKIND: Thank you.

Chris, would you please hand his Honor and the

witness Plaintiff's Exhibit 239?

BY MR. A. LAKIND:

Q. Mr. Schpero, please take a moment and review P-239.

(Witness reviewing.)

A. Okay.

Q. Can you tell me what P-239 is please?

A. Yes, this is kind of a setting-the-foundation document I

think we often see it in June and July, but in this case it's

from July. It's a set of slides that would appear on a screen

with FMG reviewing the 15(c) process, or at least elements of

it.

Q. Bates 609 is entitled Your Traditional Standard; do you

see where that is?

A. I'm sorry what page?

Q. I'm sorry. Bates 609.

A. The Traditional Standard, yes.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3759

Q. And it refers to Gartenberg v. Merrill Lynch; is that

correct?

A. Yes.

Q. And then if you go over to page 611, do you see where

that is?

A. Yes, I do.

Q. And it refers to the Chicago School Standard; do you see

that?

A. Yes.

Q. And it provides that: A fiduciary must make full

disclosure and play no tricks, but is not subject to a cap on

compensation.

Did I read that correctly?

A. Yes, you did.

Q. Are you familiar with what the Chicago School Standard

is?

A. I don't remember that specific wording, but I certainly

have read the Jones v. Harris case in the past.

Q. And do you have any reason to believe that the statement

of that standard is in fact misleading?

THE COURT: Are you talking about the statement on

this page Bates 611?

MR. A. LAKIND: I am, your Honor.

THE COURT: Okay. So, do you understand the

question then, Mr. Schpero?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3760

THE WITNESS: Yeah --

THE COURT: Mr. Lakind is referring to the standard

set forth on that Bates page 130611.

THE WITNESS: Again, I'm not going to be able to

recall the context of this discussion, this is a presentation

on the litigation environment at the time. If this is a quote

from the Supreme Court decision, then I'm certainly not going

to quarrel with it. I don't know if this is from a lower

court, I just don't remember the presentation at this point.

BY MR. A. LAKIND:

Q. Would it surprise you to learn that the quote on page 611

in fact articulates a standard that was rejected by the

Supreme Court as insufficiently protective of investors?

A. Well, I think I just said to you that -- I think I pretty

clearly said to you that I don't remember the context in which

this was presented, and I couldn't tell from this at what

point even in the decision process this would be from. But

this is a slide that would have been part of the presentation,

and I think without being able to remember the specifics of

that presentation I'm not going to be helpful to you.

Q. The question I asked, though, would it surprise you to

learn that the quote on page 611 is not an accurate statement

of the holding of Jones v. Harris?

MR. BENEDICT: Objection, your Honor. I don't know

where this is going, the question was confusing at best.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3761

THE COURT: All right. If you ask me it looks like

it should be Mr. Schpero should be given the opportunity to

look at the entire litigation environment, because there's

more quotes on the next page, I don't even know if they're

from the same page. So you have to either rephrase, Mr.

Lakind, or give the witness the opportunity to look at the

entire section.

BY MR. A. LAKIND:

Q. Mr. Schpero, would you please look at the entire section.

THE COURT: So, the litigation environment section.

(Witness reviewing.)

A. What's your question?

Q. My question to you, sir, would it surprise you to learn

that the quote that is cited on page 211, in fact was a

standard rejected by the Supreme Court as insufficient -- I'm

sorry, 611; insufficiently protective of investors?

A. No, actually I'm not. As I think I testified a moment

ago, this -- as I'm looking through these pages, again, I

think this was part of the presentation at the time when

there's continuing updates on the litigation. I actually in

looking at this was a little bit mystified by part of -- at

least the second -- there's no question about fiduciary making

full disclosure, but I -- subject to a cap on compensation was

a little bit difficult for me to understand just given my

general understanding of the area.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3762

So, as I said earlier this -- this is part of a slide,

it would have been part of an update on what was happening at

the time. It's not -- this is not a quote that I personally

use in my understanding of review of the 15(c) process.

Q. Your expectation, though, was that if FMG were to provide

you with information about legal standards they would be

accurate; is that correct?

A. Yeah, I think that's a fair statement.

Q. Mr. Schpero, I'd like you to take a look at Defendant's

Exhibit 1812, tab 63, and that's one of the large white

binders. Have you had chance to look at that, sir?

A. I think I would know if I had that in front of me.

THE COURT: He didn't get it yet.

MR. A. LAKIND: I'm sorry.

Your Honor, it's not mine to give, it was an exhibit

that they used on Friday.

Chris, it's a white binder, it should be back there.

THE COURT: What's the number on it?

MR. A. LAKIND: Your Honor, it's 1812, tab 63.

THE COURT: Here you go.

(Handing to witness.)

THE WITNESS: I've got it.

BY MR. A. LAKIND:

Q. If you would just take a moment to look briefly at that

exhibit, please.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3763

A. Yeah, I know what the book is.

Q. And that book is something -- is a book of material upon

which the Board relied in its 15(c) review; is that correct?

A. Yeah, I think what I testified on direct is that this was

a best efforts -- this reflected our best -- or my best

efforts in gathering documents that I thought were responsive

as best I could to your 30(b)(6) request.

Q. And what is tab 63, sir?

A. 63?

Q. Yes, sir.

A. This is an ICI, is the Investment Company Institute,

it's -- it looks like one of their periodic industry level

presentations that was delivered to the Board in July of 2013

on trends and expenses and fees of mutual funds.

Q. Turn over if you would to Bates ending 937, please.

A. Yeah.

Q. I'm going to ask you a series of questions about this

document. And on the left-hand column, the last paragraph --

MR. BENEDICT: I'm sorry, your Honor, can we give

the witness a chance to read through the document?

THE COURT: All right. Please peruse it, Mr.

Schpero.

THE WITNESS: You want me to read this full

document?

MR. A. LAKIND: It's not necessary for the questions

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01:37

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01:38

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3764

I'm going to ask. I think if I can ask the question, he can

decide whether he needs to read it.

THE COURT: All right.

BY MR. A. LAKIND:

Q. Just have to put my magnifying glass on.

THE COURT: I see that.

Could you read it, Mr. Schpero?

THE WITNESS: The document itself? Yeah, I'm all

right.

THE COURT: I see Mr. Lakind has a little aid there.

MR. A. LAKIND: Getting old is not easy.

THE COURT: I know. I didn't have know they had a

app for that.

BY MR. A. LAKIND:

Q. Mr. Schpero, on the left-hand side there's a paragraph at

the last column; do you see where that is?

A. I'm sorry; again, we are at 937?

Q. No, sir -- 937. I'm sorry.

A. Left-hand side bottom left.

Q. Right. And it reads: Over the past two decades on an

asset weighted basis, average expenses paid by mutual fund

investors have fallen significantly.

Did I read that correctly?

A. Yes, you did.

Q. And is that something you agree with?

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01:38

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01:39

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3765

A. I don't know how I could say I agree or disagree. This

is -- you know, this is from the Investment Company Institute,

so I would -- as I think I testified earlier I think it's

reliable, so I'm assuming it's accurate.

Q. Okay. Turn over if you would to page 940.

A. Yeah.

Q. And there's a graph on the top of page 940; do you see

where that is?

A. Yes, I do.

Q. And that graph seems to indicate that as assets under

management grow, the fees charged shrink; is that correct?

(Witness reviewing.)

MR. BENEDICT: Objection, your Honor. I have no

idea what he's referring to.

THE COURT: You don't understand the question, Mr.

Benedict?

MR. BENEDICT: I do not understand the question.

THE WITNESS: I'm not sure I do either actually as

I'm looking at the chart.

THE COURT: So rephrase the question.

MR. A. LAKIND: I will.

BY MR. A. LAKIND:

Q. Would you agree with the proposition that as assets under

management grow, typically the expense ratio shrinks.

A. You're talking generically in the industry at large?

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01:40

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3766

Q. Yes, sir.

A. I guess I would want to look at charts that told me that.

Q. Well, you're on the Board of Trustees for a variety of

mutual funds, and you never had occasion to consider the

impact of size on fees?

A. What I'm struggling with, sir, is your question is so

broad, it doesn't seem -- it's not specific to a fund, it's

not even specific to a complex. You're asking me about the

whole industry, at any given time or decade; I don't know

what's happening in the industry -- assets growing in certain

kinds of funds may have an impact on expense ratios than

others; I'm not sure where to go with that question.

THE COURT: All right, next question.

Q. Would you agree with the proposition that index funds

tend to have lower funds than actively managed funds?

A. Yes, I think that's generally true.

Q. And if you would turn over to page 942 in tab 63, there's

a graph called expense ratios of actively managed index funds.

Do you see where that is?

A. Yes.

Q. The expense ratio of index funds is quite significantly

smaller than the expense ratio of active funds; correct?

THE COURT: Hold on a second; there's an objection.

Mr. Benedict?

MR. BENEDICT: Your Honor, he has laid no foundation

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01:41

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01:42

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3767

whatsoever for this exhibit, what it is, what it was used for.

For the last two days on direct he would even let me ask

questions about EQAT as a total; he says that we have to talk

about the 12 funds at issue. Now we have some generic

analysis from ICI dealing with the industry as a whole;

there's been no -- nothing established as to what this is,

what it's intended to do, what funds it covers, none of that.

THE COURT: It's cross-examination, so I'll allow

it.

If you can understand the question.

THE WITNESS: I don't remember it now, so maybe you

can ask it again.

MR. A. LAKIND: Your Honor, can I ask Mr. Gable to

read it back?

(Question read back by the reporter.)

THE WITNESS: Sorry; I'm just trying to read the

chart a moment.

So, I'm reading the note, I do want to understand

what I'm looking at; the note points out these are measured on

an asset weighted average. It also points out that it

excludes mutual funds available as investment choices in

variable annuities, which are the products we're talking about

here, and fund of funds. So I just want to start with that

point which --

THE COURT: So does your question have anything to

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3768

do with the chart?

MR. A. LAKIND: The only thing I want to establish

with this witness is that index funds tend to charge

substantially less by way of fees than actively managed funds.

THE COURT: If you know that --

THE WITNESS: I thought the question just two

minutes ago asked me whether I thought that index funds

charged less -- tend to be lower and I think my answer had

been yes.

THE COURT: That's what I thought, too.

Next question.

MR. A. LAKIND: If you can hand the witness 2042, 43

and 44.

And Rob, if you can put 2042 up, please?

THE COURT: What exhibit was that?

MR. A. LAKIND: Your Honor, Defendant's Exhibits

2042, 2043, and 2044.

THE WITNESS: Mr. Lakind, do I still need to hold

this?

BY MR. A. LAKIND:

Q. You do not.

Mr. Schpero, would you take a moment just to review

Defendant's Exhibit 2042?

A. That's these three -- I'm sorry; just one of them. 2042?

Q. Yeah. I'm going to ask you some questions about

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3769

comparative fees.

MR. A. LAKIND: Your Honor, would it be okay if I

move closer to the exhibit?

THE COURT: You may.

MR. A. LAKIND: Thank you.

(Witness reviewing.)

THE COURT: Do you need more time --

THE WITNESS: Yeah, I need one more minute, your

Honor.

Okay.

BY MR. A. LAKIND:

Q. Mr. Schpero, 2042 bears the title Contractual Management

Administrative Fees at Common Asset Levels Versus Funds in the

Lipper Expense Universe; do you see where that is?

A. Yes, I do.

Q. Do you have an understanding of what's meant by

contractual management and administrative fees?

A. Yes, I do.

Q. And what is that?

A. So that would be fees at -- per the contract at a

particular asset level. The reason it says contractual is

it's distinguishing from effective fees, which I think I

testified on Thursday or Friday, which would be the actual fee

at a particular asset level that would take into account any

expense waivers or caps that might have been put in place by

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3770

the management company.

Q. And Exhibit 2043 is entitled Total Expense Less 12b-1 --

A. I'm sorry?

Q. 2043, sir?

A. So we're moving to another one?

Q. Yes, please.

A. All right.

Q. And that refers to total expenses less 12b-1/non 12b-1

fees; do you see where that is?

A. Yes, I do.

Q. And it compares those fees the funds in the Lipper

expense universe; is that correct?

A. Correct.

Q. And there is an indication in green that those funds

with -- that are colored in green are at or below their Lipper

median; is that correct?

MR. BENEDICT: Your Honor, there's been no

foundation laid whatsoever for this exhibit. To the best of

my knowledge this witness may never have even seen this

document before, it was put into evidence through Mr. Joenk

and prepared by FMG. I don't know if the witness has any

basis to testify as to this.

THE COURT: Well, we should know whether he's seen

the document before. I imagine they come out of the Board

minutes, but you can ask him that question, too.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3771

BY MR. A. LAKIND:

Q. Have you ever seen this document, Mr. Schpero?

A. I don't believe so.

MR. A. LAKIND: Your Honor, it's not critical that

he sees it; I can cross-examine him on pretty much anything as

long as I have a good faith belief that it shows evidence

that's relevant, and I just want to have an understanding of

his interpretation of this document.

THE COURT: All right. I don't have any objection

to you cross-examining on it, but it's good to know whether he

has had any experience with it.

MR. A. LAKIND: I'm sorry, I should have asked that.

BY MR. A. LAKIND:

Q. Mr. Schpero, you understand this document to indicate, do

you not, that those funds in the green are at or below their

Lipper median; is that correct?

A. That's what it indicates.

Q. Now, you do receive a report from Lipper; is that

correct?

A. Yes.

Q. Memorialized on that report in connection with the fee

review process; is that correct?

A. I'm sorry --

THE COURT: Are you finished with 2043?

MR. A. LAKIND: For now I am, your Honor.

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01:50

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3772

THE COURT: For now. So you're going back to it

again?

MR. A. LAKIND: I will.

THE COURT: All right.

THE WITNESS: You have to repeat the question.

BY MR. A. LAKIND:

Q. Yes. Sir, you receive a report from Lipper that the

Board considers in its fee review process; is that correct?

A. Yes, that's correct.

Q. And it's your expectation that that report is accurate;

is that correct?

A. It's accurate, but as I testified it's subject to -- as

any of these comparisons are, to inherent limitations in terms

of trying to find peer groups, and the fact that within peer

groups there are lots of issues in terms of trying to compare

funds.

Q. Okay. Mr. Schpero, I'd like you to turn to plaintiff's

-- strike that; I'm sorry.

Exhibit 1812. Defendant's Exhibit 1812. I'm sorry.

A. Do I have that already?

Q. Yes, you do, sir.

THE COURT: You need the binder. Why don't you keep

it. (Handing to witness.)

(Laughter.)

THE WITNESS: I kind of liked it over there.

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01:51

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3773

Q. Pretty heavy I guess.

A. Okay.

Q. Now, sir, that is a Lipper report that was included in

the documents you provided to me at depositions; is that

correct?

MR. BENEDICT: I'm sorry; what tab?

THE COURT: What page?

MR. A. LAKIND: I apologize, I apologize; tab 45.

I'm sorry.

THE COURT: Then could you just repeat your question

again, Mr. Lakind?

MR. A. LAKIND: Yes, sir.

BY MR. A. LAKIND:

Q. The Lipper report at tab 45 was something that you

provided at your deposition; is that correct?

A. Yes, this is in the 30(b)(6) booklets, yes.

Q. And the Lipper report shown at tab 45 is the type of

document that the Board considers in determining whether the

fees of the funds at issue are appropriate; correct?

A. That's correct.

Q. Now, one of the reports that Lipper provides is something

they call a total return performance report; are you aware of

that?

A. Total return performance; are you referring to something

in this book?

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01:52

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3774

Q. No, it's not in that book, I'm asking --

A. That's why you're confusing me, because I thought you had

me looking at this book.

Q. Turn over to Bates 5595, sir.

A. Yes.

Q. And in the second paragraph from the bottom on the left

-- the left-hand side, do you see where that is?

A. The paragraph that begins comparative data?

Q. Yes, sir.

A. Yeah.

Q. Comparative data shown in the report typically includes

contractual and actual management fees. Your Lipper report

includes that; correct?

A. Yes, it does.

Q. And operating expense components. Does Lipper report

include that? By that I mean --

A. Sorry; I'm just trying to understand what you're pointing

to me. So I guess what we're looking at is the introduction

which just discusses generally what Lipper does.

Q. Yes, sir.

A. So, your first question had been that comparative data

typically includes contractual and actual management fees; and

yes, I definitely see contractual and actual management fees.

Operating expense components; I -- again, I guess I'd have to

flip through to remember, but I believe there is -- I'm seeing

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01:54

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3775

now expense ratio components table, so yes, this is in the

report we received.

Q. Okay. And the last is, sir, total return performance; do

you know what that is?

A. Yeah, the reason I hesitated on that one when you first

asked it is I didn't think -- and again, this is a 300 page or

so book; but my recollection was that -- was that all of our

performance information -- or much of it which is from Lipper,

but I don't recall that we get -- I think our format is that

we do not get it in the Lipper expense book, because that's a

book we get specifically with respect to expense comparisons.

And I believe we get a lot of Lipper performance data at every

Board meeting as well as for July, but -- but I don't think

it's part of this book.

Q. Mr. Schpero, you do not receive a Lipper performance

report; isn't that correct? And by you I mean the Board; I'm

sorry.

A. Well, I guess I don't know what that means, because we --

we receive extensive Lipper performance comparisons. So that

at every Board meeting we see the comparisons of the funds

against Lipper peer groups prepared by Lipper.

Q. Okay, I'm going to come back to that in a few moments.

A. Sure.

Q. With regard to the expense comparisons shown in tab 45,

you have no way of knowing whether or not the funds to which

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01:55

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3776

the FMG funds are compared, have fees that are the product of

an arms-length negotiation; is that correct?

A. Could you give that to me, I'm sorry, one more time?

Q. Yes, sir. The comparative fee report at P-45, compares

the fees of the FMG funds to a number of comparative funds;

correct?

A. Right.

Q. And do you know if the fees shown on the comparison table

are the product of an arms-length negotiation?

A. I don't personally know. I know that they are all funds

that are subject to the Investment Company Act and to the case

law in the area, and they all I'm certain have boards that

satisfy the SEC and regulatory requirements, but I certainly

can't represent I know precisely what each of those boards do.

Q. And you don't know if fallout benefits are available to

any of those funds; is that correct?

A. I would not be privied to what the specific information

each of those boards receives.

Q. And you don't know what the costs are of running any of

those funds; is that correct?

A. Same answer, I certainly wouldn't be privy to that.

Q. And you understand that FMG reviews the Lipper report

before it's sent to the Board; is that correct?

A. I don't know.

Q. Okay. Who determines the contents of the Lipper report,

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01:56

01:56

01:56

01:57

01:57

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3777

is that FMG, is that the Board or is it done some other

fashion?

A. I believe Lipper determines the content.

Q. Lipper determines the content.

A. Yeah. In terms of the substantive information in there,

in terms of who the peer groups are, I think that's all

determined by Lipper. When I say that I know -- let me be

careful because I know that the Board has pushed hard, for

example, Lipper for years, for reasons I've never understood,

reviewed to break out index funds from active funds. So a lot

of the comparisons they would provide -- and this went to my

point about the limitations of the Lipper data; a lot of the

comparisons they would provide for -- including for a number

of these at-issue funds, would compare an index fund to a peer

group that included -- that included both active funds and

passive funds. And the Board was -- struggled with that.

And so we would -- in the first case we would ask FMG

on their own to try to break it out -- well, the first case we

would ask them to go back to Lipper, which is why I wanted to

respond to this, and see if Lipper understanding this issue

could break it out. And not surprisingly, because this has

been my experience in the industry, Lipper, because they

believe incorrectly that they're independent, said we make our

own decisions; I believe very recently they've begun to break

it out, but that's -- I'm giving that as an example because I

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3778

do think there have been cases where certainly the Board has

attempted to get Lipper to change things, and we use FMG as a

conduit in trying to pass that information on.

Q. But the Lipper data used in 2042 and 2043, is data which

compares the EQAT's index funds to actively managed funds;

correct?

A. The Lipper used data used where?

Q. The Lipper data reported at tab 45 for many of the funds

compares EQAT index funds to -- to active comparative funds;

is that correct?

A. I believe that it compares EQAT index funds to peer

groups that include both index funds and active funds.

Q. All right. We're going to review that in a moment. I

have some questions about some definitions. What does the

term median mean to you?

A. Median would be the -- would be the midpoint of the

information provided.

Q. In other words, if you have information with regard to 25

funds, the median would be the fund that is halfway from the

highest and halfway from the lowest.

A. That's correct.

Q. What about mean, what does that mean? Excuse the pun.

A. I'm sorry?

Q. What is mean? What is the definition of mean?

A. You know, I'm not going to remember the difference

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3779

between -- I don't remember.

Q. A mean is an average, so you add --

A. So average I remember, I just didn't remember that mean

is the same term.

Q. Okay. And what is weighted average?

A. So weighted average I believe is where the -- where the

effort is to eliminate the smaller funds and only look at the

larger fund assets in doing the analysis.

Q. And do you know how that analysis is done?

A. The actual mechanics of it?

Q. Yes, sir.

A. I'm not going to remember.

Q. Okay. And do you know why people undertake to compute a

weighted average in the investment industry?

A. Well, there seems to be an assumption in what you just

said that it's -- it's the common practice; I don't know that

that's -- I don't know that you're intending to imply that. I

know the Investment Company Institute, we've seen some

presentations from them that is done that way, I don't think

Lipper does it that way.

Q. Correct. At tab 45 the Lipper report provides

information about the median and mean of each -- of the

comparative funds and the EQAT Funds; correct?

MR. BENEDICT: Where are you referring, Mr. Lakind?

You have the specific page?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3780

MR. A. LAKIND: There's a list of comparative fees

throughout this -- this document tab 45.

A. I guess -- I mean I'm looking at page 41, it shows the

median, it doesn't show the mean; that's why I'm struggling

with that kind of question.

Q. There's no information about a weighted average in tab 45

for any of the funds; is that correct?

A. Well, unless I read through this whole book I can't -- my

general sense is that Lipper doesn't tend to use weighted

average, but I'm not going to be able to represent to you

what's in this book without reading it.

MR. A. LAKIND: Would you please provide the witness

with Defendant's Exhibit 1924? And the Court please?

THE WITNESS: So this book --

Q. If you would keep it open?

A. 245?

Q. Yes, sir.

A. Okay.

Q. Mr. Schpero, would you just identify this document for us

please?

A. It's from Strategic Insight, it's labeled Mutual Fund

Fees, Facts, Trends, Economies of Scale and Market Forces.

Q. And Strategic Insight is one of the companies you

mentioned that provides information to the Board; is that

correct?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3781

A. That's -- yes, it's one of the companies that we've

certainly accessed, yes.

Q. Take a moment to review Defendant's Exhibit 1924, and I'm

going to point your attention to something on the second page.

THE COURT: So this document is from the year 2004?

MR. A. LAKIND: It is, your Honor.

THE COURT: Okay.

MR. A. LAKIND: It's actually page I it looks like.

THE WITNESS: I assume you just want me to turn to

that page? It looks like there's a lot of information --

BY MR. A. LAKIND:

Q. Yes, sir?

A. You want me to turn to the second page of the book.

Q. Yes, sir.

A. Okay.

Q. All right. I would just like you to follow along with

me, I'm going to ask you some questions about the text there.

It's entitled Mutual Fund Fees: Averages sometimes lie and

often mislead.

Do you see where that is?

A. Down at the bottom, yes.

Q. The average weight of all cars and trucks has been rising

over the past 20 years; the average speed of all flying

objects has increased since 1903; the Fidelity Magellan fund

controls nearly 70 billion in assets for over five million

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3782

shareholders at a total expense ratio of .72 percent as of

9/03; the Boyle Marathon Fund runs one million for 400

shareholders at a total expense ratio of over three percent;

averaging the expense ratios with these two funds to imply an

average cost for the fund shareholders is patently ridiculous.

Did you read that accurately?

A. Yes, you did.

Q. Nevertheless, a similar calculation that gives equal

weight to funds of all sizes and treats the many thousands of

tiny expensive funds the same as the few hundred large ones

with a lower -- excuse me; with lower expense ratios that

control almost all fund assets has become a daily exercise in

misinterpreting statistics.

Did I read that accurately?

A. Yes, you did.

Q. And a median and an average both give equal weight to

each data point; is that correct?

MR. BENEDICT: Objection, your Honor --

A. You're not reading that now?

Q. No, I'm asking you a question, sir.

A. I'm not really sure how to respond to that. I mean we've

already defined what the two do. The information that I see

from Lipper as I recall it, typically deals with a median, and

it deals specifically with peer groups at particular similar

asset levels. So I'm having trouble seeing the relationship

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3783

between that and what you're showing me here.

Q. Okay, we're going to get to that in a few moments as

well. Do you have any reason to disagree with the accuracy of

what I read to you, sir?

MR. BENEDICT: Your Honor, again, no foundation has

been laid whatsoever. We don't know if the witness has ever

seen this, and it's well beyond the scope of direct

examination.

MR. A. LAKIND: Your Honor, he was deposed -- excuse

me; he was examined about comparative fees, they introduced

the Lipper data, and whether the witness has seen this or not,

it's an exhibit which defendants admitted into evidence and I

want to see if he agrees with it.

THE COURT: But you go back to where you compared

the Fidelity with the Boyle?

MR. A. LAKIND: Yes, sir?

THE COURT: Are you using all of that in this?

MR. A. LAKIND: Yes, sir.

THE COURT: So, Mr. Schpero, if you can, you can

answer the question.

THE WITNESS: And the question again is?

BY MR. A. LAKIND:

Q. Do you agree with the paragraph that I read to you

beginning with the Fidelity Magellan?

A. I'm sorry; I'm going to reread it again.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3784

THE COURT: You may.

(Witness reviewing.)

A. Yeah, I am not a statistical expert, I don't have any

reason to disagree with it.

Q. Okay. The second paragraph on page -- looks like double

I, sir, there's some bolded language at the bottom of that

paragraph and I'll read that to you: The use of "simple

mathematical averages which --

A. I'm sorry; where are we now?

Q. I'm sorry, sir. Double I, left-hand corner -- left-hand

side second paragraph.

THE COURT: Bold print?

MR. A. LAKIND: Bold print, yes, sir -- your Honor.

A. Yeah, okay.

Q. I'm going read that to you, sir: The use of "simple

mathematical averages" which equates the fee ratios of the

many thousands of tiny expensive funds that hardly anyone

owns, with the lower fees among the few hundred funds that

control most fund assets is inappropriate, misleading and

irresponsible."

Did I read that correctly, sir?

A. Yes, you did.

Q. And do you agree with that?

A. I will -- again, I am reluctant only because as I've

testified previously we have a lot of trustees with lots of

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3785

areas of expertise; statistical analysis is not something that

I'm schooled in. So I can read that, I understand the concept

that that's there, but I'm not going to -- I'm not prepared to

offer much more than that, because we're in an area that I

don't claim expertise in.

Q. All right. Let me go through one more paragraph and then

I'll move off this exhibit if I might. The paragraph below

says: To see the dramatic distortion generated by simple

averages, consider this; for all actively managed equity funds

the asset weighted average total expense ratio (cost ratio

actually paid by investor) was 1.10 percent in 2002, whereas

the simple average expense ratio was 1.71 percent, 55 percent

higher than the true cost ratio.

Do you see where that is?

A. I do.

Q. And you have no opinion as to whether that is accurate or

inaccurate; correct?

A. I've never seen this before, I've certainly have not had

an opportunity to think about it or talk to it with

co-trustees who would -- who have statistical backgrounds, but

I understand the concept.

Q. Do you ever -- excuse me; did you ever ask FMG to provide

information about weighted average fees?

A. Not that I recall.

Q. Have you ever considered retaining an consultant to

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3786

assist you to develop information about weighted average fees?

A. I don't believe so.

Q. Is there any disadvantage to providing the trustees with

information about weighted average fees?

A. I can only answer that from the perspective of what I

know we do, which is we very much consistent with industry

practice use the premiere provider of comparative fee

information, and we rely on the format that they provide, not

that FMG provides.

Q. Have you ever asked Lipper to provide information to you

about weighted average fees?

A. I have not. But I also would say I don't think Lipper

provides us with simple average fees, I think they --

information; I think they provide it where you see the actual

fee of each of the peer group where there are similar --

similar asset levels against the median of that peer group. I

don't think there's anything misleading about that.

Q. And you're referring to the contractual fee comparison,

sir?

A. My recollection is that they provide it both at a

contractual level, at different asset levels and I believe

they provide it at effective fee levels of different asset

levels.

Q. Can you show me in that exhibit, tab 45, where Lipper

provides the effective fee at an asset level for any fund at

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3787

issue in this case?

A. I do see contractual, I'm not finding effective. I do

know the Board sees effective for every fund we looked at.

Q. Lipper does not provide you with the effective fee rate

at the asset levels; is that correct, sir?

A. I don't see that here. Again, I don't remember -- I'm

trying to remember the long sheets that we see in the

summaries, and I believe we see effective fee levels; now I

may be wrong and that may not be Lipper, that may be provided

by FMG, I just don't remember.

Q. Your testimony is that the long sheets provide the

effective fee levels of comparative funds, sir? Is that your

testimony?

A. I'm trying to remember.

THE COURT: Well, do you need the document?

THE WITNESS: Certainly in terms of what the long

sheet shows, at this point I'm just trying to remember what

they look like.

MR. A. LAKIND: Your Honor, it's in 1811, right at

the very beginning of Defendant's Exhibit 1811.

THE WITNESS: In this book?

BY MR. A. LAKIND:

Q. I think you have 1812. It's -- 1811 is the right one.

(Court handing to witness.)

MR. BENEDICT: Do you have extra copies for us, Mr.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3788

Lakind?

MR. A. LAKIND: It's your exhibit. I'll give you a

copy.

MR. BENEDICT: I don't even know which exhibit

you're referring to.

THE WITNESS: I assume you're suggesting that I pull

out the long sheets; is that correct?

BY MR. A. LAKIND:

Q. Yes, sir, just to confirm your testimony is correct.

THE COURT: Where is that?

THE WITNESS: This was right on the inside of the

book.

THE COURT: Oh, okay.

MR. BENEDICT: Mr. Lakind, is this the version of

the long sheet that's included in the 30(b)(6) binder?

MR. A. LAKIND: It is. I'm looking at the long

sheet that you gave me this morning.

MR. BENEDICT: Ending with Bate stamp -- first page

1568, ending the Bate stamp 82111, are you talking about the

same document?

THE COURT: Well, Mr. Benedict, I think you should

come up and take a look at the one that Mr. Schpero is

referring to.

THE WITNESS: This was inside the beginning of the

book that has tabs 1 through 40.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3789

MR. BENEDICT: And what's the Bate stamp number?

THE WITNESS: AXA0282111.

MR. BENEDICT: I'm fine. Thank you, your Honor.

THE COURT: All right.

Are you on the same one, Mr. Lakind?

MR. A. LAKIND: I am, your Honor.

THE WITNESS: And I'm looking at the first one,

which is for the EQ/Equity 500 Index. And if you just let me

try to look at this at bit, because it's pretty small.

Yeah, as I think I suggested, this shows the actual

contractual fee, and then it shows the effective management

fee, which would be the fee at the current asset level

reflecting any kind of expense caps or waivers. And then

several columns over it shows the actual

management/administrative fee, which again I think is -- which

I believe is the effective fee --

BY MR. A. LAKIND:

Q. Mr. Schpero, can I stop you?

A. Sure.

THE COURT: No, let him finish his answer.

MR. A. LAKIND: It's not the question I asked.

THE WITNESS: Your Honor, I thought the question had

been whether -- whether I see the effective fee, and I said I

thought it was, it was on the long sheet, and in the long

sheet I am looking and I see the effective fee, it's 25 basis

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3790

points on a net basis for the EQ 500 Index; and I also see the

percentile of the effective fee compared to the Lipper

universe for Class K; and similarly I see that for the A and B

Classes. So that's what I was remembering and that's what I

see here.

BY MR. A. LAKIND:

Q. Okay. Turn over if you would to Bates 5785 of the Lipper

report, which was tab 45, sir.

A. So we're back in the Lipper book?

Q. Yes, sir.

A. And I'm sorry; what --

Q. Page Bates 5785.

A. 5785. Yeah, 5785, S&P 500 index.

Q. Right. And that's a spreadsheet, is it not, that

compares the fee on the EQ 500 Index to a variety of

comparative funds; is that correct?

A. This shows the EQ Index against -- I guess it shows the

-- I'm just trying to see; it shows -- yeah, it shows the

expense ratio components, excluding 12b-1.

Q. And the left-hand column is name of fund; is that

correct?

A. Yes.

Q. And there's a list of funds under that; sir?

A. Correct.

Q. And the majority of those funds are index funds; is that

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3791

correct?

A. So this is the S&P 500; if I didn't say earlier, I could

have told you, that I think that's the one fund -- remember I

said that there were -- the problem with Lipper is that many

of their funds for years that they did not break out index and

active; the one fund that was the exception to that is the S&P

500.

So here -- I'm saying that only because as a result I

think what you just asked me I think I can answer pretty

readily, but given that I understood that was the only case

where they were willing to break out index funds, then I'm

assuming -- I can't always tell by the name, but it looks to

me like these are probably all of the index funds.

Q. Okay. And then if you go over four columns, it says

portfolio average net assets; do you see where that is?

A. Yes, I do.

Q. And the average net assets of the EQ 500 is about $3

billion?

A. Yes.

Q. And the average net assets of the funds to which it's

compared, some of them are as small as $60 million; correct?

A. I see funds -- yes, I see a fund that's 63 million I

guess.

Q. And in fact, the EQ 500 has the highest actual management

and administrative fee of any fund on that chart at page 5785;

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3792

correct?

A. I'm looking at it now; and I'm sorry, are you asking

about the actual --

Q. Yes, sir.

A. I don't think it's the highest. No, that looks like --

that does not appear to be correct.

Q. Tell me which of these 20, 25 funds have a higher fee.

THE COURT: In gross dollars?

MR. A. LAKIND: No, I'm sorry, in fee rate.

THE WITNESS: So again, just so we're in the right

place, I am over -- five over at the column that's called

actual management/administrative fee?

BY MR. A. LAKIND:

Q. Yes, sir.

A. Which as I understand it would be the effective fee. And

the fee that EQ/S&P 500 is .352; and I see -- down near the

bottom I see one that's Large Cap is .387; I see MML SRS is at

.399; I see Ohio National, which is at .376; and Sun America

is at .370.

Q. And what are the assets in the Ohio National, sir?

A. 193 million.

Q. About three percent of those in the EQ 500; correct?

A. Beg your pardon?

Q. It's about three percent of the assets in the EQ 500?

A. It's obviously much smaller, I don't know what the

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3793

percentage is.

Q. And the same with the Sun America; correct?

A. Correct.

Q. In fact, with the exception of the EQ 500, every fund

that which you receive a Lipper report, compares an -- an

index -- excuse me; I'm sorry. With regard to the index funds

at issue, the Lipper report compares index funds to active

funds with every single fund; is that correct?

A. Say that again please?

Q. Yes, sir. With regard to the index funds that are at

issue, the Lipper report compares an index EQAT fund to a

group of active funds; is that correct?

A. With the exception of S&P 500.

Q. Yes, sir. And with regard to the --

A. Was that a question?

Q. I'm sorry?

A. I'm sorry; was that the question?

Q. Yes, that was.

A. So yes, and that's why we've always asked for a breakout

of index funds alone on those other funds. So we can see this

same comparison.

Q. And can you tell me where that breakout is? Do you know

where it is in 1811, 1812?

A. In these two books?

Q. Yes, sir.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3794

A. If you want to give me time to look -- I -- I will

represent to you that -- that the Board, because of what we

identified as an issue with the Lipper data, where you see

both index and active together, the Board has asked FMG to

deliver and has received from FMG presentations where we have

seen for the other funds -- not the S&P, but the other funds,

a breakout that shows us just the index funds gathered from as

best they could, gathered from the Lipper data so that we can

see a -- a better apples to apples comparison. Where is that

this is in the two books I'm not going to be able to tell you,

I -- it certainly was in the Board materials which you have

received.

Q. Right. You never thought to retain a consultant to

undertake the same analysis that Lipper did, but to do it with

index funds; is that correct? You relied on FMG to do that.

A. We relied on FMG to go through the Lipper data and

identify the index funds.

Q. Turn over if you would the Bates 5611?

MR. A. LAKIND: Your Honor, I'm almost done with

this area.

THE COURT: Okay.

A. 56 -- I'm sorry same tab?

Q. Yes, sir.

A. 56 what?

Q. 11; it's tab 45.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3795

A. Sorry; having trouble finding this one.

THE COURT: Mr. Lakind, can you come forward and

just direct Mr. Schpero --

A. I think I'm heading in the right spot. 5611; I've got

it.

Q. And that -- that serves for the Intermediate Government

Bond Index; correct?

A. Yes, that's correct.

Q. And the assets under management for the Intermediate

Government Bond Index is $7.3 billion; is that correct?

A. Yes, it is.

Q. And the second highest -- the second largest fund has

assets of about $3.8 billion; is that correct?

A. Yes, that appears to be correct.

Q. And the Goldman VIT Fund, about 60 percent of the way

down, that has assets of $68.1 million; is that correct?

A. Yes, it is.

Q. And you think a comparison to the Goldman VIT Fund is a

meaningful comparison to assess the reasonableness of the fees

for the Intermediate Government Bond Index?

A. Your question again is do I think it's what?

Q. It's a meaningful or helpful comparison to compare a fund

that has assets of 69 or $68 billion, to one that has assets

-- excuse me; $68 million to one that has assets of $7

billion?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3796

A. Yeah, I think certainly that comparison just on the

simple basis you just gave it is not helpful, but I believe

what we typically what we -- well, we gets lots of data

obviously, but among other things what often say among each

fund is comparisons of effective fee levels at the same asset

level for each fund, which I think is a meaningful way to look

at it.

But if you're just going to look at a fund at what its

rate is at 68 million versus a fund that's 7 billion alone, I

would certainly agree that is not sufficient information to do

an analysis.

Q. Turn over if you would, sir, to Bates 5608.

A. Yes, I'm there.

Q. That's called Contractual Management Fees At Various

Asset Levels; is that correct?

A. Correct.

Q. And what do you understand this chart to be saying?

A. Just give me minute to look at it.

Yeah, so this is looking at the fund's contractual fee

at different data points, different asset levels, versus other

funds that Lipper has identified as peers at the same asset

levels.

Q. Do you have any reason to believe that type of analysis

is flawed?

A. Well, I think I've already testified that I think there

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3797

are inherent limitations in these comparisons. At a minimum

when you're looking at -- I guess a couple of things. I'm

just going to jot so I can remember to make both my points.

One would be the -- the fact that comparing fees --

management fees, which under Lipper include administrative

fees fund by fund has its inherent limitations, because as

I've testified last week, particularly the administrative

types of fees that are components of that depending on the

fund complex, may or may not be part of the

management/administrative fees. So you can have funds where

there are account fees and other fees that show up elsewhere,

which is -- so I think one point I made was that as a result

often looking at total expense ratios is another important

data point as a result of that, I think that would be one

point.

Second point I would make is that we certainly --

again, I should talk about myself; but this is why we see the

Lipper data, because we understand that depending on the

presentation there are limitations that Lipper is based with

in terms of the amount of peers that they can find and what

those peers look like. So inherently you've got limitations

in terms of who could be compared, and as you pointed out

there's certainly as a result -- can result in funds that are

at different asset levels.

Q. Now, you would agree -- strike that.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3798

The contractual management fees, it's a bar graph, and

it has 250 million, 500 million, one billion; do you see where

is that?

A. Yes, I do.

Q. And all -- there's a number of lines that represents each

fund in the Lipper universe; correct?

A. Right.

Q. Now, a fund at $250 million is very unlikely to have

breakpoints at 3 billion, 5 billion or 7.5 billion; isn't that

so?

A. A fund that's currently at 250 million?

Q. Yes, sir.

A. May or may not. I think -- I think it depends on the

complex. There are certainly complexes where you could, but I

agree there are ones where you may not.

Q. It would be fairly unlikely for a small fund to have

breakpoints at a much higher -- higher asset levels, 5, 6, 7

billion; would you agree with that?

A. I guess I wouldn't be prepared to say yes or no, because

I think there are a lot of -- I've certainly seen what I would

call mature complexes where when they set up new funds they

simply use the fee structure that's in place with their other

funds, notwithstanding that it may be starting up as a small

fund.

Q. Did the Board make any effort to determine whether the

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3799

small funds had breakpoints that would -- at asset levels as

high as $7 billion that are included in the contractual

management fee table?

A. I don't recall seeing specific information on that.

MR. A. LAKIND: Your Honor, perhaps now would be a

good time to break if your Honor desires.

THE COURT: No, let's keep going for a few more

minutes.

MR. A. LAKIND: Okay.

Q. I'd like to turn to risk. And you testified about risk

when you were examined by FMG; is that correct?

A. Just give me one minute. Can I put this book aside?

Q. Yes, sir.

A. I'm sorry; your question?

Q. Yes, sir. You testified under examination about FMG's

counsel about risks; do you recall that?

A. Yes, I do.

Q. And you identified two types of risk, entrepreneurial

risk and enterprise risk; is that correct?

A. Correct.

Q. Entrepreneurial risk you described as the risk associated

with starting a fund, will it succeed, et cetera; is that

correct?

A. Right.

Q. Now, these funds Mr. Joenk testified were in the

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3800

neighborhood of 15 years old; is that consistent with your

understanding?

