1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

United States District Court

Trenton, New Jersey

3905

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 23, 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 23

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

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 1 of 198 PageID: 19254
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

United States District Court

Trenton, New Jersey

3906

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

ROBERT G. STEVENS, JR., 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

NIKKI NIELSON, ESQUIRE

ANDREA HOOD, ESQUIRE

FOR THE DEFENDANTS

ALSO PRESENT: PATRICIA LOUIE, ESQUIRE

MANAGING DIRECTOR & ASSOCIATE GENERAL COUNSEL

AXA EQUITABLE LIFE INSURANCE CO.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 2 of 198 PageID: 19255
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

United States District Court

Trenton, New Jersey

3907

I N D E X

WILLIAM W. HOLDER 3908

DIRECT EXAMINATION OF WILLIAM HOLDER BY MR. HORA 3908

CROSS-EXAMINATION OF WILLIAM HOLDER BY MR.

STEVENS

3965

CHRISTOPHER M. JAMES, Ph.D. 4042

DIRECT EXAMINATION OF CHRISTOPHER M. JAMES, Ph.D.

BY MS. HOOD

4042

VOIR DIRE ON QUALIFICATIONS BY MR. A. LAKIND 4059

E X H I B I T S

Defendant's Exhibit 1510 was marked into evidence 3931

Plaintiff's Exhibits 847, 848, 849 were marked

into evidence

3992

Plaintiff's Exhibit 787 was marked into evidence 4034

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 3 of 198 PageID: 19256
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:00

00:00

00:01

00:01

00:01

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3908

THE COURT: Good morning. Please be seated.

Any applications?

MR. MURPHY: None from defendants, your Honor.

THE COURT: Ready to begin?

MR. HORA: Your Honor, Robert Hora for defendants.

Defendants called call expert witness, William Holder.

THE COURT: All right. Mr. Holder.

(WILLIAM W. HOLDER, sworn)

THE DEPUTY CLERK: State your name for the record.

THE WITNESS: William Wallace Holder.

THE COURT: Once you're seated, sir, could you just

spell your last name for us?

THE WITNESS: Certainly, it is H-o-l-d-e-r.

(DIRECT EXAMINATION OF WILLIAM HOLDER BY MR. HORA:)

Q. Mr. Holder, what is your current occupation?

A. I serve as Dean of the Leventhal School of Accounting at

the University of Southern California, and also teach and

serve as professor there.

Q. Could you please describe for us your educational

background beginning with college?

A. Certainly. I received a Bachelor of Science in business

administration degree with a major in accounting, from

Oklahoma State University; I then attended the University of

Oklahoma where I received a Master of accountancy degree and a

Doctorate in business administration with a dissertation field

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 4 of 198 PageID: 19257
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:02

00:02

00:02

00:03

00:03

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3909

also in accounting.

Q. Can you just put some dates on that? When did you get

your Bachelor's and when did you get the other degrees?

A. Certainly. I received my Bachelor's degree in 1969, my

Master's in 1972, and the Doctorate in 1974.

Q. Could you please describe your academic employment

history since graduating with your Doctorate in 1974?

A. Certainly. I first joined the faculty at Texas Tech

University, I served there for five years, I began as an

assistant professor during that period of time, I was promoted

to associate professor and granted tenure; during that period

of time I also served as a visiting professor at the

University of Tennessee.

In 1979 I joined the faculty at the University of

Southern California as an untenured associate, and since then

I've been granted tenure, promoted to professor or full

professor, and then I held I think it's three endowed chairs

or professorships.

Q. So, roughly how long have you been tenured at the USC?

A. Well, it would have been since the early to mid '80s, I

don't remember the exact date of that grant.

Q. And all of those positions that you've been talking

about, they've been in the field of accounting?

A. They have, yes, sir.

Q. Broadly speaking, what have you done as an academic in

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 5 of 198 PageID: 19258
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:03

00:03

00:04

00:04

00:04

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3910

the field of accounting?

A. Well, the things one would normally expect I think, I've

certainly taught financial accounting, managerial accounting,

cost accounting, I've taught auditing; over the years, I have

conducted research, published the results thereof, I have --

and that's generally been in the fields of managerial cost

accounting, financial accounting and reporting.

I have rendered service both to the university, but

also to the profession, serving on policy groups, standards --

accounting standards setting bodies over the years; and then

in addition to that I've done a good bit of consulting over

the duration of my career.

Q. You just mentioned financial accounting, what is

financial accounting?

A. Financial accounting is a functional area of accounting

that is designed primarily I think to provide decision useful

information to individuals outside a reporting entity, a

business enterprise. Those individuals typically lack the

authority and the proximity to specify the type of information

that they would like to have on which to base their decisions,

primarily investment and credit decisions.

The financial accounting information is also commonly

used internally within organizations, business enterprises,

but it's designed primarily for those that are outside the

organization.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 6 of 198 PageID: 19259
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:05

00:05

00:05

00:06

00:06

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3911

Q. Could you describe broadly for us what you've done in the

area of financial accounting?

A. Sure. I have taught in that area, I've written in that

area, I've conducted research in that area and published;

again, I mentioned the standards setting activities, financial

accounting generally encompasses a rather large range of

professional accounting standards that one must follow for

financial information to be presented in conformity with GAAP.

And I served on several of those accounting standards setting

groups over the years.

I've written textbooks or co-authored at least

textbooks in financial accounting that was published through

five editions used at numerous colleges and universities; I

still am involved in publishing a practice manual, which

guides audits of financial information presented in conformity

with generally accepted accounting principles.

Q. And the textbook you just mentioned, what is that?

A. Its title is Intermediate Accounting, it deals with -- or

dealt -- it deals with a wide range of financial accounting

and reporting topics.

Q. Are you familiar with something called the SEC and

Financial Reporting Institute?

A. I am, yes.

Q. Could you explain what that is?

A. That institute is an organization within the Leventhal

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 7 of 198 PageID: 19260
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:06

00:07

00:07

00:07

00:08

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3912

School of Accounting at USC, it does a number of things over

the years; it's commissioned research, one of those projects I

and a couple colleagues participated in; it also hosts

so-called round tables, when there are major issues

confronting the profession, we can act as an independent forum

for practitioners and business executives to meet and confer

with regulators, standard setters, or individuals of that ilk,

and it provides a good forum for an interchange of ideas.

We also hold an annual conference that attracts 6 or

700 pretty much senior executives in business enterprises,

partners from public accounting firms; and the presenters at

that conference are -- we've been very blessed, they're

individuals such as the chairman of the financial accounting

standards boards, the chief accountant of the SEC,

commissioners of the SEC occasionally as the chair person.

Q. And you mentioned a little bit earlier in your testimony

that you served on accounting standard setting bodies?

A. I did.

Q. Could you flesh that out a little bit for us?

A. Sure. I served originally as the senior technical editor

of an industry accounting and audit guide, dealing with audits

of state and local government units; I also then served on a

compliance auditing task force that focused on the auditor's

responsibility for identifying violations of laws and

regulations in the related disclosures in financial statements

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 8 of 198 PageID: 19261
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:08

00:08

00:08

00:09

00:09

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3913

for those. I then served on a group called the accounting

standards executive committee; that was a group that published

a variety of different types of standards. We issued

statements of position accounting and audit guides; other

documents, practice bulletins and so on, that in part

established generally accepted accounting principles.

That worked focused on a wide range of entities. We

set -- during my time on the committee, we set accounting

standards for everything from common interest realty

associations to insurance companies, mutual funds and so on,

as well as other financial institutions, banks, savings and

loans.

Q. And when were you on that committee?

A. That was from '87 to '90.

Q. Have you had any other roles with accounting standards

setting bodies?

A. I have. I served two five-year terms on the governmental

accounting standards board that started in 2000, and ended in

2010. That group sets generally accepted accounting

principles for the nation's 80,000 or so units of state and

local government.

Q. Now, you mentioned generally accepted accounting

principles a couple of times; what is that or what are they?

A. Sure. Generally accepted accounting principles

represents a body of knowledge composed I would say primarily

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 9 of 198 PageID: 19262
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:09

00:10

00:10

00:10

00:10

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3914

of written accounting standards, with which information

contained in financial reports must comply, if those financial

-- resulting financial statements are to be presented in

conformity with generally accepted accounting principles. The

Securities and Exchange, for example, requires SEC registrants

generally to prepare their information in conformity with that

body of knowledge, in conformity with generally accepted

accounting principles.

Q. And who forms generally accepted accounting principles?

A. Over the years a large number of or relatively large

number of organizations have performed that function. The SEC

was formed back in the early '30, and one of the first things

they did was they had the authority to set accounting

standards; they delegated that authority to the private sector

and a number of organizations over the years, including AcSEC,

has been active in writing those accounting standards.

MR. STEVENS: If I just may object; you used a

phrase there AcSEC --

MR. HORA: I was just going to get to that.

BY MR. HORA:

Q. You used an acronym and I'd like you to explain that.

A. I did and I apologize. The Accounting Standards

Executive Committee, which I alluded to earlier and on which I

had served, was known by that acronym of AcSEC. Sorry.

Q. Are you familiar with something called FASB?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 10 of 198 PageID: 19263
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:11

00:11

00:11

00:12

00:12

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3915

A. GASB?

Q. FASB, F-A-S-B --

A. FASB, yes, absolutely.

Q. What's FASB?

A. FASB is the Financial Accounting Standards Board, it is

currently the most authoritative standards setter establishing

GAAP for business enterprises, and not-for-profit

organizations. Such as USC, for example.

Q. Have you had any role with FASB?

A. I have, yes. The FASB and the GASB are frequently

characterized as sister boards, so during my 10 years were

housed in the same building and shared the same facilities.

So, during the 10 years I was on GASB many of our projects

would have some relationship to -- some interrelationship with

those being pursued by the FASB. So we would discuss those

projects among board members of both FASB and GASB or staffs

would interact and so on. We both had accounting for

derivatives projects going at the same time, so there was a

good bit of discussion about those that took place. In

addition to that I was commissioned to do research at an

earlier point by the FASB that were designed to help their

standards setting efforts.

Q. Now, earlier in your testimony you mentioned something

called managerial accounting; do you recall that?

A. I do.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 11 of 198 PageID: 19264
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:12

00:12

00:13

00:13

00:13

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3916

Q. What is managerial accounting?

A. Managerial accounting is a functional area of accounting

that is designed to provide decision useful information to

those that manage business enterprises. And there are a

number of facets of managerial accounting, cost accounting

being one of those; cost accounting also related to financial

accounting very closely. But managerial accounting is

designed to provide information of use to those that are

charged with the responsibility of managing the business.

Q. Broadly speaking, could you describe your experience in

the area of managerial accounting?

A. Sure. Well, again, I've taught in that area, I've taught

a number of managerial and cost accounting courses over the

years; I also have written in that area, performed research

and published information about managerial accounting,

contributed to a handbook on cost accounting; I also have

consulted on cost accounting issues and learned from those

endeavors as well.

Q. How if at all does managerial accounting differ from

financial accounting, which is what we were talking about a

little bit earlier?

A. Well, there's a considerable overlap. I think it's a

fair to say while financial accounting is required to be

guided by professional accounting standards established

establishing generally accepted accounting principles, under

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 12 of 198 PageID: 19265
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:14

00:14

00:14

00:15

00:15

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3917

managerial accounting you do have more flexibility, you can

ask for alternative presentations. I think the managerial

accounting body of knowledge recognizes that the decisions

that individuals make that manage business enterprises vary,

from very strategic long-range focus, to incremental

decisions, should we accept this order that's coming in or

should we reject it. So there are great many types of

decisions that managerial accounting addresses, that really

aren't the subject of financial accounting.

Q. And you've talked a little bit in your testimony so far

about cost accounting, and I'd like to step back a little bit

and define that. What is cost accounting?

A. Cost accounting generally is the process of associating

economic endeavor, that is, the costs that incurred in

fulfilling some function, some activity, some good or some

service. So cost accounting is the association of economic

endeavor with some productive function, some

revenue-generating activity, some good, some service.

Q. And broadly speaking, could you explain for us what

you've done in the area of cost accounting?

A. Again, I've taught in that area, college courses devoted

to cost accounting, and college courses and university courses

that deal in part with cost accounting, concepts and

practices; I've also performed research and published in that

area; and also consulted over the years in -- on issues of

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 13 of 198 PageID: 19266
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:15

00:16

00:16

00:16

00:17

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3918

cost accounting.

Q. And generally, without revealing any confidential

information, could you describe for us your consulting work

with respect to cost accounting?

A. Sure. The earliest involvement involved a hospital. The

Medicare formula had just been -- the Medicare program had

just been put in place recently, and the whole process of

reporting the Medicare and receiving reimbursement for

providing services under that program, was cost based; that

is, the cost of providing services to Medicare patients needed

to be measured, and that would in large measure determine the

amount of reimbursement that a hospital would receive.

And so you had a large number of revenue producing

departments within the hospital, various varying levels of

Medicare penetration as we would call it, that is, the

percentage of patients served that were Medicare eligible; for

example, nursing service, which is essentially the room and

board, would generally have a higher percentage of Medicare

patients, than say something like OB-GYN, older people don't

have babies too much.

So the cost -- finding the cost determination for that

we would try to allocate the cost of various support

departments, like housekeeping and purchasing and human

resources and medical records, to those revenue producing

areas for purposes of determining the appropriate

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 14 of 198 PageID: 19267
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:17

00:17

00:18

00:18

00:18

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3919

reimbursement for Medicare.

Since that time I have worked with other hospitals

trying to assist them in developing systems that will allow

them to evaluate cost relationships with productive functions

they were considering. I've also been involved in terms of

cost accounting in the standards setting activities I alluded

to. A good deal of cost accounting is found in financial

accounting reporting; for example, we had a project on

environment contamination remediation obligations and trying

to measure the costs that would be incurred by a government in

cleaning up a polluted harbor or some other property that the

government owned that required remediation, and, of course,

you know, there are great many cost allocation problems that

are associated with -- with those processes.

I've consulted on other issues that involved cost

accounting, the costs, for example, of acquiring a building,

if you're building it yourself will require -- to construct a

building may require cost allocations, frequently does.

Q. Have you done any cost accounting work with respect to

mutual funds?

A. I don't recall doing so, other than in this case in

looking at it.

Q. How if at all are cost accounting principles and concepts

applicable to different industries?

A. Well, I think the same general concepts apply almost

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 15 of 198 PageID: 19268
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:19

00:19

00:19

00:20

00:20

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3920

regardless of the industry. Again, the goal of cost

accounting is to associate the amount of economic endeavor,

that is, the costs that were incurred with some financial

that's being performed by the organization, and that

transcends industries generally.

Q. Mr. Holder, have you ever testified before Congress?

A. I have, yes.

Q. Could you explain when and on what subjects?

A. Sure. As I recall that was in May I believe of 2002;

Congress at that time was considering legislation that would

become known later when passed as the Sarbanes-Oxley Act, they

were interested in the nature, extent I guess of alleged

fraudulent financial reporting that was occurring in our

capital markets. Enron had just failed, Worldcom also had had

its problems; the congressional committee before whom I

testified was -- they thought well informed about those, so

they asked me to look at five other instances that had been

reported in the press involving allegations of fraudulent

financial reporting and to try to provide insights to them on

the causes and perhaps the cures, things that could be done

that would mitigate or extinguish instances of fraudulent

financial reporting.

Q. Have you heard of something called the National

Commission on Fraudulent Financial Reporting?

A. I have.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 16 of 198 PageID: 19269
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:20

00:21

00:21

00:21

00:21

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3921

Q. What is that?

A. That was a commission formed back in the '80s for similar

reasons. I think that was probably a response to the -- what

became known as the savings and loan crisis, the failure of a

great many savings and loans, and financial accounting and

reportings role in either not predicting that or not conveying

the troubles of a given institution on a timely basis.

The commission was named after its chairman, James

Treadway was an SEC commissioner, and he chaired that

commission, so it became known as the Treadway Commission.