A. The at-issue funds?

Q. Yes, sir.

A. I believe -- well, if he testified to that then I'm sure

that's the case.

Q. Do you associate any entrepreneurial risk with any of the

existing funds?

(Brief pause.)

A. No, I think -- I think at this point if they're 15 years

old, I don't see significant entrepreneurial risk.

Q. But you mentioned that there are enterprise risks

associated with these funds; correct?

A. Right.

Q. And among the things you mentioned are regulatory

violations, legal, operational, compliance risks and so on;

correct?

A. Yes.

Q. Now, you were asked by the Court if some of those risks

can be passed on to sub-advisors; do you recall that?

A. Yes, I do.

Q. And you responded that the sub-advisors might not have

the ability to pay; correct?

A. I think that was at least part of my answer.

Q. With regard to the risks, has the EQAT Board or FMG to

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3801

your knowledge ever sought to quantify those risks?

A. No, I think -- we certainly discussed this concept;

there's no specific quantification. I'm not sure how we would

quantify it.

Q. Did you ever bring a consultant in to help you assess the

risks?

A. No.

Q. Did Ms. Louie ever tell the Board that in her view the

risks are limited?

A. I don't have a recollection of that discussion.

Q. Earlier I showed you a slide which showed the total fee

for index funds to be about 12 basis points; do you recall

that?

A. This was the ICI study that was done excluding funds in

on this arena?

Q. Yes, sir.

A. Yes.

Q. And that was the total fee, including distribution,

management, administration, compliance, legal, risk, et

cetera; correct?

A. I put it aside but --

Q. Okay. Rather than spend the time to go back to it let me

move into another area.

There's several ways to mitigate risk; is that correct?

A. Sure.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3802

Q. One is insurance?

A. Yes, insurance.

Q. And do you know how much insurance FMG has to protect the

EQAT against risk?

A. To protect EQAT; I'm not sure I understand the question.

Q. Do you know how much insurance FMG has in connection with

the types of risks you've identified as enterprise risks?

A. Well, the only insurance that I know specifically of is

the D & O and E & O insurance that is -- that jointly covers

the funds and FMG.

Q. Did you make any effort in connection with your work on

the Board to assess the adequacy of the insurance that FMG

had?

A. No, I would not, I would not engage --

MR. BENEDICT: Objection, vague.

THE COURT: Did you understand the question?

THE WITNESS: Why don't you ask it again.

BY MR. A. LAKIND:

Q. Sure. Did you make any effort to assess whether or not

FMG had adequate insurance to cover the risks you testified

to?

A. No, I don't -- I wouldn't see engaging in that, but no, I

have not.

Q. A second way to mitigate risk is to require FMG to keep a

certain amount of capital; correct?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3803

A. In theory I guess.

Q. Is the -- does the Board have any capital requirements

imposed upon FMG?

A. I think we're confusing points here, Mr. Lakind. The

Board -- we are not -- I am not a trustee of FMG, I am a

trustee of the fund under the -- under the case law and

presentations that we receive from our counsel, we're --

there's a lot of information that we are obliged to look at in

determining the fairness and reasonableness of the fees. And

I think all that I tried to suggest the other day is that one

of the many factors we take into account is -- in analyzing

the fee, is that as part of the services that are provided we

want -- we think it's important that we at least take into

account the fact that there are risks associated with managing

the fund, and that's just another data point in analyzing the

fee.

But I think -- that's different from somebody who is a

on the Board of AXA or FMG who by definition would be

concerned about the specific capital and other requirements of

that entity.

Q. Mr. Schpero, you testified yesterday -- or excuse me,

Friday, that if something went wrong you're going to sue FMG;

correct?

A. If something went wrong, I would hope we wouldn't get to

that point, because I think I testified that my expectation

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3804

based on my reasonable business judgment and working with them

over the years is that if something went wrong and the Board

said that the fund needed to be made whole, the fund would be

immediately be made whole.

Q. But you didn't think it was helpful to ascertain whether

or not FMG had the capital that was sufficient to make the

Board whole?

A. Mr. Lakind, we see every year the financials of AXA

Equitable, we meet with senior management and I personally

take great comfort from the fact that we are dealing with one

of the largest insurance companies in the world, so those

specifics are not my concern.

Q. Mr. Schpero, your contract is with FMG, it's not with AXA

Equitable --

A. I understand.

Q. EQAT's contract, I'm sorry. Is not with AXA Equitable,

it's with FMG; isn't that correct?

A. I understand that.

Q. Now, you told the judge that some of the sub-advisors

might not have sufficient assets to pay a judgment should the

EQAT obtain one; is that correct?

A. I think what I said was that there are a number of very

small sub-advisors, and that one of the -- one of the risks

inherent in this process where you're retaining, where they're

retaining many different sub-advisors to make that available

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3805

to the marketplace is that some of them are start-ups or

small, and there are risks associated with that.

Q. Among the sub-advisors to the at-issue funds is

Blackrock; is that a small sub-advisor?

A. No, Blackrock is not.

Q. What about Morgan Stanley, is that a small sub-advisor?

A. No.

Q. Oppenheimer?

A. Probably not for particular particularly.

Q. Wellington, sir?

A. I don't know the size of Wellington, but I think they're

of some size.

Q. GAMCO?

A. They're not small.

Q. T.Rowe Price?

A. Same.

Q. So, all of the sub-advisors to the at-issue funds in fact

are considerably larger than FMG, are they not?

A. Well, again, first of all I don't know that I would be

comparing them to FMG. As I said from the perspective of

sitting on the Board, I look to AXA and FMG as the sponsors

who would be standing behind these funds. And I would also

note that I think you're identifying one of to me would be a

number of reasons why a sub-advisor may not be the party that

would be willing to step up, which is why I think those risks

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3806

are in place.

Q. The EQAT has no indemnity agreement with AXA, does it?

A. I believe there are indemnification provisions in the

management contract.

MR. A. LAKIND: If I might, if you could just hand

the judge and the witness J-4 please?

THE COURT: Is this a new topic?

MR. A. LAKIND: It's still within risk.

THE WITNESS: Good time for a break.

THE COURT: All right. It's time for a break? So

we'll break for lunch at the present time. I didn't realize

we were so far after 1:00. We'll reconvene at 2:00.

And then Mr. Lakind, you have two more hours to

cross-examine and that's it.

MR. A. LAKIND: Thank you, your Honor.

(Luncheon recess.)

THE COURT: Mr. Schpero, you should know that you're

here until after 4 o'clock today.

THE WITNESS: Whatever you ask.

THE COURT: So, you may be seated. Thank you.

Mr. Lakind?

MR. A. LAKIND: May I proceed, your Honor?

THE COURT: You may.

THE WITNESS: I apologize; my glasses I seem to have

left in my bag.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3807

(Pause; witness getting glasses.)

THE WITNESS: Sorry.

THE COURT: That's okay

MR. A. LAKIND: May I proceed, your Honor?

THE COURT: You may.

MR. A. LAKIND: Thank you.

BY MR. A. LAKIND:

Q. Mr. Schpero, are you familiar with the term report card

as used in the material provided as part of the 15(c) process?

A. Yes, I am.

Q. And that report card assigns a grade to each of the EQAT

Funds in the areas of performance and so on; is that correct?

A. Yes, it does.

Q. And what role did the EQAT have in determining the

criteria used to assign those grades?

A. You know, that's going to be hard for me to remember,

that report card's been used for a long time, there's been a

lot of discussions so I can't remember at this point it's been

a -- it's been a lot of years.

Q. Fallout benefits, could you define -- strike that.

Both you and Mr. Joenk used a but-for test for fallout

benefits; is that correct?

A. Right.

Q. And can you repeat that test, please, so I understand it?

A. Yeah, those are benefits that would not -- those are

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3808

benefits elsewhere from the management contract itself that

are received by affiliates or related parties, that would not

be received but for the relationship between FMG and the

funds.

Q. In this case there are separate account fees and general

account fees that accrued to the benefit of AXA; is that

correct?

A. I don't think you mean separate account fees; there are

general account fees that AXA receives, is that what you're --

Q. Yes, sir. And product wrapper fees that AXA receives as

well; right?

A. Right.

Q. And they receive those benefits because of their

relationship with the mutual fund, isn't that so?

A. I don't think that's correct.

Q. You do not.

A. No, as I testified I'm -- and we certainly have discussed

this over the years with our counsel; you've got two different

fees you just referenced, in both cases I believe that they

would be either -- whether or not these funds are there, the

general account fee is -- is an alternative to the funds; and

the wrapper is a wrapper to the insurance product, which makes

available not just the funds but other outside products, and

in fact a lot of outside products.

Q. But because AXA has a relationship with the funds, it

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3809

receives product wrapper fees, does it not?

A. I just disagreed with that a moment ago.

Q. Okay. Now, you would agree with me that the if the Board

were improperly advised as to the definition of fallout

benefits, that would be something that's important to you;

correct?

A. If we were improperly advised? Yes, that would be --

Q. If you got an improper definition; correct?

A. That would be a concern, correct.

Q. Now you know Jones v. Harris defines fallout benefits, is

that so? Are you aware of that?

A. As I said I've read the case, I don't remember the --

Q. Would it --

A. It's a lot of pages.

Q. Would it surprise you to learn that the but-for test is

nowhere in Jones v. Harris?

A. I don't think -- I don't think that would be -- I don't

think that would be surprising, because I think the but-for

case is -- but-for test is a -- is kind of a summary way of

trying to analyze it. I think the general concept are

benefits that are received as a result of the relationship.

Q. Okay, thank you. Did you ever retain a consultant to

assess whether or not product wrapper and general account

spread are fallout benefits?

A. No. Other than obviously relying quite extensively on

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3810

our independent counsel.

Q. Okay. If you would I'd like to turn to the --

THE WITNESS: I'm going to take a candy if that's

all right, your Honor.

THE COURT: You may.

A. Sorry.

Q. Profit. And if you would, Defendant's Exhibit 1812, I

think Milbank located another copy of that; tab 47, please.

A. I'm sorry; tab what?

Q. 47.

A. Okay.

Q. Turn over if you would to Bates 794, please.

A. Can I look at it a moment?

Q. Yeah, sure. Of course.

A. This is the -- it's Headed Pre-Marketing; is that right?

Q. Yes, sir.

(Witness reviewing.)

A. Okay.

Q. Now, tab 47 is entitled Profitability Discussion;

correct?

A. Yeah.

Q. And Bates 794 compares the pre-marketing profit of the

EQAT to a variety of investment advisors; correct?

A. That's correct.

Q. Now, the profitability of the EQAT is not relevant to the

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3811

Gartenberg factors; is it?

A. I think this is -- I said that was correct that it

references the word EQAT, but I think -- and again, we're

looking at a document that was delivered I guess to the Board

in July of almost three years ago, but I would have guessed

that this is a reference to FMG's profitability.

Q. Because the profitability of the EQAT would be irrelevant

to the Board's assessment of the appropriateness of fees.

A. Well, in fact, there is no -- there's not even a

profitability to examine of the EQAT.

Q. That's correct.

A. So I think that was probably just an error in the wording

of the document, which happens periodically.

Q. If you would, turn over to Bates 796. And do you --

would you take a moment to look at that?

A. I'm sorry; the pages are switched around, so I have to

access it.

796, right.

Q. And again, it shows the post-marketing profitability of

the EQAT; correct?

A. Yeah, and again, I think this is -- this was just -- for

whatever reason this was their short shorthand way of

referring to FMG's profitability. Because there is no EQAT

profitability.

Q. And that's repeated on 799, and 801, et cetera; correct?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3812

A. You want me to look at each of those pages?

Q. Please.

A. So, what was the next one?

Q. 801.

A. 801, I see EQAT's referenced. And what's the next one?

Q. That was the last one.

A. Okay.

Q. So it's your testimony that you believe the reference to

EQAT refers to FMG the investment manager; is that correct?

A. Yeah, I mean this is profitability numbers, when we look

at profitability it's FMG; again, there's no concept of

profitability of a mutual fund. So -- you know, the fund

itself. So I think that was just a shorthand reference to

FMG.

Q. Mr. Schpero, we've introduced into evidence, and I'd like

to go quickly through this, audited financial statements for

FMG which show their pre-market profitability of being 75

percent. On any of the exhibits you just looked at, is that

disclosed?

THE COURT: Well, when did he look at these, just --

MR. A. LAKIND: Just right now; I'm sorry.

THE COURT: Okay. So the last three pages?

MR. A. LAKIND: Yes, your Honor, sorry.

THE WITNESS: So, again, I guess -- I think the

first page you had me look at was 794?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3813

BY MR. A. LAKIND:

Q. Right. And the audited financials, which are in

evidence, show FMG's profit at 75 percent.

A. Well -- so you're comparing the audited financial

statement of FMG, to what I believe is intended to show the

profitability of FMG, including any appropriate allocations,

with respect to the funds. I think we're talking apples and

oranges.

Q. So you don't think the profitability shown in the audited

financials of FMG is germane to your assessment of the

reasonableness of its fee?

A. I wouldn't say that, I did not say that, I don't think I

said anything like that. The audited financials, as I've

testified before, we certainly look at very closely, but we

also look at a profitability study pursuant to a methodology

that's been allowed. And that profitability study is I

believe reflects an analysis that is different than an audited

income statement of the investment manager.

Q. Turn over if you would to Bates 827.

MR. BENEDICT: This is at tab 47?

MR. A. LAKIND: Yes, sir.

MR. BENEDICT: 827?

MR. A. LAKIND: Yeah.

BY MR. A. LAKIND:

Q. Have you found that document?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3814

A. Yeah.

Q. And it's entitled Average -- excuse me; Arithmetic

Average of All Firms at 250 million; correct?

A. Right.

Q. Does the EQAT have $200 million in it?

MR. BENEDICT: I'm sorry; could you repeat the

question?

Q. Does the EQAT have $200 million in it?

A. So you're saying separate from this chart does EQAT have

only 200 million in it?

Q. Yes, sir.

A. No.

Q. I'd like to move on to nature of services.

A. Okay. Should I close this book up?

Q. Yes, please.

MR. A. LAKIND: And Chris, if you could provide his

Honor and the witness with Defendant's Exhibit 144.18 at tab

13 -- I'm sorry; it doesn't have a tab. It's tab 18 -- tab 13

of the book that defendants were going to leave up there.

Q. Mr. Schpero, do you recognize this document? P-144.18?

A. Yes, I do.

Q. And can you tell us what it is?

A. It would be one of the presentations that were done I

guess in July 2013; looks like it's specific -- it

specifically is looking at the spread and analyzing it in

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3815

different ways.

Q. And Bates page ending 877, that's a document that's

called the Gary chart after you?

A. Yeah, I think all of these unfortunately are called that.

Q. And 877 is entitled Net Advisory Spread as a Percentage

of Gross Advisory Fee?

A. Right.

Q. And that's the percentage of the gross fee represented by

the portion that's paid to FMG; correct?

A. Yeah, I'm sorry, I'm just looking at it compared to the

prior page to make sure I know what I'm looking at. So I

guess some of them give basis points, I guess this one gives

it in percentage. Yeah.

Q. And that indicates that the Intermediate Government Bond

Fund, the EQ/Core Bond, the Global Bond PLUS and the PIMCO

Ultra Short are between 80 and some of them as high as 95

percent; correct?

A. Do you want to identify specific funds? Because you just

went very quickly.

Q. Yes, sir. The Intermediate Government Bond Index, that's

slightly over 95 percent as to its net advisory spread;

correct?

A. Intermediate Government -- yes.

Q. Core Bond Index is about the same?

A. Yes.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3816

Q. And the Global Bond is probably around 80 something

percent?

A. Right.

Q. And the PIMCO Ultra Short is slightly under 68 percent;

correct?

A. Correct.

Q. And if you go to the next page, it has the Lipper median

retention; do you see that where that is at Bates 878?

A. Yes, I do.

Q. And for fixed income funds it's about 66 percent at $1

billion; correct?

A. That's what it says, yes.

Q. And the EQAT weighted average is 68.4 percent; correct?

A. Correct.

Q. Have you ever computed the spread in dollar terms in

connection with your review of the advisory fee?

A. Well, I guess I would make two points in response to

that. First is I think importantly, which is why I asked to

make sure this is the document I thought it was, I actually

don't look at -- I shouldn't say I don't look; I give very

little weight to the percentage, I think much more importantly

is the basis points which shows up earlier in the document; I

think the percentage is just an arithmetic result as opposed

to the basis points, which I think are more realistic in

understanding the actual spread.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3817

And in terms of what the actual spread is in dollars, I

believe we see that as part of the process that the Board

works through. I don't calculate it, but I believe we have

seen those numbers.

Q. And it's your testimony that the dollar spread is in the

15(c) material; is that correct?

A. You know, I'm just trying -- we see a lot of material, we

certainly see the total -- let me just think about it. We

see -- yeah, I mean the profitability -- sorry; I'm thinking

out loud. The profitability presentation we see for each fund

shows the revenues that are received by FMG, and it shows as

separate line items the deductions for the sub-advisory fees.

And we see that -- those numbers I believe in actual dollars,

and then we see the percentages, so I think that is -- I

believe that's all there.

Q. Now, I don't want to take the time to go over an exhibit

with you, but from my review of P-52, which is the spreadsheet

I think you referred to, it appeared the Core Bond Index had a

management fee of about 22.17 million and sub-advisory fee of

1.06 million; does that seem right, or do you want me to show

you to document?

A. I think you better show me.

MR. A. LAKIND: P-52, Chris?

A. So, which fund you want me to look at?

Q. Core Bond Index. And towards the end of that document

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3818

there's a spreadsheet.

A. I'm sorry; there's two exhibits that were attached

together; do you want me to look at the second exhibit?

Q. Yeah, Bates 4211.

A. 4211, yeah.

Q. Do you see about six columns over there's a reference to

the Core Bond Index?

A. Yes.

Q. And it shows a management fee of $22.174 million;

correct?

A. Yes I see that.

Q. And a sub-advisory fee of about 1.066 or 60 dollars?

A. Yes, I see that.

Q. So the difference between those two numbers is about $21

million; correct?

A. You know, I apologize; so you see -- you point out the

management fee of 22 million, and then you're identifying

specifically the sub-advisory fee of one million; is that

correct?

Q. No, I think it's 1.060.

A. Yeah, I see, it yes.

Q. So the difference in dollar terms is about $21 million;

correct?

A. Approximately, yeah.

Q. You can lay that aside for the moment.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3819

Now, in D-1811 --

A. I'm sorry; different document?

Q. Yes, sir. In 1811 there are a bunch of what we call long

sheets, or what you have referred to as long sheets. You

should have a Bates number to bottom 2111.

A. Right. First page?

Q. Yes, sir. And if you go to the right-hand side, there's

something where it says EQ/Equity 500 Index, and there's some

purple bars and some blue bars; do you see where that is?

A. Yes.

Q. Turn over, if you would, to the EQ/Common Stock Index.

That's Bates number 113.

A. Yeah, I'm there.

Q. Okay. There's a chart on the right that I believe that

color is brown and purple is also there; do you see where that

is? I'm color blind so --

A. I was going to say, I see a chart middle right, I think

it's purple and yellow --

Q. Okay. I'm sure you're right, I'm wrong. Do you know

what the purple represents?

A. Let me look at it one moment if that's all right.

MR. A. LAKIND: Your Honor, should I hand up my

magnifying glass to somebody?

THE COURT: Maybe Mr. Schpero needs it.

THE WITNESS: No, I'm okay. I just want to make

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3820

sure I know what I'm looking at before I respond, but I can

see it.

Yeah, so the -- so the purple -- I think that was

your question.

BY MR. A. LAKIND:

Q. Yes, sir.

A. Shows the total management and -- and administrative fee.

I'm just double checking I believe -- bear with me. I believe

that's the total management, effective management and

administrative fee.

Q. And what is the yellow?

A. The yellow would be the variable expenses, which would

consist of the sub-advisory fee -- I'm sorry; I'm just having

trouble -- I'm pretty sure -- I'm trying to tie this so I can

accurately represent to you. I'm just struggling with whether

that is --

THE COURT: The problem he's having, Mr. Lakind, is

you can't read the chart when it refers to what the purple is

and what the yellow is.

THE WITNESS: Yeah, I'm pretty --

THE COURT: So why don't you tell him what it says.

MR. A. LAKIND: Your Honor, this is -- remember when

I complained about a chart I couldn't read and defendants were

going to give me a better chart? This is the best they could

give me.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3821

THE COURT: Well, you can tell him what it says.

THE WITNESS: I think I'm okay. So I think -- I

believe it says management advisory fee, so that's what I

wanted to clarify.

BY MR. A. LAKIND:

Q. Okay.

A. I believe that's just showing the management and advisory

fee, I don't think it includes administrative from looking at

the top; and that was the point I was trying to clarify. And

then below that is the variable expenses for that fee, and

again, I'm just trying to confirm it so I can accurately

represent to you -- the sub-advisory, if I'm correct it's

without administrative fee, then the yellow would be the --

would be the sub-advisory fee as well as any expense caps or

waivers.

Q. Okay, and the blue below that represents the spread in

basis points; correct?

A. Correct.

Q. And for the Common Stock Index the spread seems to have

gone up quite a bit between 2008 and 2009; correct, more than

doubled?

A. Just bear with me one minute; I'm just, again, trying to

take a closer look at this. (Witness reviewing.)

So, I apologize, it's just difficult to see this. And

I'm trying to track it up to the information that's very clear

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3822

up top, and I see that the net management fee is 35 basis

points, the net spread after a waiver is 30, and then the

administrative spread is about 9. So it would look to me like

the total spread is about -- would be a little under 39 basis

points probably.

Q. Okay. You see this document every year at every 15(c)

meeting, don't you?

A. Yes, I do.

Q. Okay. Turn over to page 120, which is the Core Bond

Index.

A. I'm sorry to take your time, I'm just trying -- I'm just

trying to see these numbers again.

Q. Are you ready for me, Mr. Schpero?

A. No, I'm not just yet.

MR. BENEDICT: Your Honor, we may have a clearer

version here for the witness.

THE COURT: Oh, if you do why don't we just --

THE WITNESS: That would be helpful.

THE COURT: Show it to Mr. Lakind so he knows it's

the same.

MR. BENEDICT: I think we gave one to Mr. Lakind.

MR. MURPHY: That's the one I gave you this morning.

MR. BENEDICT: If I may approach, your Honor?

MR. A. LAKIND: Your Honor, I would be more helpful

if I could, but --

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3823

THE COURT: Can't what?

MR. A. LAKIND: I can't read it.

(Handing to witness.)

MR. BENEDICT: Is this more helpful?

THE WITNESS: Yes, it is.

THE COURT: That should help us along.

THE WITNESS: So I'm looking at -- let's just start

with the one I was trying to read, which is the Common

Stock --

THE COURT: Core Bond Index.

MR. BENEDICT: Your Honor, would you like a cleaner

version as well?

THE COURT: No, I'm good, I can read it.

THE WITNESS: So I can now see the numbers which

allows me to be able to better answer your question. If you

don't mind I just want to clarify on Common Stock Index. As

you would expect these charts are summaries of other

information, and so it's important to be able to make sure I

know what the summary is showing, that's why I couldn't -- I

couldn't do it without the numbers.

So it's clear to me that the actual net management

fee is 35 basis points, so that is what the purple is, it's

just the management fee alone. And then the spread would be

-- sorry; the yellow under that, which actually now looks

brown or green, I can't see that number, but that would be the

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3824

variable expenses, which is the sub-advisory fees and the

product -- any product waivers. And so that difference would

be the turquoise below that would be the spread under the

management contract, I think it's very clear now.

BY MR. A. LAKIND:

Q. Okay. Now, turn over to the Core Bond Index, if you

would, which is Bates 2120.

A. Got it.

Q. Turquoise -- on the right-hand side there's the graph

with the turquoise line; do you see where that is?

A. Yes.

Q. And looks like the spread has remained a constant at .230

percent; correct?

A. That's correct -- well, it's remained constant, yeah,

since 2008.

Q. Yes. Now, if -- there's a chart called average assets in

millions, just about an inch above the turquoise; correct?

A. Correct.

Q. And in 2009 the average assets were about 3 million --

$3,136,000,000; correct?

A. Right.

Q. And in 2012 it grew to $6,404,000,000; correct?

A. Yes, I see that.

Q. So, the spread in dollar terms in 2009 was probably about

half of the spread in dollar terms in 2012; correct?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3825

A. The percentage -- if you apply the percentage it would

have increased over that period.

Q. Yes, sir. So the spread in 2009 would have been roughly

10 million and the spread in 2012 roughly 21 million?

A. That's probably right.

Q. Now, earlier we look at the Gary chart which said that

the sub-advisory fees were about -- I'm sorry; strike that.

That the percentage spread was about 68 percent; do you

recall that?

A. Percentage spread of what?

Q. I'm sorry; I apologize. The EQAT, overall weighted

average EQAT spread was about 68 percent?

MR. BENEDICT: Could you put a document in front of

the witness --

Q. Yeah. Pick up, if you would, again 144.18, please? It's

an exhibit you looked at a few minutes ago, it's called the

Gary chart.

A. Is that in the book?

Q. It's in front of you I believe.

A. And you're pointing me to which page?

Q. Page 878.

A. Right.

Q. And it shows the EQAT weighted average spread about 68.4

percent; right?

A. Yes, this is where I told you the percentages to me are

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3826

not very helpful.

Q. Okay. And the management fee -- excuse me; strike that.

The sub-advisory fee was about a million dollars for the

EQ/Core Bond Index; correct?

A. The one we just looked at -- which was a million dollars,

the sub fee is that what you're saying?

Q. Yeah, sub-advisory fee for EQ/Core Bond Index, P-52, you

looked at it a minute ago.

A. Okay.

Q. About a million dollars; correct?

A. Yeah, I think that was the number you showed me.

Q. Now, if the spread for the EQ/Core Bond Index were on a

percentage basis the same as the spread for the EQAT as a

whole, the management fee to the EQ/Core Bond Index would be

roughly $3 million right because 68 percent -- because if you

multiply 68 percent by 3 million, you're left with a million

as a sub-advisory fee; does that make sense to you?

MR. BENEDICT: Objection; vague and ambiguous.

THE COURT: Rephrase.

BY MR. A. LAKIND:

Q. Knowing the sub-advisory fee of one million, and the EQAT

weighted average spread of 68 percent, are you able to

calculate what management fee would translate to a 68

percent -- percent margin?

A. Well, as I --

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3827

MR. BENEDICT: Totally hypothetical.

THE COURT: I'll allow it. It's cross-examination.

If you understand the question. And if you can do

the math.

THE WITNESS: I'm certain I can't do the math, and I

think the point I would want to -- I would want to stress is

that I think trying to do the math off of percentages is

actually just an incorrect way to approach this. What the

reality is, is the manager's getting paid a certain amount of

basis points and we examine those carefully for the services.

But the fee itself is purely an arithmetic play

based on a differential between whether it's -- whether the

index -- whether it's an index fund versus -- whether it's a

sub-advisor running an index fund versus a sub-advisor running

an active fund, you can get a vastly different percentage,

even though in both cases FMG is receiving effectively a

similar fee. So the percentage can throw you wildly off in

examining this.

THE COURT: So the answer to his question is you

couldn't figure it out?

THE WITNESS: Yeah.

BY MR. A. LAKIND:

Q. Mr. Schpero, is it the sub-advisor's responsibility to

formulate the investment program?

A. I don't think I would put it that way.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3828

Q. Okay. Does the sub-advisor have the obligation to obtain

and evaluate economics statistical and financial information

affecting the economy generally?

A. I'm sorry, sir?

Q. Does the sub-advisor have -- undertake to obtain and

evaluate economics, statistical and financial information

about the economy in connection with the services it renders?

A. Well, I don't have the form of contract in front of me,

but given my understanding, which I think it's pretty clear

what the sub-advisor does, I would expect that that would be

part of trying to figure out the day-to-day actual investments

that they make.

Q. And it's a sub-advisor that selects the brokers and

dealers?

A. Does what?

Q. The sub-advisor is the one that selects the brokers with

the stock purchases?

A. Yes, it does.

Q. And the sub-advisor negotiates brokerage commissions?

A. Yes, it does.

Q. And the sub-advisor maintains accounts and records with

respect to the funds that are required?

A. I'm not sure that that would -- I don't know -- I don't

think that's accurate.

Q. Okay. And who votes proxies?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3829

A. The proxies itself I believe is -- I believe it's voted

by the sub-advisor.

Q. And the sub-advisors have the responsibility to calculate

the fund's performance?

A. I don't know -- again, I'm not -- again, I don't have the

contract in front of me; I certainly haven't reviewed it

recently, but I don't know that's technically required. I

mean you would expect the sub-advisor is going to provide that

information, and as I testified the manager I think quite

appropriately does, manager FMG, does its own calculation and

analysis of the performance.

Q. Does the sub-advisor undertake and compare the fund's

performance against the benchmark in the Lipper peer group or

is that something the manager does?

A. I think that, again, I would expect the sub-advisor in

seeking to defend its own performance is certainly going to go

through that analysis as well.

Q. Sub-advisor perform an attribution analysis?

A. I don't -- I don't believe there's any -- I don't think

that's -- we see attribution analyses at each Board meeting,

but they come from FMG, they are not prepared by the

sub-advisor.

Q. Incidentally, insofar as the sub-advisors undertake to

compare funds performance to a benchmark or a Lipper peer

group, do you know if they make that information available to

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3830

FMG?

A. The only thing I can answer on this point, Mr. Lakind, is

that as I've testified periodically, the Board meets with the

sub-advisor, when the sub-advisor comes in, they prepare their

own booklet kind of making their case as to how they've done,

and they certainly show various comparisons and analysis

that's kind of part of their marketing material.

Separate from that we get separate analytics, not only

then, but at every Board meeting from FMG. The only time we

get I believe direct information from the sub-advisor is that

once every 18 months or whenever it might be, where they come

in and they bring in what I call their marketing brochure and

make their own presentation.

Q. Now, if the contracts were inconsistent with your

recollection with regard to the allocation of duties, you

would acknowledge -- you would defer to the contract; is that

correct?

A. Yeah, the contract clearly is -- is a critical part of

this. So what the contract says and how it's interpreted,

these contracts are -- you know, are somewhat vague. But yes,

the contract is certainly what I would look at.

MR. A. LAKIND: Chris, would you give the judge and

Mr. Schpero P-29, please?

Q. Would you take a look at P-29, please?

A. Sure.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3831

Okay.

Q. P-29 appears to be something that was provided to the

Board in connection with the meeting July 2013; is that

correct?

A. I'm just looking -- yes, July 2013.

Q. And on page 998 it refers to something called terms of

endearment?

A. Right.

Q. And how did this terms of endearment document come to be

created?

A. I'm really -- I have some recollection of seeing it; I

don't remember the origins of it.

Q. Page 999 describes FMG's business structure; do you see

where that is?

A. Yes, I do.

Q. And then finally you get to the next page 1000, it's a

called FMG Business Structure Day-to-Day; do you see there?

A. Yes.

Q. And under the heading Investment Management it lists a

bunch of tasks; correct?

A. Right.

Q. It indicates that there's seven full-time employees at

the very bottom?

A. I think it indicates that there are seven full-time

employees as I read this that report to Mr. Kozlowski.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3832

Q. Okay. And the employees that do investment management,

manage investments on behalf of the EQAT and the other funds

that FMG manage -- or excuse me, the other trusts that FMG

manages; correct?

A. I'm sorry; again please?

Q. Sure. Those who perform investment management services

don't only manage the EQAT, they manage the offshore fund, the

VIP and other -- and several other non-EQAT Trusts; is that

correct?

A. Yeah, FMG employees generally you're saying.

Q. Yes.

A. Yes, I'm aware there's the VIP funds, I don't know that

there's a lot more beyond that.

Q. Now, the first heading under investment management reads

responsible for hiring, firing, monitoring and reporting on

sub-advisors; do you see where that is?

A. Yes, I do.

Q. And essentially that is something that FMG does; correct?

A. They do that -- certainly play a lead role. I'm

hesitating only because the independent trustees certainly

have the ultimate say on these matters, but recommendations

are made by FMG to the Board.

Q. The second entry --

A. At least with respect to hiring and firing.

Q. Okay, I'm sorry. The second entry is managing daily cash

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3833

flow at the fund and sleeve level; do you see where that is?

A. Yes.

Q. Now, the Core Bond Index has no sleeve; correct?

A. Core Bond has no sleeve, that's correct.

Q. And trading ETF baskets, Core Bond has no ETFs; correct?

A. Correct.

Q. All asset allocation activities, re-balancing analytics,

is that work done on behalf of the Core Bond?

A. I don't believe -- I think that's referring again to

allocations among funds or sleeves, and as we've just said

there are none there.

Q. ATM execution; what is the ATM?

A. That's the volatility management structure; I don't have

-- which fund are you we talking about?

Q. Core Bond.

A. I don't have it in front of me. It would identify

whether it has a volatility overlay or not, so I don't

remember.

Q. I don't want to spend time pulling out document.

A. I'm just answering your question.

Q. But it does not. And finally management, due diligence;

FMG does that, correct, for the Core Bond?

A. Yes.

Q. And Board reporting, FMG does that?

A. Correct.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3834

Q. So essentially, and correct me if I'm wrong, we come down

to hiring, firing, monitoring and reporting on sub-advisors,

manager, due diligence, Board reporting; correct, that are

done for the Core Bond?

A. Well, I think -- when you say correct, I think that is

correct in terms of the few items that are listed here, but I

certainly don't think this is at all a full list of the

investment management services that FMG provides.

Q. It's a full list of the investment management services

set forth in the terms of endearment document; correct?

A. I'm just looking to see how this is structured. This is

in 2013, so whether you look at the FMG memorandum or the

charts that were done, I think you would see there are

certainly a -- much longer list than what you got me looking

at on this page.

Q. Are you saying that page 1000 is inaccurate?

A. I am saying that this appears to be -- since as I told

you I don't remember the origins of this chart or its purpose,

this -- these are slides that would have been done in

conjunction with very extensive presentations on all of the

services that FMG provides. And what the goal was here I

don't know, but this in no way summarizes all of the services

that are provided by FMG under the investment management

contract.

Q. You would agree, would you not, that the services

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3835

described on Bates 1000, do not warrant a management fee to

FMG of roughly -- to FMG for the Core Bond Index of $20

million?

A. Well, I'm not going to agree or disagree, because that's

not the analysis that I would ever do, since this is not all

of the services that are provided.

Q. Now, between 2009 and 2012, we did some arithmetic and

found that the portion of the retained management fee by FMG

grew from 10 million to 21 million; do you recall that?

A. Do I recall your analysis?

Q. Yes, sir. We did some --

A. We meaning -- sorry; I thought your law firm did this, I

didn't know who the we is.

Q. No. I had asked you a question earlier referring to the

long sheets, and said isn't it apparent that the dollar

retention of FMG on the Core Bond Index rose from roughly 10

to 20 million, and you said that seems correct; do you recall

that testimony?

A. Yes, on the -- I think you were suggesting that -- I'm

sorry; I'm not -- I don't remember the specifics of the

analysis now, we've gone through several charts.

Q. Yes. But we did earlier go through a calculation where I

thought you had agreed that in 2009 the dollar retention was

about 10 million, and it had grown to about 21 million in

2012.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3836

A. Because -- because the assets had doubled in size.

Q. Yes, correct.

A. I remember that now, yes.

Q. Okay, thank you.

A. I'm sorry; we're moving through a lot of material here,

so it is hard to keep track.

Q. Yeah, and it's been long day for both of us.

A. Right.

Q. What changes in management services occurred between 2009

and 2012 to warrant a $10 million increase in the management

fee?

A. Well, first of all, again, this is very difficult without

having all of the documentation for the fund in place. So

when we look at the fund each year, as you know we look at a

lot of material, and you've got me looking at a couple of

isolated pieces of paper. With respect to the index funds in

particular I know that over that period we've added -- we, the

Board, have added breakpoints, and I know that there have been

points where we reduced the management fee. So I'm a little

bit uncertain as to the numbers that I was looking at in terms

of how they relate to what the facts were each year.

But I will also tell you that with respect to an

increase in assets, there are lots of services that increase,

and there are greater burdens that are often associated with

increase in assets. The fund we're talking about is which

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3837

fund?

Q. Core Bond Index.

A. Core Bond? I believe -- I believe has thousands of

stocks in it, and you would be talking about a significant

amount of asset flow going in, significant additional trading

and compliance issues; bonds have become a marketplace where

there are very significant liquidity issues. So from an

valuation perspective, the role of the valuation committee in

trying to -- which is FMG's responsibility, in terms of trying

to do the daily analysis of pricing of these securities where

there are trade halts or where there are liquidity issues

arising, all of these are things that would increase in size

as the assets would increase.

But I also would tell you that trying to analyze that

in isolation looking at an over four year period as opposed to

doing what I think the Board does in the exercise of our

business judgment, which is to look each year at all of the

data, I think that's the way we do it. I think trying to do

this big macro look at the information is not going to be a

very helpful endeavor.

Q. Trading is something you referred to, that's done by the

sub-advisor; isn't that correct?

A. The trading is done by the sub-advisors, but there are

very significant compliance issues that result from that, and

there's a complete -- a significant overview and role that FMG

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3838

plays both at the manager level and the administrative level

with respect to those kinds of activities.

Q. And compliance activities are split between the

sub-advisor JP Morgan, and FMG; correct?

A. Between the sub-advisor -- the sub-advisor you just said

JP Morgan --

Q. JP Morgan, the sub-administrator.

A. You said the sub-advisor, that's why I'm confused.

THE COURT: Why don't you rephrase the question.

MR. A. LAKIND: I will.

Q. The sub-advisor has compliance responsibilities; correct?

A. The sub-advisor -- so we're not talking about the

sub-administrator, you're asking me --

Q. No, sub-advisor.

A. The sub-advisor has compliance responsibilities, yes.

Q. Does the sub-administrator have any compliance

responsibilities?

A. My recollection is there are some -- I think it's fairly

limited, I think -- I think there's some computer systems;

we've had presentations, but I don't think it's terribly

extensive is my recollection.

Q. Net asset valuation determinations, they are done by JP

Morgan, aren't they?

A. That's correct.

Q. The cost of hiring, firing and monitoring sub-advisors,

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3839

that didn't double from 2009 to 2012 in connection with the

Core Bond Index, did it?

A. Cost of hiring and firing, no, I would not imagine it

did.

MR. A. LAKIND: Chris, would you put up P-373,

please?

Q. Mr. Schpero, would you please take a look at P-373?

A. Okay.

Q. Can you tell us what that document is please?

(Witness reviewing.)

A. Yeah, this is -- this is a summary of -- as indicated, of

certain of the administrative management and administrative

services over this time period from 2010 to 2013.

Q. And has a number of columns and rows; correct?

A. Yeah, it appears to identify each of the at-issue funds.

Q. And three columns from the right is the EQ/Core Bond

Index; do you see where that is?

A. Yes, I do.

Q. If you could turn over to Bates page ending in 152,

please.

A. The last page?

Q. Yes, sir.

A. Yeah.

Q. And the left-hand column there's something called

in-house meetings; do you see where that is?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3840

A. Yes, I do.

Q. And how many in-house meetings occurred with -- involving

the EQ/Core Bond Index?

A. It says N/A, which appears to be non-applicable or non --

I don't know what N/A means in this context.

Q. Conference calls, you don't know what that means either;

correct?

A. I know what conference calls mean, I don't know what the

N/A is supposed to identify.

Q. Right. I didn't mean to suggest that. Compliance

issues, there was one compliance issue in February 2011?

A. Right.

Q. And over the period of time there are essentially five

valuation meetings involving the Core Bond Index; correct?

A. Yeah.

Q. Core Bond Index's got no savings on the directed

brokerage program?

A. No.

Q. That was a double negative. Did the Core Bond Index

achieve any savings --

A. This shows none.

Q. And on the preceding page ending in 151?

A. Yeah, I'm there.

Q. In the three-year period there were three on-site due

diligence visits; correct?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3841

A. Core Bond?

Q. Yes, sir.

A. There are three, yes.

Q. And there were four under the next row, annual compliance

questionnaires completed?

A. Right.

Q. And there were four Board presentations; correct?

A. Correct.

Q. Mr. Schpero, do you agree -- strike that.

Essentially it's your -- it is your understanding, is

it not, that JP Morgan essentially provides three functions,

for FMG: The first is to do net asset value calculations for

the portfolios; the second is to keep the books and records;

and the third is to provide assistance -- some assistance in

filings such as shareholder reports. Is that correct?

A. Yeah, I think I've -- I think I testified and I said so a

few minutes ago. Again, I believe there's some limited

compliance systems that are available as well.

Q. At your deposition do you recall if you mentioned

compliance work on behalf of JP Morgan -- done by JP Morgan?

A. I do not recall at this point.

Q. With regard to that compliance work, would you

acknowledge that JP Morgan on a daily basis monitors the

portfolios for investment restrictions and regulatory

requirement?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3842

A. You're going to have to say that again; I'm sorry.

Q. Would you acknowledge that JP Morgan on a daily basis

monitors the portfolios for investment restrictions and

regulatory requirements?

A. You know, that's -- I think I can only stick by what I

remember, which is that I do remember that they provide some

limited compliance work; I don't know that that's inconsistent

with what you just read.

Q. Does JP Morgan essentially do the compliance work in

connection with Section 17-H of the Internal Revenue Code?

A. I just don't remember.

Q. Does JP Morgan maintain journals of the daily records of

all purchases and sales of securities?