But they commissioned themselves a number of research

projects, one of which I participated in with two of my

colleagues. Our charge was to look at things that the

Securities and Exchange Commission could do or do differently

that would mitigate or diminish the frequency, severity of

instances of fraudulent financial reporting.

Q. Thank you. Do you have any professional accreditations?

A. Yes, I do.

Q. What are they?

A. I am a Certified Public Accountant both in California and

Oklahoma where I took the examination.

Q. And how about a professional affiliations, do you have

any of those?

A. I do, I am a member of the American Institute of

Certified Public Accountants; I'm a member of the California

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 17 of 198 PageID: 19270
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:22

00:22

00:22

00:23

00:23

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3922

Society of Certified Public Accountants; I am a member of the

American Accounting Association; and then in each of those

organizations I've held various offices and served on

committees, chaired some of them.

Q. Have you received any awards during your career?

A. I have, yes.

Q. Generally speaking, what have you received?

A. Well, there have been a number of teaching awards and

because students propel those that they tend to mean a great

deal to the recipient, they certainly do to me. I've also

received awards from professional societies; I've received

awards from the two schools from which I graduated, Oklahoma

State, the university of Oklahoma; I received the Gold Medal

for distinguished service from the American Institute of CPAs;

I also was named for a couple years as one of the hundred most

-- I think the phrasing is influential people in accounting.

Q. Okay. Mr. Holder, who developed the opinions that you

intend to offer today?

A. Yes, I did.

Q. You did.

A. I did. I'm sorry, I thought --

Q. I said who developed. In the process of forming your

opinions, did anyone assist you?

A. Yes, they did. I was assisted by the professional staff

of Cornerstone Research.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 18 of 198 PageID: 19271
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:23

00:23

00:24

00:24

00:24

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3923

Q. What is Cornerstone Research?

A. They are a company that tends to as least focuses, to my

knowledge, on economic analysis; they provide litigation

support over a wide range of matters and topics and functional

areas, including accounting and financial reporting; they've

assisted me in numerous engagements I've been involved in, and

they did in this one.

Q. And why did you obtain assistance from Cornerstone?

A. Well, I think there were efficiency concerns at issue. I

think they were -- in my experience have been well positioned

to provide that kind of assistance. I generally used them as

I would use a research assistant on a research project;

they're very helpful in organizing information, getting

documents, putting them in logical order and so on. But they

were -- they were helpful in a variety of ways, in assisting

me in developing my opinions.

Q. Thank you.

MR. HORA: Your Honor, at this time I ask the Court

to qualify Mr. Holder as an expert in financial accounting,

managerial accounting, and cost accounting, and submit that

he's qualified to testify as an expert in these areas by

reason of his experience and training.

THE COURT: Mr. Stevens?

MR. STEVENS: Good morning, your Honor. The only

thing I would note is that we had filed prior to this a motion

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 19 of 198 PageID: 19272
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:24

00:25

00:25

00:25

00:25

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3924

in limine to preclude his testimony entirely. It's my

understanding based on discussions I heard yesterday that the

trial schedule and everybody agrees we'll be finished Thursday

and that's sufficient time for defendant to put in all its

witnesses; because of that we're going to reserve on that

motion, not entertain it at this point and wait for

cross-examination to raise the issues that we had identified

in that specific motion, your Honor.

THE COURT: All right. Do you have any objections

to that?

MR. HORA: No objection to that.

THE COURT: All right. I guess I'm tentatively

finding that Mr. Holder is an expert in financial, managerial

and cost accounting.

MR. HORA: Thank you.

BY MR. HORA:

Q. Mr. Holder, as part of your work in this matter, have you

reviewed the process by which FMG reports its profitability to

the EQAT, E-Q-A-T, Board of Trustees?

A. Yes, I have.

Q. And based on your understanding how does FMG classify

sub-advisory and sub-administrative fees in these reports?

A. In the reports I've seen they classify those costs as

expenses, rather than as a direct reduction of revenues.

Q. Okay. And my next question I'm just going to ask for a

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 20 of 198 PageID: 19273
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:26

00:26

00:26

00:27

00:27

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3925

yes or no because I want to lay some foundation later for what

your opinion is, but did you reach any opinions about FMG's

classification of sub-advisory and sub-administrative fees in

those profitability reports?

A. Yes.

Q. And could you let us know what you did to prepare

yourself in forming your opinion?

A. As they relate to this profitability issue, I read a

great number of documents; I looked at the arrangements, the

agreement between the Trust and FMG; I looked at the

agreements between -- some of the agreements at least between

FMG and the sub-advisors and sub-administrators; I had

interviews and discussions with Mr. Joenk, Ms. Louie; I read a

number of our documents, deposition testimony, trial

testimony; I also conducted analysis of the professional

literature of the accounting profession and considered it as I

went through my analysis. Those things come to mind.

Q. And could you please summarize for the Court your opinion

with respect to FMG's classification of sub-advisory and

sub-administrative fees in its profitability reports to the

EQAT Board?

A. I think the classification as expenses as I've indicated

was perfectly appropriate.

Q. Now, you mentioned -- one thing you mentioned you looked

at was accounting standards, and I'd like to go through some

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 21 of 198 PageID: 19274
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:28

00:28

00:28

00:29

00:29

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3926

of the professional standards that I understand are related to

your opinion.

MR. HORA: Could we hand the witness DX-1510?

Q. Do you recognize this document?

A. I do.

Q. What is it?

A. This is the text of an Emerging Issues Task Force

consensus abstract, that's what EITF at the top left stands

for, and it was issued in 1999. It was the 19th abstract they

issued that year, so it's characterized this EITF 99-19.

Q. And this is a document that Mr. Barrett cited in his

report; correct?

A. I recall that being the case, yes.

Q. What is the Emerging Issues Task Force?

A. That is a group of practitioners, business executives, as

well as those in public accounting practice, established by

the FASB to deal with problems that were -- or challenges that

were arising in practice, there may be new transactions, there

may be into business structures; when those arise the EITF is

to provide immediate guidance if you will to the practicing

community, to the accounting profession.

The FASB in establishing its standards, goes through a

rather lengthy due process procedure, some of those can take

five, seven, eight years. And so the EITF was designed to be

-- to provide much more immediate guidance to emerging issues,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 22 of 198 PageID: 19275
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:29

00:29

00:30

00:30

00:30

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3927

trends, things that are taking place in practice that are new.

Q. Now, on this document in brackets it says, superseded by

FASB codification 9/15/2009; do you see that?

A. Yes.

Q. What does that mean?

A. Well, as I testified earlier, there have been a very

relatively large number of standards setting organizations

over the years, and the standards they issued have all

different kinds of names; there was no central electronic

repository for all of those standards, it was difficult to

search, using keywords and so on, there wasn't a single

electronic database for all of the accounting standards.

So the FASB recognized that it would be highly

desirable to create such a database. They set about doing so,

and in 2009 they codified all the existing authoritative

standards into that single accounting standards codification.

And so they took a great many, including EITF 99-19, a great

many existing standards and just arranged them into a single

database that was much easier to search and use and identify

the pertinent literature.

Q. And did the substance of EITF 99-19 change when it was --

change when it was codified by FASB in 2009?

A. It did not.

Q. So it's still the same.

A. Pardon me?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 23 of 198 PageID: 19276
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:30

00:31

00:31

00:31

00:32

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3928

Q. It's still the same.

A. Yes.

Q. All right. And could you let us know what the EITF 99-19

addresses?

A. Well, it addresses circumstances in which there may --

there may have been deviations in practice or different

practices beginning to emerge for the circumstances in which

revenue would be reported gross with certain costs reported as

expenses, and circumstances in which revenue would be reduced

by those costs and not then reporting those costs as expenses.

There were a number of emerging issues here that I think

probably captured the task force's attention and caused them

to prepare this particular standard.

And so it's essentially provided in here are -- first

of all, considerable professional judgment is recognized as

necessary; and then secondly, there are a number of indicators

that are established that would mitigate toward reporting

those costs as expenses versus reporting them as reduction of

revenue.

Q. And just to make this a little more tangible, can you

give us an example of a situation where this guidance would

apply to the issue of reporting revenues gross versus net?

A. Sure. There are a couple of that come to mind. In

retail, for example, there may be instances in which a

retailer does not actually buy goods that are sold within its

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 24 of 198 PageID: 19277
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:32

00:32

00:33

00:33

00:34

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3929

premise, those goods are put on racks by another party, and

but yet they're sold through that store. And the retailer

never takes possession or owns that inventory, if you will,

they don't have the risk of the inventory becoming obsolete,

they don't have to pay for the inventory regardless of whether

they sell it or not; and then there are other instances in the

same store in which they do buy the items that are being held

for resale, and they do have those risks of owning the

inventory.

And so both items go through the cash register when

people buy them, but should one of those items be reported as

a commission, if you will, for selling someone's else's goods

or services, or should they be reported as the total revenue

accruing to the -- to the retailer. Amazon.com was one of the

organizations I think that probably helped propel this. When

you order something from Amazon.com, in some circumstances at

least, you may send them $40, and what they do is arrange for

a book to be sent to you and pay the book seller the $32 for

the bookkeeping only the 8. And questions arise as to whether

in a circumstance like that where Amazon did not acquire the

book and have the risk and rewards of the ownership of the

inventory of books, should that be reported as a commission or

did they generate $40 of revenue. And so it's those kinds of

questions; how much revenue should be reported here, 8 or 40

in that case.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 25 of 198 PageID: 19278
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:34

00:34

00:34

00:35

00:35

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3930

Q. Mr. Holder, I think you pushed the microphone away from

yourself a little bit.

A. I'm sorry.

Q. All right. Could you turn to page 2 of DX-1510,

Defendant's Exhibit 1510. And I want to specifically focus

you on the first sentence of paragraph 3. Just let me know

when you're there.

A. I'm there.

Q. All right. Could you read that sentence?

A. Yes. It says: The issue is under what circumstances a

company should report revenue based on: (a) the gross amount

billed to a customer because it has earned revenue from the

sale of goods or services, or (b) the net amount retained,

that is the amount billed to the customer less the amount paid

to a supplier, because it has earned a commission or fee.

Q. And I'd like to understand how some of the terms in that

sentence apply to the case here as you understand it.

Focusing again on the first sentence of paragraph 3, what is

the company here?

A. The company here would be FMG.

Q. And who or what are the customers?

A. The customer here would be the Trust, the funds

themselves.

Q. And who are the -- who are the suppliers as you

understand it here?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 26 of 198 PageID: 19279
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:35

00:35

00:36

00:36

00:36

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3931

A. The supplies here would represent the sub-advisors and

sub-administrators.

Q. All right, thank you. Let's turn to page 4 of

Defendant's Exhibit 1310 -- 1510. And there's a heading there

that says Indicators of Gross Revenue Reporting. Do you see

that?

A. I do, yes.

Q. And just briefly -- because I think you kind of went over

it already, what's gross revenue reporting?

A. Well, where you have this cost from a supplier, and it's

not clear in your own mind whether it should be reported as an

expense, or whether it should be reported as a direct

reduction of revenue, these eight indicators are designed to

provide guidance in resolving that question.

Q. All right. And have you summarized these eight

indicators of gross revenue reporting in a demonstrative?

A. I have.

MR. HORA: Okay. We hand the witness Defendant's

Exhibit 2053.

And, your Honor, before I move into that document, I

would like to offer in evidence Defendant's Exhibit 1510.

THE COURT: Any objections?

MR. STEVENS: No objection, your Honor.

THE COURT: All right, admitted.

(Defendant's Exhibit 1510 was marked into evidence.)

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 27 of 198 PageID: 19280
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:37

00:37

00:37

00:38

00:38

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3932

BY MR. HORA:

Q. So, Mr. Holder, I take it you have in front of you

Defendant's Exhibit 2053?

A. I do.

Q. Was this a document that was prepared under your

direction?

A. It is, yes.

Q. What's the purpose of this demonstrative?

A. Well, it's designed to summarize the general guidance and

provisions of the EITF we've been discussing, and apply

those -- those criteria or actually the indicators to the

relevant circumstances in this matter.

Q. What information did you use to prepare this document?

A. Well, certainly the mitigator -- or indicators that are

contained in the EITF document were used by me; in addition to

that, the documents that I've alluded to earlier in large

measure are the ones that I used in preparing this exhibit.

So, those would be the agreement between the Trust and FMG;

the agreements between FMG and some at least of the

sub-advisors and sub-administrators; the interviews and

discussions I've had with Mr. Joenk particularly and Ms.

Louie; trial testimony that I've read of this matter;

depositions, other documents come to mind.

Q. Sure. And could you walk us through your analysis with

respect to the eight indicators of gross revenue reporting?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 28 of 198 PageID: 19281
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:38

00:39

00:39

00:39

00:40

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3933

A. Certainly. You can see that there are eight here, you

can also see that item 2 and item 7 I did not find applicable,

because here in this case we're talking about services rather

than tangible inventory items that, you know, where you really

wouldn't have that kind of a risk in either 2 or 7. So there

were six of these that I found to be of relevance.

And the following pages in the exhibit, there's one for

each of the six that are relevant. So the first indicator is

that the entity in this case, FMG, is the primary obligor.

And so if you look at the second page, you can see just a

couple of examples that I picked from the information of which

I was aware, that support that the entity, FMG here, is the

primary obligor to the Trust and the funds. So they -- the

question is whether they have accepted the obligation to

provide these services, or merely the obligation to arrange

for services say to be provided.

And so here, some of the language I've chosen to

present, the Trust hereby appoints the manager, that's FMG, as

the investment manager for each of the portfolios of the

Trust; and then FMG accepts such appointment and agrees to

render the services and assume the obligations. In the

administrative side of it you find similar language; the Trust

hereby appoints FMG to provide administrative, accounting and

compliance services, and FMG accepts such appointment and

agrees to furnish the services.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 29 of 198 PageID: 19282
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:40

00:40

00:41

00:41

00:42

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3934

Speaking as an accountant and trying to interpret this

agreement and apply the accounting indicators to it, this

suggests to me, and it's consistent with other evidence I

recall, the testimony and so on, that indeed FMG was

responsible for the provision of the services and not just for

arranging someone else to provide them.

If you look at two -- or I'm sorry, the third one, the

second one is not applicable; it says the entity, FMG in this

case, has latitude in establishing price. And so if you look

at the third backup, you can see that FMG has negotiated with

the Trust in those agreements, and that the Trust will pay the

manager, FMG, with respect to each portfolio the compensation

that's specified in the agreement. And you see similar

language on the administrative side. So, it appears here that

FMG was involved in establishing a price rather than say --

with the Trust, rather than say the sub-advisors or

sub-administrators.

If you look at the fourth one, here FMG changes the

product or performs part of the service. And so, I'm aware of

the information here, and again these are examples that I've

chosen to include on this exhibit. But FMG will have overall

supervisory responsibility for the general management and

investment of each portfolio's assets; full discretion to

select new or additional sub-advisors; FMG will -- is to

assess each portfolio's investment focus and seek to implement

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 30 of 198 PageID: 19283
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:42

00:42

00:43

00:43

00:43

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3935

decisions with respect to the allocation/reallocation of the

portfolio's assets among sub-advisors; FMG is to monitor

compliance of each sub-advisor with the investment objectives,

policies and restrictions; and FMG will also furnish to the

Trust office space, personnel, preparation of prospectus and

other documents.

So -- and you find similar language over on the

administrative side. And so I think it's clear here that FMG

is involved in the providing of these services and assuring

that the services are of the quality that is necessary to

appropriately operate the funds.

If you look at the fifth one, does the entity, FMG in

this case, have discretion in selecting the suppliers. And so

if you look at number 5, you can see here that FMG will at its

own expense select and contract with one or more sub-advisors.

Also, FMG will have full discretion to select new or

additional sub-advisors for each portfolio. And you find

similar language I think in the administrative side.

And so, this suggests that strongly, that FMG does have

the ability to pick the sub-advisors, sub-administrators at --

at their discretion.