A. Well, they keep -- they do -- they do maintain -- I think

have a definite service of maintaining the books and records,

and that may well be part of the book and records of the fund.

Q. Well, do you know for a fact if they maintain daily

records and purchase of sales and securities for the funds?

A. I just don't remember.

Q. You've been on the Board for how long, sir?

A. Almost 15 years. And I've sat through many presentations

by JP Morgan.

Q. You believe JP Morgan has the obligation to update

accounting records to reflect completed share transactions?

A. Give it to me again please?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3843

Q. Yes, sir. Do you believe that JP Morgan has the

obligation to update accounting records to reflect completed

share transactions?

A. I'm -- again, the specifics are very hard for me to

remember, it would seem again to be consistent with either

their net asset value calculations or books and records

maintenance, but I don't remember the specifics.

Q. Is it JP Morgan's responsibility to compute each fund's

net income and capital gains dividend payables, dividend

factors, and agreed upon rates and yields?

A. Give me the list again please?

Q. Yes, sir. To compute each fund's net income and capital

gains, dividend payables, dividend factors and agreed upon

rates and yield, is that a responsibility of JP Morgan?

MR. BENEDICT: Objection to form, your Honor.

There's about 16 questions put into that.

THE COURT: It's one list. If you understood the

question you may answer it, Mr. Schpero.

THE WITNESS: What I can't remember is to what

extent these are subsets of what needs to be done to calculate

an asset value, so I don't -- I don't remember that -- that

specifically.

BY MR. A. LAKIND:

Q. Does JP Morgan record fund distributions?

A. I would think that would be part of the books and

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3844

records.

Q. Does JP Morgan provide assistance to the EQAT's auditors?

A. I think by definition they would have to do that since

they do the calculations I've described.

Q. Does JP Morgan file annual and semi-annual reports with

the SEC?

A. I think they -- I know they do that very much in

conjunction with FMG; I believe FMG has the primary

responsibility there, although I think they do certainly

receive as I said earlier some portions of the financial

information from JP Morgan.

Q. Are you familiar with a document called a 24f-2 notice?

A. I'm trying to remember what that specifically references;

it might have to do with the purchase and sale of securities,

but I don't remember that clearly now.

Q. Do you remember whether it's JP Morgan's responsibility

to prepare that notice?

A. Since I can't specifically remember that actual document,

then I'm certainly not going to guess as to that.

Q. Do you know what a form N-Q is? N dash Q, do you know

what that form is?

A. N dash 2?

Q. N dash Q, quiet.

A. I don't remember that.

Q. You don't know if JP Morgan completes that document?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3845

A. I don't remember the document, so I don't recall whose

responsibility that is.

Q. Do you know what an N-SAR is?

A. Yes, I do.

Q. And what is that?

A. I thinks that's -- I think that's a semi-annual report; I

think it's different from the actual disclosure document, but

I think it's some kind of semi-annual filing by open-end

funds.

Q. Does JP Morgan prepare that document?

A. I'm sure they play a role, because again, I think it

would be dependent on some of the basic underlying NAV and

financial information.

Q. But you don't think they have the responsibility to

entirely prepare that form; correct?

A. I just -- I can tell you, I just don't remember at this

point.

Q. Who is it that prepares and files tax returns, is that JP

Morgan or FMG?

A. I think that's FMG that does the tax returns. I mean I

will tell you that certainly the tax and budgeting and other

accounting information, I think the primary responsibility

there is in Mr. Walsh's group at FMG.

Q. Now, Mr. Walsh testified in depositions that JP Morgan

prepares the tax returns?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3846

A. Then I'm wrong.

Q. Okay. And JP Morgan calculates dividend distributions;

is that correct?

A. Again, JP Morgan --

Q. Does JP Morgan undertake the task to calculate dividend

distributions?

A. I think, again, that would be -- that would be connected

with the NAV information, so I think they probably do.

Q. And does JP Morgan record fund or class expense accruals?

A. Again, I think that's connected with NAV, so I would

think they do.

Q. Now, FMG entered into a new fund services agreement with

JP Morgan in 2015; is that correct?

A. Right.

Q. And have you ever seen that agreement?

A. Yes, we reviewed it at the time.

Q. Did you have any reason to believe that agreement was

inaccurate?

A. The new agreement that was entered into in -- by the

funds in the spring of 2015.

Q. Yes, sir.

A. It was amending the agreement that had been in place

since 2000?

Q. Yes, sir.

A. No, I don't have any reason to believe it's inaccurate.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3847

Q. Mr. Schpero, you acknowledge, do you not, that one of

your tasks in approving contracts is to assess the services

performed by FMG in the management area, in comparison to the

fee FMG earns and the services performed by the sub-advisor in

the management area in comparison to the fees the sub-advisor

earns; do you agree with that?

A. You have to ask me that again please.

Q. Sure. Is one of your tasks as the EQAT Board, to assess

the services performed by FMG, under the Management Agreement,

in comparison to the fees received by FMG?

A. Yes.

Q. And in that undertaking, do you also attempt to assess

the fees paid to the sub-advisors in comparison to the

services performed by the sub-advisors?

A. That's correct.

Q. You do that.

A. Yes.

Q. In connection with the Administration Agreement, is it

one of the Board's tasks to ascertain the services performed

by FMG in -- in comparison to the fees earned by FMG?

A. Yes, it is.

Q. And in connection with your approval -- strike that.

And in that endeavor, do you seek to ascertain what

services the sub-administrator performs in relationship to the

fees paid to the sub-administrator?

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04:48

Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3848

A. Yes, and -- and we receive extensive information over the

years as to what the parties do, as well as having an

opportunity to meet with each of them.

Q. And if your assessment of the services of any of those

parties was inaccurate, that could jeopardize your assessment

of what the fees should be; is that correct?

A. Well, I certainly agree that it's important to understand

the key services that each -- each provider provides.

MR. A. LAKIND: Your Honor, can I just have a minute

without leaving just to go through my notes?

THE COURT: Can we take a 10 minute break and we'll

can back out?

MR. A. LAKIND: Yes, sir.

THE COURT: So we'll take a 10 minute break and be

back out around 3:30.

MR. A. LAKIND: Thank you, your Honor.

(Recess.)

THE COURT: Ready to go, Mr. Lakind?

MR. A. LAKIND: I am, your Honor. Thank you.

Chris, will you please hand up J-4 to the witness

and to his Honor?

BY MR. A. LAKIND:

Q. Mr. Schpero, when this deposition began -- excuse me.

Your testimony began we talked about a duty of loyalty that

the Board trustees owed to the fund; is that correct? Do you

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3849

recall --

A. Yes we did.

Q. And in pursuant to that duty of loyalty, do you agree it

would be imprudent for the -- for the EQAT Board to agree to

indemnify FMG as fund manager?

A. It's a very general question; I'm trying to remember in

response from my own experience the way that management

contracts are structured. I think there probably is some

cross-indemnity that's usually in there, but I don't remember

the specifics.

Q. If you would, take a look at J-4 please and tell us what

that is?

A. I'm sorry; look at the document itself?

Q. Yeah.

A. This at this Investment Management Agreement.

Q. And turn over to page 4030.

A. Yes.

Q. There's a paragraph entitled Limitations on Liability; do

you see where that is?

A. Yes, I do.

Q. And I'm going to read that paragraph if I might: Manager

will exercise its best judgment in rendering its services to

the Trust, and the Trust agrees as an inducement to manager's

undertaking to do so that the manager will not be liable for

any error of judgment or mistake of law or for any loss

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3850

suffered by the Trust in connection with the matters to which

this agreement relates, but will be liable only for willful

misconduct, bad faith, gross negligence, reckless disregard of

its duties, or the failure to exercise due care in rendering

its services to the Trust as specified in this agreement.

Did I read that accurately?

A. Yes, you did.

Q. And do you think that provision is in the best interest

of the Trust?

A. I think that that is -- I think that is part and parcel,

now that you've shown it to me, of what I think is industry

practice and is a standard that's generally out there.

Q. Do you think that provision is in the best interest of

the Trust?

A. I don't think the Trust is in any way disadvantaged for

reasons I've testified about previously, which is that the

independent trustees I think have the leverage to make sure

that the investors are never harmed.

Q. Don't they have to same leverage to encourage reductions

in fees?

A. I'm sorry?

Q. Don't they have the same leverage to bring about

reductions in fees?

A. Which the independent trustees have done.

Q. The next sentence reads: Any person, even though an

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3851

officer, director or employee or agent of manager, who may be

or become an officer, trustee, employee or agent of the

Trust -- now that would include various employees such as Ms.

Louie, Mr. Joenk, sub-advisors, sub-administrator; is that

correct?

A. Yes, anybody that FMG -- looks like anybody that FMG

provides who may become an officer, employee or agent of the

Trust, yeah.

Q. And that would include the sub-advisors and

sub-administrators because they're agents as well; correct?

A. May become an officer, trustee or agent of the Trust; I'm

not sure what that language means.

Q. Okay. Goes on to -- you've been on this Board for 15

years and you don't have an understanding of a limitation of

liability provision in a management agreement between FMG and

EQAT, is that what you're saying?

A. I don't believe that's what I just said.

Q. I thought you said you don't know what it means.

A. I'm looking at this on the spur at your request without a

chance to think about it; these contracts have been reviewed

many times with two counsels, and I believe this is very

standard language in the industry. And for reasons I've

already testified I am very comfortable that if there was ever

a problem with these funds, whether covered by this limitation

or not, that the nature of the Board's leverage over the

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3852

manager is the investors will never be harmed.

Q. Let me continue if I might after the word trustee,

employee or agent of the Trust: Shall be deemed when

rendering services to the Trust or when acting on any business

of the Trust, to be rendering such services to or to be acting

solely for the Trust and not as an officer, director, employee

or agent, or one under the control or direction of manager

even though paid by it.

Did I read that accurately?

A. Yes, you did.

Q. And is that provision in the best interest of the Trust?

A. I think it is standard investment management contract

language, and for the reasons I've indicated I don't think

that there's any disadvantage to the investor as a result.

Q. Now, given the leverage --

A. You understand we can terminate any of these contracts at

any time, so there's -- there's ultimate leverage there.

Q. Given that leverage, would it not have been prudent to

negotiate a liability provision more in the interests of the

EQAT than the one I just read you?

A. Again, I think there's a matter of practice in the

industry. I think given the nature of the -- of the power

that the independent trustees have, I don't think there's any

disadvantage.

MR. A. LAKIND: If you could, Chris, would you give

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3853

his Honor J-5 and Mr. Schpero J-5 as well?

THE WITNESS: Thank you.

THE COURT: Thank you.

BY MR. A. LAKIND:

Q. Can you tell us -- take a look at this agreement, please.

A. Sure. Okay.

Q. Can you tell me what that agreement says -- what it is?

I'm sorry.

A. So this is the mutual funds service agreement, so this is

the agreement covering the administrative arrangements. And

it looks like it starts with an amendment.

Q. And it's between the EQAT and FMG; is that correct?

A. Correct.

Q. And if you would turn over to page Bates number 821.

A. Page? I'm sorry.

Q. 821, Bates 821. Do you see paragraph 6 there?

A. Yes, I do.

Q. And I'll read a portion of that to you: Equitable shall

not be liable for any error of judgment or mistake of law or

for any loss or expense suffered by the Trust in connection

with the matters to which this agreement relates, except for a

loss or expense caused by or resulting from or attributable to

willful misfeasance, bad faith or negligence on equitable's

part (or on part of any third-party to whom equitable has

delegated any of its duties and obligations pursuant to

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3854

Section 4C hereunder) in performance of it's (or such

third-party's duties) or for reckless disregard by equitable,

et cetera.

Read the rest of that paragraph to yourself if you

would.

(Witness reviewing.)

A. Okay.

Q. Is that provision a provision that you deem to be in the

best interest of the Trust?

A. I'm going to make the same point, which is I think this

is standard industry contract language; and again, I think

that the Board has very significant leverage over making sure

that what has happened for the last 15 years is not going to

happen going forward, which is there has never been a loss

suffered by fund investors, from any compliance or issues of

that sort.

Q. Once again given that leverage, would it not have been

prudent to negotiate an agreement more favorable to the EQAT?

A. I think we -- I think an agreement was put in place that

our very experienced independent counsel thought was

appropriate and consistent with industry practice.

Q. Given the fact that there has been no problems over the

last 15 years, is that a fact you considered when you were

testifying in court about the enterprise risk which FMG

sustains?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3855

A. I don't think I said that there weren't any problems, I

think that the investors would never suffer any loss and

haven't. In fact, I can think of any number of compliance

issues that have -- that have come up over the years, I think

in every case so far that I can remember, although we're

talking 14, 15 years, in every case where there was an issue,

reimbursement to the fund was made. I think that typically

that has been by sub-advisors, but there may well have been

times it was made by the manager, and nobody has spent a

single moment looking at this language, because the

understanding is the Board wouldn't stand for anything other

than that.

MR. A. LAKIND: Chris, if you would give the

witness, please, J-26.

Q. Can you tell us what that agreement is please?

A. Yeah, this is the Sub-Administration Agreement entered

into -- it looks like in May of 2000, between Equitable and I

guess the predecessor to JP Morgan -- predecessor to FMG, and

JP Morgan.

Q. Turn over to page 874, please?

A. 874?

Q. Yes, sir, Bates 874.

A. Yeah.

Q. Are you there? Do you see paragraph 6 entitled

Limitations on Liability and Indemnification?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3856

A. Yes, I do.

Q. And this is an agreement between FMG and what's known now

as JP Morgan, but was then known as Chase; correct?

A. Right.

Q. And paragraph A reads: Chase shall not be liable for any

error of judgment or mistake of law or for any loss or expense

suffered by equitable or the Trust in connection with the

matters to which this agreement relates -- and then goes on to

list four exceptions. Except for: (i) willful misfeasance,

bad faith or negligence on Chase's part in the performance of

its duties; (ii) from reckless disregard by Chase of its

obligations and duties under this agreement; from Chase's

refusal or failure to comply with the terms of this agreement;

or the breach of any representation or warranty of Chase.

Did I read that accurately?

A. Yes, you did.

Q. Is this an agreement that you viewed to be in the best

interest of FMG?

A. Well, I'm puzzled by your question, because this is not

an agreement that the fund would have reviewed or approved.

There is no requirement for the Sub-Administration Agreement

to be approved by the independent trustees, and I believe this

was not presented to the Board.

Q. The reason I asked that is there was testimony earlier in

this case that FMG was reluctant to amend the

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3857

Sub-Administration Agreement because it viewed the indemnity

provisions as favorable, and I was just wondering if that

issue was ever presented to the Board.

A. Which issue?

Q. Whether or not the Sub-Administration Agreement should be

amended.

A. I'm sorry, you're -- you have to restate the question.

Ml: Your Honor, I have 10 minutes I guess; is that

right?

THE COURT: No, I said you'd have two hours, and we

started late, so I think you can go to 10 after 4:00.

MR. A. LAKIND: Okay, thank you.

THE COURT: So you have 20 minutes.

MR. A. LAKIND: Thank you.

THE COURT: But we're counting.

THE WITNESS: Me too.

MR. A. LAKIND: Me too.

BY MR. A. LAKIND:

Q. Mr. Schpero, I want to ask you some questions about the

Board process, and make sure I have an understanding. You

would agree, would you not, that the Board over the years has

made no effort to verify the magnitude of direct and variable

expenses shown in the cost allocation methodology; is that

correct?

A. So when you -- I just want to understand the question.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3858

So your question is whether the Board has sought some kind of

audit of those numbers; is that what you're asking?

Q. Yes.

A. I think -- yeah, the Board has not made that request.

Q. Has the Board ever retained an accountant to assist it in

evaluating the cost allocation methodology in the last four or

five years, last five years?

A. Retained an accountant to do that, no.

Q. Has the Board ever verified the variable expenses

reported as part of the administrative profitability report of

FMG?

MR. BENEDICT: Would you repeat the question,

please?

MR. A. LAKIND: Could I ask Mr. Gable to read it

back?

(Question read back by the reporter.)

THE WITNESS: We've not had an independent

evaluation. Those numbers, you know, often tied pretty

obviously to the other information we receive, but there's not

been an outside entity that's come in and reviewed that.

BY MR. A. LAKIND:

Q. Now, the cost allocation methodology is based on certain

baskets; is that correct? The first step to allocate expenses

what they call baskets; do you understand that?

A. Yes, I recall that.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3859

Q. And has the Board ever undertaken any review to determine

if the expenses are allocated to the appropriate basket?

A. There's not been an independent review.

Q. Has the Board undertaken any review to determine whether

or not the baskets are appropriately allocated between the

different lines of business, be it the variable annuity line,

the mutual fund line, et cetera?

A. No, other than as I think there's been -- I think I

testified as to -- and others I suspect have, as to the role

of two independent accounting firms in reviewing all aspects

of the methodology.

Q. And that review occurred in 2000; correct?

A. Correct.

Q. Now, do you know if depreciation is allocated pursuant to

the cost allocation methodology?

A. I just -- I don't remember. I mean I know the starting

place is -- is the expense -- the audited expenses of AXA;

there are certain things pursuant to the methodology that are

deducted from the start; I remember deferred acquisition costs

are deducted, and all the direct expenses are deducted, but

that's as much as I remember at this point.

Q. Do you know if a depreciation expense is allocated?

A. I just don't remember.

Q. And you said the deferred acquisition cost is deducted;

correct?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3860

A. Yes, I do recall that.

Q. Does the Board make any effort to determine that

allocations of expenses are appropriately divided among the

Trust?

A. Well, we certainly have discussions, as I'm sure you've

heard we have -- there is an extensive review in June and July

every year of the allocation methodology, and we certainly

have discussions and explore with FMG the way the allocations

are made and we've had that presentation.

Q. Has the Board ever retained a consultant to see if other

cost allocation methodologies might be more favorable to the

Trust?

A. Other than the process that the two independent

accounting firms went through, no.

Q. Since 2000.

A. Well, as I believe I testified the other day, I certainly

have asked Pricewaterhouse periodically about the methodology

and whether it continues to be consistent with industry

practice.

Q. Are you aware of the fact there's testimony in this case

from Pricewaterhouse that an appropriate allocation would be

time based? By way of deposition.

MR. BENEDICT: Objection; no foundation for that.

Q. By way of deposition.

THE COURT: Wait; Mr. Benedict, do you wish to be

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3861

heard on that?

MR. BENEDICT: There's no foundation whatsoever that

he's laid as to discussions or to the deposition of PwC.

THE COURT: Well, wasn't there -- we submitted some

depositions; right?

MR. BENEDICT: And I don't know if that's been read

into evidence or not.

THE COURT: I can't remember that.

MR. A. LAKIND: It was, your Honor.

THE COURT: So who would be the person? Whose

deposition?

MR. A. LAKIND: Mr. Warren I believe --

MR. R. LAKIND: Martin Jennings.

MR. A. LAKIND: It was Martin Jennings, your Honor.

THE COURT: He read part Martin Jennings; right?

MR. BENEDICT: Yes, he did.

THE COURT: All right. So, Frank, can you repeat

that question?

(Question read back by the reporter.)

THE COURT: Do you understand that question?

THE WITNESS: Yeah. I'm hesitant because I do know

at some point probably around -- after my deposition, I was

shown some language from the Pw deposition, but I don't think

it went to this point. So I don't -- I don't remember the

specifics of that.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3862

BY MR. A. LAKIND:

Q. At the time you voted -- excuse me -- that you considered

the allocation methodology, the Board had not seen the Shared

Services Agreement; correct?

A. Yes, we had not seen the Shared Services Agreement until

in the last year or two when it came up in the context of this

litigation.

Q. Were you able to assess whether or not costs allocated

pursuant to the cost allocation methodology were included in

the Shared Service Agreement?

A. Yes, I think as I've testified I think extensively this

morning, we've had extensive discussions with management, as

well as with some of defendant's experts on that very subject,

and I certainly was very comfortable that the Shared Services

Agreement only covered the direct expenses that are in the

profitability study.

Q. Now, the Board never undertook to assess whether the

sub-advisors are devoting greater labor to the funds than FMG

is devoting; is that correct?

A. I don't -- I think we're talking about two very different

service providers, so I don't know why the Board would go

through that analysis.

Q. Did the Board go through that analysis?

A. FMG is not providing sub-advisory services alongside a

sub-advisor, they're providing management services and they're

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3863

very different construct of services. So I don't -- as you

asked earlier, we certainly examine each of the service

providers and the services they provide, but to try to compare

the two I think is not a terribly fruitful exercise.

Q. And no effort was made to do that; is that correct?

A. That's what I just said, yes.

Q. The Board never attempted to determine the costs

sustained by the sub-advisors; correct?

A. Beg your pardon?

Q. The Board never made an effort to ascertain the costs

sustained by the sub-advisors?

A. I believe what I testified on -- I guess it wasn't

yesterday, Friday, was that we do see profitability analysis

for the affiliated advisor Alliance, but for the reasons I

testified to we do not get profitability information on the

other sub-advisors.

MR. A. LAKIND: Your Honor, if I could just have one

minute?

THE COURT: You may.

(Brief pause.)

BY MR. A. LAKIND:

Q. You referred to deferred acquisition costs earlier; do

you recall that?

A. Yes.

Q. And what is that?

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3864

A. My recollection is -- and again, this comes from the

detailed presentations we get on -- with many pages of the

profitability analysis, but my recollection is that those are

-- and this goes back to methodology obviously reviewed by

these two accounting firms in 2000; where as I recall it was

determined that these were actuarial related expenses, and I

think not unimportantly, all distribution related, but

actuarial related expenses that in order to normalize the

presentation of information, that the most reasonable approach

was to have those deducted from the expenses right at the top,

and that's been a consistent presentation ever since.

MR. A. LAKIND: Chris, Plaintiff's Exhibit 210,

please?

Q. Mr. Schpero, before you look at that, I neglected to ask

you a question. The reason the DAC is deducted from the

expense allocation is because it's a distribution expense;

correct?

A. Obviously I'm telling you from memory because these are

long conversations that have taken place a while ago now; but

my recollection is the DAC, these actuarial expenses, are

primarily distribution related. That's the best of my memory.

Q. Okay. If you would, would take look at Exhibit P-210 and

tell us what that is please?

A. Yeah, this looks like one of the presentations, slide

presentations that would have been made in walking the Board

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3865

through the allocation; looks like there was done in July

2013.

Q. Now, turn over if you would to page 747 please.

A. Yeah, I'm there.

Q. Okay. On the left-hand column there's kind a red

rectangular box; do you see what is that?

A. Yes, I do.

Q. And on the bottom it says total AXA equitable allocated

expenses 2.275 billion I believe that is?

A. Right.

Q. Is that accurate?

A. Yes.

Q. And the starting point is 1.615 billion; correct?

A. Yes -- hang on; I'm just looking at this a second. Yes,

right.

Q. And then under that there's $14.4 million in FMG direct

expenses; correct?

A. Correct.

Q. And then under that there's a DAC impact of 674 million;

correct?

A. Correct.

Q. The DAC impact -- the DAC impact is in fact added, not

deducted to the starting expenses; isn't that correct?

A. Given that it's in parentheses I would assume that's

correct, yeah.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3866

Q. So, in other words, it's a 1.615 billion, minus 14.4

billion, plus 674 billion, gets you to 2.275 billion; correct?

A. That's correct.

Q. So the testimony you gave earlier was erroneous that the

DAC was deducted; correct?

A. No, I don't think I was erroneous at all. It just

happens that this is -- I mean I was certainly not a

mathematics major, but I think this is showing subtraction of

two things; in one case the subtraction is in parentheses, so

it ends up being added, but I don't think there's anything

incorrect about my statement.

Q. Could you say that again? But I didn't understand that.

A. Yeah. I think you have total expenses, and then you are

subtracting two things. As I recall -- I don't remember

whether this was algebra or what category of coursework, but

as I recall when you subtract a negative, which is effectively

what's in parentheses, it's added. So I think we're both

right, but I don't think there was anything incorrect about

the statement I made, I think these are subtractions.

Q. Okay. So the 674 million DAC impact, is added to the 1.6

in order to get to the 2.2; right?

A. That appears to be the mathematics to me, yes.

Q. Okay. So, in other words, distribution costs are a part

of the allocation.

A. Distribution costs -- yeah, I don't -- I'm hesitating

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3867

because there are clearly costs in this presentation that are

allocated between management and distribution. And that you

can see later on in the presentation.

Q. Yes, sir.

A. You have -- I think my failure here again is because I'm

not a mathematician, but I believe that what was happening was

there was an attempt to reverse -- and I use the word minus, I

think it's the same point; to reverse these actuarial deferred

acquisition costs. As it happens here it ends up being a

double negative. I don't think that means that therefore

distribution costs are being allocated. But I certainly don't

profess to be an accounting expert.

Q. This allocation methodology results in an allocation of

$309 million to the EQAT; correct?

A. That's correct. Yes, but that -- that 309 -- yes, would

have been before allocating between distribution and

management within this structure.

Q. Do you know, Mr. Schpero, how costs are allocated between

the product wrapper, general account and the investment

portfolios?

A. So, we're looking at the -- at B in the middle here?

Q. Yes, sir.

A. I believe that they are allocated based -- my

recollection is I'm pretty certain it's based on revenues.

Q. Okay. So, in other words if the revenues of the mutual

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3868

funds increase, they're going to get a higher percentage of

the allocated costs; correct?

(Brief pause.)

A. A year-by-year basis, I guess that would be right.

Q. And if the revenues of the product wrapper and the

general account spread increase, they will get a higher

percentage; correct?

A. Right.

Q. And if the revenues of the general account spread and the

product wrapper shrink, they will are get -- they'll get a

lower percentage; is that correct?

A. I believe that's correct.

Q. Why would your Board -- strike that.

If that in fact happens, is not -- are not the funds,

the portfolios, absorbing increased costs because of poor

performance of the general account spread and the product

wrapper?

A. You're going have to try me again with that one.

Q. Sure. If the general account revenues shrink --

THE COURT: So, this is a hypothetical question?

MR. A. LAKIND: No, no, it's based right, your

Honor, right on the formula -- maybe I should do it a

different way, I think I'm not doing it very well.

BY MR. A. LAKIND:

Q. Turn over if you would to 756.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3869

A. Okay.

Q. Do you see to the bottom it reads, expenses are allocated

by revenue contribution within each of the products for each

category? Do you see where that is?

A. Right, which is what I think I just said.

Q. Yes, it is. So if the revenue contribution of the

general account spread, if the general account and the wrapper

were to shrink, more expenses would be allocated to the

portfolios; correct?

A. Right.

MR. BENEDICT: Objection. I don't believe there's

any testimony they're allocated to the portfolios, they're

allocated to FMG for profitability presentation purposes to

the funds.

THE COURT: Do you wish to be heard on that?

MR. A. LAKIND: Yes, your Honor. It says allocated

to the EQAT on page 747.

THE COURT: So where does it say that?

MR. A. LAKIND: Your Honor, 747, right in the

middle.

THE COURT: I see.

MR. A. LAKIND: About two inches from the right.

THE COURT: Under C?

MR. A. LAKIND: Yes, your Honor.

THE COURT: Okay.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3870

MR. A. LAKIND: May I continue?

THE COURT: You may.

MR. A. LAKIND: Could I just ask Mr. Gable to read

back the last question and answer?

(Question and answer read back by the reporter.)

THE WITNESS: And just to clarify, when you say the

portfolios, we're of course not talking about allocating to

the complex, in all of this we're talking about -- so the

point is it would be allocated to FMG in its profitability

study, as opposed to whatever analysis might be done for the

wrapper or the general account. None of this is about

allocating costs to the fund complex.

BY MR. A. LAKIND:

Q. Those allocated costs are considered when -- excuse me --

when the EQAT Board reviews FMG's fee -- fees; is that

correct?

A. They are considered -- one of many things we consider and

specifically they are considered in the context -- exclusively

in the context of looking at FMG's profitability with respect

to the funds. They have nothing to do with costs of the fund

level.

Q. Nothing to do with costs at the fund level.

Now, let me ask you my last question; I think. Under

the methodology we just reviewed, if the performance of the

variable annuity and the general account spread is poor, then

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3871

a greater amount of expenses are allocated to FMG in

connection with the services it performs for the EQAT;

correct?

MR. BENEDICT: Objection; vague and confusing.

THE COURT: Did you understand the question, Mr.

Schpero?

THE WITNESS: Maybe if I heard it again I'll be

okay.

THE COURT: Frank, can you repeat the question one

more time?

(Question read back by the reporter.)

THE COURT: So, this is a hypothetical question?

MR. A. LAKIND: Yes, your Honor.

MR. BENEDICT: Objection; he's a fact witness, your

Honor, this is not an expert?

MR. A. LAKIND: A hypothetical is permissible to a

fact witness as long as it's -- I have the case.

THE COURT: All right. I'd rather you stick with

the facts of the case. Did this happen at any time during the

five years?

MR. A. LAKIND: Well, it varies from year to year,

so it does.

THE COURT: All right. So what's the case?

MR. BENEDICT: There is no foundation that this has

ever happened.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3872

MR. A. LAKIND: I have the case, but I'll tell you

-- I'll conclude my testimony. But for anyone's interest, the

case is Teen-Ed v. Kimble, 620 F.2d 399: While generally a

lay witness cannot answer a hypothetical, so long as you base

your hypothetical on facts in the record, then the

hypothetical becomes acceptable.

I'll leave it go, your Honor, though. I have no

further questions.

THE COURT: You have no further questions?

MR. A. LAKIND: None.

THE COURT: All right. Any redirect?

MR. BENEDICT: No, your Honor.

THE COURT: All right. So, Mr. Schpero, you're

completed. Thank you for coming.

THE WITNESS: Thank you very much.

MR. A. LAKIND: Thank you, your Honor.

THE COURT: Oh, I had a question for you, Mr.

Schpero; I'm sorry.

A few days ago, Mr. Joenk had indicated -- and I'm

not sure, but he said that he has a goal of reaching -- I

don't know whether it was the 50 percent level or 50 percent

area of fees that are reported by Lipper of all similar funds,

or whether it was 50 basis points; but he has this goal. Does

the Board have a goal?

THE WITNESS: A couple things. First of all, I know

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3873

he has a goal, and I will tell you that that is his goal, not

ours. The Board's goal is to look at all of this relevant

information each year, and this is, as you know, a

year-by-year analysis, it is fund by fund. And our goal is to

-- and in as a conscientious manner as possible, diligencing

all of this information, determine whether we are comfortable,

that at the end of the process, including often negotiations,

the fee is fair and reasonable.

And I can only, you know, emphasize what I think I

mentioned to you in our discussion on Friday, you know, at the

end of the day that's an exercise of our business judgment.

And I think the fact of the matter is there is not a lot of

specificity in the case law as to a lot of the issues we

talked about. That's why we rely heavily on our independent

counsel for guidance, and we rely heavily on understanding

what the practice is out there, and we look at comparative

data, we look at all the other factors, and we then on a

case-by-case analysis come to a decision.

But we certainly do not have any specific numerical

goal. And I will tell you every year, you know, there's a

fund where one year we are untroubled, and a year later we

have a very different view; and that can be based on

performance, that can be based on asset growth where funds

have grown to a sufficient size where we do think there should

be additional negotiations; it can be based on some kind of

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3874

concern on the service for that particular fund; but it's very

much fund by fund. And at the end it's -- it's eight

trustees, each weighing those factors as best they can in

coming to individual judgments.

THE COURT: Okay. And my last question is -- and

this is my last question --

THE WITNESS: You did tell me the last one was your

last question.

THE COURT: I know, I did; I'm sorry.

THE WITNESS: But you're in charge, so it's all

right.

THE COURT: At any rate, part of the factors that I

need to look at is whether or not the fee is disproportionate.

So, does the Board have a definition of disproportionate?

THE WITNESS: No. I'm very familiar, and the Board

is certainly very familiar with that language. You know,

again, I think that's -- that's a reasonable person's

judgment. I have never seen a definition of what that is, as

I recall, so disproportionate that it could not have been

negotiated at an arms-length basis. And again, from the

Board's perspective, I think that, you know, the question is,

is the fee -- is the fee fair and reasonable. And if we get

to that analysis, I certainly don't think it is -- anywhere

close to that kind of range. But we're certainly very much

aware that that's the ultimate test.

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Schpero - Cross - A. Lakind

United States District Court

Trenton, New Jersey

3875

THE COURT: All right. Okay, thank you.

THE WITNESS: Thank you.

MR. A. LAKIND: Your Honor, there are two exhibits I

neglected to move in --

THE COURT: So, you may step down, Mr. Schpero.

THE WITNESS: Thank you.

(Witness excused.)

MR. A. LAKIND: There's two exhibits I neglected to

move in. I know I should technically do it in my rebuttal

case or if you wish I can wait until tomorrow --

THE COURT: Just tell me what --

MR. A. LAKIND: The two are DX-1445; I don't know if

they admitted that or not. It's one of the defendant

exhibits. And 721, which is a Bingham letter.

MR. BENEDICT: We have no objection.

THE COURT: I'm sorry; let me just see if I can find

them.

MR. KORN: It was the first exhibit of the day, your

Honor.

MR. A. LAKIND: Mutual Fund Directors Forum, your

Honor.

THE COURT: And what was the number on that?

MR. A. LAKIND: Your Honor, it was D-1445.

THE COURT: Okay, admitted.

(Defendant's Exhibit 1445 was marked into evidence.)

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United States District Court

Trenton, New Jersey

3876

MR. A. LAKIND: And then P-721 was a letter from

Bingham to -- to two new trustees.

MR. BENEDICT: No objection, your Honor.

THE COURT: Okay, admitted.

(Plaintiff's Exhibit 721 was marked into evidence.)

MR. A. LAKIND: Your Honor, I apologize for going so

long, but thank you.

THE COURT: No, that's fine. Thank you.

So we'll reconvene tomorrow. So we'll see you

tomorrow at 10:30.

MR. A. LAKIND: Thank you, your Honor.

THE COURT: Have a good evening.

(Proceedings concluded for the day.)

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$

$10 [1] - 3836:10

$20 [1] - 3835:2

$200 [2] - 3814:5,

3814:8

$21 [2] - 3818:14,

3818:22

$22.174 [1] - 3818:9

$250 [1] - 3798:8

$3,136,000,000 [1] -

3824:20

$309 [1] - 3867:14

$6,404,000,000 [1] -

3824:22

$60 [1] - 3791:21

$68 [2] - 3795:23,

3795:24

/

/S [1] - 3708:24

0

08608 [1] - 3708:15

1

1 [4] - 3747:8,

3757:25, 3788:25,

3816:10

1.06 [1] - 3817:20

1.060 [1] - 3818:20

1.066 [1] - 3818:12

1.10 [1] - 3785:11

1.6 [1] - 3866:20

1.615 [2] - 3865:13,

3866:1

1.71 [1] - 3785:12

10 [8] - 3825:4,

3835:9, 3835:16,

3835:24, 3848:11,

3848:14, 3857:8,

3857:11

1000 [3] - 3831:16,

3834:16, 3835:1

10:30 [1] - 3876:10

11 [1] - 3794:25

11-4194 [1] - 3708:5

113 [1] - 3819:12

12 [3] - 3723:1,

3767:4, 3801:12

120 [1] - 3822:9

12b-1 [3] - 3770:2,

3770:8, 3790:19

12b-1/non [1] - 3770:8

13 [2] - 3814:18

13-312 [1] - 3708:10

130611 [1] - 3760:3

14 [1] - 3855:6

14.4 [2] - 3865:16,

3866:1

144.18 [2] - 3814:17,

3825:15

1445 [6] - 3710:8,

3720:8, 3720:9,

3720:17, 3721:19,

3875:25

15 [9] - 3723:6,

3757:25, 3800:1,

3800:10, 3842:21,

3851:13, 3854:13,

3854:23, 3855:6

15(c [16] - 3718:21,

3719:4, 3725:2,

3725:21, 3725:24,

3727:7, 3731:3,

3733:4, 3733:9,

3733:12, 3758:19,

3762:4, 3763:3,

3807:9, 3817:6,

3822:6

15,000 [1] - 3733:22

151 [1] - 3840:22

152 [1] - 3839:19

1568 [1] - 3788:19

16 [3] - 3724:20,

3724:21, 3843:16

17-H [1] - 3842:10

18 [4] - 3725:5,

3743:9, 3814:18,

3830:11

1811 [6] - 3719:16,

3787:19, 3787:20,

3787:23, 3793:23,

3819:3

1812 [8] - 3719:16,

3762:10, 3762:19,

3772:19, 3787:23,

3793:23, 3810:7

1903 [1] - 3781:24

1924 [2] - 3780:13,

3781:3

193 [1] - 3792:21

1:00 [1] - 3806:12

2

2 [2] - 3722:4, 3844:22

2.2 [1] - 3866:21

2.275 [2] - 3865:9,

3866:2

20 [5] - 3756:12,

3781:23, 3792:7,

3835:17, 3857:13

200 [3] - 3734:1,

3734:2, 3814:10

2000 [5] - 3846:23,

3855:17, 3859:12,

3860:15, 3864:5

2002 [1] - 3785:11

2004 [3] - 3723:6,

3724:13, 3781:5

2008 [2] - 3821:20,

3824:15

2009 [8] - 3821:20,

3824:19, 3824:24,

3825:3, 3835:7,

3835:23, 3836:9,

3839:1

2010 [1] - 3839:13

2011 [4] - 3737:20,

3747:6, 3752:18,

3840:11

2012 [7] - 3824:22,

3824:25, 3825:4,

3835:7, 3835:25,

3836:10, 3839:1

2013 [7] - 3763:13,

3814:24, 3831:3,

3831:5, 3834:12,

3839:13, 3865:2

2015 [2] - 3846:13,

3846:20

2016 [1] - 3708:13

2038 [1] - 3743:17

2042 [7] - 3768:12,

3768:14, 3768:17,

3768:23, 3768:24,

3769:12, 3778:4

2043 [5] - 3768:17,

3770:2, 3770:4,

3771:24, 3778:4

2044 [1] - 3768:17

2064 [5] - 3735:18,

3736:13, 3736:14,

3736:16, 3737:2

21 [3] - 3825:4,

3835:9, 3835:24

210 [1] - 3864:12

211 [1] - 3761:14

2111 [1] - 3819:5

2120 [1] - 3824:7

22 [3] - 3708:13,

3708:20, 3818:17

22.17 [1] - 3817:19

23 [2] - 3712:5,

3724:13

230 [1] - 3824:12

239 [2] - 3757:21,

3758:10

245 [1] - 3780:16

24f-2 [1] - 3844:12

25 [3] - 3778:18,

3789:25, 3792:7

250 [3] - 3798:2,

3798:11, 3814:3

26323 [1] - 3723:6

273 [1] - 3747:4

28 [2] - 3708:23,

3724:19

285,000 [1] - 3732:24

29 [1] - 3725:4

2918 [1] - 3754:5

2:00 [1] - 3806:12

3

3 [5] - 3791:17,

3798:9, 3824:19,

3826:15, 3826:16

3.8 [1] - 3795:13

30 [2] - 3756:12,

3822:2

30(b)(6 [3] - 3763:7,

3773:16, 3788:15

300 [1] - 3775:6

309 [1] - 3867:15

35 [2] - 3822:1,

3823:22

352 [1] - 3792:16

36 [1] - 3726:1

370 [1] - 3792:19

3714 [2] - 3710:2,

3710:3

376 [1] - 3792:18

387 [1] - 3792:17

3875 [1] - 3710:8

3876 [1] - 3710:8

39 [1] - 3822:4

399 [2] - 3792:18,

3872:3

3:30 [1] - 3848:15

4

4 [1] - 3806:18

40 [1] - 3788:25

40,000 [1] - 3732:24

400 [1] - 3782:2

402 [1] - 3708:14

4030 [1] - 3849:16

41 [1] - 3780:3

4211 [2] - 3818:4,

3818:5

43 [1] - 3768:12

44 [3] - 3727:1,

3727:15, 3768:13

449 [1] - 3746:24

45 [12] - 3749:10,

3773:8, 3773:14,

3773:17, 3775:24,

3778:8, 3779:21,

United States District Court

Trenton, New Jersey

3877

3780:2, 3780:6,

3786:24, 3790:8,

3794:25

47 [4] - 3810:8,

3810:10, 3810:19,

3813:20

4:00 [1] - 3857:11

4C [1] - 3854:1

5

5 [6] - 3721:19,

3721:21, 3749:7,

3798:9, 3798:17

50 [4] - 3713:5,

3872:21, 3872:23

500 [16] - 3757:3,

3789:8, 3790:1,

3790:13, 3790:15,

3791:2, 3791:7,

3791:17, 3791:24,

3792:16, 3792:22,

3792:24, 3793:4,

3793:13, 3798:2,

3819:8

55 [1] - 3785:12

5595 [1] - 3774:4

56 [2] - 3794:22,

3794:24

5608 [1] - 3796:12

5611 [2] - 3794:18,

3795:4

5785 [5] - 3790:7,

3790:12, 3790:13,

3791:25

6

6 [6] - 3721:18,

3722:5, 3723:1,

3798:17, 3853:16,

3855:24

60 [4] - 3756:9,

3756:22, 3795:15,

3818:12

609 [2] - 3758:21,

3758:24

611 [5] - 3759:4,

3759:22, 3760:11,

3760:22, 3761:16

620 [1] - 3872:3

63 [6] - 3762:10,

3762:19, 3763:8,

3763:9, 3766:17,

3791:22

66 [1] - 3816:10

674 [3] - 3865:19,

3866:2, 3866:20

68 [8] - 3796:9,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 170 of 197 PageID: 19226
3816:4, 3825:8,

3825:12, 3826:15,

3826:16, 3826:22,

3826:23

68.1 [1] - 3795:16

68.4 [2] - 3816:13,

3825:23

69 [1] - 3795:23

7

7 [4] - 3795:24,

3796:9, 3798:17,

3799:2

7.3 [1] - 3795:10

7.5 [1] - 3798:9

70 [2] - 3756:10,

3781:25

72 [1] - 3782:1

721 [4] - 3710:8,

3743:1, 3875:14,

3876:5

747 [3] - 3865:3,

3869:17, 3869:19

75 [2] - 3812:17,

3813:3

753 [1] - 3708:23

756 [1] - 3868:25

794 [3] - 3810:12,

3810:22, 3812:25

796 [2] - 3811:14,

3811:18

799 [1] - 3811:25

8

80 [3] - 3756:22,

3815:16, 3816:1

801 [3] - 3811:25,

3812:4, 3812:5

81 [1] - 3726:1

821 [3] - 3853:14,

3853:16

82111 [1] - 3788:19

827 [2] - 3813:19,

3813:22

856 [1] - 3708:25

874 [3] - 3855:20,

3855:21, 3855:22

877 [2] - 3815:2,

3815:5

878 [2] - 3816:8,

3825:21

889-4761 [1] - 3708:25

9

9 [1] - 3822:3

9/03 [1] - 3782:2

90,000 [1] - 3732:21

937 [3] - 3763:15,

3764:17, 3764:18

940 [2] - 3765:5,

3765:7

942 [1] - 3766:17

95 [2] - 3815:16,

3815:21

998 [1] - 3831:6

999 [1] - 3831:13

A

ability [1] - 3800:23

able [9] - 3726:23,

3760:4, 3760:19,

3780:10, 3794:10,

3823:15, 3823:18,

3826:22, 3862:8

Absolutely [1] -

3723:17

absorbing [1] -

3868:15

acceptable [3] -

3722:13, 3722:15,

3872:6

access [2] - 3736:1,

3811:17

accessed [1] - 3781:2

account [20] -

3755:21, 3769:24,

3797:11, 3803:11,

3803:14, 3808:5,

3808:6, 3808:8,

3808:9, 3808:21,

3809:23, 3867:19,

3868:6, 3868:9,

3868:16, 3868:19,

3869:7, 3870:11,

3870:25

accountant [2] -

3858:5, 3858:8

accounting [8] -

3748:10, 3842:24,

3843:2, 3845:22,

3859:10, 3860:14,

3864:5, 3867:12

accounts [1] -

3828:21

accruals [1] - 3846:9

accrued [1] - 3808:6

accuracy [1] - 3783:3

accurate [15] - 3724:7,

3728:10, 3728:17,

3728:18, 3728:25,

3729:4, 3729:12,

3760:22, 3762:7,

3765:4, 3772:10,

3772:12, 3785:16,

3828:24, 3865:11

accurately [14] -

3723:12, 3725:10,

3726:9, 3744:1,

3744:15, 3747:15,

3749:14, 3782:6,

3782:14, 3820:15,

3821:11, 3850:6,

3852:9, 3856:15

achieve [3] - 3728:9,

3728:13, 3840:20

achieved [1] - 3744:20

acknowledge [4] -

3830:16, 3841:23,

3842:2, 3847:1

acquisition [4] -

3859:19, 3859:24,

3863:22, 3867:9

act [1] - 3717:3

Act [2] - 3723:6,

3776:11

acting [3] - 3715:17,

3852:4, 3852:5

action [1] - 3744:7

actions [1] - 3743:21

active [13] - 3756:11,

3756:13, 3757:7,

3766:22, 3777:10,

3777:15, 3778:9,

3778:12, 3791:6,

3793:7, 3793:12,

3794:4, 3827:15

actively [6] - 3755:23,

3766:15, 3766:18,

3768:4, 3778:5,

3785:9

Actively [1] - 3755:24

activities [3] - 3833:7,

3838:2, 3838:3

acts [1] - 3716:8

actual [19] - 3755:21,

3769:23, 3774:12,

3774:22, 3774:23,

3779:10, 3786:14,

3789:10, 3789:14,

3791:24, 3792:3,

3792:12, 3816:25,

3817:1, 3817:13,

3823:21, 3828:11,

3844:18, 3845:7

actuarial [5] - 3748:9,

3864:6, 3864:8,

3864:20, 3867:8

add [1] - 3779:2

added [6] - 3836:17,

3836:18, 3865:22,

3866:10, 3866:17,

3866:20

addition [1] - 3755:1

additional [4] -

3731:14, 3740:22,

3837:5, 3873:25

adequacy [1] -

3802:12

adequate [1] -

3802:20

Administration [6] -

3746:5, 3847:18,

3855:16, 3856:21,

3857:1, 3857:5

administration [2] -

3748:4, 3801:19

administrative [20] -

3718:21, 3728:15,

3741:19, 3741:22,

3747:13, 3749:20,

3769:17, 3791:25,

3797:5, 3797:7,

3820:7, 3820:10,

3821:8, 3821:13,

3822:3, 3838:1,

3839:12, 3853:10,

3858:10

Administrative [2] -

3745:25, 3769:13

administrator [7] -

3729:18, 3838:7,

3838:13, 3838:16,

3847:24, 3847:25,

3851:4

administrators [1] -

3851:10

admitted [4] -

3783:12, 3875:13,

3875:24, 3876:4

advantage [1] -

3716:12

advertising [1] -

3748:20

advice [5] - 3719:13,

3742:3, 3742:6,

3742:8, 3742:13

advised [2] - 3809:4,

3809:7

advisor[38] - 3722:8,

3722:9, 3723:9,

3729:3, 3805:4,

3805:6, 3805:24,

3827:14, 3828:1,

3828:5, 3828:10,

3828:13, 3828:16,

3828:19, 3828:21,

3829:2, 3829:8,

3829:12, 3829:15,

3829:18, 3829:22,

3830:4, 3830:10,

3837:22, 3838:4,

3838:5, 3838:8,

3838:11, 3838:12,

United States District Court

Trenton, New Jersey

3878

3838:14, 3838:15,

3847:4, 3847:5,

3862:25, 3863:14

advisor's [2] - 3727:3,

3827:23

advisors [25] -

3729:17, 3732:10,

3800:20, 3800:22,

3804:19, 3804:23,

3804:25, 3805:3,

3805:17, 3810:23,

3829:3, 3829:23,

3832:16, 3834:2,

3837:23, 3838:25,

3847:13, 3847:14,

3851:4, 3851:9,

3855:8, 3862:18,

3863:8, 3863:11,

3863:16

advisory [20] - 3744:7,

3749:19, 3815:21,

3816:16, 3817:12,

3817:19, 3818:12,

3818:18, 3820:13,

3821:3, 3821:7,

3821:12, 3821:14,

3824:1, 3825:7,

3826:3, 3826:7,

3826:17, 3826:21,

3862:24

Advisory [3] -

3745:20, 3815:5,

3815:6

advocate [1] - 3744:12

affecting [1] - 3828:3

affiliated [2] - 3722:9,

3863:14

affiliates [1] - 3808:2

afternoon [1] - 3711:6

agency [2] - 3741:10,

3741:25

agenda [1] - 3723:9

agent [6] - 3851:1,

3851:2, 3851:7,

3851:11, 3852:3,

3852:7

agents [1] - 3851:10

ago [12] - 3720:20,

3739:20, 3754:4,

3761:18, 3768:7,

3809:2, 3811:5,

3825:16, 3826:8,

3841:17, 3864:19,

3872:19

agree [26] - 3719:22,

3724:7, 3724:17,

3728:8, 3730:4,

3744:8, 3755:8,

3764:25, 3765:1,

3765:23, 3766:14,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 171 of 197 PageID: 19227
3783:23, 3784:23,

3796:10, 3797:25,

3798:15, 3798:18,

3809:3, 3834:25,

3835:4, 3841:9,

3847:6, 3848:7,

3849:3, 3849:4,

3857:21

agreed [3] - 3835:23,

3843:10, 3843:13

agreement [38] -

3744:7, 3746:13,

3746:14, 3746:18,

3746:20, 3747:5,

3748:15, 3750:19,

3751:6, 3752:11,

3752:14, 3752:15,

3752:18, 3754:6,

3754:7, 3806:2,

3846:12, 3846:15,

3846:17, 3846:19,

3846:22, 3850:2,

3850:5, 3851:15,

3853:5, 3853:7,

3853:9, 3853:10,

3853:21, 3854:18,

3854:19, 3855:15,

3856:2, 3856:8,

3856:12, 3856:13,

3856:17, 3856:20

Agreement [19] -

3746:5, 3746:8,

3750:25, 3751:10,

3752:8, 3754:4,

3754:8, 3755:4,

3847:9, 3847:18,

3849:15, 3855:16,

3856:21, 3857:1,

3857:5, 3862:4,

3862:5, 3862:10,

3862:15

Agreements [4] -

3745:12, 3745:16,

3745:20, 3745:25

agreements [2] -

3745:15, 3745:23

agrees [2] - 3783:13,

3849:23

aid [1] - 3764:10

al [3] - 3708:3, 3708:6,

3708:8

algebra [1] - 3866:15

align [1] - 3726:4

allegations [1] -

3738:17

Alliance [1] - 3863:14

allocate [2] - 3749:25,

3858:23

allocated [23] -

3750:3, 3750:4,

3750:5, 3753:11,

3859:2, 3859:5,

3859:14, 3859:22,

3862:8, 3865:8,

3867:2, 3867:11,

3867:18, 3867:23,

3868:2, 3869:2,

3869:8, 3869:12,

3869:13, 3869:16,

3870:9, 3870:14,

3871:1

allocates [1] - 3750:21

allocating [3] -

3867:16, 3870:7,

3870:12

allocation [25] -

3729:21, 3747:24,

3748:24, 3749:23,

3750:12, 3750:16,

3750:17, 3750:21,

3751:1, 3830:15,

3833:7, 3857:23,

3858:6, 3858:22,

3859:15, 3860:7,

3860:11, 3860:21,

3862:3, 3862:9,

3864:16, 3865:1,

3866:24, 3867:13

allocations [4] -

3813:6, 3833:10,

3860:3, 3860:8

allow [2] - 3767:8,

3827:2

allowed [1] - 3813:16

allows [1] - 3823:15

Almost [1] - 3842:21

almost [5] - 3711:22,

3713:14, 3782:12,

3794:19, 3811:5

alone [4] - 3738:10,

3793:20, 3796:9,

3823:23

alongside [1] -

3862:24

ALSO [1] - 3709:16

alternative [1] -

3808:21

ambiguous [1] -

3826:18

amend [1] - 3856:25

amended [1] - 3857:6

amending [1] -

3846:22

amendment [1] -

3853:11

America [2] - 3792:18,

3793:2

amount [10] - 3727:23,

3728:1, 3728:3,

3753:8, 3797:20,

3802:25, 3827:9,

3837:5, 3871:1

analyses [1] - 3829:20

analysis [32] - 3727:2,

3727:8, 3727:22,

3742:23, 3747:24,

3750:6, 3750:7,

3750:11, 3767:5,

3779:8, 3779:9,

3785:1, 3794:14,

3796:11, 3796:23,

3813:17, 3829:11,

3829:17, 3829:18,

3830:6, 3835:5,

3835:10, 3835:21,

3837:10, 3862:22,

3862:23, 3863:13,

3864:3, 3870:10,

3873:4, 3873:18,

3874:23

analytics [2] - 3830:8,

3833:7

analyze [3] - 3720:5,

3809:20, 3837:14

analyzing [3] -

3803:11, 3803:15,

3814:25

ANN [1] - 3708:3

annual [8] - 3742:22,

3748:22, 3841:4,

3844:5, 3845:6,

3845:8

annuities [1] -

3767:22

annuity [2] - 3859:6,

3870:25

answer[26] - 3720:1,

3721:12, 3721:14,

3721:15, 3722:22,

3723:23, 3723:24,

3724:5, 3728:4,

3735:25, 3751:19,

3752:10, 3768:8,

3776:21, 3783:20,

3786:5, 3789:20,

3791:9, 3800:24,

3823:15, 3827:19,

3830:2, 3843:18,

3870:4, 3870:5,

3872:4

answered [1] -

3722:23

answering [1] -

3833:20

Antarctica [1] -

3712:20

apologize [8] -

3722:12, 3773:8,

3806:24, 3818:16,

3821:24, 3825:11,

3876:6

app [1] - 3764:13

apparent [1] - 3835:15

appear[2] - 3758:18,

3792:6

appeared [2] -

3740:16, 3817:18

apples [3] - 3794:9,

3813:7

applicable [1] -

3840:4

applications [1] -

3711:2

apply [2] - 3728:11,

3825:1

apportioned [1] -

3749:12

apportionment [2] -

3749:13, 3749:18

approach [3] -

3822:23, 3827:8,

3864:9

approaches [1] -

3722:14

appropriate [7] -

3731:15, 3738:21,

3773:19, 3813:6,

3854:21, 3859:2,

3860:21

appropriately [5] -

3745:4, 3746:18,

3829:10, 3859:5,

3860:3

appropriateness [1] -

3811:8

approval [3] -

3746:15, 3749:19,

3847:22

approve [2] - 3735:4,

3742:11

approved [2] -

3856:20, 3856:22

approving [2] -

3750:8, 3847:2

area [11] - 3731:21,

3737:7, 3745:9,

3761:25, 3776:12,

3785:4, 3794:20,

3801:23, 3847:3,

3847:5, 3872:22

areas [2] - 3785:1,

3807:12

arena [1] - 3801:15

argument [1] - 3712:6

arguments [3] -

3744:12, 3744:14,

3753:20

arising [1] - 3837:12

arithmetic [3] -

3816:23, 3827:11,

United States District Court

Trenton, New Jersey

3879

3835:7

Arithmetic [1] -

3814:2

arms [5] - 3728:9,

3728:13, 3776:2,

3776:9, 3874:20

arms-length [5] -

3728:9, 3728:13,

3776:2, 3776:9,

3874:20

ARNOLD [1] - 3709:4

arrangement [2] -

3753:1, 3753:2

arrangements [2] -

3746:22, 3853:10

Articulate [1] - 3744:6

articulates [1] -

3760:12

ascertain [4] - 3804:5,

3847:19, 3847:23,

3863:10

aside [4] - 3728:7,

3799:12, 3801:21,

3818:25

aspect [2] - 3745:14,

3746:12

aspects [1] - 3859:10

assess [10] - 3795:19,

3801:5, 3802:12,

3802:19, 3809:23,

3847:2, 3847:8,

3847:12, 3862:8,

3862:17

assessment [5] -

3714:1, 3811:8,

3813:10, 3848:4,

3848:5

Asset [2] - 3769:13,

3796:15

asset [25] - 3764:21,

3767:20, 3769:21,

3769:24, 3782:25,

3785:10, 3786:16,

3786:21, 3786:22,

3786:25, 3787:5,

3789:12, 3796:5,

3796:20, 3796:21,

3797:24, 3798:17,

3799:1, 3833:7,

3837:5, 3838:22,

3841:12, 3843:6,

3843:21, 3873:23

assets [25] - 3765:10,

3765:23, 3766:10,

3779:8, 3781:25,

3782:12, 3784:19,

3791:15, 3791:17,

3791:20, 3792:20,

3792:24, 3795:9,

3795:13, 3795:16,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 172 of 197 PageID: 19228
3795:23, 3795:24,

3804:20, 3824:16,

3824:19, 3836:1,

3836:23, 3836:25,

3837:13

assign [1] - 3807:15

assigns [1] - 3807:11

assist [4] - 3719:8,

3725:24, 3786:1,

3858:5

assistance [4] -

3717:20, 3841:14,

3844:2

assisting [1] -

3737:16

assists [2] - 3719:4,

3719:7

ASSOCIATE [1] -

3709:16

associate [1] - 3800:7

associated [5] -

3799:21, 3800:13,

3803:14, 3805:2,

3836:24

assume [5] - 3731:7,

3743:4, 3781:9,

3788:6, 3865:24

assuming [4] -

3731:12, 3757:8,

3765:4, 3791:12

assumption [1] -

3779:15

at-issue [7] - 3732:7,

3756:18, 3777:14,

3800:3, 3805:3,

3805:17, 3839:15

ATM [2] - 3833:12

attached [1] - 3818:2

attempt [2] - 3847:12,

3867:7

attempted [2] -

3778:2, 3863:7

attention [2] -

3743:25, 3781:4

attributable [1] -

3853:22

attribution [2] -

3829:18, 3829:20

audit [1] - 3858:2

audited [7] - 3812:16,

3813:2, 3813:4,

3813:9, 3813:13,

3813:17, 3859:17

auditing [1] - 3748:15

auditors [1] - 3844:2

available [8] - 3739:8,

3747:11, 3767:21,

3776:15, 3804:25,

3808:23, 3829:25,

3841:18

Average [2] - 3814:2,

3814:3

average [29] -

3764:21, 3767:20,

3779:2, 3779:3,

3779:5, 3779:6,

3779:14, 3780:6,

3780:10, 3781:22,

3781:23, 3782:5,

3782:16, 3785:10,

3785:12, 3785:23,

3786:1, 3786:4,

3786:11, 3786:13,

3791:15, 3791:17,

3791:20, 3816:13,

3824:16, 3824:19,

3825:12, 3825:23,

3826:22

Averages [1] -

3781:18

averages [3] - 3784:8,

3784:16, 3785:9

averaging [1] - 3782:4

awaited [1] - 3740:8

aware [5] - 3773:22,

3809:11, 3832:12,

3860:20, 3874:25

AXA [35] - 3708:6,

3708:10, 3709:17,

3747:5, 3747:10,

3747:21, 3747:23,

3748:3, 3748:6,

3748:10, 3748:17,

3748:24, 3749:3,

3749:11, 3749:16,

3749:25, 3750:22,

3751:10, 3751:25,

3753:2, 3753:5,

3753:10, 3754:12,

3803:18, 3804:8,

3804:13, 3804:16,

3805:21, 3806:2,

3808:6, 3808:9,

3808:10, 3808:25,

3859:17, 3865:8

AXA's [2] - 3754:18,

3756:8

AXA0282111 [1] -

3789:2

B

backgrounds [1] -

3785:20

bad [3] - 3850:3,

3853:23, 3856:10

bag [1] - 3806:25

balancing [1] - 3833:7

ball [1] - 3711:19

bar[1] - 3798:1

bargain [2] - 3728:9,

3728:14

Barrett [1] - 3714:3

bars [2] - 3819:9

base [2] - 3718:17,

3872:4

based [13] - 3757:10,

3757:16, 3797:19,

3804:1, 3827:12,

3858:22, 3860:22,

3867:23, 3867:24,

3868:21, 3873:22,

3873:23, 3873:25

bases [1] - 3742:10

basic [3] - 3754:23,

3754:24, 3845:12

basis [23] - 3718:16,

3739:9, 3749:12,

3764:21, 3770:22,

3789:25, 3790:1,

3796:2, 3801:12,

3815:12, 3816:22,

3816:24, 3821:17,

3822:1, 3822:4,

3823:22, 3826:13,

3827:10, 3841:23,

3842:2, 3868:4,

3872:23, 3874:20

basket [1] - 3859:2

baskets [4] - 3833:5,

3858:23, 3858:24,

3859:5

Bate [3] - 3788:18,

3788:19, 3789:1

Bates [26] - 3743:17,

3758:21, 3758:24,

3759:22, 3760:3,

3763:15, 3774:4,

3790:7, 3790:12,

3794:18, 3796:12,

3810:12, 3810:22,

3811:14, 3813:19,

3815:2, 3816:8,

3818:4, 3819:5,

3819:12, 3824:7,

3835:1, 3839:19,

3853:14, 3853:16,

3855:22

bear [2] - 3820:8,

3821:22

bears [1] - 3769:12

beat [2] - 3756:2,

3757:7

beating [1] - 3711:18

become [6] - 3742:19,

3782:12, 3837:6,

3851:2, 3851:7,

3851:11

becomes [1] - 3872:6

Beg [2] - 3792:23,

3863:9

began [3] - 3740:22,

3848:23, 3848:24

beginning [3] -

3783:24, 3787:20,

3788:24

begins [2] - 3727:2,

3774:8

begun [1] - 3777:24

behalf [7] - 3715:17,

3716:8, 3717:3,

3734:4, 3832:2,

3833:8, 3841:20

behind [1] - 3805:22

belief [1] - 3771:6

believes [1] - 3726:3

below [6] - 3770:15,

3771:15, 3785:7,

3821:10, 3821:16,

3824:3

Benchmark [1] -

3756:25

benchmark [6] -

3755:21, 3756:2,

3756:24, 3757:8,

3829:13, 3829:24

BENEDICT [45] -

3709:13, 3720:9,

3751:13, 3751:15,

3760:24, 3763:19,

3765:13, 3765:17,

3766:25, 3770:17,

3773:6, 3779:24,

3782:18, 3783:5,

3787:25, 3788:4,

3788:14, 3788:18,

3789:1, 3789:3,

3802:15, 3813:20,

3813:22, 3814:6,

3822:15, 3822:21,

3822:23, 3823:4,

3823:11, 3825:13,

3826:18, 3827:1,

3843:15, 3858:12,

3860:23, 3861:2,

3861:6, 3861:16,

3869:11, 3871:4,

3871:14, 3871:24,

3872:12, 3875:15,

3876:3

Benedict [5] -

3713:22, 3765:16,

3766:24, 3788:21,

3860:25

benefit [3] - 3719:23,

3740:22, 3808:6

benefits [13] -

3729:24, 3730:1,

3730:3, 3776:15,

3807:20, 3807:22,

United States District Court

Trenton, New Jersey

3880

3807:25, 3808:1,

3808:13, 3809:5,

3809:10, 3809:21,

3809:24

BENJAMIN [1] -

3709:14

Best [1] - 3720:20

best [18] - 3715:20,

3742:14, 3760:25,

3763:5, 3763:7,

3770:18, 3794:8,

3820:24, 3849:22,

3850:8, 3850:13,

3852:11, 3854:9,

3856:17, 3864:21,

3874:3

better [4] - 3794:9,

3817:22, 3820:24,

3823:15

Between [1] - 3838:5

between [22] -

3716:25, 3745:12,

3746:1, 3747:5,

3779:1, 3783:1,

3808:3, 3815:16,

3818:14, 3821:20,

3827:12, 3835:7,

3836:9, 3838:3,

3851:15, 3853:12,

3855:17, 3856:2,

3859:5, 3867:2,

3867:16, 3867:18

beyond [2] - 3783:7,

3832:13

big [1] - 3837:19

bill [1] - 3735:11

billion [20] - 3781:25,

3791:18, 3795:10,

3795:13, 3795:23,

3795:25, 3796:9,

3798:2, 3798:9,

3798:18, 3799:2,

3816:11, 3865:9,

3865:13, 3866:1,

3866:2

bills [5] - 3735:4,

3735:5, 3735:12,

3754:20

binder[3] - 3762:17,

3772:22, 3788:15

binders [2] - 3719:11,

3762:11

Bingham [4] - 3742:3,

3743:8, 3875:14,

3876:2

bit [6] - 3713:12,

3761:21, 3761:24,

3789:9, 3821:20,

3836:20

Blackrock [2] -

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 173 of 197 PageID: 19229
3805:4, 3805:5

Blackstone [7] -

3726:17, 3726:20,

3726:24, 3732:15,

3732:19, 3733:3,

3734:6

BLADER [1] - 3709:3

BLANK [1] - 3709:9

blind [1] - 3819:16

blue [2] - 3819:9,

3821:16

BLUMSTEIN [1] -

3709:3

Board [119] - 3715:16,

3716:12, 3716:13,

3716:21, 3716:25,

3717:24, 3718:1,

3720:22, 3721:9,

3725:12, 3725:20,

3725:23, 3727:22,

3728:10, 3729:15,

3729:20, 3729:23,

3730:3, 3730:6,

3731:22, 3732:2,

3734:10, 3736:3,

3737:12, 3737:14,

3737:21, 3737:22,

3739:8, 3739:16,

3740:3, 3740:13,

3740:23, 3742:9,

3742:24, 3743:11,

3743:14, 3743:16,

3744:3, 3744:17,

3744:24, 3744:25,

3745:10, 3746:15,

3750:7, 3750:11,

3752:16, 3763:3,

3763:13, 3766:3,

3770:24, 3772:8,

3773:18, 3775:13,

3775:16, 3775:20,

3776:23, 3777:1,

3777:8, 3777:16,

3778:1, 3780:24,

3787:3, 3794:2,

3794:4, 3794:11,

3798:25, 3800:25,

3801:8, 3802:12,

3803:2, 3803:5,

3803:18, 3804:2,

3804:7, 3805:21,

3809:3, 3811:4,

3817:2, 3829:20,

3830:3, 3830:9,

3831:3, 3832:22,

3833:24, 3834:3,

3836:18, 3837:16,

3841:7, 3842:20,

3847:8, 3848:25,

3849:4, 3851:13,

3854:12, 3855:11,

3856:23, 3857:3,

3857:20, 3857:21,

3858:1, 3858:4,

3858:5, 3858:9,

3859:1, 3859:4,

3860:2, 3860:10,

3862:3, 3862:17,

3862:21, 3862:23,

3863:7, 3863:10,

3864:25, 3868:13,

3870:15, 3872:24,

3874:14, 3874:15

board [10] - 3722:7,

3723:8, 3723:10,

3724:13, 3724:22,

3731:6, 3732:15,

3732:18, 3742:15,

3742:17

Board's [5] - 3811:8,

3847:19, 3851:25,

3873:2, 3874:21

board's [1] - 3723:8

boardroom [1] -

3723:11

boards [4] - 3743:21,

3776:12, 3776:14,

3776:18

Bold [2] - 3784:12,

3784:13

bolded [1] - 3784:6

Bond [37] - 3795:7,

3795:10, 3795:20,

3815:14, 3815:15,

3815:20, 3815:24,

3816:1, 3817:18,

3817:25, 3818:7,

3822:9, 3823:10,

3824:6, 3826:4,

3826:7, 3826:12,

3826:14, 3833:3,

3833:4, 3833:5,

3833:8, 3833:15,

3833:22, 3834:4,

3835:2, 3835:16,

3837:2, 3837:3,

3839:2, 3839:16,

3840:3, 3840:14,

3840:16, 3840:19,

3841:1

bond [1] - 3757:3

bonds [1] - 3837:6

book [23] - 3763:1,

3763:2, 3773:25,

3774:1, 3774:3,

3775:7, 3775:10,

3775:11, 3775:14,

3780:8, 3780:11,

3780:14, 3781:13,

3787:21, 3788:12,

3788:25, 3790:9,

3799:12, 3814:14,

3814:19, 3825:18,

3842:16

booklet [1] - 3830:5

booklets [1] - 3773:16

books [7] - 3720:12,

3793:24, 3794:10,

3841:13, 3842:15,

3843:6, 3843:25

bottom [13] - 3735:19,

3736:13, 3737:2,

3743:20, 3764:19,

3774:6, 3781:21,

3784:6, 3792:17,

3819:5, 3831:23,

3865:8, 3869:2

box [1] - 3865:6

Boyle [2] - 3782:2,

3783:15

breach [1] - 3856:14

break [13] - 3757:24,

3777:10, 3777:18,

3777:21, 3777:24,

3791:5, 3791:11,

3799:6, 3806:9,

3806:10, 3806:11,

3848:11, 3848:14

breakout [3] -

3793:19, 3793:22,

3794:7

breakpoints [4] -

3798:9, 3798:17,

3799:1, 3836:18

brief [1] - 3712:5

Brief [5] - 3719:25,

3745:1, 3800:9,

3863:20, 3868:3

brief's [1] - 3712:4

briefly [2] - 3711:25,

3762:24

bring [3] - 3801:5,

3830:12, 3850:22

broad [3] - 3757:10,

3757:16, 3766:7

broader [2] - 3755:4,

3755:9

brochure [1] - 3830:12

broken [1] - 3735:11

brokerage [2] -

3828:19, 3840:17

brokers [2] - 3828:13,

3828:16

brown [2] - 3819:15,

3823:25

budget [1] - 3754:25

budgeting [1] -

3845:21

bullet [3] - 3727:2,

3727:16, 3744:5

bunch [2] - 3819:3,

3831:20

burdens [1] - 3836:24

business [9] -

3715:18, 3715:19,

3735:8, 3804:1,

3831:13, 3837:17,

3852:4, 3859:6,

3873:11

Business [1] -

3831:17

but-for [4] - 3807:21,

3809:15, 3809:18,

3809:19

buy [1] - 3726:23

BY [54] - 3709:4,

3709:9, 3709:12,

3710:3, 3714:23,

3720:13, 3722:25,

3724:9, 3730:14,

3735:15, 3736:6,

3737:1, 3739:2,

3747:2, 3752:6,

3754:2, 3758:11,

3760:10, 3761:8,

3762:23, 3764:4,

3764:14, 3765:22,

3768:20, 3769:11,

3771:1, 3771:13,

3772:6, 3773:13,

3781:11, 3783:22,

3787:22, 3788:8,

3789:17, 3790:6,

3792:13, 3802:18,

3807:7, 3813:1,

3813:24, 3820:5,

3821:5, 3824:5,

3826:20, 3827:22,

3843:23, 3848:22,

3853:4, 3857:18,

3858:21, 3862:1,

3863:21, 3868:24,

3870:13

C

C.S.R [1] - 3708:24

calculate [5] - 3817:3,

3826:23, 3829:3,

3843:20, 3846:5

calculates [1] - 3846:2

calculation [3] -

3782:8, 3829:10,

3835:22

calculations [3] -

3841:12, 3843:6,

3844:4

calendar [1] - 3749:10

candy [1] - 3810:3

cannot [2] - 3732:14,

United States District Court

Trenton, New Jersey

3881

3872:4

Cap [1] - 3792:17

cap [2] - 3759:11,

3761:23

capital [6] - 3802:25,

3803:2, 3803:19,

3804:6, 3843:9,

3843:12

caps [3] - 3769:25,

3789:13, 3821:14

card [2] - 3807:8,

3807:11

card's [1] - 3807:17

care [2] - 3743:24,

3850:4

careful [2] - 3740:15,

3777:8

carefully [2] -

3756:14, 3827:10

cars [1] - 3781:22

case [36] - 3711:21,

3713:10, 3725:12,

3734:18, 3734:21,

3734:24, 3735:7,

3754:3, 3756:16,

3758:17, 3759:18,

3776:11, 3777:17,

3777:18, 3787:1,

3791:10, 3800:6,

3803:6, 3808:5,

3809:12, 3809:19,

3830:5, 3855:5,

3855:6, 3856:25,

3860:20, 3866:9,

3871:17, 3871:19,

3871:23, 3872:1,

3872:3, 3873:13,

3873:18, 3875:10

case-by-case [1] -

3873:18

cases [4] - 3714:11,

3778:1, 3808:19,

3827:16

cash [4] - 3728:5,

3748:5, 3753:8,

3832:25

category [5] - 3735:9,

3741:3, 3741:5,

3866:15, 3869:4

caused [1] - 3853:22

causing [1] - 3712:7

certain [9] - 3766:10,

3776:12, 3802:25,

3827:5, 3827:9,

3839:12, 3858:22,

3859:18, 3867:24

certainly [61] -

3716:14, 3718:11,

3718:25, 3720:3,

3725:15, 3729:9,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 174 of 197 PageID: 19230
3729:25, 3731:25,

3732:3, 3732:10,

3735:5, 3741:8,

3745:3, 3745:7,

3746:18, 3746:19,

3748:12, 3752:16,

3752:22, 3755:8,

3759:17, 3760:7,

3776:13, 3776:21,

3778:1, 3781:2,

3785:18, 3794:11,

3796:1, 3796:10,

3797:16, 3797:23,

3798:14, 3798:20,

3801:2, 3808:17,

3813:14, 3817:8,

3829:6, 3829:16,

3830:6, 3830:21,

3832:19, 3832:20,

3834:7, 3834:14,

3844:9, 3844:19,

3845:21, 3848:7,

3860:5, 3860:7,

3860:16, 3862:14,

3863:2, 3866:7,

3867:11, 3873:19,

3874:16, 3874:23,

3874:24

Certainly [1] - 3787:16

Certified [1] - 3708:23

cetera [5] - 3799:22,

3801:20, 3811:25,

3854:3, 3859:7

chair [1] - 3722:17

chairman [6] - 3721:9,

3722:7, 3723:8,

3723:10, 3724:14,

3732:20

challenged [1] -

3744:10

challenging [1] -

3744:13

chambers [1] -

3711:12

chance [4] - 3730:11,

3762:11, 3763:20,

3851:20

change [2] - 3722:12,

3778:2

changes [1] - 3836:9

charge [2] - 3768:3,

3874:10

charged [4] - 3728:16,

3765:11, 3768:8

chart [16] - 3765:19,

3767:17, 3768:1,

3791:25, 3796:17,

3814:9, 3815:3,

3819:14, 3819:17,

3820:18, 3820:23,

3820:24, 3824:16,

3825:6, 3825:17,

3834:18

charter [2] - 3724:25,

3725:1

charts [4] - 3766:2,

3823:17, 3834:13,

3835:21

Chase [4] - 3856:3,

3856:5, 3856:11,

3856:14

Chase's [2] - 3856:10,

3856:12

check [1] - 3724:16

checking [1] - 3820:8

Chicago [2] - 3759:7,

3759:15

choices [1] - 3767:21

chose [1] - 3740:9

Chris [13] - 3742:25,

3746:23, 3757:20,

3758:9, 3762:17,

3814:16, 3817:23,

3830:22, 3839:5,

3848:20, 3852:25,

3855:13, 3864:12

CHRISTOPHER [2] -

3709:6, 3709:6

cited [1] - 3761:14

CIVIL [2] - 3708:5,

3708:9

claim [2] - 3755:14,

3785:5

claims [1] - 3739:9

clarify [4] - 3821:4,

3821:9, 3823:16,

3870:6

CLARKSON [1] -

3708:14

class [1] - 3846:9

Class [1] - 3790:3

Classes [1] - 3790:4

cleaner [1] - 3823:11

clear [8] - 3722:15,

3726:6, 3738:23,

3738:24, 3821:25,

3823:21, 3824:4,

3828:9

clearer [1] - 3822:15

clearly [6] - 3718:23,

3737:14, 3760:15,

3830:18, 3844:15,

3867:1

clock [3] - 3713:7,

3713:10, 3713:14

close [3] - 3711:20,

3814:14, 3874:24

closed [1] - 3732:17

closed-end [1] -

3732:17

closely [2] - 3755:20,

3813:14

closer[2] - 3769:3,

3821:23

co [1] - 3785:20

CO [2] - 3708:6,

3709:17

co-trustees [1] -

3785:20

Code [1] - 3842:10

colloquy [1] - 3754:5

color [2] - 3819:15,

3819:16

colored [1] - 3770:15

column [6] - 3763:18,

3764:16, 3790:20,

3792:11, 3839:24,

3865:5

columns [5] -

3789:14, 3791:14,

3818:6, 3839:14,

3839:16

combination [4] -

3756:7, 3756:13,

3757:5, 3757:19

combined [1] - 3757:1

comfort [1] - 3804:10

comfortable [4] -

3746:20, 3851:23,

3862:14, 3873:6

coming [4] - 3731:25,

3746:15, 3872:14,

3874:4

comments [1] -

3713:22

Commission [1] -

3724:13

commission [1] -

3726:2

commissions [1] -

3828:19

committee [6] -

3724:22, 3724:24,

3725:1, 3725:8,

3732:21, 3837:8

common [2] -

3738:16, 3779:16

Common [4] -

3769:13, 3821:19,

3823:8, 3823:16

communications [1] -

3748:19

companies [3] -

3780:23, 3781:1,

3804:11

company [2] -

3735:13, 3770:1

Company [9] - 3716:1,

3716:17, 3718:13,

3723:5, 3723:6,

3763:11, 3765:2,

3776:11, 3779:18

comparative [14] -

3728:18, 3769:1,

3774:8, 3774:21,

3776:4, 3776:5,

3778:9, 3779:23,

3780:1, 3783:10,

3786:7, 3787:12,

3790:16, 3873:16

Comparative [1] -

3774:11

compare [6] -

3772:15, 3777:14,

3795:22, 3829:12,

3829:24, 3863:3

compared [6] -

3776:1, 3783:14,

3790:2, 3791:21,

3797:22, 3815:10

compares [10] -

3770:11, 3776:4,

3778:5, 3778:9,

3778:11, 3790:15,

3793:5, 3793:7,

3793:11, 3810:22

comparing [3] -

3797:4, 3805:20,

3813:4

comparison [14] -

3728:16, 3776:8,

3786:18, 3793:21,

3794:9, 3795:18,

3795:19, 3795:22,

3796:1, 3847:3,

3847:5, 3847:10,

3847:13, 3847:20

comparisons [10] -

3772:13, 3775:11,

3775:19, 3775:20,

3775:24, 3777:11,

3777:13, 3796:5,

3797:1, 3830:6

compensation [2] -

3759:12, 3761:23

complained [1] -

3820:23

complete [1] -

3837:25

completed [4] -

3841:5, 3842:24,

3843:2, 3872:14

completes [1] -

3844:25

complex [6] - 3756:8,

3766:8, 3797:9,

3798:14, 3870:8,

3870:12

complexes [2] -

3798:14, 3798:21

United States District Court

Trenton, New Jersey

3882

Compliance [1] -

3840:10

compliance [17] -

3800:16, 3801:19,

3837:6, 3837:24,

3838:3, 3838:11,

3838:15, 3838:16,

3840:11, 3841:4,

3841:18, 3841:20,

3841:22, 3842:7,

3842:9, 3854:15,

3855:3

comply [1] - 3856:13

component [1] -

3756:21

components [5] -

3774:15, 3774:24,

3775:1, 3790:19,

3797:8

compute [3] -

3779:13, 3843:8,

3843:12

computed [1] -

3816:15

computer [2] -

3754:10, 3838:19

computers [3] -

3754:15, 3755:16

conceivable [1] -

3719:7

concept [6] - 3756:15,

3785:2, 3785:21,

3801:2, 3809:20,

3812:11

concern [10] -

3723:14, 3730:5,

3730:8, 3730:15,

3730:19, 3730:24,

3731:2, 3804:12,

3809:9, 3874:1

concerned [1] -

3803:19

conclude [1] - 3872:2

concluded [1] -

3876:13

conclusion [1] -

3712:22

conditions [5] -

3739:21, 3739:22,

3739:25, 3740:4,

3740:10

conduit [1] - 3778:3

Conference [1] -

3840:6

conference [1] -

3840:8

confidence [2] -

3717:13, 3717:16

confirm [2] - 3788:9,

3821:11

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 175 of 197 PageID: 19231
conflict [1] - 3716:25