In 6, the entity FMG is involved in the determination

or product or service specifications. And so if we turn to

the sixth item, again, we find language here that FMG has

overall supervisory responsibility for general management,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 31 of 198 PageID: 19284
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:44

00:44

00:44

00:44

00:45

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3936

investment of each portfolio's assets; full discretion, again,

to select new additional advisors; full discretion to enter

into and materially modify existing advisor agreements; full

discretion to terminate and replace any advisor and full

investment discretion to make all determinations with respect

to the investment of a portfolio's assets not then managed by

an advisor.

Over on the administrative side it points out the

division of FMG's duties and obligations, hereunder between

those to be delegated and those to be performed, shall be in

FMG's sole discretion and may be changed from time to time by

FMG.

Again, the seventh one I didn't find applicable. The

eighth one is that the entity FMG has credit risk. That

essentially means if they don't get paid by the Trust, are

they still obliged to pay the suppliers, in this case the

sub-administrators and sub-advisors.

And again, speaking as an accountant interpreting this

and trying to apply it from an accounting perspective, you

find that in the agreement the Trust acknowledges and agrees

that it is -- it is contemplated that FMG will at its own

expense select and contract with one or more investment

advisors. And you find similar language in the administrative

side; the compensation of the sub-administrator shall be paid

by FMG, and no obligation shall be incurred on behalf of the

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 32 of 198 PageID: 19285
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:45

00:45

00:46

00:46

00:46

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3937

Trust in such respect. That suggests to me that FMG does

indeed have credit risk here with respect to the two sets of

general arrangement.

And so, that suggests that the indicators of gross

revenue reporting have generally been met here insofar as

they're generally applicable, and based on the evidence of

which I'm aware.

Q. So, Mr. Holder, what's your overall conclusion with

respect to how these factors apply to FMG's classification of

sub-advisory and sub-administrative fees as expenses?

A. Well, I recognize that the information is being reported

here to the Board, and that one is not completely bound by

generally accepted accounting principles in providing that

information. However, I'm also quite aware that when

standards setters focus on an issue such as this, they are

focusing on the substance of the transaction, the economic

realities of the transaction as they perceive it and see it,

and that they try very hard to propound accounting standards

that will be representationally faithful to what's taking

place in the real world; that is, the manner in which these

transactions are presented on paper is a faithful

representation of what's transpiring in the real world with

the rights and risk of the transaction bearing from

transaction to transaction.

And so, I find this is very supporting of the

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 33 of 198 PageID: 19286
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:47

00:47

00:47

00:48

00:48

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3938

reasonableness of presenting these costs, the sub-advisor and

sub-administrative costs, as expenses, rather than as

reductions in revenue.

Q. And by the way, how are sub-advisory and

sub-administrative fees reported in FMG's audited financial

statements?

A. They're reported as expenses there, too.

Q. And how if at all did that classification inform your

opinion in this matter?

A. Well, it certainly supports it. Those financial

statements were audited by PricewaterhouseCoopers, the amounts

involved I think are material, and so I take comfort from and

influence by the accounting treatment that was attributed

there, and Pricewaterhouse's unqualified or clean opinion on

those -- those financial statements.

Q. Now, those financials are an example of financial

accounting, not managerial accounting; right?

A. That's true, they -- the assertion made is that the

figures that are presented in conformity with GAAP.

Q. Right. And what's presented to the Board, FMG's

profitability calculations, that's an example of managerial

accounting; right?

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

Q. Okay. And plaintiffs have asserted in this litigation

that the GAAP guidelines that we've been discussing so far,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 34 of 198 PageID: 19287
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:48

00:48

00:49

00:49

00:49

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3939

specifically relate to financial accounting and have nothing

to do with how FMG should report revenues and expenses to the

EQAT Board. What's your reaction to that?

A. Well, I disagree with that.

Q. Why is that?

A. Well, I think nothing to do is a rather an extreme

statement. I think -- for some of the reasons I already

articulated, that when accounting standards setters focus on

how a transaction should be reported, that they focus on the

substance of the transaction; they try to have replicated on

paper the economic realities, the economic substance of what's

transpiring in the real world. I do not believe that is

disconsonant with what the goals would be in reporting to the

Board.

So I think one providing information to the Board would

certainly consider the application of these standards, the

contents of these standards, the philosophies, if you will, of

financial accounting and reporting that are embodied in them.

Because the goals are rather simple, that is to focus on the

substance of what's happening.

Q. And plaintiffs' expert, Mr. Barrett, has testified at

this trial that classifying sub-advisory and

sub-administrative fees as expenses and reporting

profitability to the EQAT Board does not reflect the true

economics of the transaction; do you agree with that

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 35 of 198 PageID: 19288
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:49

00:50

00:50

00:50

00:51

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3940

statement?

A. I do not.

Q. Why not?

A. Well, because I think probably the best articulation of

the substance of the transactions and how they should be

accounted for when that substance is identified and subjected

to analysis, is probably contained in the EITF pronouncement

that we've just been discussing. That I think is important

evidence as to what the substance of transactions are, and

when you apply those criteria generally to the arrangements

here, I think you're inexorably driven to the conclusion that

reporting them as expenses is at least perfectly appropriate,

if not the preferred or only acceptable way.

Q. And as a matter of managerial accounting, do you think

it's appropriate for FMG to classify sub-advisory and

sub-administrative fees as expenses?

A. Yes, I do.

Q. All right. Mr. Holder, do you know how the sub-advisory

and sub-administrative fees are physically paid?

A. I do have that understanding, yes.

Q. And what's your understanding?

A. My understanding is that the Trust for the funds,

disburses cash directly to the sub-advisors and

sub-administrators.

Q. And do you have an understanding of at whose direction

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 36 of 198 PageID: 19289
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:51

00:51

00:51

00:52

00:52

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3941

the Trust does that?

A. If I recall correctly, it's at FMG's, yes.

Q. Okay. And so instead of having the Trust send the entire

management and administrative fees to FMG, FMG directs

payments of the sub-advisors and sub-administrator directly

from the Trust account?

A. Yes.

Q. Okay. Now, does that payment mechanism affect your

opinion as to the appropriate classification of sub-advisory

and sub-administrative fees?

A. It does not.

Q. Why not?

A. Well, I think it's ministerial in nature, I think it's

clerical in nature, I think frankly it's non-substantive in

nature. There are analogies one can easily develop and

articulate that I think parallel this circumstance and

illustrate why that's not a particularly important feature of

what's transpiring.

Q. Could you give us some examples or analogies?

A. Well, I mean if -- to make it a personal example, if

you're being paid -- if your compensation your salary is

$200,000 a year, and you authorize your employer to withhold

from your salary let's say 10,000 and pay that to a healthcare

provider to provide insurance, health insurance for you, that

doesn't lower your compensation to 190,000, you're still

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 37 of 198 PageID: 19290
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:52

00:53

00:53

00:53

00:54

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3942

receiving $200,000 compensation, you're incurring an expense

of 10,000; in that case the compensation of 10,000 is paid on

your behalf by your employer, but the fact that it's not paid

to you and then -- the fact that it's not paid to you and that

you pay the insurance company, doesn't have any impact on your

gross revenue, your gross revenue is the stated salary amount.

Q. Thank you.

MR. HORA: Unless your Honor has any questions, I'm

going to skip -- shift gears here.

THE COURT: No.

Q. All right. Let's talk a little bit more about cost

allocation which you touched on a little bit earlier.

A. Certainly.

Q. Mr. Holder, are there any accounting requirements for a

cost allocation methodology to be considered a reasonable

methodology?

A. There are.

Q. And could you explain that a little?

A. Sure. Essentially there are two broad requirements. One

is that the cost allocation methodology adopted be rational,

and that is that it makes sense at some level. And while some

cost allocation processes are, you know, very obvious, others

are much more subjective; but regardless, the cost allocation

methodology needs to be rational at some level, that makes

sense.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 38 of 198 PageID: 19291
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:54

00:54

00:54

00:55

00:55

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3943

Secondly, the cost allocation methodology must be

systematic, and essentially that means it's replicable that

other individuals can come out, apply the same cost allocation

methodology, and reach similar or identical results.

Q. All right. And is cost allocation a science?

A. I believe it to be an art.

Q. And why is that? Could you flesh that out for us a

little bit?