conflicts [1] - 3731:5

confused [1] - 3838:8

confusing [6] -

3736:20, 3750:13,

3760:25, 3774:2,

3803:4, 3871:4

confusion [1] -

3751:21

conjunction [2] -

3834:20, 3844:8

connected [5] -

3739:21, 3739:22,

3739:25, 3846:7,

3846:10

connection [24] -

3718:20, 3733:7,

3733:9, 3734:6,

3741:18, 3741:20,

3745:10, 3748:4,

3749:19, 3750:10,

3771:21, 3802:6,

3802:11, 3816:16,

3828:7, 3831:3,

3839:1, 3842:10,

3847:18, 3847:22,

3850:1, 3853:20,

3856:7, 3871:2

conscientious [1] -

3873:5

consequence [1] -

3740:13

consider [8] - 3725:8,

3729:9, 3733:6,

3733:7, 3744:12,

3766:4, 3785:9,

3870:17

considerably [2] -

3755:4, 3805:18

consideration [3] -

3741:7, 3741:10,

3750:10

considered [9] -

3741:13, 3742:24,

3750:7, 3785:25,

3854:23, 3862:2,

3870:14, 3870:17,

3870:18

considers [2] -

3772:8, 3773:18

consist [1] - 3820:13

consistent [9] -

3721:17, 3740:20,

3742:14, 3786:6,

3800:1, 3843:5,

3854:21, 3860:18,

3864:11

consisting [1] -

3724:23

constant [2] -

3824:12, 3824:14

construct [1] - 3863:1

consultant [7] -

3725:20, 3725:23,

3785:25, 3794:13,

3801:5, 3809:22,

3860:10

consultants [4] -

3717:9, 3717:20,

3725:9, 3725:13

content [2] - 3777:3,

3777:4

contents [1] - 3776:25

context [11] - 3715:9,

3723:16, 3743:13,

3746:15, 3752:24,

3760:5, 3760:15,

3840:5, 3862:6,

3870:18, 3870:19

continue [2] - 3852:2,

3870:1

continues [2] -

3748:15, 3860:18

continuing [1] -

3761:20

contract [18] - 3725:7,

3741:23, 3741:24,

3769:20, 3804:13,

3804:16, 3806:4,

3808:1, 3824:4,

3828:8, 3829:6,

3830:16, 3830:18,

3830:19, 3830:21,

3834:24, 3852:12,

3854:11

contracts [7] -

3718:21, 3830:14,

3830:20, 3847:2,

3849:8, 3851:20,

3852:16

Contractual [2] -

3769:12, 3796:14

contractual [12] -

3769:17, 3769:21,

3774:12, 3774:22,

3774:23, 3786:18,

3786:21, 3787:2,

3789:11, 3796:19,

3798:1, 3799:2

contribution [2] -

3869:3, 3869:6

control [4] - 3723:8,

3782:12, 3784:19,

3852:7

controls [1] - 3781:25

conversation [1] -

3739:22

conversations [1] -

3864:19

copies [1] - 3787:25

copy [4] - 3735:22,

3750:11, 3788:3,

3810:8

Core [23] - 3815:24,

3817:18, 3817:25,

3818:7, 3822:9,

3823:10, 3824:6,

3833:3, 3833:4,

3833:5, 3833:8,

3833:15, 3833:22,

3834:4, 3835:2,

3835:16, 3837:2,

3837:3, 3839:2,

3840:14, 3840:16,

3840:19, 3841:1

corner [1] - 3784:10

corporate [4] -

3747:18, 3749:4,

3750:22, 3753:11

Corporate [1] -

3748:19

correct [234] -

3708:23, 3716:2,

3716:25, 3717:3,

3717:6, 3717:21,

3717:22, 3717:25,

3718:6, 3718:22,

3719:5, 3719:8,

3719:9, 3719:12,

3719:13, 3719:17,

3721:16, 3722:10,

3726:18, 3726:19,

3726:21, 3728:11,

3728:12, 3728:17,

3728:20, 3728:25,

3729:4, 3729:8,

3729:13, 3729:18,

3729:21, 3729:23,

3729:24, 3730:3,

3732:16, 3733:11,

3734:13, 3734:14,

3739:24, 3741:1,

3741:2, 3741:4,

3741:7, 3741:11,

3741:21, 3742:1,

3742:2, 3742:4,

3742:8, 3742:11,

3743:9, 3743:12,

3745:12, 3745:20,

3746:5, 3746:6,

3746:8, 3749:20,

3750:1, 3750:8,

3750:9, 3751:2,

3753:22, 3755:6,

3755:11, 3756:17,

3756:22, 3759:2,

3762:7, 3763:3,

3765:11, 3766:22,

3770:12, 3770:16,

3771:16, 3771:19,

3771:22, 3772:8,

3772:9, 3772:11,

3773:5, 3773:15,

3773:19, 3773:20,

3774:13, 3775:16,

3776:2, 3776:6,

3776:16, 3776:20,

3776:23, 3778:6,

3778:10, 3778:21,

3779:23, 3780:7,

3780:25, 3782:17,

3785:17, 3787:5,

3788:7, 3788:9,

3790:16, 3790:21,

3791:1, 3791:21,

3792:1, 3792:6,

3792:22, 3793:2,

3793:8, 3793:12,

3794:15, 3795:7,

3795:8, 3795:10,

3795:13, 3795:14,

3795:16, 3796:15,

3798:6, 3799:11,

3799:19, 3799:23,

3800:13, 3800:17,

3800:23, 3801:20,

3801:24, 3802:25,

3803:23, 3804:17,

3804:21, 3807:12,

3807:22, 3808:7,

3808:15, 3809:6,

3809:8, 3809:9,

3810:20, 3810:23,

3810:24, 3811:2,

3811:11, 3811:20,

3811:25, 3812:9,

3814:3, 3815:9,

3815:17, 3815:22,

3816:5, 3816:11,

3816:13, 3817:6,

3818:10, 3818:15,

3818:19, 3818:23,

3821:12, 3821:17,

3821:20, 3824:13,

3824:14, 3824:17,

3824:20, 3824:22,

3824:25, 3826:4,

3826:10, 3830:17,

3831:4, 3831:20,

3832:4, 3832:9,

3832:18, 3833:3,

3833:4, 3833:5,

3833:22, 3834:1,

3834:3, 3834:5,

3834:6, 3834:10,

3835:17, 3836:2,

3837:22, 3838:4,

3838:11, 3838:24,

3839:14, 3840:7,

3840:14, 3840:25,

3841:7, 3841:15,

United States District Court

Trenton, New Jersey

3883

3845:15, 3846:3,

3846:13, 3847:15,

3848:6, 3848:25,

3851:5, 3851:10,

3853:12, 3856:3,

3857:24, 3858:23,

3859:12, 3859:25,

3862:4, 3862:19,

3863:5, 3863:8,

3864:17, 3865:13,

3865:17, 3865:20,

3865:23, 3865:25,

3866:2, 3866:3,

3866:5, 3867:14,

3867:15, 3868:2,

3868:7, 3868:11,

3868:12, 3869:9,

3870:16, 3871:3

Correct [20] - 3743:10,

3750:2, 3754:13,

3770:13, 3779:21,

3790:24, 3793:3,

3796:16, 3799:20,

3816:6, 3816:14,

3821:18, 3824:18,

3833:6, 3833:25,

3841:8, 3853:13,

3859:13, 3865:18,

3865:21

corrected [1] - 3732:3

correctly [3] -

3759:13, 3764:23,

3784:21

Cost [1] - 3839:3

cost [20] - 3727:3,

3727:22, 3729:20,

3748:24, 3749:22,

3750:16, 3750:17,

3750:21, 3750:25,

3782:5, 3785:10,

3785:13, 3838:25,

3857:23, 3858:6,

3858:22, 3859:15,

3859:24, 3860:11,

3862:9

costs [27] - 3741:7,

3741:10, 3741:25,

3750:4, 3751:11,

3751:23, 3751:24,

3753:3, 3753:6,

3776:19, 3859:19,

3862:8, 3863:7,

3863:10, 3863:22,

3866:23, 3866:25,

3867:1, 3867:9,

3867:11, 3867:18,

3868:2, 3868:15,

3870:12, 3870:14,

3870:20, 3870:22

Council [2] - 3716:9,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 176 of 197 PageID: 19232
3718:14

counsel [44] - 3712:3,

3718:12, 3719:1,

3719:4, 3719:10,

3719:14, 3719:24,

3720:2, 3731:10,

3734:8, 3734:13,

3734:15, 3734:20,

3734:23, 3736:9,

3736:15, 3737:9,

3737:12, 3737:14,

3738:2, 3738:5,

3738:10, 3738:12,

3738:14, 3738:22,

3739:4, 3739:16,

3739:23, 3740:2,

3740:3, 3740:7,

3740:8, 3740:9,

3742:3, 3742:7,

3742:13, 3752:17,

3799:16, 3803:7,

3808:18, 3810:1,

3854:20, 3873:15

COUNSEL [1] -

3709:16

counsels [1] -

3851:21

counting [1] - 3857:15

couple [4] - 3711:15,

3797:2, 3836:15,

3872:25

course [7] - 3717:8,

3721:7, 3736:7,

3736:12, 3737:8,

3810:14, 3870:7

coursework [1] -

3866:15

Court [17] - 3715:25,

3719:8, 3719:22,

3720:5, 3722:3,

3722:13, 3754:5,

3754:11, 3754:14,

3754:19, 3754:22,

3760:7, 3760:13,

3761:15, 3780:13,

3787:24, 3800:19

court [2] - 3760:9,

3854:24

COURT [163] - 3708:1,

3708:17, 3711:1,

3711:10, 3712:14,

3713:15, 3713:19,

3713:25, 3714:9,

3714:17, 3714:21,

3715:2, 3715:6,

3715:8, 3722:23,

3723:18, 3723:25,

3724:2, 3724:5,

3727:10, 3727:13,

3730:11, 3733:15,

3734:25, 3735:14,

3735:22, 3735:25,

3736:5, 3736:16,

3736:19, 3736:23,

3737:5, 3738:5,

3738:19, 3744:21,

3751:14, 3751:17,

3751:19, 3752:3,

3753:14, 3753:18,

3753:23, 3757:24,

3758:4, 3758:7,

3759:21, 3759:24,

3760:2, 3761:1,

3761:10, 3762:13,

3762:18, 3762:20,

3763:21, 3764:3,

3764:6, 3764:10,

3764:12, 3765:15,

3765:20, 3766:13,

3766:23, 3767:8,

3767:25, 3768:5,

3768:10, 3768:15,

3769:4, 3769:7,

3770:23, 3771:9,

3771:24, 3772:1,

3772:4, 3772:22,

3773:7, 3773:10,

3781:5, 3781:7,

3783:14, 3783:17,

3783:19, 3784:1,

3784:12, 3787:15,

3788:10, 3788:13,

3788:21, 3789:4,

3789:20, 3792:8,

3794:21, 3795:2,

3799:7, 3802:16,

3806:7, 3806:10,

3806:17, 3806:20,

3806:23, 3807:3,

3807:5, 3810:5,

3812:20, 3812:22,

3819:24, 3820:17,

3820:21, 3821:1,

3822:17, 3822:19,

3823:1, 3823:6,

3823:10, 3823:13,

3826:19, 3827:2,

3827:19, 3838:9,

3843:17, 3848:11,

3848:14, 3848:18,

3853:3, 3857:10,

3857:13, 3857:15,

3860:25, 3861:4,

3861:8, 3861:10,

3861:15, 3861:17,

3861:20, 3863:19,

3868:20, 3869:15,

3869:18, 3869:21,

3869:23, 3869:25,

3870:2, 3871:5,

3871:9, 3871:12,

3871:18, 3871:23,

3872:9, 3872:11,

3872:13, 3872:17,

3874:5, 3874:9,

3874:12, 3875:1,

3875:5, 3875:11,

3875:16, 3875:22,

3875:24, 3876:4,

3876:8, 3876:12

COURTHOUSE [1] -

3708:14

cover[3] - 3718:16,

3755:1, 3802:20

covered [2] - 3851:24,

3862:15

covering [2] -

3757:16, 3853:10

covers [3] - 3757:17,

3767:7, 3802:9

created [1] - 3831:10

criteria [1] - 3807:15

critical [2] - 3771:4,

3830:18

cross [10] - 3711:8,

3711:21, 3714:2,

3714:17, 3767:8,

3771:5, 3771:10,

3806:14, 3827:2,

3849:9

CROSS [2] - 3710:3,

3714:23

cross-examination [3]

- 3714:17, 3767:8,

3827:2

CROSSEXAMINATION [2] -

3710:3, 3714:23

cross-examinations

[1] - 3711:21

cross-examine [2] -

3771:5, 3806:14

cross-examining [1] -

3771:10

cross-indemnity [1] -

3849:9

crossed [1] - 3714:4

crunched [1] -

3712:21

culture [1] - 3723:11

current [1] - 3789:12

custodian [1] -

3712:10

cutting [1] - 3712:16

D

D-1445 [1] - 3875:23

D-1811 [1] - 3819:1

DAC [7] - 3864:15,

3864:20, 3865:19,

3865:22, 3866:5,

3866:20

daily [9] - 3718:15,

3718:16, 3782:12,

3832:25, 3837:10,

3841:23, 3842:2,

3842:12, 3842:17

DANIEL [1] - 3709:4

dash [3] - 3844:20,

3844:22, 3844:23

data [28] - 3715:18,

3716:2, 3725:16,

3728:18, 3728:19,

3728:20, 3731:23,

3774:8, 3774:11,

3774:21, 3775:12,

3777:12, 3778:4,

3778:7, 3778:8,

3782:17, 3783:11,

3794:3, 3794:8,

3794:16, 3796:3,

3796:20, 3797:14,

3797:18, 3803:15,

3837:18, 3873:17

date [2] - 3722:15,

3739:13

dated [1] - 3743:8

DAY [1] - 3708:20

day-to-day [1] -

3828:11

Day-to-Day [1] -

3831:17

days [14] - 3711:5,

3711:9, 3712:8,

3713:2, 3713:4,

3713:23, 3714:9,

3714:13, 3714:14,

3740:5, 3749:10,

3754:4, 3767:2,

3872:19

dealers [1] - 3828:14

dealing [3] - 3734:9,

3767:5, 3804:10

deals [3] - 3727:6,

3782:23, 3782:24

decade [1] - 3766:9

decades [1] - 3764:20

December [1] -

3738:11

decide [2] - 3744:6,

3764:2

decision [9] -

3715:20, 3719:22,

3744:8, 3744:10,

3744:11, 3744:13,

3760:7, 3760:17,

3873:18

decisions [6] -

3720:4, 3727:24,

United States District Court

Trenton, New Jersey

3884

3742:10, 3743:24,

3744:6, 3777:24

deducted [8] -

3859:19, 3859:20,

3859:24, 3864:10,

3864:15, 3865:23,

3866:5

deductions [1] -

3817:12

deem [1] - 3854:8

deemed [2] - 3726:14,

3852:3

defend [1] - 3829:16

DEFENDANT [1] -

3708:11

defendant [1] -

3875:13

defendant's [2] -

3719:18, 3862:13

Defendant's [17] -

3710:8, 3719:15,

3720:8, 3720:16,

3721:18, 3735:18,

3746:24, 3762:9,

3768:16, 3768:23,

3772:19, 3780:13,

3781:3, 3787:20,

3810:7, 3814:17,

3875:25

DEFENDANTS [3] -

3708:7, 3709:10,

3709:14

defendants [5] -

3714:13, 3735:16,

3783:12, 3814:19,

3820:23

defense [3] - 3738:16,

3738:17, 3744:11

defer [1] - 3830:16

deferred [4] - 3859:19,

3859:24, 3863:22,

3867:8

define [2] - 3755:17,

3807:20

defined [2] - 3756:14,

3782:22

defines [1] - 3809:10

definite [1] - 3842:15

definitely [2] -

3731:20, 3774:23

definition [9] -

3729:24, 3730:3,

3778:24, 3803:18,

3809:4, 3809:8,

3844:3, 3874:14,

3874:18

definitions [1] -

3778:14

delegated [1] -

3853:25

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 177 of 197 PageID: 19233
deliberations [2] -

3742:17, 3743:23

deliver[1] - 3794:5

delivered [2] -

3763:13, 3811:4

deliverer[1] - 3718:10

delivers [1] - 3718:8

delivery [1] - 3755:2

demonstrates [1] -

3743:24

dependent [1] -

3845:12

deposed [3] - 3714:4,

3740:21, 3783:9

deposition [13] -

3719:12, 3732:8,

3738:3, 3738:8,

3773:15, 3841:19,

3848:23, 3860:22,

3860:24, 3861:3,

3861:11, 3861:22,

3861:23

depositions [3] -

3773:4, 3845:24,

3861:5

depreciation [2] -

3859:14, 3859:22

described [3] -

3799:21, 3835:1,

3844:4

describes [1] -

3831:13

description [1] -

3755:4

designate [1] -

3724:22

designed [1] -

3754:25

desired [1] - 3749:11

desires [1] - 3799:6

detailed [4] - 3727:2,

3727:8, 3727:22,

3864:2

determinations [1] -

3838:22

determine [6] -

3798:25, 3859:1,

3859:4, 3860:2,

3863:7, 3873:6

determined [2] -

3777:7, 3864:6

determines [3] -

3776:25, 3777:3,

3777:4

determining [3] -

3773:18, 3803:9,

3807:14

develop [1] - 3786:1

developed [1] -

3739:13

development [3] -

3728:3, 3737:21,

3737:23

devil's [1] - 3744:11

devoted [1] - 3734:24

devoting [2] -

3862:18, 3862:19

dialogue [1] - 3712:2

difference [4] -

3778:25, 3818:14,

3818:22, 3824:2

different [22] -

3750:14, 3757:15,

3757:17, 3757:19,

3786:21, 3786:22,

3796:20, 3797:24,

3803:17, 3804:25,

3808:18, 3813:17,

3815:1, 3819:2,

3827:15, 3845:7,

3859:6, 3862:20,

3863:1, 3868:23,

3873:22

differential [1] -

3827:12

difficult [5] - 3712:24,

3730:20, 3761:24,

3821:24, 3836:12

diligence [3] -

3833:21, 3834:3,

3840:25

diligencing [1] -

3873:5

diligent [1] - 3731:7

direct [28] - 3711:21,

3715:9, 3717:8,

3718:11, 3718:13,

3718:15, 3719:19,

3721:7, 3725:17,

3746:19, 3751:11,

3751:12, 3751:16,

3751:23, 3751:24,

3753:3, 3753:6,

3753:9, 3756:6,

3763:4, 3767:2,

3783:7, 3795:3,

3830:10, 3857:22,

3859:20, 3862:15,

3865:16

directed [2] - 3735:6,

3840:16

direction [1] - 3852:7

Directions [1] -

3718:17

directly [2] - 3718:19,

3751:7

director [3] - 3724:11,

3851:1, 3852:6

DIRECTOR [1] -

3709:16

directors [6] - 3722:1,

3724:23, 3725:7,

3726:4, 3726:5,

3743:22

Directors [9] - 3716:5,

3716:9, 3716:13,

3716:21, 3718:14,

3720:19, 3720:21,

3721:9, 3875:20

disadvantage [3] -

3786:3, 3852:14,

3852:24

disadvantaged [1] -

3850:15

disagree [9] -

3718:11, 3722:10,

3722:11, 3723:21,

3724:6, 3765:1,

3783:3, 3784:4,

3835:4

disagreed [2] -

3724:3, 3809:2

discharged [1] -

3743:25

disclosed [2] -

3739:23, 3812:19

disclosure [5] -

3742:21, 3742:23,

3759:11, 3761:23,

3845:7

discovery [1] -

3739:13

discuss [5] - 3712:1,

3737:24, 3738:1,

3739:17, 3740:2

discussed [3] -

3740:3, 3801:2,

3808:17

discusses [1] -

3774:19

discussion [3] -

3760:5, 3801:10,

3873:10

Discussion [1] -

3810:19

discussions [7] -

3731:9, 3752:16,

3807:18, 3860:5,

3860:8, 3861:3,

3862:12

dispensing [1] -

3712:21

disproportionate [3] -

3874:13, 3874:14,

3874:19

disregard [3] - 3850:3,

3854:2, 3856:11

distinguish [1] -

3730:21

distinguishing [2] -

3730:16, 3769:22

distortion [1] - 3785:8

Distribution [1] -

3866:25

distribution [10] -

3741:7, 3742:1,

3801:18, 3864:7,

3864:16, 3864:21,

3866:23, 3867:2,

3867:11, 3867:16

distributions [3] -

3843:24, 3846:2,

3846:6

DISTRICT [4] - 3708:1,

3708:1, 3708:17,

3708:18

divided [2] - 3742:20,

3860:3

dividend [6] - 3843:9,

3843:13, 3846:2,

3846:5

division [6] - 3711:13,

3712:11, 3752:18,

3752:25, 3753:4,

3753:7

Division [2] - 3712:18,

3724:11

document [48] -

3720:22, 3720:25,

3721:3, 3727:13,

3744:19, 3746:7,

3747:1, 3749:22,

3749:25, 3758:16,

3763:18, 3763:20,

3763:24, 3764:8,

3770:20, 3770:24,

3771:2, 3771:8,

3771:14, 3773:18,

3780:2, 3780:19,

3781:5, 3787:15,

3788:20, 3811:4,

3811:13, 3813:25,

3814:20, 3815:2,

3816:19, 3816:22,

3817:21, 3817:25,

3819:2, 3822:6,

3825:13, 3831:9,

3833:19, 3834:10,

3839:9, 3844:12,

3844:18, 3844:25,

3845:1, 3845:7,

3845:10, 3849:13

documentation [1] -

3836:13

documented [1] -

3743:24

documents [5] -

3716:15, 3719:1,

3740:16, 3763:6,

3773:4

United States District Court

Trenton, New Jersey

3885

dollar[7] - 3816:15,

3817:5, 3818:22,

3824:24, 3824:25,

3835:15, 3835:23

dollars [7] - 3792:8,

3817:1, 3817:13,

3818:12, 3826:3,

3826:5, 3826:10

done [24] - 3712:25,

3713:5, 3716:16,

3745:5, 3750:6,

3777:1, 3779:9,

3779:19, 3794:19,

3801:14, 3814:23,

3830:5, 3833:8,

3834:4, 3834:13,

3834:19, 3837:21,

3837:23, 3838:22,

3841:20, 3843:20,

3850:24, 3865:1,

3870:10

double [5] - 3784:5,

3820:8, 3839:1,

3840:19, 3867:10

Double [1] - 3784:10

doubled [2] - 3821:21,

3836:1

down [5] - 3727:2,

3792:16, 3795:16,

3834:1, 3875:5

Down [1] - 3781:21

dramatic [1] - 3785:8

due [4] - 3833:21,

3834:3, 3840:24,

3850:4

during [1] - 3871:19

duties [8] - 3734:5,

3743:25, 3830:15,

3850:4, 3853:25,

3854:2, 3856:11,

3856:12

duty [4] - 3719:20,

3719:21, 3848:24,

3849:3

DX-1445 [1] - 3875:12

E

e-mails [2] - 3718:13,

3718:15

early [1] - 3734:8

earned [1] - 3847:20

earns [2] - 3847:4,

3847:6

EAST [1] - 3708:14

easy [1] - 3764:11

economic [1] - 3726:7

economics [2] -

3828:2, 3828:6

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 178 of 197 PageID: 19234
Economies [1] -

3780:22

economies [3] -

3729:7, 3729:9,

3729:12

economy [2] - 3828:3,

3828:7

Ed [1] - 3872:3

education [3] -

3716:11, 3734:4,

3743:14

effective [18] -

3724:16, 3726:3,

3769:22, 3786:22,

3786:25, 3787:2,

3787:3, 3787:4,

3787:8, 3787:12,

3789:11, 3789:16,

3789:23, 3789:25,

3790:2, 3792:15,

3796:5, 3820:9

effectively [4] -

3753:5, 3753:8,

3827:16, 3866:16

efficiently [3] -

3711:15, 3712:13,

3713:8

effort [9] - 3739:18,

3779:7, 3798:25,

3802:11, 3802:19,

3857:22, 3860:2,

3863:5, 3863:10

efforts [2] - 3763:5,

3763:6

eight [2] - 3714:13,

3874:2

either [7] - 3722:16,

3757:6, 3761:5,

3765:18, 3808:20,

3840:6, 3843:5

elements [1] - 3758:19

eliminate [1] - 3779:7

elsewhere [2] -

3797:11, 3808:1

emphasize [1] -

3873:9

employee [5] - 3851:1,

3851:2, 3851:7,

3852:3, 3852:6

employees [5] -

3831:22, 3831:25,

3832:1, 3832:10,

3851:3

encourage [1] -

3850:19

end [11] - 3714:7,

3714:15, 3732:17,

3740:6, 3740:9,

3749:10, 3817:25,

3845:8, 3873:7,

3873:11, 3874:2

endearment [3] -

3831:7, 3831:9,

3834:10

endeavor [2] -

3837:20, 3847:23

ended [1] - 3740:2

Ending [1] - 3788:18

ending [6] - 3743:17,

3763:15, 3788:19,

3815:2, 3839:19,

3840:22

ends [2] - 3866:10,

3867:9

engage [1] - 3802:14

engages [1] - 3715:16

engaging [1] -

3802:22

enhance [1] - 3721:25

enhanced [1] - 3726:4

ensure [1] - 3743:23

entered [5] - 3747:6,

3752:18, 3846:12,

3846:19, 3855:16

enterprise [4] -

3799:19, 3800:12,

3802:7, 3854:24

entertain [1] - 3739:16

entire [3] - 3761:3,

3761:7, 3761:9

entirely [3] - 3740:1,

3755:7, 3845:15

entirety [1] - 3711:21

entities [2] - 3722:8,

3725:16

entitled [8] - 3758:21,

3770:2, 3781:18,

3810:19, 3814:2,

3815:5, 3849:18,

3855:24

entity [2] - 3803:20,

3858:20

entrepreneurial [3] -

3799:18, 3800:7,

3800:11

Entrepreneurial [1] -

3799:21

entry [2] - 3832:23,

3832:25

environment [3] -

3760:6, 3761:3,

3761:10

EQ [8] - 3790:1,

3790:15, 3790:17,

3791:17, 3791:24,

3792:22, 3792:24,

3793:4

EQ/Common [1] -

3819:11

EQ/Core [7] - 3815:15,

3826:4, 3826:7,

3826:12, 3826:14,

3839:16, 3840:3

EQ/Equity [2] -

3789:8, 3819:8

EQ/S&P [1] - 3792:16

EQAT [49] - 3726:12,

3732:23, 3734:5,

3743:12, 3745:12,

3746:1, 3752:9,

3767:3, 3778:9,

3778:11, 3779:23,

3793:11, 3800:25,

3802:4, 3802:5,

3804:21, 3806:2,

3807:11, 3807:14,

3810:23, 3810:25,

3811:3, 3811:7,

3811:10, 3811:20,

3811:23, 3812:9,

3814:5, 3814:8,

3814:9, 3816:13,

3825:11, 3825:12,

3825:23, 3826:13,

3826:21, 3832:2,

3832:7, 3832:8,

3847:8, 3849:4,

3851:16, 3852:20,

3853:12, 3854:18,

3867:14, 3869:17,

3870:15, 3871:2

EQAT's [4] - 3778:5,

3804:16, 3812:5,

3844:2

equal [2] - 3782:8,

3782:16

equaled [1] - 3711:22

equates [1] - 3784:16

EQUITABLE [3] -

3708:6, 3708:10,

3709:17

equitable [4] -

3853:24, 3854:2,

3856:7, 3865:8

Equitable [8] -

3747:10, 3749:11,

3754:12, 3804:9,

3804:14, 3804:16,

3853:18, 3855:17

equitable's [1] -

3853:23

equity [2] - 3757:4,

3785:9

erroneous [2] -

3866:4, 3866:6

error [4] - 3811:12,

3849:25, 3853:19,

3856:6

errors [2] - 3731:24,

3732:11

ESQUIRE [12] -

3709:4, 3709:4,

3709:5, 3709:5,

3709:6, 3709:6,

3709:9, 3709:12,

3709:13, 3709:13,

3709:14, 3709:16

essential [1] - 3720:4

Essentially [2] -

3727:6, 3841:10

essentially [7] -

3716:24, 3740:24,

3832:18, 3834:1,

3840:13, 3841:11,

3842:9

establish [1] - 3768:2

established [1] -

3767:6

et [8] - 3708:3, 3708:6,

3708:8, 3799:22,

3801:19, 3811:25,

3854:3, 3859:7

ETF [2] - 3756:12,

3833:5

ETFs [1] - 3833:5

evaluate [3] - 3717:19,

3828:2, 3828:6

evaluated [3] - 3741:4,

3741:6, 3741:9

evaluating [1] -

3858:6

evaluation [1] -

3858:18

evaporating [1] -

3712:8

evening [1] - 3876:12

evidence [11] -

3710:8, 3710:8,

3719:16, 3770:20,

3771:6, 3783:12,

3812:15, 3813:3,

3861:7, 3875:25,

3876:5

evolved [1] - 3740:10

examination [6] -

3714:17, 3734:8,

3767:8, 3783:8,

3799:15, 3827:2

EXAMINATION [2] -

3710:3, 3714:23

examinations [1] -

3711:21

examine [8] - 3713:23,

3715:18, 3741:16,

3771:5, 3806:14,

3811:10, 3827:10,

3863:2

examined [2] -

3783:10, 3799:11

examining [8] -

United States District Court

Trenton, New Jersey

3886

3741:17, 3741:19,

3741:20, 3741:22,

3741:23, 3771:10,

3827:18

example [5] - 3732:5,

3732:6, 3757:18,

3777:9, 3777:25

examples [1] - 3757:3

exceed [1] - 3711:23

except [1] - 3853:21

Except [1] - 3856:9

exception [5] -

3718:23, 3718:25,

3791:6, 3793:4,

3793:13

exceptions [1] -

3856:9

excludes [1] - 3767:21

excluding [2] -

3790:19, 3801:14

exclusively [1] -

3870:18

excuse [20] - 3714:4,

3726:11, 3729:3,

3734:4, 3734:13,

3739:12, 3740:24,

3748:10, 3782:11,

3783:9, 3785:22,

3793:6, 3795:24,

3803:21, 3814:2,

3826:2, 3832:3,

3848:23, 3862:2,

3870:14

Excuse [3] - 3718:5,

3753:14, 3778:22

excused [1] - 3875:7

execution [1] -

3833:12

exercise [8] - 3715:18,

3731:15, 3782:12,

3837:16, 3849:22,

3850:4, 3863:4,

3873:11

exercises [1] -

3715:19

Exhibit [26] - 3710:8,

3710:8, 3720:8,

3720:16, 3721:18,

3735:18, 3736:16,

3743:1, 3746:24,

3747:4, 3757:21,

3758:10, 3762:10,

3768:23, 3770:2,

3772:19, 3780:13,

3781:3, 3787:20,

3810:7, 3814:17,

3864:12, 3864:22,

3875:25, 3876:5

exhibit [23] - 3719:18,

3734:15, 3734:21,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 179 of 197 PageID: 19235
3734:24, 3735:20,

3736:1, 3736:2,

3743:2, 3762:15,

3762:25, 3767:1,

3768:15, 3769:3,

3770:18, 3783:12,

3785:7, 3786:24,

3788:2, 3788:4,

3817:16, 3818:3,

3825:16, 3875:18

exhibits [8] - 3734:9,

3736:8, 3736:13,

3812:18, 3818:2,

3875:3, 3875:8,

3875:14

Exhibits [2] - 3719:16,

3768:16

existing [1] - 3800:8

expect [5] - 3735:6,

3823:17, 3828:10,

3829:8, 3829:15

expectation [3] -

3762:5, 3772:10,

3803:25

expedite [1] - 3714:6

expense [31] -

3765:24, 3766:11,

3766:18, 3766:21,

3766:22, 3769:25,

3770:12, 3774:15,

3774:24, 3775:1,

3775:10, 3775:11,

3775:24, 3782:1,

3782:3, 3782:4,

3782:11, 3785:10,

3785:12, 3789:13,

3790:19, 3797:13,

3821:14, 3846:9,

3853:20, 3853:22,

3856:6, 3859:17,

3859:22, 3864:16

Expense [2] -

3769:14, 3770:2

expenses [32] -

3733:1, 3733:2,

3749:12, 3749:18,

3749:25, 3750:3,

3753:9, 3763:14,

3764:21, 3770:8,

3820:12, 3821:10,

3824:1, 3857:23,

3858:9, 3858:23,

3859:2, 3859:17,

3859:20, 3860:3,

3862:15, 3864:6,

3864:8, 3864:10,

3864:20, 3865:9,

3865:17, 3865:23,

3866:13, 3869:2,

3869:8, 3871:1

expensive [2] -

3782:10, 3784:17

experience [3] -

3771:11, 3777:22,

3849:7

experienced [1] -

3854:20

expert [4] - 3712:17,

3784:3, 3867:12,

3871:15

expertise [4] -

3725:20, 3725:23,

3785:1, 3785:5

experts [5] - 3712:17,

3713:3, 3739:8,

3740:16, 3862:13

explain [3] - 3730:10,

3739:9, 3739:14

explore [1] - 3860:8

extended [2] -

3714:11, 3714:13

extension [1] -

3711:10

extensive [8] - 3742:6,

3752:16, 3775:19,

3834:20, 3838:21,

3848:1, 3860:6,

3862:12

extensively [2] -

3809:25, 3862:11

extent [2] - 3740:17,

3843:20

extra [1] - 3787:25

F

F.2d [1] - 3872:3

fact [29] - 3712:20,

3712:23, 3713:8,

3713:13, 3729:7,

3732:5, 3740:4,

3759:20, 3760:12,

3761:14, 3772:14,

3791:24, 3793:4,

3797:4, 3803:14,

3804:10, 3805:17,

3808:24, 3811:9,

3842:17, 3854:22,

3854:23, 3855:3,

3860:20, 3865:22,

3868:14, 3871:14,

3871:17, 3873:12

factors [9] - 3733:6,

3742:24, 3803:11,

3811:1, 3843:10,

3843:13, 3873:17,

3874:3, 3874:12

Facts [1] - 3780:22

facts [3] - 3836:21,

3871:19, 3872:5

failure [3] - 3850:4,

3856:13, 3867:5

fair[8] - 3712:12,

3715:10, 3715:13,

3715:15, 3715:22,

3762:8, 3873:8,

3874:22

fairly [3] - 3749:18,

3798:16, 3838:18

fairness [1] - 3803:9

faith [5] - 3715:17,

3771:6, 3850:3,

3853:23, 3856:10

fallen [1] - 3764:22

Fallout [1] - 3807:20

fallout [8] - 3729:24,

3730:1, 3730:3,

3776:15, 3807:21,

3809:4, 3809:10,

3809:24

familiar [9] - 3716:4,

3743:7, 3746:7,

3749:22, 3759:15,

3807:8, 3844:12,

3874:15, 3874:16

familiarity [1] -

3755:15

far [2] - 3806:12,

3855:5

fashion [2] - 3754:16,

3777:2

favorable [3] -

3854:18, 3857:2,

3860:11

FEBRUARY [1] -

3708:13

February [1] - 3840:11

Fee [1] - 3815:6

fee [87] - 3715:14,

3715:15, 3715:22,

3728:18, 3740:25,

3741:3, 3741:6,

3741:9, 3741:12,

3741:13, 3769:23,

3771:21, 3772:8,

3776:4, 3784:16,

3786:7, 3786:15,

3786:18, 3786:22,

3786:25, 3787:4,

3787:8, 3787:12,

3789:11, 3789:12,

3789:15, 3789:16,

3789:23, 3789:25,

3790:2, 3790:15,

3791:25, 3792:7,

3792:9, 3792:12,

3792:15, 3792:16,

3796:5, 3796:19,

3798:22, 3799:3,

3801:11, 3801:18,

3803:12, 3803:16,

3808:21, 3813:11,

3815:8, 3816:16,

3817:19, 3818:9,

3818:12, 3818:17,

3818:18, 3820:7,

3820:10, 3820:13,

3821:3, 3821:8,

3821:10, 3821:13,

3821:14, 3822:1,

3823:22, 3823:23,

3826:2, 3826:3,

3826:6, 3826:7,

3826:14, 3826:17,

3826:21, 3826:23,

3827:11, 3827:17,

3835:1, 3835:8,

3836:11, 3836:19,

3847:4, 3870:15,

3873:8, 3874:13,

3874:22

Fees [4] - 3769:13,

3780:22, 3781:18,

3796:14

fees [69] - 3715:10,

3728:15, 3728:16,

3741:16, 3741:18,

3741:19, 3741:20,

3741:22, 3742:1,

3742:11, 3749:20,

3750:8, 3755:21,

3763:14, 3765:11,

3766:5, 3768:4,

3769:1, 3769:17,

3769:20, 3769:22,

3770:9, 3770:11,

3773:19, 3774:12,

3774:22, 3774:23,

3776:1, 3776:5,

3776:8, 3780:1,

3783:10, 3784:18,

3785:23, 3786:1,

3786:4, 3786:11,

3786:13, 3795:19,

3797:4, 3797:5,

3797:6, 3797:8,

3797:10, 3797:11,

3798:1, 3803:9,

3808:5, 3808:6,

3808:8, 3808:9,

3808:10, 3808:19,

3809:1, 3811:8,

3817:12, 3824:1,

3825:7, 3847:5,

3847:10, 3847:13,

3847:20, 3847:25,

3848:6, 3850:20,

3850:23, 3870:15,

3872:22

few [11] - 3720:19,

United States District Court

Trenton, New Jersey

3887

3734:9, 3775:22,

3782:10, 3783:2,

3784:18, 3799:7,

3825:16, 3834:6,

3841:17, 3872:19

Fidelity [3] - 3781:24,

3783:15, 3783:24

fiduciaries [1] -

3715:17

fiduciary [2] -

3759:10, 3761:22

field [1] - 3713:13

figure [2] - 3827:20,

3828:11

file [1] - 3844:5

filed [3] - 3711:9,

3712:4, 3740:17

files [1] - 3845:18

filing [1] - 3845:8

filings [1] - 3841:15

fill [2] - 3728:8,

3728:13

finally [2] - 3831:16,

3833:21

finance [1] - 3747:18

financial [8] - 3748:5,

3748:19, 3812:16,

3813:4, 3828:2,

3828:6, 3844:10,

3845:13

financials [4] -

3804:8, 3813:2,

3813:10, 3813:13

Fine [1] - 3730:13

fine [3] - 3740:23,

3789:3, 3876:8

finish [3] - 3711:6,

3714:14, 3789:20

finished [1] - 3771:24

firing [5] - 3832:15,

3832:24, 3834:2,

3838:25, 3839:3

firm [2] - 3743:8,

3835:12

firms [3] - 3859:10,

3860:14, 3864:5

Firms [1] - 3814:3

first [17] - 3711:23,

3735:7, 3743:21,

3747:7, 3774:21,

3775:5, 3777:17,

3777:18, 3788:18,

3789:7, 3805:19,

3812:25, 3832:14,

3836:12, 3841:12,

3858:23, 3875:18

First [3] - 3816:18,

3819:6, 3872:25

FISHER [2] - 3708:14,

3709:5

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 180 of 197 PageID: 19236
five [7] - 3757:22,