A. Well, yes, because of the inherent subjectivity and

ambiguity that exists in many many situations in which one is

trying to attribute economic endeavor or cost to a given

activity, I think there are a number of processes, a number of

methodologies that would be appropriate to use in essentially

identical circumstances. And therefore, the selection of what

one to use becomes a matter of the professional judgment of

the information preparer, and consequently, you know, you can

have similarly situated professionals applying judgment to the

same facts and at least times coming to different conclusions

and neither can necessarily be said to be wrong.

Q. Okay. Could you -- would it be possible to give us sort

of a real world example that would bring this to life?

A. Well, sure. There are a great many, I think that can do

that. I mean something as simple as perhaps potentially

unremarkable is going to the store and buying a quart of milk;

if you pay a dollar 50 for that quart of milk and you bring it

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 39 of 198 PageID: 19292
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:56

00:56

00:56

00:57

00:57

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3944

home in and put it in your refrigerator, and you're going to

have on your cereal tomorrow morning, the question might arise

what's the cost of that milk. And certainly the cost would

include the dollar 50, but it would include many other costs,

as least from the perspective of accounting concepts; it would

include the cost of traveling to the store, and that would

involve if you drove your own car, depreciation on the car,

fuel cost, repair cost, you're burning rubber off the tire of

the car a little bit; it would require an allocation for the

value of your time; the cost of the labor involved in fetcing

it; when you get home you're storing it for a while, that

would involve the cost of utilities; there are also other

things in your refrigerator that are been being kept cool, so

you would have to allocate that electrical cost to all of

those items.

And then it gets even more complex. If while at the

store you decide well, yes, I need not just milk, but I need

razor blades, so you bring two things home; does that cut in

half the cost of travel and so on for the milk. I mean the

world that we're talking about here in this case, is far more

complex than the simple example that I've provided here. But

I think one can see that a lot of cost allocations are going

to involve subjective determinations.

Q. Sure. And what limitations, if any, exist when choosing

a cost allocation methodology?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 40 of 198 PageID: 19293
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:57

00:58

00:58

00:58

00:59

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3945

A. I'm sorry; could I --

Q. Sure. What limitations, if any, exist when choosing a

cost allocation methodology?

A. Well, there are a number: The availability of data; the

existence of cost drivers, does this cost result from directly

the activity that is under analysis; cost benefit limitations

certainly apply; the cost of acquiring data may see the

benefit from flows from acquiring it, if a less costly method

of cost allocation can be adopted, that doesn't result in

materially in early -- in materially different allocations

from one that costs more, one would -- would select the least

costly approach; of course, without doing both you really

don't know which is which. But those are -- some of the

complex judgments that cause people to pick one cost

allocation methodology versus another.

Q. And you mentioned cost drivers in your last answer;

what's a cost driver?

A. A cost driver is a function, an activity that causes a

cause to increase, is there a direct cause and effect.

Q. Sure. And how if at all does the availability of cost

drivers effect the design of an allocation methodology?

A. Well, the cost accounting literature I think is fairly

clear in providing guidance here. I think there's a

preference for cost drivers if they exist, if they're

available, to use as a basis for allocating cost. The problem

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 41 of 198 PageID: 19294
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

00:59

00:59

00:59

01:00

01:00

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3946

arises is that in many cases cost drivers simply don't exist,

but to the extent they do I think it's preferable that they be

used.

Q. And so what do you do if a cost driver doesn't exist or

isn't available?

A. Well, you must move to other allocation processes. If

the overarching goal is to estimate the cost of providing a

function or the cost of providing a good or a service, then

all of the costs that are necessarily incurred to provide that

good or service need to at least in part be attributed to that

good or service. And so less and less direct methods of

allocation must be selected. This issue, this challenge is

identified in the cost accounting literature and developed at

some length.

Q. Okay.

A. And the path forward to finding other allocation bases.

Q. And we'll look at some in a little bit. Are you familiar

with something called time and motion studies?

A. I am.

Q. What are they?

A. Well, time and motion studies are designed to determine

the effort it takes to fulfill a given task --

MR. STEVENS: Your Honor, I just want to object at

this point; I believe this is outside the scope of his expert

report.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 42 of 198 PageID: 19295
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:00

01:00

01:01

01:01

01:01

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3947

MR. HORA: I certainly don't think so. He's got a

huge section in his report about cost allocation methodologies

and how they're developed.

THE COURT: So this is one element to that?

MR. HORA: Yes.

THE COURT: All right. So you may proceed.

BY MR. HORA:

Q. I think I was asking you what are time and motion

studies.

A. Yes, I think I had gotten to the point in my answer that

I was going to say they are most useful when the endeavor

being evaluated, is of high volume and of repetitive nature.

And so you're doing the same thing, one, a worker is doing the

same thing over and over and over again; and doing a time and

motion study provides evidence about the time it takes for a

particular function to be done. These can become very

granular and frequently are.

I recall a consulting -- or an engagement in which I

was involved, involving a manufacturer of children's clothing,

and I think there were nine cost accounting steps in attaching

a zipper to the child's -- to the children's ware. And each

of those had been subjected to a cost -- or a time and motion

study in order to estimate the cost it would reasonably incur

in fulfilling that function.

Q. And how if at all are time and motion studies suited for

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 43 of 198 PageID: 19296
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:01

01:02

01:02

01:02

01:02

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3948

measuring skilled professional services?

A. They tend not to work very well because they're not

repetitive tasks, they differ from engagement to engagement,

from function to function, and so they're more difficult to

measure in any meaningful way. An observation of what time it

took to fulfill a given function in one matter is not

necessarily predictive of the effort it will take in another

that has different characteristics.

Q. And are time and motion studies a required allocation

basis?

A. No, I don't believe so.

Q. Now, Mr. Holder, are you aware that FMG goes through a

process of reporting its profitability to the EQAT Board

whereby it allocates expenses incurred by its parent AXA

Equitable?

A. I am aware of that.

Q. And, again, just yes or no to this because I want to lay

some foundation, have you formed an opinion as to whether it's

appropriate for FMG to perform such an allocation?

A. I have.

Q. What did you do to prepare yourself in forming that

opinion?

A. Well, as before, I read a large volume of documents,

including company documents, Board presentations, the

deposition testimony I've alluded to earlier; trial testimony;

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 44 of 198 PageID: 19297
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:03

01:03

01:03

01:04

01:04

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3949

I also considered the -- the information gained in my

interviews, particularly with Mr. Joenk; those things come to

mind.

Q. And what's your opinion as to whether it's appropriate

for FMG when reporting its profitability to the EQAT Board, to

include costs allocated from its parent AXA Equitable?

A. I think that's entirely appropriate. As I indicated

earlier the tests for allocability of a cost is its necessity

for supporting the function that's being fulfilled. And if

the goal is to determine the full cost of that function, then

all of the costs necessarily incurred in support of it would

at least in part, through the allocation process, need to be

attributed to it.

Q. And is it your understanding that AXA Equitable performs

services in support of FMG and the funds?

A. That is my understanding.

Q. And broadly speaking, what's your -- well, what's that

understanding based on?

A. Well, again, the same types of activities I've done

before; I've seen, you know, Board packages, I've seen lists

of expenses and so on that were incurred, categories of costs

that were incurred; I've gained an understanding of the

importance of those costs to the appropriate functioning of

the -- of the funds, and so on. I've interviewed, again, Mr.

Joenk at some length and on various occasions; read lots of

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 45 of 198 PageID: 19298
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:04

01:05

01:05

01:05

01:06

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3950

documents.

Q. And broadly speaking, what's your understanding of what

some of AXA Equitable's services are to FMG and the funds?

A. Well, AXA Equitable provides a wide range of support

services to the funds outside those costs that were charged to

FMG. I think it's important to understand that the costs that

are being allocated are not limited to just costs that were

incurred to support the 50 or 51 employees of FMG. There were

certainly some costs that were attributed that support

directly those employees, but many of those costs were

supporting the operation of the funds generally.

Such things as shareholder activity, the treasury

function, accounting function, other functions like that were

in part at least necessarily incurred to allow the function --

the funds to function appropriately.

Q. Now, Mr. Holder, we've talked about why FMG would

allocate costs from its parent AXA Equitable, I'd like to talk

now about how the allocations are performed.