3781:25, 3792:11,

3840:13, 3858:7,

3871:20

fixed [3] - 3757:5,

3816:10

flawed [1] - 3796:24

flip [1] - 3774:25

flow [2] - 3833:1,

3837:5

flying [1] - 3781:23

FM [1] - 3750:4

FMG [145] - 3715:23,

3716:25, 3717:6,

3717:14, 3717:17,

3717:24, 3718:2,

3718:5, 3718:22,

3721:8, 3728:16,

3729:6, 3729:16,

3730:6, 3730:25,

3731:17, 3732:12,

3733:7, 3733:23,

3734:3, 3734:8,

3734:21, 3737:9,

3737:13, 3738:2,

3739:24, 3745:12,

3746:1, 3747:5,

3747:11, 3747:19,

3747:22, 3748:3,

3748:6, 3748:10,

3748:11, 3748:17,

3749:11, 3749:16,

3750:6, 3750:22,

3751:11, 3751:24,

3752:18, 3753:6,

3754:11, 3754:14,

3758:19, 3762:5,

3770:21, 3776:1,

3776:5, 3776:22,

3777:1, 3777:17,

3778:2, 3785:22,

3786:9, 3787:10,

3794:4, 3794:5,

3794:15, 3794:16,

3799:11, 3800:25,

3802:3, 3802:6,

3802:10, 3802:12,

3802:20, 3802:24,

3803:3, 3803:5,

3803:18, 3803:22,

3804:6, 3804:13,

3804:17, 3805:18,

3805:20, 3805:21,

3808:3, 3812:9,

3812:11, 3812:14,

3812:17, 3813:5,

3813:6, 3813:10,

3815:9, 3817:11,

3827:16, 3829:10,

3829:21, 3830:1,

3830:9, 3831:17,

3832:3, 3832:10,

3832:18, 3832:22,

3833:22, 3833:24,

3834:8, 3834:12,

3834:21, 3834:23,

3835:2, 3835:8,

3835:16, 3837:25,

3838:4, 3841:12,

3844:8, 3845:19,

3845:20, 3845:23,

3846:12, 3847:3,

3847:4, 3847:9,

3847:10, 3847:20,

3849:5, 3851:6,

3851:15, 3853:12,

3854:24, 3855:18,

3856:2, 3856:18,

3856:25, 3858:11,

3860:8, 3862:18,

3862:24, 3865:16,

3869:13, 3870:9,

3871:1

FMG's [10] - 3727:22,

3750:8, 3799:15,

3811:6, 3811:23,

3813:3, 3831:13,

3837:9, 3870:15,

3870:19

folks [1] - 3753:23

follow [2] - 3755:7,

3781:16

following [1] - 3754:4

follows [1] - 3726:2

footer [1] - 3735:18

footnote [3] - 3723:1,

3723:22, 3726:1

FOR [3] - 3709:7,

3709:10, 3709:14

Forces [1] - 3780:22

foregone [1] - 3712:22

forget [1] - 3723:21

forgetting [1] -

3738:15

form [6] - 3751:15,

3828:8, 3843:15,

3844:20, 3844:21,

3845:15

format [2] - 3775:9,

3786:8

formula [1] - 3868:22

formulate [1] -

3827:24

forth [2] - 3760:3,

3834:10

Forum [3] - 3716:5,

3720:19, 3875:20

forum [1] - 3716:8

forward [3] - 3753:20,

3795:2, 3854:14

foundation [8] -

3751:15, 3758:16,

3766:25, 3770:18,

3783:5, 3860:23,

3861:2, 3871:24

four[13] - 3711:5,

3711:9, 3712:8,

3712:17, 3713:2,

3713:4, 3714:9,

3791:14, 3837:15,

3841:4, 3841:7,

3856:9, 3858:6

France [1] - 3754:18

Francis [1] - 3708:24

FRANCIS [1] -

3708:24

Frank [3] - 3751:17,

3861:17, 3871:9

frankly [1] - 3713:1

free [1] - 3728:7

frequently [1] -

3718:12

Friday [8] - 3712:3,

3722:13, 3728:23,

3762:16, 3769:23,

3803:22, 3863:13,

3873:10

front [6] - 3762:12,

3825:13, 3825:19,

3828:8, 3829:6,

3833:16

fruitful [1] - 3863:4

fulfill [2] - 3734:5,

3744:24

fulfilled [3] - 3733:3,

3744:3, 3744:17

full [12] - 3714:3,

3723:16, 3731:8,

3740:21, 3743:15,

3759:10, 3761:23,

3763:23, 3831:22,

3831:24, 3834:7,

3834:9

full-time [2] - 3831:22,

3831:24

fully [1] - 3737:24

fulsome [1] - 3742:20

functions [2] -

3747:14, 3841:11

Fund [12] - 3716:5,

3716:13, 3718:17,

3720:19, 3720:21,

3780:21, 3781:18,

3782:2, 3795:15,

3795:18, 3815:15,

3875:20

fund [100] - 3719:20,

3719:21, 3721:25,

3722:16, 3723:8,

3724:13, 3724:16,

3724:24, 3726:3,

3726:5, 3726:7,

3732:15, 3735:8,

3735:9, 3742:15,

3747:17, 3752:15,

3755:18, 3755:19,

3755:23, 3755:24,

3756:3, 3756:8,

3757:7, 3764:21,

3766:7, 3767:23,

3777:14, 3778:19,

3779:8, 3781:24,

3782:5, 3782:12,

3784:19, 3786:25,

3787:3, 3790:20,

3791:3, 3791:6,

3791:22, 3791:25,

3793:4, 3793:8,

3793:11, 3795:12,

3795:22, 3796:5,

3796:6, 3796:8,

3796:9, 3797:6,

3797:9, 3798:6,

3798:8, 3798:11,

3798:16, 3798:24,

3799:22, 3803:6,

3803:15, 3804:3,

3808:14, 3812:12,

3817:10, 3817:24,

3827:13, 3827:14,

3827:15, 3832:7,

3833:1, 3833:14,

3836:13, 3836:14,

3836:25, 3837:1,

3842:16, 3843:24,

3846:9, 3846:12,

3848:25, 3849:5,

3854:15, 3855:7,

3856:20, 3859:7,

3870:12, 3870:20,

3870:22, 3873:4,

3873:21, 3874:1,

3874:2

fund's [8] - 3723:11,

3724:22, 3724:23,

3796:19, 3829:4,

3829:12, 3843:8,

3843:12

Funding [1] - 3718:17

FUNDS [1] - 3708:10

Funds [4] - 3716:21,

3769:13, 3779:23,

3807:12

funds [138] - 3726:4,

3726:6, 3726:11,

3726:12, 3726:16,

3726:17, 3726:20,

3726:24, 3728:17,

3728:24, 3729:3,

3732:7, 3732:17,

United States District Court

Trenton, New Jersey

3888

3733:4, 3733:10,

3733:24, 3750:23,

3756:16, 3756:18,

3756:21, 3763:14,

3766:4, 3766:11,

3766:14, 3766:15,

3766:18, 3766:21,

3766:22, 3767:4,

3767:7, 3767:21,

3767:23, 3768:3,

3768:4, 3768:7,

3770:11, 3770:14,

3771:15, 3772:16,

3773:19, 3775:20,

3775:25, 3776:1,

3776:5, 3776:10,

3776:16, 3776:20,

3777:10, 3777:14,

3777:15, 3777:16,

3778:5, 3778:8,

3778:9, 3778:11,

3778:12, 3778:19,

3779:7, 3779:23,

3780:7, 3782:4,

3782:9, 3782:10,

3784:17, 3784:18,

3785:9, 3787:12,

3790:16, 3790:23,

3790:25, 3791:5,

3791:11, 3791:13,

3791:20, 3791:22,

3792:7, 3793:6,

3793:7, 3793:8,

3793:10, 3793:12,

3793:20, 3794:6,

3794:7, 3794:15,

3794:17, 3796:21,

3797:10, 3797:23,

3798:21, 3798:23,

3799:1, 3799:25,

3800:3, 3800:8,

3800:13, 3801:12,

3801:14, 3802:10,

3805:3, 3805:17,

3805:22, 3808:4,

3808:20, 3808:21,

3808:23, 3808:25,

3813:7, 3815:18,

3816:10, 3828:22,

3829:24, 3832:2,

3832:12, 3833:10,

3836:16, 3839:15,

3842:18, 3845:9,

3846:20, 3851:24,

3853:9, 3862:18,

3868:1, 3868:14,

3869:14, 3870:20,

3872:22, 3873:23

funds' [2] - 3721:9,

3722:7

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 181 of 197 PageID: 19237
G

Gable [4] - 3708:24,

3767:13, 3858:14,

3870:3

GABLE [1] - 3708:24

gains [2] - 3843:9,

3843:13

GAMCO [1] - 3805:13

Gartenberg [3] -

3733:6, 3759:1,

3811:1

Gary [3] - 3815:3,

3825:6, 3825:17

GARY [4] - 3710:2,

3710:3, 3714:19,

3714:23

gathered [2] - 3794:7,

3794:8

gathering [1] - 3763:6

general [20] - 3733:16,

3735:4, 3748:5,

3761:25, 3780:9,

3808:5, 3808:9,

3808:21, 3809:20,

3809:23, 3849:6,

3867:19, 3868:6,

3868:9, 3868:16,

3868:19, 3869:7,

3870:11, 3870:25

GENERAL [1] -

3709:16

generally [9] -

3714:12, 3751:11,

3756:21, 3766:16,

3774:19, 3828:3,

3832:10, 3850:12,

3872:3

generated [1] - 3785:8

generic [1] - 3767:4

generically [1] -

3765:25

germane [1] - 3813:10

Given [3] - 3852:18,

3854:22, 3865:24

given [16] - 3712:20,

3719:20, 3731:17,

3738:15, 3738:16,

3738:21, 3740:15,

3744:23, 3761:2,

3761:24, 3766:9,

3791:10, 3828:9,

3852:15, 3852:22,

3854:17

glass [2] - 3764:5,

3819:23

glasses [3] - 3722:12,

3806:24, 3807:1

GLENN [1] - 3708:8

Global [2] - 3815:15,

3816:1

goal [16] - 3715:10,

3715:22, 3715:24,

3717:5, 3744:3,

3744:17, 3744:20,

3834:21, 3872:20,

3872:23, 3872:24,

3873:1, 3873:2,

3873:4, 3873:20

goals [1] - 3744:24

Goldman [2] -

3795:15, 3795:18

governance [5] -

3712:17, 3712:19,

3723:7, 3726:3,

3732:21

Governance [1] -

3723:5

Government [6] -

3795:6, 3795:10,

3795:20, 3815:14,

3815:20, 3815:23

grade [1] - 3807:11

grades [1] - 3807:15

graph [5] - 3765:7,

3765:10, 3766:18,

3798:1, 3824:9

great [1] - 3804:10

greater [3] - 3836:24,

3862:18, 3871:1

green [4] - 3770:14,

3770:15, 3771:15,

3823:25

grew [2] - 3824:22,

3835:9

gross [3] - 3792:8,

3815:8, 3850:3

Gross [1] - 3815:6

GROUP [1] - 3708:11

group [7] - 3777:15,

3786:15, 3786:16,

3793:12, 3829:13,

3829:25, 3845:23

groups [7] - 3754:18,

3772:14, 3772:15,

3775:21, 3777:6,

3778:12, 3782:24

grow [2] - 3765:11,

3765:24

growing [1] - 3766:10

grown [2] - 3835:24,

3873:24

growth [2] - 3757:18,

3873:23

guess [35] - 3718:10,

3718:23, 3719:9,

3720:1, 3720:4,

3723:23, 3730:9,

3732:6, 3735:3,

3740:9, 3741:5,

3747:6, 3766:2,

3773:1, 3774:18,

3774:24, 3775:18,

3780:3, 3790:17,

3791:23, 3797:2,

3798:19, 3803:1,

3811:4, 3812:24,

3814:24, 3815:12,

3816:17, 3844:19,

3855:18, 3857:8,

3863:12, 3868:4

guessed [1] - 3811:5

guessing [1] -

3737:18

guidance [4] - 3740:6,

3740:8, 3740:9,

3873:15

Guidance [1] -

3720:20

H

HADLEY [1] - 3709:12

half [5] - 3712:25,

3713:2, 3713:3,

3739:20, 3824:25

halfway [2] - 3778:19,

3778:20

halts [1] - 3837:11

hand [18] - 3746:23,

3757:20, 3758:9,

3763:18, 3764:15,

3764:19, 3768:12,

3774:7, 3784:10,

3790:20, 3806:5,

3819:7, 3819:22,

3824:9, 3839:24,

3848:20, 3865:5

handing [1] - 3787:24

Handing [3] - 3762:21,

3772:23, 3823:3

hang [1] - 3865:14

happy [3] - 3721:13,

3723:23, 3739:14

hard [5] - 3737:5,

3777:8, 3807:16,

3836:6, 3843:4

hardly [1] - 3784:17

harmed [2] - 3850:18,

3852:1

Harris [4] - 3759:18,

3760:23, 3809:10,

3809:16

Headed [1] - 3810:15

heading [3] - 3795:4,

3831:19, 3832:14

hear [2] - 3721:14,

3738:25

heard [6] - 3713:16,

3757:10, 3860:6,

3861:1, 3869:15,

3871:7

heat [1] - 3754:21

heavily [2] - 3873:14,

3873:15

heavy [1] - 3773:1

help [3] - 3752:16,

3801:5, 3823:6

helpful [11] - 3734:4,

3740:13, 3760:20,

3795:22, 3796:2,

3804:5, 3822:18,

3822:24, 3823:4,

3826:1, 3837:20

helps [1] - 3734:5

hereunder [1] - 3854:1

hesitant [1] - 3861:21

hesitated [1] - 3775:5

hesitating [2] -

3832:20, 3866:25

hesitation [1] -

3750:13

high [2] - 3799:2,

3815:16

higher[6] - 3785:13,

3792:7, 3798:17,

3868:1, 3868:6

highest [4] - 3778:20,

3791:24, 3792:5,

3795:12

hindsight [1] -

3743:22

hiring [5] - 3832:15,

3832:24, 3834:2,

3838:25, 3839:3

Hold [1] - 3766:23

hold [1] - 3768:18

holding [1] - 3760:23

Honor [97] - 3711:3,

3711:4, 3711:11,

3711:16, 3712:16,

3713:1, 3713:11,

3713:17, 3714:16,

3715:1, 3722:20,

3723:23, 3724:1,

3727:12, 3730:9,

3733:18, 3735:2,

3735:3, 3735:24,

3736:17, 3737:21,

3738:6, 3746:24,

3751:22, 3752:5,

3753:17, 3753:22,

3754:1, 3757:20,

3757:22, 3758:2,

3758:6, 3758:9,

3759:23, 3760:24,

3762:15, 3762:19,

3763:19, 3765:13,

United States District Court

Trenton, New Jersey

3889

3766:25, 3767:13,

3768:16, 3769:2,

3769:9, 3770:17,

3771:4, 3771:25,

3781:6, 3782:18,

3783:5, 3783:9,

3784:13, 3787:19,

3789:3, 3789:6,

3789:22, 3794:19,

3799:5, 3799:6,

3806:15, 3806:22,

3807:4, 3810:4,

3812:23, 3814:17,

3819:22, 3820:22,

3822:15, 3822:23,

3822:24, 3823:11,

3843:15, 3848:9,

3848:16, 3848:19,

3848:21, 3853:1,

3857:8, 3861:9,

3861:14, 3863:17,

3868:22, 3869:16,

3869:19, 3869:24,

3871:13, 3871:15,

3872:7, 3872:12,

3872:16, 3875:3,

3875:19, 3875:21,

3875:23, 3876:3,

3876:6, 3876:11

HONORABLE [1] -

3708:17

hope [1] - 3803:24

HORA [1] - 3709:13

hour [1] - 3712:25

hours [5] - 3711:22,

3714:2, 3714:4,

3806:13, 3857:10

house [2] - 3839:25,

3840:2

housekeeping [2] -

3711:4, 3711:5

hovers [1] - 3756:21

human [1] - 3748:16

hundred [4] - 3717:23,

3718:21, 3782:10,

3784:18

hybrid [2] - 3756:6,

3756:13

hypothetical [7] -

3827:1, 3868:20,

3871:12, 3871:16,

3872:4, 3872:5,

3872:6

I

ICI [3] - 3763:11,

3767:5, 3801:14

idea [1] - 3765:14

ideally [2] - 3755:25,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 182 of 197 PageID: 19238
3757:7

identified [7] - 3716:1,

3732:4, 3755:22,

3794:3, 3796:21,

3799:18, 3802:7

identify [8] - 3720:16,

3747:4, 3780:19,

3794:17, 3815:18,

3833:16, 3839:15,

3840:9

identifying [3] -

3727:23, 3805:23,

3818:17

ii [1] - 3856:11

III [2] - 3721:19,

3721:22

imagine [2] - 3770:24,

3839:3

immediately [1] -

3804:4

impact [7] - 3723:14,

3766:5, 3766:11,

3865:19, 3865:22,

3866:20

imply [2] - 3779:17,

3782:4

important [19] -

3712:19, 3720:3,

3728:9, 3728:14,

3728:23, 3729:11,

3729:15, 3729:20,

3729:23, 3730:2,

3730:17, 3730:21,

3731:2, 3743:23,

3797:13, 3803:13,

3809:5, 3823:18,

3848:7

importantly [2] -

3816:18, 3816:21

imposed [1] - 3803:3

improper[1] - 3809:8

improperly [2] -

3809:4, 3809:7

imprudent [1] -

3849:4

in-house [2] -

3839:25, 3840:2

inaccurate [10] -

3731:17, 3745:15,

3745:23, 3746:2,

3746:13, 3785:17,

3834:16, 3846:18,

3846:25, 3848:5

inappropriate [1] -

3784:19

incentive [4] -

3712:12, 3713:7,

3713:8, 3726:7

incentives [2] -

3711:14, 3713:9

inch [1] - 3824:17

inches [1] - 3869:22

Incidentally [1] -

3829:23

include [10] - 3719:11,

3719:15, 3723:9,

3747:18, 3757:18,

3774:16, 3778:12,

3797:5, 3851:3,

3851:9

included [6] - 3773:3,

3777:15, 3788:15,

3799:2, 3862:9

includes [5] -

3754:19, 3774:11,

3774:13, 3774:22,

3821:8

including [5] -

3718:15, 3777:13,

3801:18, 3813:6,

3873:7

income [4] - 3813:18,

3816:10, 3843:9,

3843:12

inconsistent [5] -

3731:23, 3746:21,

3755:10, 3830:14,

3842:7

incorrect [3] - 3827:8,

3866:11, 3866:18

incorrectly [2] -

3732:9, 3777:23

increase [8] - 3836:10,

3836:23, 3836:25,

3837:12, 3837:13,

3868:1, 3868:6

increased [3] -

3781:24, 3825:2,

3868:15

incurred [1] - 3753:4

Indemnification [1] -

3855:25

indemnification [1] -

3806:3

indemnify [1] - 3849:5

indemnity [3] -

3806:2, 3849:9,

3857:1

independence [1] -

3721:25

independent [38] -

3716:8, 3716:9,

3719:1, 3719:3,

3722:1, 3722:8,

3722:16, 3722:17,

3724:13, 3724:14,

3724:23, 3726:15,

3731:10, 3732:25,

3734:13, 3734:14,

3734:15, 3734:20,

3734:23, 3737:22,

3740:6, 3742:7,

3743:22, 3748:23,

3756:25, 3777:23,

3810:1, 3832:20,

3850:17, 3850:24,

3852:23, 3854:20,

3856:22, 3858:17,

3859:3, 3859:10,

3860:13, 3873:14

Independent [3] -

3716:9, 3718:14,

3725:7

Index [32] - 3789:8,

3790:1, 3790:15,

3790:17, 3795:7,

3795:10, 3795:20,

3815:20, 3815:24,

3817:18, 3817:25,

3818:7, 3819:8,

3819:11, 3821:19,

3822:10, 3823:10,

3823:16, 3824:6,

3826:4, 3826:7,

3826:12, 3826:14,

3833:3, 3835:2,

3835:16, 3837:2,

3839:2, 3839:17,

3840:3, 3840:14,

3840:19

index [46] - 3755:18,

3755:19, 3755:22,

3756:9, 3756:14,

3756:21, 3757:1,

3757:2, 3757:3,

3757:7, 3757:10,

3757:14, 3757:16,

3757:17, 3766:14,

3766:18, 3766:21,

3768:3, 3768:7,

3777:10, 3777:14,

3778:5, 3778:9,

3778:11, 3778:12,

3790:13, 3790:25,

3791:5, 3791:11,

3791:13, 3793:6,

3793:7, 3793:10,

3793:11, 3793:20,

3794:4, 3794:7,

3794:15, 3794:17,

3801:12, 3827:13,

3827:14, 3836:16

Index's [1] - 3840:16

indexes [2] - 3757:4

indicate [2] - 3765:10,

3771:14

indicated [6] -

3715:10, 3736:8,

3736:12, 3839:11,

3852:13, 3872:19

indicates [4] -

3771:17, 3815:14,

3831:22, 3831:24

indication [1] -

3770:14

individual [1] - 3874:4

inducement [1] -

3849:23

industry [18] -

3718:17, 3722:16,

3722:19, 3740:20,

3763:12, 3765:25,

3766:9, 3766:10,

3767:5, 3777:22,

3779:14, 3786:6,

3850:11, 3851:22,

3852:22, 3854:11,

3854:21, 3860:18

influence [1] -

3723:10

information [78] -

3716:10, 3716:18,

3716:22, 3717:14,

3717:17, 3717:20,

3717:24, 3718:1,

3718:3, 3718:4,

3718:8, 3718:10,

3718:12, 3718:15,

3719:3, 3719:7,

3719:10, 3719:11,

3719:15, 3719:23,

3720:2, 3725:15,

3727:6, 3728:10,

3728:14, 3728:24,

3729:2, 3729:11,

3730:6, 3730:16,

3730:17, 3730:20,

3730:21, 3730:22,

3730:24, 3731:2,

3731:17, 3732:12,

3740:12, 3762:6,

3775:8, 3776:17,

3777:5, 3778:3,

3778:17, 3778:18,

3779:22, 3780:6,

3780:24, 3781:10,

3782:22, 3785:23,

3786:1, 3786:4,

3786:8, 3786:10,

3786:14, 3796:10,

3799:4, 3803:8,

3821:25, 3823:18,

3828:2, 3828:6,

3829:9, 3829:25,

3830:10, 3837:19,

3844:11, 3845:13,

3845:22, 3846:8,

3848:1, 3858:19,

3863:15, 3864:9,

3873:3, 3873:6

United States District Court

Trenton, New Jersey

3890

informed [1] - 3737:16

inherent [6] - 3716:25,

3731:5, 3772:13,

3797:1, 3797:6,

3804:24

inherently [1] -

3797:21

input [1] - 3717:9

inquire [1] - 3739:4

INS [1] - 3708:6

inside [2] - 3788:11,

3788:24

Insight [2] - 3780:21,

3780:23

Insights [1] - 3725:18

insofar[1] - 3829:23

Institute [6] - 3716:1,

3716:17, 3718:14,

3763:11, 3765:2,

3779:18

insufficient [1] -

3761:15

insufficiently [2] -

3760:13, 3761:16

INSURANCE [1] -

3709:17

insurance [19] -

3726:16, 3726:22,

3735:12, 3735:13,

3746:16, 3747:13,

3752:20, 3752:22,

3752:23, 3802:1,

3802:2, 3802:3,

3802:6, 3802:8,

3802:9, 3802:12,

3802:20, 3804:11,

3808:22

integrity [2] - 3717:14,

3717:17

intend [1] - 3715:5

intended [4] - 3753:2,

3755:19, 3767:7,

3813:5

intending [1] -

3779:17

interest [8] - 3715:20,

3738:16, 3850:8,

3850:13, 3852:11,

3854:9, 3856:18,

3872:2

interested [1] -

3738:24

interests [4] - 3726:4,

3726:5, 3726:7,

3852:19

Intermediate [6] -

3795:6, 3795:9,

3795:20, 3815:14,

3815:20, 3815:23

Internal [1] - 3842:10

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 183 of 197 PageID: 19239
interpretation [1] -

3771:8

interpreted [1] -

3830:19

interviewed [1] -

3738:12

introduced [2] -

3783:10, 3812:15

introduction [1] -

3774:18

Investment [15] -

3712:18, 3716:1,

3716:17, 3718:13,

3723:5, 3723:6,

3724:11, 3745:11,

3745:16, 3763:11,

3765:2, 3776:11,

3779:18, 3831:19,

3849:15

investment [26] -

3728:15, 3729:3,

3740:25, 3741:6,

3741:9, 3741:12,

3741:13, 3741:15,

3741:16, 3756:1,

3767:21, 3779:14,

3810:23, 3812:9,

3813:18, 3827:24,

3832:1, 3832:6,

3832:14, 3834:8,

3834:9, 3834:23,

3841:24, 3842:3,

3852:12, 3867:19

investments [2] -

3828:11, 3832:2

investor[3] - 3717:3,

3785:11, 3852:14

investors [14] -

3715:17, 3715:21,

3717:5, 3719:20,

3719:21, 3742:21,

3742:23, 3760:13,

3761:16, 3764:22,

3850:18, 3852:1,

3854:15, 3855:2

involved [1] - 3753:19

involving [2] - 3840:2,

3840:14

irrelevant [1] - 3811:7

irresponsible [1] -

3784:20

isolated [1] - 3836:16

isolation [1] - 3837:15

issue [19] - 3718:7,

3732:7, 3756:18,

3767:4, 3773:19,

3777:14, 3777:20,

3787:1, 3793:7,

3793:11, 3794:3,

3800:3, 3805:3,

3805:17, 3839:15,

3840:11, 3855:6,

3857:3, 3857:4

issues [9] - 3772:15,

3837:6, 3837:7,

3837:11, 3837:24,

3840:11, 3854:15,

3855:4, 3873:13

item [2] - 3731:16,

3749:13

items [3] - 3718:18,

3817:12, 3834:6

itself [6] - 3764:8,

3808:1, 3812:13,

3827:11, 3829:1,

3849:13

J

J-26 [1] - 3855:14

J-4 [3] - 3806:6,

3848:20, 3849:11

J-5 [2] - 3853:1

JAMES [1] - 3709:13

January [1] - 3723:6

Jennings [3] -

3861:13, 3861:14,

3861:15

jeopardize [1] -

3848:5

JERSEY [3] - 3708:1,

3708:15, 3708:18

Joenk [11] - 3711:22,

3723:15, 3753:13,

3754:3, 3755:5,

3755:10, 3770:20,

3799:25, 3807:21,

3851:4, 3872:19

joining [1] - 3743:14

joint [1] - 3738:16

jointly [1] - 3802:9

JONATHAN [1] -

3709:9

Jones [4] - 3759:18,

3760:23, 3809:10,

3809:16

jot [1] - 3797:3

journals [1] - 3842:12

JP [34] - 3712:1,

3838:4, 3838:6,

3838:7, 3838:22,

3841:11, 3841:20,

3841:23, 3842:2,

3842:9, 3842:12,

3842:22, 3842:23,

3843:1, 3843:8,

3843:14, 3843:24,

3844:2, 3844:5,

3844:11, 3844:16,

3844:25, 3845:10,

3845:18, 3845:24,

3846:2, 3846:4,

3846:5, 3846:9,

3846:13, 3855:18,

3855:19, 3856:3

JUDGE [1] - 3708:17

judge [3] - 3804:19,

3806:6, 3830:22

judgment [12] -

3715:19, 3731:15,

3804:1, 3804:20,

3837:17, 3849:22,

3849:25, 3853:19,

3856:6, 3873:11,

3874:18

judgments [1] -

3874:4

July [11] - 3748:22,

3758:17, 3758:18,

3763:13, 3775:13,

3811:5, 3814:24,

3831:3, 3831:5,

3860:6, 3865:1

June [3] - 3724:13,

3758:17, 3860:6

K

keep [7] - 3772:22,

3780:15, 3799:7,

3802:24, 3836:6,

3841:13, 3842:14

key [1] - 3848:8

Kimble [1] - 3872:3

kind [24] - 3712:11,

3731:9, 3739:20,

3742:19, 3752:21,

3754:11, 3756:2,

3756:25, 3757:1,

3757:2, 3757:5,

3757:19, 3758:16,

3772:25, 3780:5,

3789:13, 3809:19,

3830:5, 3830:7,

3845:8, 3858:1,

3865:5, 3873:25,

3874:24

kinds [4] - 3726:15,

3749:5, 3766:11,

3838:2

Knowing [1] - 3826:21

knowing [1] - 3775:25

knowledge [5] -

3747:21, 3748:7,

3749:3, 3770:19,

3801:1

known [3] - 3756:24,

3856:2, 3856:3

knows [1] - 3822:19

Kopcke [1] - 3714:5

KORN [2] - 3709:9,

3875:18

Kozlowski [1] -

3831:25

KWELTY [2] - 3709:6,

3746:25

L

labeled [1] - 3780:21

labor [1] - 3862:18

laid [4] - 3766:25,

3770:18, 3783:6,

3861:3

Lakind [27] - 3711:7,

3713:20, 3723:25,

3726:13, 3727:11,

3751:22, 3752:4,

3753:14, 3760:2,

3761:6, 3764:10,

3768:18, 3773:11,

3779:24, 3788:1,

3788:14, 3789:5,

3795:2, 3803:4,

3804:8, 3806:13,

3806:21, 3820:17,

3822:19, 3822:21,

3830:2, 3848:18

LAKIND [176] - 3709:3,

3709:4, 3709:5,

3710:3, 3711:3,

3713:17, 3713:21,

3714:1, 3714:16,

3714:23, 3715:1,

3715:3, 3715:7,

3720:7, 3720:10,

3720:13, 3722:20,

3722:25, 3724:1,

3724:3, 3724:9,

3727:12, 3730:14,

3733:17, 3735:1,

3735:15, 3735:23,

3736:6, 3736:17,

3737:1, 3737:6,

3738:6, 3739:2,

3742:25, 3746:23,

3747:1, 3747:2,

3752:5, 3752:6,

3753:17, 3753:22,

3754:1, 3754:2,

3757:20, 3758:2,

3758:6, 3758:8,

3758:11, 3759:23,

3760:10, 3761:8,

3762:14, 3762:19,

3762:23, 3763:25,

3764:4, 3764:11,

3764:14, 3765:21,

3765:22, 3767:13,

United States District Court

Trenton, New Jersey

3891

3768:2, 3768:12,

3768:16, 3768:20,

3769:2, 3769:5,

3769:11, 3771:1,

3771:4, 3771:12,

3771:13, 3771:25,

3772:3, 3772:6,

3773:8, 3773:12,

3773:13, 3780:1,

3780:12, 3781:6,

3781:8, 3781:11,

3783:9, 3783:16,

3783:18, 3783:22,

3784:13, 3787:19,

3787:22, 3788:2,

3788:8, 3788:16,

3789:6, 3789:17,

3789:21, 3790:6,

3792:9, 3792:13,

3794:19, 3799:5,

3799:9, 3802:18,

3806:5, 3806:8,

3806:15, 3806:22,

3807:4, 3807:6,

3807:7, 3812:21,

3812:23, 3813:1,

3813:21, 3813:23,

3813:24, 3814:16,

3817:23, 3819:22,

3820:5, 3820:22,

3821:5, 3822:24,

3823:2, 3824:5,

3826:20, 3827:22,

3830:22, 3838:10,

3839:5, 3843:23,

3848:9, 3848:13,

3848:16, 3848:19,

3848:22, 3852:25,

3853:4, 3855:13,

3857:12, 3857:14,

3857:17, 3857:18,

3858:14, 3858:21,

3861:9, 3861:12,

3861:13, 3861:14,

3862:1, 3863:17,

3863:21, 3864:12,

3868:21, 3868:24,

3869:16, 3869:19,

3869:22, 3869:24,

3870:1, 3870:3,

3870:13, 3871:13,

3871:16, 3871:21,

3872:1, 3872:10,

3872:16, 3875:3,

3875:8, 3875:12,

3875:20, 3875:23,

3876:1, 3876:6,

3876:11

language [10] -

3755:3, 3755:8,

3784:6, 3851:12,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 184 of 197 PageID: 19240
3851:22, 3852:13,

3854:11, 3855:10,

3861:23, 3874:16

Large [1] - 3792:17

large [5] - 3733:12,

3749:18, 3762:10,

3765:25, 3782:10

largely [1] - 3723:8

larger [2] - 3779:8,

3805:18

largest [2] - 3795:12,

3804:11

last [21] - 3724:10,

3733:19, 3763:18,

3764:16, 3767:2,

3775:3, 3797:7,

3812:6, 3812:22,

3839:21, 3854:13,

3854:23, 3858:6,

3858:7, 3862:6,

3870:4, 3870:23,

3874:5, 3874:6,

3874:7, 3874:8

late [2] - 3739:20,

3857:11

Laughter [1] - 3772:24

law [9] - 3743:8,

3752:22, 3776:12,

3803:6, 3835:12,

3849:25, 3853:19,

3856:6, 3873:13

lawyer[5] - 3730:11,

3746:16, 3752:20,

3752:21

lay [2] - 3818:25,

3872:4

lead [3] - 3722:17,

3732:24, 3832:19

leadership [1] -

3724:14

learn [4] - 3760:11,

3760:22, 3761:13,

3809:15

learned [1] - 3752:14

least [6] - 3718:18,

3758:19, 3761:22,

3800:24, 3803:13,

3832:24

leave [2] - 3814:19,

3872:7

leaving [1] - 3848:10

Left [1] - 3764:19

left [14] - 3711:6,

3713:6, 3763:18,

3764:15, 3764:19,

3774:6, 3774:7,

3784:10, 3790:20,

3806:25, 3826:16,

3839:24, 3865:5

left-hand [8] -

3763:18, 3764:15,

3774:7, 3784:10,

3790:20, 3839:24,

3865:5

Left-hand [1] -

3764:19

legal [6] - 3728:10,

3742:3, 3748:15,

3762:6, 3800:16,

3801:19

length [5] - 3728:9,

3728:13, 3776:2,

3776:9, 3874:20

Less [1] - 3770:2

less [3] - 3768:4,

3768:8, 3770:8

letter [2] - 3875:14,

3876:1

level [18] - 3751:24,

3751:25, 3753:4,

3755:14, 3755:16,

3763:12, 3769:21,

3769:24, 3786:21,

3786:25, 3789:12,

3796:6, 3833:1,

3838:1, 3870:21,

3870:22, 3872:21

levels [14] - 3782:25,

3786:16, 3786:21,

3786:22, 3786:23,

3787:5, 3787:8,

3787:12, 3796:5,

3796:20, 3796:22,

3797:24, 3798:17,

3799:1

Levels [2] - 3769:13,

3796:15

leverage [9] - 3850:17,

3850:19, 3850:22,

3851:25, 3852:15,

3852:17, 3852:18,

3854:12, 3854:17

Lewis [5] - 3712:4,

3714:6, 3742:6,

3753:15, 3753:24

Lewis' [1] - 3712:5

Liability [2] - 3849:18,

3855:25

liability [2] - 3851:15,

3852:19

liable [4] - 3849:24,

3850:2, 3853:19,

3856:5

lie [1] - 3781:18

LIFE [2] - 3708:6,

3709:17

light [2] - 3713:13,

3740:3

lights [1] - 3754:21

likely [4] - 3711:8,

3724:14, 3724:15,

3724:16

limitation [3] -

3747:18, 3851:14,

3851:24

Limitations [2] -

3849:18, 3855:25

limitations [7] -

3745:3, 3772:13,

3777:12, 3797:1,

3797:6, 3797:19,

3797:21

limited [4] - 3801:9,

3838:19, 3841:17,

3842:7

line [5] - 3753:9,

3817:12, 3824:10,

3859:6, 3859:7

lines [2] - 3798:5,

3859:6

linked [1] - 3754:15

lion's [1] - 3713:6

Lipper[69] - 3718:4,

3718:5, 3725:14,

3728:19, 3728:20,

3769:14, 3770:11,

3770:15, 3771:16,

3771:18, 3772:7,

3773:3, 3773:14,

3773:17, 3773:21,

3774:12, 3774:15,

3774:19, 3775:8,

3775:10, 3775:12,

3775:15, 3775:19,

3775:21, 3776:22,

3776:25, 3777:3,

3777:4, 3777:7,

3777:9, 3777:12,

3777:19, 3777:20,

3777:22, 3778:2,

3778:4, 3778:7,

3778:8, 3779:20,

3779:21, 3780:9,

3782:23, 3783:11,

3786:10, 3786:12,

3786:24, 3787:4,

3787:9, 3790:2,

3790:7, 3790:9,

3791:4, 3793:5,

3793:7, 3793:11,

3794:3, 3794:8,

3794:14, 3794:16,

3796:21, 3797:5,

3797:18, 3797:19,

3798:6, 3816:7,

3829:13, 3829:24,

3872:22

liquidity [2] - 3837:7,

3837:11

list [11] - 3748:2,

3748:8, 3748:25,

3780:1, 3790:23,

3834:7, 3834:9,

3834:14, 3843:11,

3843:17, 3856:9

listed [3] - 3725:16,

3735:19, 3834:6

lists [1] - 3831:19

litigation [16] -

3735:10, 3737:8,

3737:17, 3737:19,

3738:10, 3738:14,

3739:3, 3739:5,

3739:11, 3739:17,

3746:16, 3760:6,

3761:3, 3761:10,

3761:20, 3862:7

litigator [1] - 3738:18

LLP [2] - 3709:9,

3709:12

located [1] - 3810:8

look [54] - 3727:10,

3727:15, 3744:19,

3761:3, 3761:6,

3761:9, 3762:9,

3762:11, 3762:24,

3766:2, 3779:7,

3787:18, 3788:22,

3789:9, 3794:1,

3796:6, 3796:8,

3796:18, 3797:21,

3803:8, 3805:21,

3810:13, 3811:15,

3812:1, 3812:10,

3812:20, 3812:25,

3813:14, 3813:15,

3816:20, 3817:24,

3818:3, 3819:21,

3821:23, 3822:3,

3825:6, 3830:21,

3830:24, 3834:12,

3836:14, 3837:17,

3837:19, 3839:7,

3849:11, 3849:13,

3853:5, 3864:14,

3864:22, 3873:2,

3873:16, 3873:17,

3874:13

looked [6] - 3711:17,

3787:3, 3812:18,

3825:16, 3826:5,

3826:8

looking [33] - 3733:15,

3761:18, 3761:21,

3765:19, 3767:19,

3774:3, 3774:18,

3780:3, 3788:16,

3789:7, 3789:25,

3792:2, 3796:19,

3797:2, 3797:13,

United States District Court

Trenton, New Jersey

3892

3811:4, 3814:25,

3815:10, 3815:11,

3820:1, 3821:8,

3823:7, 3831:5,

3834:11, 3834:14,

3836:15, 3836:20,

3837:15, 3851:19,

3855:10, 3865:14,

3867:21, 3870:19

looks [15] - 3761:1,

3763:12, 3781:8,

3781:10, 3784:5,

3791:12, 3792:5,

3814:24, 3823:24,

3824:12, 3851:6,

3853:11, 3855:17,

3864:24, 3865:1

loss [6] - 3849:25,

3853:20, 3853:22,

3854:14, 3855:2,

3856:6

loud [1] - 3817:10

Louie [2] - 3801:8,

3851:4

LOUIE [1] - 3709:16

lower [7] - 3760:8,

3766:15, 3768:8,

3782:11, 3784:18,

3868:11

lowest [1] - 3778:20

loyalty [3] - 3719:21,

3848:24, 3849:3

lunch [1] - 3806:11

Luncheon [1] -

3806:16

Lynch [1] - 3759:1

M

macro [1] - 3837:19

Magellan [2] -

3781:24, 3783:24

magnifying [2] -

3764:5, 3819:23

magnitude [4] -

3730:5, 3730:15,

3730:19, 3857:22

mail [1] - 3755:2

mailings [1] - 3718:13

mails [2] - 3718:13,

3718:15

maintain [3] -

3842:12, 3842:14,

3842:17

maintaining [1] -

3842:15

maintains [1] -

3828:21

maintenance [1] -

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 185 of 197 PageID: 19241
3843:7

major [1] - 3866:8

majority [1] - 3790:25

manage [4] - 3832:2,

3832:3, 3832:7

managed [9] -

3755:19, 3755:23,

3755:24, 3755:25,

3766:15, 3766:18,

3768:4, 3778:5,

3785:9

management [71] -

3718:20, 3724:16,

3727:23, 3728:5,

3728:15, 3741:6,

3741:9, 3741:12,

3741:13, 3741:15,

3741:16, 3747:13,

3747:18, 3748:6,

3749:3, 3752:17,

3765:11, 3765:24,

3769:17, 3770:1,

3774:12, 3774:22,

3774:23, 3789:11,

3791:24, 3795:9,

3797:5, 3798:1,

3799:3, 3801:19,

3804:9, 3806:4,

3808:1, 3817:19,

3818:9, 3818:17,

3820:7, 3820:9,

3821:3, 3821:7,

3822:1, 3823:21,

3823:23, 3824:4,

3826:2, 3826:14,

3826:23, 3832:1,

3832:6, 3832:14,

3833:13, 3833:21,

3834:8, 3834:9,

3834:23, 3835:1,

3835:8, 3836:9,

3836:10, 3836:19,

3839:12, 3847:3,

3847:5, 3849:7,

3851:15, 3852:12,

3862:12, 3862:25,

3867:2, 3867:17

MANAGEMENT [1] -

3708:11

Management [10] -

3712:18, 3724:12,

3725:19, 3745:11,

3745:16, 3769:12,

3796:14, 3831:19,

3847:9, 3849:15

management/

administrative [4] -

3740:25, 3789:15,

3792:12, 3797:10

Manager [1] - 3849:21

manager [13] - 3812:9,

3813:18, 3829:9,

3829:10, 3829:14,

3834:3, 3838:1,

3849:5, 3849:24,

3851:1, 3852:1,

3852:7, 3855:9

manager's [2] -

3827:9, 3849:23

managers [1] -

3755:25

manages [1] - 3832:4

managing [2] -

3803:14, 3832:25

MANAGING [1] -

3709:16

mandated [1] -

3742:20

manner[1] - 3873:5

manual [1] - 3718:24

Marathon [1] - 3782:2

margin [1] - 3826:24

MARK [1] - 3709:5

marked [4] - 3710:8,

3710:8, 3875:25,

3876:5

Market [1] - 3780:22

market [1] - 3812:17

Marketing [1] -

3810:15

marketing [4] -

3810:22, 3811:19,

3830:7, 3830:12

marketplace [2] -

3805:1, 3837:6

Martin [3] - 3861:13,

3861:14, 3861:15

MARY [1] - 3708:3

material [11] - 3718:5,

3718:21, 3719:4,

3720:6, 3763:2,

3807:9, 3817:6,

3817:7, 3830:7,

3836:5, 3836:15

materials [2] -

3731:13, 3794:11

math [3] - 3827:4,

3827:5, 3827:7

mathematical [2] -

3784:8, 3784:16

mathematician [1] -

3867:6

mathematics [2] -

3866:8, 3866:22

matter [4] - 3711:5,

3852:21, 3873:12

matters [6] - 3723:9,

3735:10, 3832:21,

3850:1, 3853:21,

3856:8

mature [1] - 3798:21

McCLOY [1] - 3709:12

mean [34] - 3711:18,

3712:15, 3714:2,

3720:2, 3731:4,

3731:20, 3737:19,

3737:22, 3738:5,

3741:5, 3754:7,

3774:16, 3775:16,

3778:15, 3778:22,

3778:24, 3779:2,

3779:3, 3779:22,

3780:3, 3780:4,

3782:21, 3808:8,

3812:10, 3817:9,

3829:8, 3840:8,

3840:10, 3845:20,

3859:16, 3866:7

meaning [2] - 3756:3,

3835:12

meaningful [3] -

3795:19, 3795:22,

3796:6

means [8] - 3717:5,

3757:13, 3775:18,

3840:5, 3840:6,

3851:12, 3851:18,

3867:10

meant [1] - 3769:16

measured [1] -

3767:19

mechanics [1] -

3779:10

median [10] - 3770:16,

3771:16, 3778:15,

3778:19, 3779:22,

3780:4, 3782:16,

3782:23, 3786:16,

3816:7

Median [1] - 3778:16

meet [6] - 3737:9,

3740:9, 3755:25,

3756:1, 3804:9,

3848:3

meeting [15] -

3732:18, 3733:16,

3733:19, 3739:16,

3739:21, 3740:14,

3740:22, 3744:9,

3745:8, 3775:13,

3775:20, 3822:7,

3829:20, 3830:9,

3831:3

meetings [8] -

3737:12, 3737:14,

3742:10, 3744:25,

3748:22, 3839:25,

3840:2, 3840:14

meets [1] - 3830:3

member[1] - 3745:10

members [3] -

3734:10, 3743:11,

3743:15

memorandum [2] -

3743:8, 3834:12

memorandums [1] -

3718:25

Memorialized [1] -

3771:21

memorized [1] -

3748:12

memory [2] - 3864:18,

3864:21

mentioned [8] -

3711:12, 3711:25,

3716:10, 3780:24,

3800:12, 3800:15,

3841:19, 3873:10

merged [1] - 3742:5

Merrill [1] - 3759:1

met [1] - 3738:22

methodologies [1] -

3860:11

methodology [17] -

3729:21, 3749:23,

3751:1, 3813:15,

3857:23, 3858:6,

3858:22, 3859:11,

3859:15, 3859:18,

3860:7, 3860:17,

3862:3, 3862:9,

3864:4, 3867:13,

3870:24

middle [3] - 3819:17,

3867:21, 3869:20

midpoint [1] - 3778:16

might [21] - 3711:12,

3730:6, 3731:3,

3744:12, 3747:10,

3756:9, 3756:12,

3756:25, 3757:17,

3769:25, 3785:7,

3800:22, 3804:20,

3806:5, 3830:11,

3844:14, 3849:21,

3852:2, 3860:11,

3870:10

Milbank [5] - 3738:6,

3738:7, 3738:11,

3739:23, 3810:8

MILBANK [1] -

3709:12

million [44] - 3781:25,

3782:2, 3791:21,

3791:22, 3792:21,

3795:16, 3795:24,

3796:9, 3798:2,

3798:8, 3798:11,

3814:3, 3814:5,

3814:8, 3814:10,

United States District Court

Trenton, New Jersey

3893

3817:19, 3817:20,

3818:9, 3818:15,

3818:17, 3818:18,

3818:22, 3824:19,

3825:4, 3826:3,

3826:5, 3826:10,

3826:15, 3826:16,

3826:21, 3835:3,

3835:9, 3835:17,

3835:24, 3836:10,

3865:16, 3865:19,

3866:20, 3867:14

millions [1] - 3824:17

mind [5] - 3713:10,

3723:16, 3731:25,

3757:16, 3823:16

mine [1] - 3762:15

minimum [2] - 3713:3,

3797:1

minus [2] - 3866:1,

3867:7

minute [11] - 3727:4,

3757:23, 3769:8,

3796:18, 3799:12,

3821:22, 3826:8,

3848:9, 3848:11,

3848:14, 3863:18

minutes [18] -

3727:14, 3732:1,

3742:9, 3742:18,

3742:22, 3744:9,

3744:25, 3745:2,

3745:4, 3745:6,

3757:25, 3768:7,

3770:25, 3799:8,

3825:16, 3841:17,

3857:8, 3857:13

mischaracterization

s [1] - 3740:19

misconduct [1] -

3850:3

misfeasance [2] -

3853:23, 3856:9

misinterpreting [1] -

3782:13

mislead [1] - 3781:19

misleading [6] -

3732:13, 3740:18,

3759:20, 3784:19,

3786:17

missing [1] - 3731:3

mistake [4] - 3736:4,

3849:25, 3853:19,

3856:6

mistakes [2] -

3731:22, 3734:18

misunderstood [1] -

3751:5

mitigate [2] - 3801:24,

3802:24

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 186 of 197 PageID: 19242
Ml [1] - 3857:8

MML [1] - 3792:17

moment [15] -

3720:11, 3743:2,

3758:12, 3761:17,

3762:24, 3767:17,

3768:22, 3778:13,

3781:3, 3809:2,

3810:13, 3811:15,

3818:25, 3819:21,

3855:10

moments [3] -

3720:20, 3775:22,

3783:2

monitoring [4] -

3737:17, 3832:15,

3834:2, 3838:25

monitors [2] -

3841:23, 3842:3

month [2] - 3739:19

monthly [1] - 3735:11

months [1] - 3830:11

Morgan [39] - 3712:1,

3712:3, 3712:5,

3714:6, 3742:5,

3753:15, 3753:24,

3805:6, 3838:4,

3838:6, 3838:7,

3838:23, 3841:11,

3841:20, 3841:23,

3842:2, 3842:9,

3842:12, 3842:22,

3842:23, 3843:1,

3843:14, 3843:24,

3844:2, 3844:5,

3844:11, 3844:25,

3845:10, 3845:19,

3845:24, 3846:2,

3846:4, 3846:5,

3846:9, 3846:13,

3855:18, 3855:19,

3856:3

Morgan's [2] - 3843:8,

3844:16

morning [6] - 3711:1,

3714:22, 3714:24,

3788:17, 3822:22,

3862:12

most [2] - 3784:19,

3864:9

motion [2] - 3712:6,

3722:20

motions [1] - 3712:6

motives [1] - 3713:9

move [13] - 3722:21,

3736:7, 3737:6,

3744:5, 3745:9,

3753:19, 3755:18,

3769:3, 3785:7,

3801:23, 3814:13,

3875:4, 3875:9

moved [2] - 3719:16,

3752:19

moving [3] - 3752:24,

3770:5, 3836:5

multiply [1] - 3826:16

MURPHY [5] -

3709:12, 3711:4,

3711:11, 3712:15,

3822:22

must [1] - 3759:10

mutual [9] - 3763:14,

3764:21, 3766:4,

3767:21, 3808:14,

3812:12, 3853:9,

3859:7, 3867:25

Mutual [8] - 3716:5,

3716:13, 3716:21,

3720:19, 3720:21,

3780:21, 3781:18,

3875:20

MYLES [1] - 3709:6

mystified [2] - 3752:1,

3761:21

N

N-SAR [1] - 3845:3

N/A [3] - 3840:4,

3840:5, 3840:9

name [2] - 3790:20,

3791:12

National [2] - 3792:18,

3792:20

naturally [1] - 3737:23

nature [10] - 3725:18,

3729:16, 3729:17,

3731:5, 3745:3,

3746:22, 3754:20,

3814:13, 3851:25,

3852:22

NAV [3] - 3845:12,

3846:8, 3846:10

near [3] - 3733:22,

3733:25, 3792:16

nearly [1] - 3781:25

necessary [3] -

3724:15, 3747:12,

3763:25

need [12] - 3713:3,

3720:12, 3731:4,

3731:14, 3736:11,

3749:21, 3768:18,

3769:7, 3769:8,

3772:22, 3787:15,

3874:13

needed [3] - 3732:2,

3741:12, 3804:3

needs [4] - 3727:10,

3764:2, 3819:24,

3843:20

negative [3] - 3840:19,

3866:16, 3867:10

neglected [3] -

3864:14, 3875:4,

3875:8

negligence [3] -

3850:3, 3853:23,

3856:10

negotiate [2] -

3852:19, 3854:18

negotiated [1] -

3874:20

negotiates [1] -

3828:19

negotiation [2] -

3776:2, 3776:9

negotiations [2] -

3873:7, 3873:25

neighborhood [1] -

3800:1

Net [2] - 3815:5,

3838:22

net [12] - 3790:1,

3791:15, 3791:17,

3791:20, 3815:21,

3822:1, 3822:2,

3823:21, 3841:12,

3843:6, 3843:9,

3843:12

network [1] - 3754:17

never[14] - 3731:7,

3766:4, 3770:19,

3777:9, 3785:18,

3794:13, 3850:18,

3852:1, 3854:14,

3855:2, 3862:17,

3863:7, 3863:10,

3874:18

Nevertheless [1] -

3782:8

new [5] - 3798:21,

3806:7, 3846:12,

3846:19, 3876:2

NEW [3] - 3708:1,

3708:15, 3708:18

next [9] - 3722:24,

3761:4, 3766:13,

3812:3, 3812:5,

3816:7, 3831:16,

3841:4, 3850:25

Next [1] - 3768:11

Nights [1] - 3718:17

NO [2] - 3708:5,

3708:9

nobody [1] - 3855:9

non [4] - 3747:13,

3832:8, 3840:4

non-applicable [1] -

3840:4

non-EQAT [1] -

3832:8

non-insurance [1] -

3747:13

None [2] - 3870:11,

3872:10

none [3] - 3767:7,

3833:11, 3840:21

normalize [1] - 3864:8

note [3] - 3767:18,

3767:19, 3805:23

notes [1] - 3848:10

Nothing [1] - 3870:22

nothing [4] - 3713:10,

3750:25, 3767:6,

3870:20

notice [3] - 3715:4,

3844:12, 3844:17

noticed [1] - 3732:8

notwithstanding [1] -

3798:23

nowhere [1] - 3809:16

NQ [1] - 3844:20

Number [1] - 3713:17

number[34] -

3712:23, 3714:11,

3722:4, 3732:1,

3732:3, 3732:9,

3732:10, 3733:14,

3733:21, 3737:12,

3737:18, 3737:25,

3739:25, 3745:11,

3749:1, 3756:16,

3756:20, 3757:17,

3757:19, 3762:18,

3776:5, 3777:13,

3789:1, 3798:5,

3804:22, 3805:24,

3819:5, 3819:12,

3823:25, 3826:11,

3839:14, 3853:14,

3855:3, 3875:22

numbers [11] -

3750:16, 3812:10,

3817:4, 3817:13,

3818:14, 3822:12,

3823:14, 3823:20,

3836:20, 3858:2,

3858:18

Numeral [2] - 3721:19,

3721:21

numerical [1] -

3873:19

O

o'clock [2] - 3757:25,

3806:18

United States District Court

Trenton, New Jersey

3894

oath [1] - 3714:21

Objection [12] -

3751:13, 3751:15,

3760:24, 3765:13,

3782:18, 3802:15,

3826:18, 3843:15,

3860:23, 3869:11,

3871:4, 3871:14

objection [4] -

3766:23, 3771:9,

3875:15, 3876:3

objective [1] - 3756:1

objects [1] - 3781:24

obligation [3] -

3828:1, 3842:23,

3843:2

obligations [2] -

3853:25, 3856:12

obliged [1] - 3803:8

observed [1] -

3724:12

obtain [4] - 3740:12,

3804:21, 3828:1,

3828:5

obviously [6] -

3737:13, 3792:25,

3796:4, 3809:25,

3858:19, 3864:4

Obviously [2] -

3719:13, 3864:18

occasion [3] -

3732:14, 3737:8,

3766:4

occasions [2] -

3732:10, 3737:11

occur [1] - 3732:11

occurred [5] - 3738:1,

3745:8, 3836:9,

3840:2, 3859:12

occurs [1] - 3754:5

OF [4] - 3708:1,

3708:18, 3710:3,

3714:23

offer[1] - 3785:4

office [2] - 3748:5,

3754:10

officer [5] - 3851:1,

3851:2, 3851:7,

3851:11, 3852:6

OFFICIAL [1] -

3708:25

offshore [1] - 3832:7

often [10] - 3749:11,

3756:1, 3756:2,

3758:17, 3781:19,

3796:4, 3797:13,

3836:24, 3858:18,

3873:7

Ohio [2] - 3792:18,

3792:20

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 187 of 197 PageID: 19243
old [3] - 3764:11,

3800:1, 3800:11

on-site [1] - 3840:24

once [2] - 3750:19,

3830:11

Once [1] - 3854:17

one [84] - 3711:4,

3711:9, 3711:12,

3711:19, 3712:1,

3712:17, 3713:14,

3713:17, 3713:23,

3715:15, 3716:3,

3717:2, 3717:23,

3718:21, 3720:18,

3722:24, 3731:25,

3732:8, 3733:15,

3734:9, 3735:8,

3755:25, 3762:10,

3763:12, 3768:24,

3769:8, 3770:5,

3773:21, 3775:5,

3776:3, 3780:23,

3781:1, 3782:2,

3785:6, 3787:23,

3788:22, 3789:5,

3789:7, 3791:3,

3791:6, 3792:17,

3795:1, 3795:23,

3795:24, 3797:12,

3797:14, 3798:2,

3799:12, 3803:10,

3804:10, 3804:21,

3804:23, 3805:23,

3812:3, 3812:5,

3812:6, 3814:23,

3815:12, 3818:18,

3819:21, 3821:22,

3822:21, 3822:22,

3823:8, 3826:5,

3826:21, 3828:16,

3840:11, 3843:17,

3847:1, 3847:8,

3847:19, 3852:7,

3852:20, 3863:17,

3864:24, 3866:9,

3868:18, 3870:17,

3871:9, 3873:21,

3874:7, 3875:13

One [2] - 3797:4,

3802:1

ones [2] - 3782:10,

3798:15

open [2] - 3780:15,

3845:8

open-end [1] - 3845:8

opening [1] - 3724:12

operating [1] -

3774:15

Operating [1] -

3774:24

operational [1] -

3800:16

opinion [1] - 3785:16

Oppenheimer [1] -

3805:8

opportunity [6] -

3737:24, 3740:5,

3761:2, 3761:6,

3785:19, 3848:3

opposed [3] -

3816:23, 3837:15,

3870:10

opposite [1] - 3713:8

opposition [1] -

3712:5

oranges [1] - 3813:8

order[4] - 3728:8,

3728:13, 3864:8,

3866:21

organization [1] -

3716:4

organizations [1] -

3725:18

origins [2] - 3831:12,

3834:18

otherwise [1] -

3716:23

ought [1] - 3744:22

outside [5] - 3717:20,

3754:23, 3808:23,

3808:24, 3858:20

Outside [1] - 3725:25

overall [1] - 3825:11

overlay [1] - 3833:17

overreaching [1] -

3717:6

oversee [3] - 3724:24,

3725:2, 3726:6

overview [1] - 3837:25

overwhelm [1] -

3730:6

owe [1] - 3719:21

owed [1] - 3848:25

own [11] - 3726:6,

3726:11, 3726:20,

3726:24, 3777:18,

3777:24, 3829:10,

3829:16, 3830:5,

3830:13, 3849:7

owned [1] - 3726:14

owns [1] - 3784:18

P

P-144.18 [1] - 3814:20

P-210 [1] - 3864:22

P-239 [2] - 3758:12,

3758:15

P-273 [2] - 3746:25,

3747:1

P-29 [3] - 3830:23,

3830:24, 3831:2

P-373 [2] - 3839:5,

3839:7

P-45 [1] - 3776:4

P-52 [3] - 3817:17,

3817:23, 3826:7

P-721 [1] - 3876:1

package [2] - 3733:9,

3733:12

packages [1] - 3731:3

pactive [5] - 3756:3,

3756:6, 3756:8,

3756:16, 3756:20

page [55] - 3712:5,

3721:18, 3721:19,

3722:5, 3723:1,

3724:19, 3725:4,

3726:1, 3727:1,

3727:15, 3734:18,

3743:17, 3754:5,

3758:23, 3759:4,

3759:22, 3760:3,

3760:11, 3760:22,

3761:4, 3761:5,

3761:14, 3765:5,

3765:7, 3766:17,

3773:7, 3775:6,

3779:25, 3780:3,

3781:4, 3781:8,

3781:10, 3781:13,

3784:5, 3788:18,

3791:25, 3812:25,

3815:2, 3815:11,

3816:7, 3819:6,

3822:9, 3825:20,

3831:6, 3831:16,

3834:15, 3834:16,

3839:19, 3839:21,

3840:22, 3849:16,

3853:14, 3855:20,

3865:3, 3869:17

Page [6] - 3721:21,

3790:12, 3825:21,

3831:13, 3853:15

pages [11] - 3733:13,

3733:14, 3733:19,

3733:21, 3734:1,

3761:18, 3809:14,

3811:16, 3812:1,

3812:22, 3864:2

paid [9] - 3732:19,

3735:7, 3764:21,

3785:11, 3815:9,

3827:9, 3847:13,

3847:25, 3852:8

paper [1] - 3836:16

paragraph [20] -

3743:21, 3747:7,

3747:8, 3749:7,

3763:18, 3764:15,

3774:6, 3774:8,

3783:23, 3784:5,

3784:7, 3784:11,

3785:6, 3785:7,

3849:18, 3849:21,

3853:16, 3854:4,

3855:24, 3856:5

parcel [1] - 3850:10

pardon [2] - 3792:23,

3863:9

parentheses [4] -

3723:7, 3865:24,

3866:9, 3866:17

part [32] - 3727:7,

3737:15, 3739:1,

3739:19, 3741:25,

3748:24, 3750:5,

3754:12, 3760:18,

3761:19, 3761:21,

3762:1, 3762:2,

3775:14, 3797:9,

3800:24, 3803:12,

3807:9, 3817:2,

3828:11, 3830:7,

3830:18, 3842:16,

3843:25, 3850:10,

3853:24, 3856:10,

3858:10, 3861:15,

3866:23, 3874:12

particular [7] -

3733:15, 3769:21,

3769:24, 3782:24,

3805:9, 3836:17,

3874:1

particularly [4] -

3731:21, 3755:14,

3797:7, 3805:9

parties [3] - 3808:2,

3848:2, 3848:5

party [5] - 3725:8,

3725:13, 3725:16,

3805:24, 3853:24

party's [1] - 3854:2

pass [1] - 3778:3

passed [3] - 3735:8,

3735:12, 3800:20

passing [2] - 3720:10,

3729:6

passive [2] - 3756:9,

3777:16

past [3] - 3759:18,

3764:20, 3781:23

patently [1] - 3782:5

PATRICIA [1] -

3709:16

Paul [1] - 3724:10

Pause [1] - 3807:1

pause [5] - 3719:25,

United States District Court

Trenton, New Jersey

3895

3745:1, 3800:9,

3863:20, 3868:3

pay [3] - 3735:9,

3800:23, 3804:20

payables [2] - 3843:9,

3843:13

paying [3] - 3734:20,

3734:23, 3753:7

PC [1] - 3709:3

peer [11] - 3772:14,

3775:21, 3777:6,

3777:14, 3778:11,

3782:24, 3786:15,

3786:16, 3829:13,

3829:24

peers [3] - 3796:21,

3797:20, 3797:21

people [2] - 3753:18,

3779:13

per[1] - 3769:20

percent [35] - 3713:5,

3717:23, 3718:22,

3756:10, 3756:12,

3756:22, 3782:1,

3782:3, 3785:11,

3785:12, 3792:22,

3792:24, 3795:15,

3812:18, 3813:3,

3815:17, 3815:21,

3816:2, 3816:4,

3816:10, 3816:13,

3824:13, 3825:8,

3825:12, 3825:24,

3826:15, 3826:16,

3826:22, 3826:24,

3872:21

percentage [14] -

3793:1, 3815:8,

3815:13, 3816:21,

3816:23, 3825:1,

3825:8, 3826:13,

3827:15, 3827:17,

3868:1, 3868:7,

3868:11

Percentage [2] -

3815:5, 3825:10

percentages [3] -

3817:14, 3825:25,

3827:7

percentile [1] - 3790:2

perfectly [1] - 3738:21

perform [4] - 3734:5,

3747:13, 3829:18,

3832:6

performance [21] -

3725:15, 3728:24,

3731:21, 3773:22,

3773:24, 3775:3,

3775:8, 3775:12,

3775:15, 3775:19,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 188 of 197 PageID: 19244
3807:12, 3829:4,

3829:11, 3829:13,

3829:16, 3829:24,

3854:1, 3856:10,

3868:16, 3870:24,

3873:23

performed [5] -

3847:3, 3847:4,

3847:9, 3847:14,

3847:19

performs [2] -

3847:24, 3871:2

perhaps [1] - 3799:5

Perhaps [1] - 3714:7

period [7] - 3740:11,

3825:2, 3836:17,

3837:15, 3839:13,

3840:13, 3840:24

periodic [1] - 3763:12

periodically [3] -

3811:13, 3830:3,

3860:17

periodicals [1] -

3718:16

permissible [1] -

3871:16

person [3] - 3722:8,

3850:25, 3861:10

person's [1] - 3874:17

personal [1] - 3740:17

personally [5] -

3740:20, 3740:21,

3762:3, 3776:10,

3804:9

personnel [4] -

3735:9, 3737:13,

3737:25, 3747:12

perspective [5] -

3740:18, 3786:5,

3805:20, 3837:8,

3874:21

peruse [1] - 3763:21

PETER [1] - 3708:17

PGS [2] - 3708:5,

3708:10

Pick [1] - 3825:15

picture [1] - 3731:8

pieces [1] - 3836:16

PIMCO [2] - 3815:15,

3816:4

place [11] - 3746:22,

3755:21, 3769:25,

3792:11, 3798:22,

3806:1, 3836:13,

3846:22, 3854:19,

3859:17, 3864:19

plaintiff [3] - 3711:3,

3714:12, 3753:24

Plaintiff's [6] - 3710:8,

3747:4, 3757:21,

3758:10, 3864:12,

3876:5

plaintiff's [1] -

3772:17

PLAINTIFFS [3] -

3708:4, 3708:8,

3709:7

plaintiffs [5] -

3711:18, 3712:7,

3712:9, 3739:7,

3739:12

plaintiffs' [3] - 3736:9,

3736:14, 3739:4

planning [2] -

3747:19, 3748:1

plans [1] - 3711:7

play [5] - 3744:11,

3759:11, 3827:11,

3832:19, 3845:11

playing [1] - 3713:13

plays [1] - 3838:1

plus [2] - 3756:16,

3866:2

PLUS [1] - 3815:15

point [32] - 3711:12,

3711:13, 3712:22,

3743:6, 3760:9,

3760:17, 3767:24,

3777:12, 3781:4,

3782:17, 3787:17,

3797:12, 3797:14,

3797:15, 3797:16,

3800:10, 3803:15,

3803:25, 3807:18,

3818:16, 3821:9,

3827:6, 3830:2,

3841:21, 3845:17,

3854:10, 3859:21,

3861:22, 3861:24,

3865:13, 3867:8,

3870:9

pointed [3] - 3731:22,

3732:2, 3797:22

pointing [2] - 3774:17,

3825:20

points [18] - 3767:19,

3767:20, 3790:1,

3796:20, 3797:3,

3801:12, 3803:4,

3815:12, 3816:17,

3816:22, 3816:24,

3821:17, 3822:2,

3822:5, 3823:22,

3827:10, 3836:19,

3872:23

policies [1] - 3726:16

policy [1] - 3726:22

Pomerantz [1] -

3714:5

poor [2] - 3868:15,

3870:25

portfolio [4] -

3727:23, 3741:1,

3756:10, 3791:15

portfolios [8] -

3841:13, 3841:24,

3842:3, 3867:20,

3868:15, 3869:9,

3869:12, 3870:7

portion [3] - 3815:9,

3835:8, 3853:18

portions [1] - 3844:10

position [3] - 3712:16,

3712:24, 3719:2

possession [1] -

3711:19

possible [1] - 3873:5

post [1] - 3811:19

post-marketing [1] -

3811:19

power [1] - 3852:22

Practical [1] - 3720:20

practice [7] - 3779:16,

3786:7, 3850:12,

3852:21, 3854:21,

3860:19, 3873:16

Practice [1] - 3725:19

practices [3] -

3722:15, 3722:19,

3742:15

Practices [1] -

3720:20

Pre [1] - 3810:15

pre [2] - 3810:22,

3812:17

pre-market [1] -

3812:17

Pre-Marketing [1] -

3810:15

pre-marketing [1] -

3810:22

preceding [1] -

3840:22

precise [1] - 3733:17

precisely [1] - 3776:14

predecessor[2] -

3855:18

premiere [1] - 3786:7

preparation [3] -

3732:8, 3738:9,

3744:25

prepare [9] - 3719:18,

3734:21, 3734:24,

3736:8, 3736:14,

3830:4, 3844:17,

3845:10, 3845:15

prepared [12] -

3713:18, 3713:19,

3713:21, 3734:12,

3734:15, 3738:3,

3755:12, 3770:21,

3775:21, 3785:3,

3798:19, 3829:21

prepares [2] -

3845:18, 3845:25

preparing [1] - 3738:7

PRESENT [1] -

3709:16

present [6] - 3713:10,

3714:10, 3738:2,

3738:7, 3738:23,

3806:11

presentation [14] -

3760:5, 3760:9,

3760:18, 3760:20,

3761:19, 3797:19,

3817:10, 3830:13,

3860:9, 3864:9,

3864:11, 3867:1,

3867:3, 3869:13

presentations [14] -

3731:23, 3731:24,

3763:13, 3779:19,

3794:5, 3803:7,

3814:23, 3834:20,

3838:20, 3841:7,

3842:21, 3864:2,

3864:24, 3864:25

presented [3] -

3760:16, 3856:23,

3857:3

pressure [1] - 3713:12

pretend [1] - 3720:4

Pretty [1] - 3773:1

pretty [9] - 3760:14,

3771:5, 3789:9,

3791:9, 3820:14,

3820:20, 3828:9,

3858:18, 3867:24

prevent [1] - 3730:16

previously [3] -

3714:19, 3784:25,

3850:16

Price [1] - 3805:15

Pricewaterhouse [2] -

3860:17, 3860:21

pricing [1] - 3837:10

primarily [1] - 3864:21

primary [2] - 3844:8,

3845:22

print [2] - 3784:12,

3784:13

Printing [1] - 3748:9

privied [1] - 3776:17

privy [1] - 3776:21

problem [3] - 3791:4,

3820:17, 3851:24

problematic [1] -

3721:16

problems [3] - 3723:5,

United States District Court

Trenton, New Jersey

3896

3854:22, 3855:1

proceed [7] - 3714:6,

3714:15, 3714:24,

3715:1, 3758:6,

3806:22, 3807:4

Proceedings [1] -

3876:13

process [28] -

3712:19, 3713:11,

3715:16, 3718:24,

3724:24, 3725:2,

3725:21, 3725:24,

3733:4, 3737:15,

3739:20, 3740:1,

3742:20, 3742:21,

3743:14, 3748:25,

3750:21, 3758:19,

3760:17, 3762:4,

3771:22, 3772:8,

3804:24, 3807:9,

3817:2, 3857:20,

3860:13, 3873:7

processing [1] -

3755:1

product [14] - 3728:3,

3742:17, 3776:1,

3776:9, 3808:10,

3808:22, 3809:1,

3809:23, 3824:2,

3867:19, 3868:5,

3868:10, 3868:16

products [4] -

3767:22, 3808:23,

3808:24, 3869:3

profess [1] - 3867:12

Profit [1] - 3810:7

profit [3] - 3729:3,

3810:22, 3813:3

Profitability [1] -

3810:19

profitability [32] -

3747:24, 3750:6,

3750:7, 3750:11,

3751:23, 3753:9,

3753:12, 3810:25,

3811:6, 3811:7,

3811:10, 3811:19,

3811:23, 3811:24,

3812:10, 3812:11,

3812:12, 3812:17,

3813:6, 3813:9,

3813:15, 3813:16,

3817:9, 3817:10,

3858:10, 3862:16,

3863:13, 3863:15,

3864:3, 3869:13,

3870:9, 3870:19

profits [1] - 3729:2

program [2] - 3827:24,

3840:17

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 189 of 197 PageID: 19245
programs [1] -

3716:11

prohibited [1] -

3726:13

properly [1] - 3729:15

property [1] - 3747:12

proposing [1] -

3723:7

proposition [2] -

3765:23, 3766:14

protect [4] - 3717:5,

3726:7, 3802:3,

3802:5

protective [2] -

3760:13, 3761:16

provide [28] - 3725:15,

3734:3, 3739:12,

3742:25, 3747:11,

3747:20, 3747:21,

3747:23, 3749:3,

3762:5, 3777:11,

3777:13, 3780:12,

3785:22, 3786:8,

3786:10, 3786:14,

3786:20, 3786:22,

3787:4, 3787:11,

3814:16, 3829:8,

3841:14, 3842:6,

3844:2, 3863:3

provided [25] -

3719:11, 3719:23,

3729:16, 3729:17,

3736:9, 3736:14,

3741:14, 3741:17,

3741:20, 3741:23,

3748:17, 3748:20,

3750:22, 3752:8,

3753:6, 3755:5,

3773:4, 3773:15,

3778:17, 3787:9,

3803:12, 3807:9,

3831:2, 3834:23,

3835:6

provider [2] - 3786:7,

3848:8

providers [2] -

3862:21, 3863:3

provides [16] - 3748:3,

3748:11, 3748:24,

3751:11, 3759:10,

3773:21, 3779:21,

3780:24, 3786:9,

3786:13, 3786:25,

3834:8, 3834:21,

3841:11, 3848:8,

3851:7

providing [3] - 3786:3,

3862:24, 3862:25

provision [7] - 3850:8,

3850:13, 3851:15,

3852:11, 3852:19,

3854:8

provisions [2] -

3806:3, 3857:2

proxies [2] - 3828:25,

3829:1

prudent [2] - 3852:18,

3854:18

public [1] - 3748:19

pull [1] - 3788:6

pulling [1] - 3833:19

pun [1] - 3778:22

purchase [2] -

3842:18, 3844:14

purchases [2] -

3828:17, 3842:13

purely [1] - 3827:11

purple [7] - 3819:9,

3819:15, 3819:18,

3819:20, 3820:3,

3820:18, 3823:22

purpose [5] - 3722:18,

3738:13, 3745:5,

3746:20, 3834:18

purposes [1] -

3869:13

pursuant [6] -

3813:15, 3849:3,

3853:25, 3859:14,

3859:18, 3862:9

pushed [1] - 3777:8

put [18] - 3712:9,

3712:24, 3712:25,

3713:3, 3714:2,

3720:18, 3728:7,

3764:5, 3768:14,

3769:25, 3770:20,

3799:12, 3801:21,

3825:13, 3827:25,

3839:5, 3843:16,

3854:19

puzzled [1] - 3856:19

Pw [1] - 3861:23

PwC [1] - 3861:3

Q

qualifications [1] -

3736:18

quantification [1] -

3801:3

quantify [2] - 3801:1,

3801:4

quarrel [1] - 3760:8

quarter [1] - 3749:10

quarterly [1] - 3750:12

quash [1] - 3712:6

questioned [1] -

3743:22

questioning [2] -

3713:9, 3731:7

questionnaires [1] -

3841:5

questions [17] -

3715:8, 3715:25,

3724:15, 3736:1,

3738:22, 3738:24,

3739:1, 3763:17,

3763:25, 3767:3,

3768:25, 3778:14,

3781:17, 3843:16,

3857:19, 3872:8,

3872:9

quickly [5] - 3714:7,

3722:22, 3735:24,

3812:16, 3815:19

quiet [1] - 3844:23

quite [7] - 3711:19,

3713:1, 3718:12,

3766:21, 3809:25,

3821:20, 3829:9

quote [5] - 3760:6,

3760:11, 3760:22,

3761:14, 3762:3

quotes [1] - 3761:4

R

R.M.R [1] - 3708:24

range [1] - 3874:24

rate [4] - 3787:4,

3792:9, 3796:9,

3874:12

rates [2] - 3843:10,

3843:14

Rather [1] - 3801:22

rather[2] - 3742:20,

3871:18

ratio [12] - 3713:14,

3765:24, 3766:21,

3766:22, 3775:1,

3782:1, 3782:3,

3785:10, 3785:12,

3785:13, 3790:19

ratios [6] - 3766:11,

3766:18, 3782:4,

3782:11, 3784:16,

3797:13

re [1] - 3833:7

re-balancing [1] -

3833:7

reach [3] - 3715:19,

3739:3, 3739:7

reached [1] - 3739:15

reaching [1] - 3872:20

reactions [1] -

3738:25

Read [1] - 3854:4

read [68] - 3722:3,

3723:4, 3723:12,

3723:16, 3723:18,

3723:22, 3724:4,

3725:10, 3726:9,

3727:2, 3727:3,

3727:17, 3727:19,

3727:21, 3736:3,

3737:5, 3743:5,

3743:20, 3744:1,

3744:15, 3745:5,

3747:10, 3747:15,

3749:14, 3751:18,

3755:3, 3759:13,

3759:18, 3763:20,

3763:23, 3764:2,

3764:7, 3764:23,

3767:14, 3767:15,

3767:16, 3780:8,

3782:6, 3782:14,

3783:4, 3783:23,

3784:7, 3784:15,

3784:21, 3785:2,

3809:12, 3820:18,

3820:23, 3823:2,

3823:8, 3823:13,

3831:25, 3842:8,

3849:21, 3850:6,

3852:9, 3852:20,

3853:18, 3856:15,

3858:14, 3858:16,

3861:6, 3861:15,

3861:19, 3870:3,

3870:5, 3871:11

readily [2] - 3745:6,

3791:10

reading [5] - 3740:15,

3750:15, 3767:18,

3780:11, 3782:19

reads [11] - 3724:10,

3724:22, 3725:7,

3726:2, 3744:5,

3749:8, 3764:20,

3832:14, 3850:25,

3856:5, 3869:2

ready [2] - 3714:24,

3822:13

Ready [1] - 3848:18

realistic [1] - 3816:24

reality [2] - 3740:20,

3827:9

realize [1] - 3806:11

really [6] - 3712:9,

3735:7, 3742:19,

3755:12, 3782:21,

3831:11

reason [17] - 3716:19,

3716:23, 3745:14,

3745:22, 3746:1,

3746:12, 3759:19,

United States District Court

Trenton, New Jersey

3897

3769:21, 3775:5,

3783:3, 3784:4,

3796:23, 3811:22,

3846:17, 3846:25,

3856:24, 3864:15

reasonable [11] -

3715:11, 3715:14,

3715:15, 3715:23,

3731:15, 3755:20,

3804:1, 3864:9,

3873:8, 3874:17,

3874:22

reasonableness [3] -

3795:19, 3803:9,

3813:11

reasonably [1] -

3747:12

reasoned [1] -

3719:22

reasons [9] - 3744:6,

3744:8, 3744:10,

3777:9, 3805:24,

3850:16, 3851:22,

3852:13, 3863:14

rebut [1] - 3744:13

rebuttal [1] - 3875:9

receive [31] - 3718:1,

3718:3, 3718:4,

3718:11, 3718:12,

3718:15, 3718:25,

3719:3, 3719:10,

3720:2, 3725:15,

3727:22, 3730:16,

3730:25, 3732:12,

3732:20, 3732:22,

3732:24, 3733:9,

3733:12, 3742:6,

3771:18, 3772:7,

3775:15, 3775:19,

3793:5, 3803:7,

3808:13, 3844:10,

3848:1, 3858:19

received [22] -

3716:14, 3716:15,

3717:14, 3717:17,

3720:22, 3728:14,

3728:24, 3729:2,

3730:6, 3730:20,

3733:20, 3733:22,

3742:3, 3742:8,

3775:2, 3794:5,

3794:12, 3808:2,

3808:3, 3809:21,

3817:11, 3847:10

receives [5] - 3717:24,

3776:18, 3808:9,

3808:10, 3809:1

receiving [1] -

3827:16

recently [3] - 3724:10,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 190 of 197 PageID: 19246
3777:24, 3829:7

recess [1] - 3806:16

Recess [2] - 3758:3,

3848:17

reckless [3] - 3850:3,

3854:2, 3856:11

recognize [3] -

3716:24, 3717:2,

3814:20

recollection [14] -

3716:14, 3731:16,

3731:19, 3775:7,

3786:20, 3801:10,

3830:15, 3831:11,

3838:18, 3838:21,

3864:1, 3864:3,

3864:20, 3867:24

recollections [1] -

3731:21

recommendation [4] -

3722:3, 3724:20,

3725:4, 3742:9

recommendations [1]

- 3832:21

Recommendations

[1] - 3721:25

reconvene [2] -

3806:12, 3876:9

record [5] - 3742:9,

3742:17, 3843:24,

3846:9, 3872:5

recorded [1] - 3744:9

records [11] -

3712:10, 3828:21,

3841:13, 3842:12,

3842:15, 3842:16,

3842:18, 3842:24,

3843:2, 3843:6,

3844:1

rectangular[1] -

3865:6

red [1] - 3865:5

redirect [2] - 3730:12,

3872:11

reduced [1] - 3836:19

reductions [2] -

3850:19, 3850:23

REED [1] - 3709:14

refer [1] - 3751:6

reference [5] -

3736:21, 3811:6,

3812:8, 3812:13,

3818:6

referenced [3] -

3751:25, 3808:19,

3812:5

references [2] -

3811:3, 3844:13

referred [7] - 3736:13,

3750:20, 3752:7,

3817:18, 3819:4,

3837:21, 3863:22

referring [17] - 3726:2,

3735:20, 3750:5,

3751:16, 3751:22,

3754:6, 3757:14,

3760:2, 3765:14,

3773:24, 3779:24,

3786:18, 3788:5,

3788:23, 3811:23,

3833:9, 3835:14

Referring [1] - 3754:7

refers [6] - 3759:1,

3759:7, 3770:8,

3812:9, 3820:18,

3831:6

reflect [3] - 3716:15,

3842:24, 3843:2

reflected [2] - 3750:5,

3763:5

reflecting [2] - 3757:2,

3789:13

reflective [1] -

3715:16

reflects [1] - 3813:17

refusal [1] - 3856:13

regard [16] - 3713:21,

3713:24, 3714:1,

3729:12, 3734:25,

3735:1, 3753:14,

3753:23, 3775:24,

3778:18, 3793:6,

3793:10, 3793:14,

3800:25, 3830:15,

3841:22

regular [1] - 3735:8

regulations [1] -

3752:23

regulatory [5] -

3748:16, 3776:13,

3800:15, 3841:24,

3842:4

reimburse [1] - 3753:2

reimbursed [2] -

3733:1, 3733:2

reimbursement [2] -

3735:13, 3855:7

reimbursing [1] -

3753:5

rejected [2] - 3760:12,

3761:15

Rel [1] - 3723:6

relate [1] - 3836:21

related [6] - 3747:14,

3808:2, 3864:6,

3864:7, 3864:8,

3864:21

relates [3] - 3850:2,

3853:21, 3856:8

relations [1] - 3748:19

relationship [6] -

3782:25, 3808:3,

3808:14, 3808:25,

3809:21, 3847:24

relatively [1] - 3733:24

release [1] - 3723:7

relevant [5] - 3737:24,

3757:8, 3771:7,

3810:25, 3873:2

reliable [4] - 3716:18,

3716:20, 3716:22,

3765:4

relied [3] - 3763:3,

3794:15, 3794:16

relieved [1] - 3753:19

reluctant [3] -

3746:17, 3784:24,

3856:25

rely [3] - 3786:8,

3873:14, 3873:15

relying [1] - 3809:25

remained [2] -

3824:12, 3824:14

remaining [3] -

3711:13, 3711:15,

3712:11

remember[60] -

3718:23, 3718:25,

3721:13, 3731:18,

3740:10, 3749:1,

3749:6, 3757:11,

3759:17, 3760:9,

3760:15, 3760:19,

3767:11, 3774:25,

3778:25, 3779:1,

3779:3, 3779:12,

3787:6, 3787:7,

3787:10, 3787:14,

3787:17, 3791:3,

3797:3, 3807:16,

3807:18, 3809:12,

3820:22, 3831:12,

3833:18, 3834:18,

3835:20, 3836:3,

3842:6, 3842:11,

3842:19, 3843:5,

3843:7, 3843:19,

3843:21, 3844:13,

3844:15, 3844:16,

3844:18, 3844:24,

3845:1, 3845:16,

3849:6, 3849:9,

3855:5, 3859:16,

3859:19, 3859:21,

3859:23, 3861:8,

3861:24, 3866:14

remembering [1] -

3790:4

rendering [4] -

3849:22, 3850:4,

3852:4, 3852:5

renders [1] - 3828:7

renewing [1] - 3744:7

repeat [8] - 3751:17,

3772:5, 3773:10,

3807:24, 3814:6,

3858:12, 3861:17,

3871:9

repeated [1] - 3811:25

rephrase [6] -

3736:24, 3736:25,

3752:3, 3761:5,

3765:20, 3838:9

Rephrase [1] -

3826:19

rephrased [1] -

3744:22

report [27] - 3771:18,

3771:21, 3772:7,

3772:10, 3773:3,

3773:14, 3773:17,

3773:22, 3774:11,

3774:12, 3774:15,

3775:2, 3775:16,

3776:4, 3776:22,

3776:25, 3779:21,

3790:8, 3793:5,

3793:7, 3793:11,

3807:8, 3807:11,

3807:17, 3831:25,

3845:6, 3858:10

reported [3] - 3778:8,

3858:10, 3872:22

REPORTER [1] -

3708:25

reporter[6] - 3751:18,

3767:15, 3858:16,

3861:19, 3870:5,

3871:11

reporting [4] -

3832:15, 3833:24,

3834:2, 3834:3

reports [4] - 3720:18,

3773:21, 3841:15,

3844:5

represent [7] - 3745:4,

3748:25, 3776:14,

3780:10, 3794:2,

3820:15, 3821:12

representation [1] -

3856:14

representative [1] -

3721:8

represented [1] -

3815:8

represents [3] -

3798:5, 3819:20,

3821:16

request [4] - 3727:7,

3763:7, 3851:19,

United States District Court

Trenton, New Jersey

3898

3858:4

requests [1] - 3727:7

require [1] - 3802:24

required [5] - 3708:23,

3740:24, 3752:24,

3828:22, 3829:7

requirement [2] -

3841:25, 3856:21

requirements [4] -

3776:13, 3803:2,

3803:19, 3842:4

reread [1] - 3783:25

research [1] - 3728:1

resources [1] -

3748:16

respect [9] - 3738:17,

3775:11, 3813:7,

3828:22, 3832:24,

3836:16, 3836:22,

3838:2, 3870:19

respond [4] - 3752:12,

3777:20, 3782:21,

3820:1

responded [1] -

3800:22

responding [2] -

3738:14, 3738:24

response [5] - 3712:5,

3715:25, 3735:16,

3816:17, 3849:7

responses [1] -

3739:1

responsibilities [3] -

3838:11, 3838:15,

3838:17

responsibility [10] -

3827:23, 3829:3,

3837:9, 3843:8,

3843:14, 3844:9,

3844:16, 3845:2,

3845:14, 3845:22

responsible [1] -

3832:15

responsive [1] -

3763:6

rest [1] - 3854:4

restate [2] - 3757:1,

3857:7

restrictions [2] -

3841:24, 3842:3

result [9] - 3791:8,

3797:12, 3797:14,

3797:23, 3809:21,

3816:23, 3837:24,

3852:14

resulting [1] - 3853:22

results [1] - 3867:13

resume [1] - 3736:9

resumes [8] -

3714:19, 3734:9,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 191 of 197 PageID: 19247
3734:12, 3734:25,