MR. HORA: Could we hand the witness Defendant's

Exhibit 2050?

Q. Do you recognize this document?

A. I do.

Q. What is it?

A. Well, it's an exhibit that I caused to be prepared that

summarizes the processes through with AXA goes in attributing

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 46 of 198 PageID: 19299
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:06

01:06

01:07

01:07

01:07

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3951

or allocating costs down to the individual fund allocations.

Q. And is this document based on presentations in the EQAT

Board materials?

A. It is, yes.

Q. Is this document an accurate general representation of

the -- I see you cited some source documents in the bottom; is

it an accurate general representation of the source documents

cited?

A. I believe that's the case, yes.

MR. HORA: And your Honor, I'm just using this as an

illustrative aid. You've probably seen a different flow chart

in the Board materials, we're trying to simplify it a little

bit.

THE COURT: Okay, thank you.

Q. All right. This is broken out in three steps; correct,

Mr. Holder?

A. Yes.

Q. Could you walk us through what's identified as step A,

AXA-CAM?

A. Certainly. Step A begins with AXA Equitable expenses,

and those expenses are represented in the general ledger of

the trial balance and indeed the financial statements of AXA

Equitable. Those costs which are contained in the general

ledger are subjected to the audit procedures performed by PwC

in the financial statement audit of AXA's financial

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 47 of 198 PageID: 19300
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:08

01:08

01:08

01:09

01:09

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3952

statements. And so I take comfort from that.

I think the evidence that I've seen at least is that

those are real expenses, their costs that have been incurred,

they've been subjected to audit, and I don't understand them

at that level to be contested really.

But the first step is to allocate those expenses of AXA

Equitable generally to the insurance products that AXA

Equitable offers. And here, cost drivers are available, as I

understand it. There are annual surveys that are sent out to

the -- I think they call them business managers, the cost

center managers; those individuals report how they spend their

time and so on, and what effort goes into various activities.

And then there are I think monthly updates sent, and it's

based on that data that there is an allocation of the expenses

at the corporate-wide level to the several insurance product

groups.

Q. Okay. And moving on to step B, could you please describe

step B of of the methodology?

A. Yes. Step B begins with the insurance product group

cost, and step B step allocates those insurance product costs

into the several elements of the product that each generate

revenue. And so, they're allocated to the product wrapper, to

the general account and to the investment portfolio. The

basis for allocation here is the relative respective revenues

generated by each of those three, the product wrapper, the

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 48 of 198 PageID: 19301
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:09

01:10

01:10

01:10

01:11

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3953

general account and the investment portfolio.

Q. Do you know how step B was developed?

A. It was developed as I understand it by FMG, but it was

done so in consultation with the professional service firm PwC

as well as Ernst & Young. So those two large public

accounting or professional service firms were involved in the

establishment of this allocation feature.

Q. Does the fact that PwC and Ernst & Young were involved in

the development of step B, give you any comfort as to the

reasonableness of step B?

A. It does, yes.

Q. And why is that?

A. Well, I mean these are very large, among the largest of

the professional service firms in the world, in my experience

they are very deep repositories of accounting knowledge, and

they each have extensive consulting practices; they will have

seen many many instances of cost allocations in their

practice, and their acceptance or involvement in the creation

of this -- this methodology provides some comfort.

Q. This is going to be another question where I'm just

looking for a yes or no because I do want to lay some

foundation. Do you have an opinion as to whether it's

appropriate to allocate costs in step B on this basis of

relative revenue?

A. Yes.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 49 of 198 PageID: 19302
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:11

01:11

01:11

01:12

01:12

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3954

Q. All right. Now, what did you look at in coming to that

opinion?

A. Well, again, I looked at the Board materials that have

been alluded to here; I read deposition testimony; looked at

various documents; Excel spreadsheets, and so on; the

interviews that I conducted with Mr. Joenk particularly, but

Ms. Louie as well, provided information that was useful to me

in my analysis; I certainly considered the cost accounting

literature of the profession in evaluating the reasonableness

of what's transpiring here.

Q. Let's talk a little bit about the cost accounting

literature of the profession as you just described it. What

exactly are you talking about?

A. Well, there are a number of cost accounting treatises and

texts, one that I use particularly in this matter, I think Mr.

Barrett alluded to it as well, is a book originally authored

by Professor Charles Horngren at Stanford University; that

book is I think highly respected, it's certainly widely used

in lots of colleges and universities, including our own, my

own.

Q. And who is Professor Horngren or who was he?

A. Sure. He was an individual that really I think can

fairly be said to have kind of pioneered the approach --

before the Horngren text, cost accounting was kind of taught

in colleges and universities without too much of a context; it

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 50 of 198 PageID: 19303
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:12

01:13

01:13

01:14

01:14

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3955

was let's just try to determine, you know, how much this

particular function costs. But Professor Horngren added to

that the richness of all the management decisions that flow

from that, and how information is designed to be helpful to

those who manage business enterprises. And so the title,

Managerial Approach, I think reveals his really great

contribution to accounting education, to the production of

this textbook.

MR. HORA: Could we the hand the witness what's been

marked as Defendant's Exhibit 1329?

Q. Are you ready?

A. I am, yes, sir.

Q. Do you recognize this, Mr. Holder?

A. I do.

Q. What is it?

A. Well, it's an excerpt from the 13th edition of his

textbook Cost Accounting, an Managerial Emphasis.

Q. And is this textbook something's routinely relied upon by

professionals in the field of cost accounting?

A. In my understanding and view and knowledge it is, yes.

Q. And I think you testified that you reviewed this in

connection with forming your opinions in this matter?

A. I did.

Q. All right. Now, Mr. Holder, how does this Horngren text

inform your opinion with respect to the methodology in step B?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 51 of 198 PageID: 19304
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:14

01:14

01:15

01:15

01:16

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3956

A. Well, the first page beyond the cover page that's

provided is page 502, and you can see near the bottom of that

page there's a section entitled Criteria to Guide Cost

Allocation Decisions. And within that it points out that

using activity based costing and related cost drivers, that

cause and effect is the primary criterion that's used, and

supports the -- the process of using cost drivers.

He also points out that in his view there is a

superiority here of cause and effect, and the benefits

received criteria --

Q. I'm sorry, Mr. Holder, you're on page 5 --

A. 502.

Q. Okay.

A. In the second paragraph following the criteria. And so

he expresses preference for the cause and effect and the

benefits received criteria, in the circumstances that he

describes, to provide information for economic decisions, yes.

If you look at the four criterion that he lists on the

next page, on page 503, he identifies cause and effect and

benefits received near the top; and those are followed by two

that are not as preferable, fairness or equity and ability to

bear the cost allocation. So his preference I think is caught

up in the first two that are listed there.

Q. And I'd like you to read if you could the bullet point on

benefits received?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 52 of 198 PageID: 19305
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:16

01:16

01:16

01:17

01:17

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3957

A. Very well. It's the second one, 2, it says benefits

received: Using this criterion managers identify the

beneficiaries of the outputs of the cost object; the costs of

the cost object are allocated among the beneficiaries in

proportion to the benefits each receives. Consider a

corporate-wide advertising program that promotes the general

image of the corporation rather than any individual product.

The costs of this program may be allocated on the basis of

division revenues. The higher the revenues, the higher the

division's allocated cost of the advertising program. The

rationale behind this allocation is that divisions with higher

revenues apparently benefited from the advertising costs more

than divisions with lower revenues, and therefore ought to be

allocated more of the advertising costs.

Q. Now, Mr. Holder, what is your ultimate opinion as to

whether it's appropriate to allocate costs based on revenues

in step B of FMG's cost allocation methodology?

A. In my opinion that's appropriate.

Q. And why is that?

A. Well, I think there's a probably a combination of cause

and effect, as well as benefits received that may exist here.

I think the higher revenue item may reveal higher levels of

activity; higher levels of activity generally can relate to

hire costs being incurred to support that activity. But I

think as or more importantly, using relative revenues here is

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 53 of 198 PageID: 19306
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:17

01:18

01:18

01:19

01:19

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3958

an example I believe of the benefits received approach; that

is, that the higher the revenue, the more benefit from all the

supportive activity that's taking place can be reasonably

attributed to each of the three revenue producing functions.