3735:1, 3735:21,

3736:17

retain [5] - 3725:12,

3725:20, 3725:23,

3794:13, 3809:22

Retained [1] - 3858:8

retained [4] - 3725:14,

3835:8, 3858:5,

3860:10

retainer [1] - 3732:24

retaining [4] - 3725:8,

3785:25, 3804:24,

3804:25

retention [3] - 3816:8,

3835:16, 3835:23

retired [1] - 3752:20

return [3] - 3773:22,

3773:24, 3775:3

returns [3] - 3845:18,

3845:20, 3845:25

revenue [2] - 3869:3,

3869:6

Revenue [1] - 3842:10

revenues [6] -

3817:11, 3867:24,

3867:25, 3868:5,

3868:9, 3868:19

reverse [2] - 3867:7,

3867:8

review [28] - 3718:20,

3721:4, 3724:24,

3725:7, 3725:21,

3740:24, 3743:2,

3745:11, 3745:19,

3745:25, 3746:4,

3747:23, 3748:23,

3758:12, 3762:4,

3763:3, 3768:22,

3771:22, 3772:8,

3778:13, 3781:3,

3816:16, 3817:17,

3859:1, 3859:3,

3859:4, 3859:12,

3860:6

reviewed [11] -

3746:10, 3746:11,

3748:22, 3777:10,

3829:6, 3846:16,

3851:20, 3856:20,

3858:20, 3864:4,

3870:24

reviewing [18] -

3719:4, 3723:20,

3727:20, 3731:10,

3732:5, 3732:7,

3743:4, 3758:13,

3758:19, 3761:11,

3765:12, 3769:6,

3784:2, 3810:17,

3821:23, 3839:10,

3854:6, 3859:10

reviews [2] - 3776:22,

3870:15

revisit [1] - 3714:7

ridiculous [1] - 3782:5

right-hand [2] -

3819:7, 3824:9

rising [1] - 3781:22

risk [16] - 3749:3,

3799:10, 3799:18,

3799:19, 3799:21,

3800:7, 3800:11,

3801:19, 3801:24,

3802:4, 3802:24,

3806:8, 3854:24

risks [15] - 3799:16,

3800:12, 3800:16,

3800:19, 3800:25,

3801:1, 3801:6,

3801:9, 3802:7,

3802:20, 3803:14,

3804:23, 3805:2,

3805:25

Rob [1] - 3768:14

ROBERT [2] - 3709:5,

3709:13

robust [1] - 3744:11

role [11] - 3717:2,

3728:9, 3728:13,

3733:3, 3745:10,

3807:14, 3832:19,

3837:8, 3837:25,

3845:11, 3859:9

Roman [2] - 3721:19,

3721:21

ROME [1] - 3709:9

rose [1] - 3835:16

roughly [6] - 3713:22,

3825:3, 3825:4,

3826:15, 3835:2,

3835:16

row [1] - 3841:4

rows [1] - 3839:14

Royce [1] - 3724:11

running [3] - 3776:19,

3827:14

runs [1] - 3782:2

S

S&P [6] - 3757:3,

3790:13, 3791:2,

3791:6, 3793:13,

3794:6

sale [1] - 3844:14

sales [2] - 3842:13,

3842:18

SANFORD [1] -

3708:8

SAR [1] - 3845:3

sat [1] - 3842:21

satisfy [3] - 3744:9,

3744:19, 3776:13

savings [2] - 3840:16,

3840:20

saw [5] - 3712:4,

3721:3, 3740:18,

3740:21, 3746:15

Scale [1] - 3780:22

scale [3] - 3729:7,

3729:10, 3729:12

School [2] - 3759:7,

3759:15

schooled [1] - 3785:2

Schpero [57] - 3711:8,

3711:20, 3713:23,

3714:18, 3714:22,

3714:24, 3715:4,

3715:9, 3716:24,

3720:16, 3728:8,

3739:15, 3754:3,

3758:5, 3758:12,

3759:25, 3761:2,

3761:9, 3762:9,

3763:22, 3764:7,

3764:15, 3768:22,

3769:12, 3771:2,

3771:14, 3772:17,

3775:15, 3780:19,

3783:19, 3788:22,

3789:18, 3795:3,

3803:21, 3804:13,

3806:17, 3807:8,

3812:15, 3814:20,

3819:24, 3822:13,

3827:23, 3830:23,

3839:7, 3841:9,

3843:18, 3847:1,

3848:23, 3853:1,

3857:19, 3864:14,

3867:18, 3871:6,

3872:13, 3872:18,

3875:5

SCHPERO [4] -

3710:2, 3710:3,

3714:19, 3714:23

scope [1] - 3783:7

screen [1] - 3758:18

SEAN [1] - 3709:12

seated [2] - 3758:4,

3806:20

SEC [6] - 3712:18,

3722:14, 3726:3,

3742:20, 3776:13,

3844:6

SEC's [1] - 3724:11

Second [1] - 3797:16

second [16] - 3735:9,

3761:22, 3766:23,

3774:6, 3781:4,

3781:13, 3784:5,

3784:11, 3795:12,

3802:24, 3818:3,

3832:23, 3832:25,

3841:13, 3865:14

secretarial [1] -

3749:4

section [3] - 3761:7,

3761:9, 3761:10

Section [4] - 3708:23,

3727:7, 3842:10,

3854:1

sectors [2] - 3757:17,

3757:19

securities [5] -

3757:5, 3837:10,

3842:13, 3842:18,

3844:14

security [1] - 3757:10

See [4] - 3723:1,

3723:5, 3724:19,

3725:4

see [102] - 3712:8,

3715:10, 3721:19,

3721:21, 3722:1,

3732:22, 3735:5,

3737:4, 3747:7,

3758:17, 3758:22,

3759:4, 3759:7,

3764:6, 3764:10,

3764:16, 3765:7,

3766:19, 3769:14,

3770:9, 3774:7,

3774:23, 3775:20,

3777:20, 3781:20,

3782:22, 3783:13,

3785:8, 3785:14,

3786:14, 3787:2,

3787:6, 3787:7,

3787:8, 3789:23,

3789:25, 3790:1,

3790:3, 3790:5,

3790:18, 3791:15,

3791:22, 3792:16,

3792:17, 3792:18,

3793:20, 3794:3,

3794:9, 3797:17,

3798:2, 3800:11,

3802:22, 3804:8,

3812:5, 3816:8,

3817:2, 3817:7,

3817:8, 3817:9,

3817:10, 3817:13,

3817:14, 3818:6,

3818:11, 3818:13,

3818:16, 3818:21,

3819:9, 3819:15,

3819:17, 3820:2,

United States District Court

Trenton, New Jersey

3899

3821:24, 3822:1,

3822:6, 3822:12,

3823:14, 3823:25,

3824:10, 3824:23,

3829:20, 3831:13,

3831:17, 3832:16,

3833:1, 3834:11,

3834:13, 3839:17,

3839:25, 3849:19,

3853:16, 3855:24,

3860:10, 3863:13,

3865:6, 3867:3,

3869:2, 3869:4,

3869:21, 3875:16,

3876:9

seeing [6] - 3719:19,

3728:2, 3774:25,

3782:25, 3799:4,

3831:11

seek [1] - 3847:23

seeking [1] - 3829:16

seem [4] - 3766:7,

3806:24, 3817:20,

3843:5

sees [2] - 3771:5,

3787:3

selects [2] - 3828:13,

3828:16

semi [3] - 3844:5,

3845:6, 3845:8

semi-annual [3] -

3844:5, 3845:6,

3845:8

senior[1] - 3804:9

sense [4] - 3738:13,

3748:13, 3780:9,

3826:17

sent [1] - 3776:23

sentence [4] -

3724:10, 3724:17,

3743:20, 3850:25

Separate [1] - 3830:8

separate [8] -

3732:17, 3735:11,

3738:9, 3808:5,

3808:8, 3814:9,

3817:12, 3830:8

separated [1] - 3735:8

separately [4] -

3719:1, 3735:11,

3740:25, 3741:4

series [1] - 3763:17

serve [1] - 3745:5

served [2] - 3712:1,

3712:3

servers [1] - 3754:18

serves [2] - 3722:17,

3795:6

service [6] - 3747:5,

3842:15, 3853:9,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 192 of 197 PageID: 19248
3862:21, 3863:2,

3874:1

Service [2] - 3751:10,

3862:10

Services [9] - 3746:8,

3750:25, 3752:8,

3754:4, 3754:8,

3755:3, 3862:4,

3862:5, 3862:14

services [64] -

3716:12, 3729:16,

3729:17, 3732:22,

3734:3, 3741:13,

3741:17, 3741:20,

3741:23, 3747:12,

3747:17, 3747:21,

3748:3, 3748:6,

3748:10, 3748:12,

3748:23, 3749:4,

3750:16, 3750:22,

3751:6, 3751:7,

3751:9, 3751:10,

3751:12, 3751:16,

3752:7, 3752:8,

3753:11, 3754:6,

3754:23, 3754:24,

3803:12, 3814:13,

3827:10, 3828:7,

3832:6, 3834:8,

3834:9, 3834:21,

3834:22, 3834:25,

3835:6, 3836:9,

3836:23, 3839:13,

3846:12, 3847:2,

3847:4, 3847:9,

3847:14, 3847:19,

3847:24, 3848:4,

3848:8, 3849:22,

3850:5, 3852:4,

3852:5, 3862:24,

3862:25, 3863:1,

3863:3, 3871:2

servicing [1] - 3753:1

session [1] - 3738:23

set [5] - 3757:5,

3758:18, 3760:3,

3798:21, 3834:10

setting [1] - 3758:16

setting-thefoundation [1] -

3758:16

seven [2] - 3831:22,

3831:24

several [6] - 3725:17,

3754:4, 3789:14,

3801:24, 3832:8,

3835:21

shall [3] - 3749:11,

3853:18, 3856:5

Shall [1] - 3852:3

share [3] - 3713:6,

3842:24, 3843:3

Shared [11] - 3746:7,

3750:25, 3751:10,

3752:7, 3754:4,

3754:8, 3755:3,

3862:3, 3862:5,

3862:10, 3862:14

shared [1] - 3753:1

shareholder [2] -

3742:22, 3841:15

shareholders [5] -

3726:5, 3726:8,

3782:1, 3782:3,

3782:5

shares [4] - 3726:6,

3726:11, 3726:20,

3726:24

sharpens [1] -

3713:10

sheer [2] - 3730:5,

3730:15

sheet [5] - 3787:17,

3788:15, 3788:17,

3789:24, 3789:25

sheets [8] - 3732:7,

3732:9, 3787:7,

3787:11, 3788:7,

3819:4, 3835:15

SHERIDAN [1] -

3708:17

short [1] - 3811:22

Short [2] - 3815:16,

3816:4

shorthand [2] -

3811:22, 3812:13

shortly [1] - 3720:14

Show [1] - 3822:19

show [10] - 3735:22,

3780:4, 3786:24,

3797:11, 3812:17,

3813:3, 3813:5,

3817:20, 3817:22,

3830:6

showed [3] - 3801:11,

3826:11

showing [6] -

3749:12, 3750:12,

3783:1, 3821:7,

3823:19, 3866:8

shown [8] - 3773:17,

3774:11, 3775:24,

3776:8, 3813:9,

3850:11, 3857:23,

3861:23

Shows [1] - 3820:7

shows [19] - 3753:9,

3771:6, 3780:3,

3787:17, 3789:10,

3789:11, 3789:14,

3790:17, 3790:18,

3794:7, 3811:19,

3816:22, 3817:11,

3818:9, 3825:23,

3840:21

shrink [4] - 3765:11,

3868:10, 3868:19,

3869:8

shrinks [1] - 3765:24

sic [1] - 3724:11

side [8] - 3731:10,

3737:15, 3764:15,

3764:19, 3774:7,

3784:11, 3819:7,

3824:9

significant [9] -

3737:20, 3737:23,

3800:11, 3837:4,

3837:5, 3837:7,

3837:24, 3837:25,

3854:12

significantly [2] -

3764:22, 3766:21

similar [6] - 3782:8,

3782:24, 3786:15,

3786:16, 3827:17,

3872:22

similarly [1] - 3790:3

simple [7] - 3722:21,

3784:7, 3784:15,

3785:8, 3785:12,

3786:13, 3796:2

simply [3] - 3740:19,

3753:2, 3798:22

single [3] - 3732:18,

3793:8, 3855:10

sit [1] - 3732:15

site [1] - 3840:24

sitting [1] - 3805:21

SIVOLELLA [1] -

3708:3

six [4] - 3711:22,

3714:2, 3714:4,

3818:6

size [6] - 3766:5,

3805:11, 3805:12,

3836:1, 3837:12,

3873:24

sizes [1] - 3782:9

sleeve [7] - 3755:24,

3756:9, 3756:11,

3756:13, 3833:1,

3833:3, 3833:4

sleeves [1] - 3833:10

slide [4] - 3760:18,

3762:1, 3801:11,

3864:24

slides [2] - 3758:18,

3834:19

slightly [2] - 3815:21,

3816:4

small [11] - 3733:24,

3789:9, 3791:21,

3798:16, 3798:23,

3799:1, 3804:23,

3805:2, 3805:4,

3805:6, 3805:14

smaller [3] - 3766:22,

3779:7, 3792:25

sold [1] - 3726:22

solely [1] - 3852:6

someone [2] -

3744:13, 3754:14

sometimes [1] -

3781:18

somewhat [1] -

3830:20

Sorry [5] - 3767:16,

3774:17, 3795:1,

3807:2, 3810:6

sorry [75] - 3717:15,

3721:19, 3721:21,

3722:11, 3723:20,

3724:1, 3725:22,

3727:9, 3727:12,

3728:23, 3731:24,

3736:11, 3738:17,

3751:14, 3752:25,

3758:23, 3758:24,

3761:16, 3762:14,

3763:19, 3764:17,

3764:18, 3768:24,

3770:3, 3771:12,

3771:23, 3772:18,

3772:19, 3773:6,

3773:9, 3775:17,

3776:3, 3778:23,

3783:25, 3784:9,

3784:10, 3790:11,

3792:2, 3792:9,

3793:6, 3793:16,

3793:17, 3794:22,

3799:14, 3804:16,

3810:9, 3811:16,

3812:21, 3812:23,

3814:6, 3814:18,

3815:10, 3817:9,

3818:2, 3819:2,

3820:13, 3822:11,

3823:24, 3825:7,

3825:11, 3828:4,

3832:5, 3832:25,

3835:12, 3835:20,

3836:5, 3842:1,

3849:13, 3850:21,

3853:8, 3853:15,

3857:7, 3872:18,

3874:9, 3875:16

sort [4] - 3711:5,

3716:11, 3716:16,

United States District Court

Trenton, New Jersey

3900

3854:16

sought [2] - 3801:1,

3858:1

sound [1] - 3757:11

sounds [1] - 3728:22

source [4] - 3716:1,

3716:10, 3716:18,

3716:22

sources [2] - 3716:3,

3718:4

specific [17] -

3731:16, 3742:12,

3744:7, 3744:8,

3749:21, 3755:25,

3759:17, 3766:7,

3766:8, 3776:17,

3779:25, 3799:4,

3801:3, 3803:19,

3814:24, 3815:18,

3873:19

specifically [13] -

3717:11, 3731:18,

3749:1, 3757:11,

3775:11, 3782:24,

3802:8, 3814:25,

3818:18, 3843:22,

3844:13, 3844:18,

3870:18

specificity [1] -

3873:13

specifics [7] -

3760:19, 3804:12,

3835:20, 3843:4,

3843:7, 3849:10,

3861:25

specified [1] - 3850:5

speeches [1] - 3715:6

speed [1] - 3781:23

spend [3] - 3740:5,

3801:22, 3833:19

spent [6] - 3713:18,

3727:23, 3728:1,

3728:3, 3740:21,

3855:9

spirit [2] - 3748:13,

3749:5

split [1] - 3838:3

sponsors [1] -

3805:21

spot [1] - 3795:4

Spread [1] - 3815:5

spread [31] - 3809:24,

3814:25, 3815:21,

3816:15, 3816:25,

3817:1, 3817:5,

3821:16, 3821:19,

3822:2, 3822:3,

3822:4, 3823:23,

3824:3, 3824:12,

3824:24, 3824:25,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 193 of 197 PageID: 19249
3825:3, 3825:4,

3825:8, 3825:10,

3825:12, 3825:23,

3826:12, 3826:13,

3826:22, 3868:6,

3868:9, 3868:16,

3869:7, 3870:25

spreadsheet [3] -

3790:14, 3817:17,

3818:1

spring [1] - 3846:20

spur [1] - 3851:19

SRS [1] - 3792:17

staff [1] - 3726:3

stage [1] - 3738:11

stamp [3] - 3788:18,

3788:19, 3789:1

stand [4] - 3714:18,

3714:20, 3758:5,

3855:11

Standard [4] -

3758:21, 3758:25,

3759:7, 3759:15

standard [8] -

3759:20, 3760:2,

3760:12, 3761:15,

3850:12, 3851:22,

3852:12, 3854:11

standards [2] -

3728:10, 3762:6

standing [1] - 3805:22

Stanley [1] - 3805:6

start [4] - 3767:23,

3805:1, 3823:7,

3859:19

start-ups [1] - 3805:1

started [1] - 3857:11

starting [5] - 3798:23,

3799:22, 3859:16,

3865:13, 3865:23

starts [1] - 3853:11

STATE [1] - 3708:14

statement [15] -

3723:22, 3724:4,

3724:12, 3733:16,

3749:12, 3749:16,

3750:12, 3759:19,

3759:21, 3760:22,

3762:8, 3813:5,

3813:18, 3866:11,

3866:19

statements [4] -

3724:8, 3740:18,

3740:19, 3812:16

STATES [1] - 3708:1

statistical [5] -

3784:3, 3785:1,

3785:20, 3828:2,

3828:6

statistics [2] -

3711:15, 3782:13

step [3] - 3805:25,

3858:23, 3875:5

stick [2] - 3842:5,

3871:18

sticking [1] - 3714:9

still [5] - 3714:21,

3737:3, 3740:8,

3768:18, 3806:8

stock [1] - 3828:17

Stock [4] - 3819:11,

3821:19, 3823:9,

3823:16

stocks [1] - 3837:4

stop [1] - 3789:18

stopping [1] - 3747:24

Strategic [3] -

3725:18, 3780:21,

3780:23

strategic [2] -

3747:19, 3748:1

STREET [1] - 3708:14

stress [1] - 3827:6

strike [14] - 3719:2,

3721:6, 3722:20,

3735:17, 3747:3,

3747:20, 3772:18,

3797:25, 3807:20,

3825:7, 3826:2,

3841:9, 3847:22,

3868:13

Structure [1] -

3831:17

structure [7] -

3726:15, 3727:3,

3727:23, 3798:22,

3831:13, 3833:13,

3867:17

structured [2] -

3834:11, 3849:8

struggled [1] -

3777:16

struggling [5] -

3731:18, 3745:2,

3766:6, 3780:4,

3820:15

studies [1] - 3716:16

study [9] - 3750:17,

3751:23, 3753:10,

3753:12, 3801:14,

3813:15, 3813:16,

3862:16, 3870:10

sub [80] - 3729:17,

3729:18, 3732:10,

3800:20, 3800:22,

3804:19, 3804:23,

3804:25, 3805:3,

3805:4, 3805:6,

3805:17, 3805:24,

3817:12, 3817:19,

3818:12, 3818:18,

3820:13, 3821:12,

3821:14, 3824:1,

3825:7, 3826:3,

3826:6, 3826:7,

3826:17, 3826:21,

3827:14, 3827:23,

3828:1, 3828:5,

3828:10, 3828:13,

3828:16, 3828:19,

3828:21, 3829:2,

3829:3, 3829:8,

3829:12, 3829:15,

3829:22, 3829:23,

3830:4, 3830:10,

3832:16, 3834:2,

3837:22, 3837:23,

3838:4, 3838:5,

3838:7, 3838:8,

3838:11, 3838:12,

3838:13, 3838:14,

3838:15, 3838:16,

3838:25, 3847:4,

3847:5, 3847:13,

3847:14, 3847:24,

3847:25, 3851:4,

3851:9, 3851:10,

3855:8, 3862:18,

3862:24, 3862:25,

3863:8, 3863:11,

3863:16

Sub [7] - 3745:20,

3746:5, 3829:18,

3855:16, 3856:21,

3857:1, 3857:5

Sub-Administration

[5] - 3746:5, 3855:16,

3856:21, 3857:1,

3857:5

sub-administrator [7]

- 3729:18, 3838:7,

3838:13, 3838:16,

3847:24, 3847:25,

3851:4

sub-administrators

[1] - 3851:10

Sub-advisor[1] -

3829:18

sub-advisor[32] -

3805:4, 3805:6,

3805:24, 3827:14,

3828:1, 3828:5,

3828:10, 3828:13,

3828:16, 3828:19,

3828:21, 3829:2,

3829:8, 3829:12,

3829:15, 3829:22,

3830:4, 3830:10,

3837:22, 3838:4,

3838:5, 3838:8,

3838:11, 3838:12,

3838:14, 3838:15,

3847:4, 3847:5,

3862:25

sub-advisor's [1] -

3827:23

sub-advisors [24] -

3729:17, 3732:10,

3800:20, 3800:22,

3804:19, 3804:23,

3804:25, 3805:3,

3805:17, 3829:3,

3829:23, 3832:16,

3834:2, 3837:23,

3838:25, 3847:13,

3847:14, 3851:4,

3851:9, 3855:8,

3862:18, 3863:8,

3863:11, 3863:16

Sub-Advisory [1] -

3745:20

sub-advisory [14] -

3817:12, 3817:19,

3818:12, 3818:18,

3820:13, 3821:12,

3821:14, 3824:1,

3825:7, 3826:3,

3826:7, 3826:17,

3826:21, 3862:24

subject [8] - 3746:14,

3751:9, 3752:15,

3759:11, 3761:23,

3772:12, 3776:11,

3862:13

submit [1] - 3749:11

submitted [2] -

3749:16, 3861:4

subpoena [5] -

3712:3, 3714:5,

3753:15, 3753:19,

3753:24

subpoenas [1] -

3712:1

subsets [1] - 3843:20

subsidiary [4] -

3752:19, 3752:24,

3752:25, 3753:7

substantial [1] -

3723:10

substantially [1] -

3768:4

substantive [2] -

3722:18, 3777:5

subtract [1] - 3866:16

subtracting [1] -

3866:14

subtraction [2] -

3866:8, 3866:9

subtractions [1] -

3866:19

United States District Court

Trenton, New Jersey

3901

succeed [1] - 3799:22

sue [1] - 3803:22

suffer [1] - 3855:2

suffered [4] - 3850:1,

3853:20, 3854:15,

3856:7

sufficient [5] -

3731:13, 3796:10,

3804:6, 3804:20,

3873:24

suggest [2] - 3803:10,

3840:10

suggested [2] -

3727:6, 3789:10

suggesting [2] -

3788:6, 3835:19

suggestions [1] -

3739:1

summaries [3] -

3745:7, 3787:8,

3823:17

summarized [1] -

3732:9

summarizes [1] -

3834:22

summary [5] -

3739:12, 3739:13,

3809:19, 3823:19,

3839:11

Sun [2] - 3792:18,

3793:2

supplies [2] - 3748:5,

3748:6

supply [1] - 3720:7

support [1] - 3744:11

supposed [2] -

3711:6, 3840:9

Supreme [3] - 3760:7,

3760:13, 3761:15

surprise [4] - 3760:11,

3760:21, 3761:13,

3809:15

surprising [1] -

3809:18

surprisingly [1] -

3777:21

suspect [2] - 3734:2,

3859:9

sustained [2] -

3863:8, 3863:11

sustains [1] - 3854:25

SWEETSER [1] -

3709:4

switched [1] - 3811:16

sworn [1] - 3714:19

system [2] - 3754:12,

3754:18

systems [3] - 3755:15,

3838:19, 3841:18

SZAFERMAN [1] -

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 194 of 197 PageID: 19250
3709:3

T

T.Rowe [1] - 3805:15

tab [25] - 3762:10,

3762:19, 3763:8,

3766:17, 3773:6,

3773:8, 3773:14,

3773:17, 3775:24,

3778:8, 3779:21,

3780:2, 3780:6,

3786:24, 3790:8,

3794:22, 3794:25,

3810:8, 3810:9,

3810:19, 3813:20,

3814:17, 3814:18

table [3] - 3775:1,

3776:8, 3799:3

tabs [1] - 3788:25

task [1] - 3846:5

tasks [4] - 3831:20,

3847:2, 3847:8,

3847:19

Tax [2] - 3748:15

tax [4] - 3845:18,

3845:20, 3845:21,

3845:25

technical [2] - 3718:7,

3738:15

technically [2] -

3829:7, 3875:9

technology [1] -

3749:4

Teen [1] - 3872:3

Teen-Ed [1] - 3872:3

telephone [3] -

3754:9, 3754:12,

3755:15

tend [4] - 3766:15,

3768:3, 3768:8,

3780:9

term [6] - 3738:15,

3756:24, 3757:10,

3778:15, 3779:4,

3807:8

terminate [1] -

3852:16

terms [24] - 3711:18,

3737:16, 3755:15,

3755:17, 3756:15,

3772:13, 3772:15,

3777:5, 3777:6,

3787:16, 3797:20,

3797:22, 3816:15,

3817:1, 3818:22,

3824:24, 3824:25,

3831:6, 3831:9,

3834:6, 3834:10,

3836:20, 3837:9,

3856:13

terribly [2] - 3838:20,

3863:4

test [5] - 3807:21,

3807:24, 3809:15,

3809:19, 3874:25

testified [42] - 3717:1,

3718:3, 3720:3,

3725:14, 3725:25,

3728:19, 3728:20,

3729:9, 3734:12,

3735:17, 3736:20,

3737:15, 3746:19,

3754:3, 3761:17,

3763:4, 3765:3,

3769:23, 3772:12,

3784:25, 3796:25,

3797:7, 3799:10,

3799:15, 3799:25,

3800:5, 3802:20,

3803:21, 3803:25,

3808:17, 3813:14,

3829:9, 3830:3,

3841:16, 3845:24,

3850:16, 3851:23,

3859:9, 3860:16,

3862:11, 3863:12,

3863:15

testify [1] - 3770:22

testifying [3] -

3717:13, 3717:16,

3854:24

testimony [25] -

3715:9, 3717:8,

3719:19, 3721:7,

3725:17, 3736:7,

3736:12, 3751:5,

3754:5, 3755:5,

3755:10, 3755:13,

3756:7, 3787:11,

3787:13, 3788:9,

3812:8, 3817:5,

3835:18, 3848:24,

3856:24, 3860:20,

3866:4, 3869:12,

3872:2

text [1] - 3781:17

theory [1] - 3803:1

thereabouts [1] -

3756:10

therefore [1] - 3867:10

They've [1] - 3711:9

they've [5] - 3712:1,

3713:13, 3738:1,

3777:24, 3830:5

thinking [2] - 3712:21,

3817:9

thinks [1] - 3845:6

third [9] - 3725:8,

3725:13, 3725:16,

3727:2, 3727:16,

3744:5, 3841:14,

3853:24, 3854:2

third-party [4] -

3725:8, 3725:13,

3725:16, 3853:24

third-party's [1] -

3854:2

thoughtful [1] -

3731:7

thousands [3] -

3782:9, 3784:17,

3837:3

three [17] - 3713:3,

3714:14, 3732:17,

3733:24, 3740:5,

3768:24, 3782:3,

3792:22, 3792:24,

3811:5, 3812:22,

3839:16, 3840:24,

3841:3, 3841:11

three-year [1] -

3840:24

throughout [1] -

3780:2

throw [1] - 3827:17

Thursday [4] - 3711:6,

3713:1, 3714:15,

3769:23

ticking [1] - 3713:11

tie [1] - 3820:14

tied [1] - 3858:18

tiny [2] - 3782:10,

3784:17

title [1] - 3769:12

Title [1] - 3708:23

today [3] - 3711:8,

3715:5, 3806:18

together[3] - 3720:18,

3794:4, 3818:3

tomorrow [3] -

3875:10, 3876:9,

3876:10

took [1] - 3713:22

top [5] - 3721:23,

3765:7, 3821:9,

3822:1, 3864:10

topic [1] - 3806:7

total [17] - 3732:20,

3767:3, 3770:8,

3773:22, 3775:3,

3782:1, 3782:3,

3785:10, 3797:13,

3801:11, 3801:18,

3817:8, 3820:7,

3820:9, 3822:4,

3865:8, 3866:13

Total [2] - 3770:2,

3773:24

Totally [1] - 3827:1

tough [1] - 3724:15

towards [1] - 3817:25

track [4] - 3757:6,

3757:9, 3821:25,

3836:6

tracks [1] - 3755:20

trade [1] - 3837:11

trading [4] - 3728:3,

3833:5, 3837:5,

3837:23

Trading [1] - 3837:21

Traditional [2] -

3758:21, 3758:25

traditionally [1] -

3753:4

transactions [2] -

3842:24, 3843:3

transcript [2] -

3711:17, 3745:7

transfer [2] - 3741:10,

3741:25

translate [1] - 3826:23

travel [1] - 3733:1

treasury [1] - 3748:5

treated [1] - 3741:25

treats [1] - 3782:9

Trends [1] - 3780:22

trends [1] - 3763:14

TRENTON [1] -

3708:15

trial [2] - 3740:22,

3755:5

TRIAL [1] - 3708:20

tricks [1] - 3759:11

tried [1] - 3803:10

trouble [4] - 3755:13,

3782:25, 3795:1,

3820:14

trucks [1] - 3781:22

true [4] - 3708:23,

3717:23, 3766:16,

3785:13

Trust [21] - 3726:12,

3849:23, 3850:1,

3850:5, 3850:9,

3850:14, 3850:15,

3851:3, 3851:8,

3851:11, 3852:3,

3852:4, 3852:5,

3852:6, 3852:11,

3853:20, 3854:9,

3856:7, 3860:4,

3860:12

trustee [9] - 3722:17,

3726:15, 3726:17,

3732:25, 3803:5,

3803:6, 3851:2,

3851:11, 3852:2

Trustees [2] -

United States District Court

Trenton, New Jersey

3902

3743:11, 3766:3

trustees [19] - 3716:9,

3734:14, 3734:16,

3734:20, 3734:23,

3737:22, 3740:6,

3748:23, 3784:25,

3785:20, 3786:3,

3832:20, 3848:25,

3850:17, 3850:24,

3852:23, 3856:22,

3874:3, 3876:2

trustees' [1] - 3712:3

trusts [1] - 3832:3

Trusts [1] - 3832:8

try [6] - 3712:24,

3730:9, 3777:18,

3789:9, 3863:3,

3868:18

trying [30] - 3756:1,

3757:6, 3757:8,

3767:16, 3772:14,

3772:15, 3774:17,

3778:3, 3787:7,

3787:14, 3787:17,

3790:18, 3809:20,

3817:7, 3820:14,

3821:9, 3821:11,

3821:22, 3821:25,

3822:11, 3822:12,

3823:8, 3827:7,

3828:11, 3837:9,

3837:14, 3837:18,

3844:13, 3849:6

turn [18] - 3721:6,

3721:18, 3723:1,

3726:1, 3727:1,

3743:17, 3766:17,

3772:17, 3781:9,

3781:13, 3799:10,

3810:2, 3811:14,

3824:6, 3839:19,

3849:16, 3853:14,

3865:3

Turn [14] - 3724:19,

3725:4, 3763:15,

3765:5, 3774:4,

3790:7, 3794:18,

3796:12, 3810:12,

3813:19, 3819:11,

3822:9, 3855:20,

3868:25

turquoise [3] - 3824:3,

3824:10, 3824:17

Turquoise [1] - 3824:9

TWEED [1] - 3709:12

Tweed [4] - 3738:6,

3738:7, 3738:11,

3739:23

two [44] - 3711:9,

3711:19, 3711:23,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 195 of 197 PageID: 19251
3712:1, 3712:6,

3712:10, 3713:2,

3713:14, 3713:22,

3714:14, 3718:16,

3719:11, 3722:13,

3724:7, 3727:13,

3750:13, 3764:20,

3767:2, 3768:6,

3782:4, 3782:22,

3793:24, 3794:10,

3799:18, 3806:13,

3808:18, 3816:17,

3818:2, 3818:14,

3851:21, 3857:10,

3859:10, 3860:13,

3862:6, 3862:20,

3863:4, 3864:5,

3866:9, 3866:14,

3869:22, 3875:3,

3875:8, 3875:12,

3876:2

two-to-one [1] -

3713:14

type [5] - 3740:14,

3751:6, 3753:11,

3773:17, 3796:23

types [3] - 3797:8,

3799:18, 3802:7

typical [1] - 3756:8

typically [8] - 3756:8,

3756:14, 3765:24,

3774:11, 3774:22,

3782:23, 3796:3,

3855:7

U

U.S [2] - 3708:17,

3708:25

U.S.C [1] - 3708:23

ultimate [3] - 3832:21,

3852:17, 3874:25

ultimately [1] - 3752:8

Ultra [2] - 3815:16,

3816:4

unaffiliated [2] -

3725:8, 3725:12

uncertain [1] -

3836:20

uncomfortable [1] -

3712:15

under [26] - 3714:21,

3719:19, 3741:23,

3741:24, 3754:7,

3765:10, 3765:23,

3790:23, 3795:9,

3797:5, 3799:15,

3803:6, 3816:4,

3822:4, 3823:24,

3824:3, 3831:19,

3832:14, 3834:23,

3841:4, 3847:9,

3852:7, 3856:12,

3865:16, 3865:19

Under [2] - 3869:23,

3870:23

underlying [1] -

3845:12

understood [9] -

3729:16, 3729:20,

3738:13, 3740:23,

3741:3, 3741:8,

3777:9, 3791:10,

3843:17

undertake [8] -

3745:11, 3746:4,

3779:13, 3794:14,

3828:5, 3829:12,

3829:23, 3846:5

undertaken [2] -

3859:1, 3859:4

undertaking [2] -

3847:12, 3849:24

undertook [3] -

3745:19, 3745:25,

3862:17

unfamiliar[1] -

3757:12

unfortunately [1] -

3815:4

unimportant [2] -

3730:17, 3730:21

unimportantly [1] -

3864:7

UNITED [1] - 3708:1

Universe [1] - 3769:14

universe [3] -

3770:12, 3790:3,

3798:6

Unless [1] - 3736:3

unless [1] - 3780:8

unlevel [1] - 3713:13

unlikely [2] - 3798:8,

3798:16

unrelated [1] -

3753:10

untroubled [1] -

3873:21

untruthful [1] -

3730:25

up [25] - 3712:11,

3714:3, 3740:2,

3746:15, 3753:9,

3768:14, 3788:22,

3797:11, 3798:21,

3798:23, 3805:25,

3814:14, 3814:19,

3816:22, 3819:22,

3821:20, 3821:25,

3822:1, 3825:15,

3839:5, 3848:20,

3855:4, 3862:6,

3866:10, 3867:9

update [3] - 3762:2,

3842:23, 3843:2

updates [1] - 3761:20

ups [1] - 3805:1

utility [1] - 3754:19

V

vague [4] - 3802:15,

3826:18, 3830:20,

3871:4

valuation [4] - 3837:8,

3838:22, 3840:14

value [4] - 3757:18,

3841:12, 3843:6,

3843:21

variable [8] - 3767:22,

3820:12, 3821:10,

3824:1, 3857:22,

3858:9, 3859:6,

3870:25

varies [1] - 3871:21

variety [4] - 3745:19,

3766:3, 3790:15,

3810:23

various [4] - 3742:10,

3750:22, 3830:6,

3851:3

Various [1] - 3796:14

vastly [1] - 3827:15

verified [1] - 3858:9

verify [1] - 3857:22

versa [1] - 3734:7

version [3] - 3788:14,

3822:16, 3823:12

Versus [1] - 3769:13

versus [4] - 3796:9,

3796:20, 3827:13,

3827:14

vice [1] - 3734:7

view [10] - 3717:19,

3720:5, 3721:15,

3721:17, 3739:4,

3740:12, 3740:15,

3742:14, 3801:8,

3873:22

viewed [2] - 3856:17,

3857:1

violations [1] -

3800:16

VIP [2] - 3832:8,

3832:12

vision [1] - 3723:5

visits [1] - 3840:25

VIT [2] - 3795:15,

3795:18

volatility [2] - 3833:13,

3833:17

voted [2] - 3829:1,

3862:2

votes [1] - 3828:25

Vs [2] - 3708:5, 3708:9

W

wait [1] - 3875:10

Wait [1] - 3860:25

waiver [1] - 3822:2

waivers [4] - 3769:25,

3789:13, 3821:15,

3824:2

walked [1] - 3742:23

Walker[1] - 3743:9

walking [1] - 3864:25

Walsh [1] - 3845:24

Walsh's [1] - 3845:23

warrant [2] - 3835:1,

3836:10

warranty [1] - 3856:14

Warren [1] - 3861:12

watchdog [2] -

3717:3, 3719:20

ways [3] - 3757:15,

3801:24, 3815:1

week [1] - 3797:7

weekly [2] - 3718:15,

3718:17

weighing [1] - 3874:3

weight [4] - 3781:22,

3782:9, 3782:16,

3816:21

weighted [16] -

3764:21, 3767:20,

3779:5, 3779:6,

3779:14, 3780:6,

3780:9, 3785:10,

3785:23, 3786:1,

3786:4, 3786:11,

3816:13, 3825:11,

3825:23, 3826:22

welcomed [1] - 3723:9

Wellington [2] -

3805:10, 3805:11

whatsoever [4] -

3767:1, 3770:18,

3783:6, 3861:2

whereas [1] - 3785:11

white [2] - 3762:10,

3762:17

whole [9] - 3723:18,

3731:6, 3766:9,

3767:5, 3780:8,

3804:3, 3804:4,

3804:7, 3826:14

wildly [1] - 3827:17

United States District Court

Trenton, New Jersey

3903

willful [3] - 3850:2,

3853:23, 3856:9

Williams [1] - 3743:9

willing [3] - 3738:12,

3791:11, 3805:25

wise [1] - 3721:8

wish [4] - 3713:15,

3860:25, 3869:15,

3875:10

wished [1] - 3714:13

withdraw [1] - 3714:5

withdrawing [1] -

3753:15

withdrawn [1] -

3753:24

witness [34] -

3712:19, 3714:19,

3720:7, 3742:25,

3746:24, 3754:13,

3754:17, 3754:21,

3754:24, 3757:21,

3758:10, 3761:6,

3762:21, 3763:20,

3768:3, 3768:12,

3770:19, 3770:21,

3772:23, 3780:12,

3783:6, 3783:11,

3787:24, 3806:6,

3807:1, 3814:17,

3822:16, 3823:3,

3825:14, 3848:20,

3855:14, 3871:14,

3871:17, 3872:4

WITNESS [66] -

3720:12, 3724:7,

3730:13, 3735:3,

3736:4, 3736:20,

3738:20, 3744:22,

3751:21, 3757:22,

3758:1, 3760:1,

3760:4, 3762:22,

3763:23, 3764:8,

3765:18, 3767:11,

3767:16, 3768:6,

3768:18, 3769:8,

3772:5, 3772:25,

3780:14, 3781:9,

3783:21, 3787:16,

3787:21, 3788:6,

3788:11, 3788:24,

3789:2, 3789:7,

3789:22, 3792:10,

3802:17, 3806:9,

3806:19, 3806:24,

3807:2, 3810:3,

3812:24, 3819:25,

3820:20, 3821:2,

3822:18, 3823:5,

3823:7, 3823:14,

3827:5, 3827:21,

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 196 of 197 PageID: 19252
3843:19, 3853:2,

3857:16, 3858:17,

3861:21, 3870:6,

3871:7, 3872:15,

3872:25, 3874:7,

3874:10, 3874:15,

3875:2, 3875:6

Witness [14] -

3723:20, 3727:20,

3743:4, 3754:9,

3758:13, 3761:11,

3765:12, 3769:6,

3784:2, 3810:17,

3821:23, 3839:10,

3854:6, 3875:7

witnesses [5] -

3711:24, 3712:10,

3712:14, 3712:16,

3712:23

wondering [2] -

3736:15, 3857:2

word [3] - 3811:3,

3852:2, 3867:7

wording [4] - 3721:13,

3746:17, 3759:17,

3811:12

words [4] - 3778:18,

3866:1, 3866:23,

3867:25

works [1] - 3817:3

world [1] - 3804:11

wrapper [11] -

3808:10, 3808:22,

3809:1, 3809:23,

3867:19, 3868:5,

3868:10, 3868:17,

3869:7, 3870:11

written [3] - 3724:25,

3725:1, 3746:18

Y

year [22] - 3732:21,

3754:25, 3781:5,

3804:8, 3822:6,

3836:14, 3836:21,

3837:15, 3837:17,

3840:24, 3860:7,

3862:6, 3868:4,

3871:21, 3873:3,

3873:4, 3873:20,

3873:21

year-by-year[2] -

3868:4, 3873:4

years [23] - 3716:15,

3720:23, 3737:20,

3777:9, 3781:23,

3791:5, 3800:1,

3800:10, 3804:2,

3807:19, 3808:18,

United States District Court

Trenton, New Jersey

3904

3811:5, 3842:21,

3848:2, 3851:14,

3854:13, 3854:23,

3855:4, 3855:6,

3857:21, 3858:7,

3871:20

yellow [6] - 3819:18,

3820:11, 3820:12,

3820:19, 3821:13,

3823:24

yesterday [3] -

3728:21, 3803:21,

3863:13

yield [1] - 3843:14

yields [1] - 3843:10

yourself [3] - 3727:19,

3744:10, 3854:4

Case 3:11-cv-04194-PGS-DEA Document 270 Filed 03/31/16 Page 197 of 197 PageID: 19253