Q. Now, Mr. Barrett has testified that step B of FMG's cost

allocation methodology is arbitrary, and I think I heard him

use the word irrational as well; do you agree with that?

A. I do not.

Q. Why not?

A. Well, I don't think it's either of those. I certainly

understand that in the instant case cost drivers were really

not available to make this allocation. Again, if the

overarching desire is to estimate the costs that are incurred

in generating in this case these revenue streams, that some

process of allocation of those costs to those revenue streams

is going to be necessary.

And as you can see even in Mr. Horngren's example,

using revenue, there -- it's not completely clear in that

circumstance that each of those divisions benefited from that

general advertising campaign. But it's reasonable to make

that assumption, an informed assumption, and to base the

allocation of revenue -- or, I'm sorry; of cost on those

respective levels of revenue. I find this to be a very

similar circumstance.

Q. Now, are you aware that the net results of FMG's cost

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 54 of 198 PageID: 19307
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:19

01:20

01:20

01:20

01:21

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3959

allocation methodology is that about $50 million of AXA

Equitable expenses are allocated to FMG for the purposes of

reporting its profitability to the EQAT Board?

A. I recall that amount, yes.

Q. All right. I'd like to -- I'd like to hand you what's

been marked as Plaintiff's Exhibit 273. Do you recognize this

document, Mr. Holder?

A. I do.

Q. What is it?

A. Well, it's been characterized as the Shared Services

Agreement between AXA Equitable and FMG.

Q. Did you review this agreement in connection with forming

your opinions?

A. I did.

Q. What is your understanding of what this agreement is?

A. Well, it sets out a relationship between FMG and AXA

Equitable wherein certain services can be provided, may be

provided by AXA Equitable to FMG and for which a charge will

be made to FMG.

Q. What's your understanding of how this agreement is used

in practice?

A. My understanding in practice is that the primary costs

that flowed from this particular agreement were related to the

50 or so employees that devoted all of their effort to FMG and

by extension the funds that it was managing.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 55 of 198 PageID: 19308
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:21

01:21

01:21

01:22

01:22

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3960

Q. And how did you come to that understanding?

A. Again, through reading documents, through my interviews

with Mr. Joenk and others, reading testimony here in this

matter, depositions.

Q. Sure. Now, you're aware that there's a charge that's

related to this agreement; right? A charge or an expense that

FMG has to pay?

A. Yes.

Q. All right. And are you aware that the amount that FMG is

charged under this agreement, and let's take 2012, was around

$14 million?

A. I have that recollection, yes, sir.

Q. And is it your understanding that the $14 million charge

to FMG is included in FMG's audited financial statements?

A. I recall that being the case, yes, sir.

Q. Okay. So, my question to you is, how do you reconcile

the 49 or roughly $50 million in allocated expenses from AXA

Equitable resulting from FMG's cost allocation methodology,

with the roughly $14 million that's charged to FMG under the

Shared Services Agreement in FMG's audited financial

statements?

A. I think there's several steps that were incorporated in

my analysis. First, in this particular agreement, in

paragraph 1 I think it is, it indicates that AXA Equitable

from time to time may provide to FMG, and then there's a long

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 56 of 198 PageID: 19309
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:22

01:23

01:23

01:24

01:24

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3961

list, the services to be furnished, may include; that speaks

to me as an accountant that not all of the costs necessary to

the operation of these funds may be provided through the

operation of this particular agreement.

As I look at what was -- what were the costs that were

charged by AXA Equitable to FMG under this agreement, as I've

said my recollection is they primarily related to the

compensation cost of these 50 or 51 individuals.

My understanding is further that in order for these

funds to operate appropriately, that many many other functions

of effort were going to be necessary in addition to those 50

or 51 individuals; such things as shareholder distribution

activity, when contributions are made, when withdrawals are

made, when dividends are paid, the accounting systems and so

on, for keeping up with all of that and doing so accurately

and under appropriate control, would not be part of the 50

employees, nor would those costs be there to provide human

resources type support or travel arrangements to those 50 or

51 employees. Those would be services primarily benefitting

the funds directly that were necessary for the funds to

operate. There were others such as treasury and various legal

costs that would be incurred.

And so, with that knowledge, again, from the work that

I had done, you know, and my understanding of the process

through which AXA had moved to allocate its general costs to

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 57 of 198 PageID: 19310
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:24

01:25

01:25

01:25

01:26

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3962

the various funds, I -- I concluded that the result that was

obtained, the 49 or 50 million you alluded to, was reasonable

as a result of generally the reasonableness of the process.

I'm also aware that amount was about two percent I believe of

the total expenses.

And I also evaluated the relationship between the 49

million and the 14, and it's clear to me at least that that

relationship is not remarkable in any meaningful sense, given

the way the companies decided to provide these services and

the way they operated.

Q. Let's talk about that a little bit, because one of the

things that plaintiffs have criticized in the litigation is

that the amount of allocated costs, this 49 or 50 million, is

a multiple of what's been referred to as FMG's direct costs,

which I think you referred to in a given year 2012 would be 14

million; do you think that's a valid criticism?

A. No, I don't. I think in order to understand the

reasonableness of that relationship one has to understand the

way the organization -- AXA was organized, the way it

conducted business, the nature and extent of costs charged,

I'll use the word directly to FMG, and the range of costs that

would necessarily be incurred in addition to those that would

be required for the funds to function appropriately.

And there are many instances I think where we judge the

reasonableness, accountants judge the reasonableness of a

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 58 of 198 PageID: 19311
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:26

01:26

01:26

01:27

01:27

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3963

result through the reasonableness of the process through which

one went in arriving at that result.

Q. And I just have a couple of more questions for you.

Plaintiff's experts in the litigation have calculated 90

percent profit margins for FMG by treating sub-advisory and

sub-administrative fees as deductions from revenue, so it's

deductions from revenue rather than an expense, and excluding

expenses allocated from AXA; do you think that's appropriate?

A. Not -- not in my view.

Q. Why not?

A. Well, I mean as an isolated statistic it doesn't mean too

much for reasons I've already testified about. I think that

those sub-advisor and sub-administrative fees very clearly

should be reported as expenses not as reductions of revenues.

And again, the test for the allocability of the cost is the

necessity, at least in part, of the functions and the services

being rendered through the incurrence of those costs are being

necessary for the functioning of the funds. If that's the

case, some allocation needs to take place.

Q. And what's your opinion about the manner in which FMG

calculates its profitability for the EQAT Board?

A. It seems reasonable to me, in my view it's a reasonable

approach.

Q. And why is that?

A. Well, it would be better to look at the --

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 59 of 198 PageID: 19312
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:27

01:27

01:28

01:28

01:28

Holder - Direct - Hora

United States District Court

Trenton, New Jersey

3964

Q. I guess by manner in which FMG calculates its

profitability, I meant treating sub-advisory and

sub-administrative fees as an expense, and including allocated

expenses from AXA and the method by which its done.

A. Well, essentially I think that that better captures the

economic realities of what's transpiring here, than reporting

them as a reduction of revenue, for all of the reasons we

marched through earlier.

MR. HORA: One second, your Honor.

(Brief pause.)

Q. And Mr. Holder, just one point of classification. You

mentioned a little bit earlier in your testimony, I think you

said two percent of AXA's expenses were allocated through this

allocation methodology process to the funds; could you expand

on that a little bit more what you meant by that?

A. Well, it's a rather relatively small amount of the total

expenses that were incurred that ultimately get allocated

here. I think you have to -- in order to assess

reasonableness of amounts you need to place those in an

appropriate context, and so that's part of that context.

MR. HORA: Okay. Your Honor, thank you. I don't

have any additional questions.

THE COURT: All right.

MR. HORA: If your Honor does --

THE COURT: All right, thank you.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 60 of 198 PageID: 19313
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:29

01:29

01:43

01:43

01:44

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3965

Cross?

MR. STEVENS: Thank you, your Honor.

MR. HORA: I need one minute to gather my papers.

THE COURT: Do you want to break for 10 minutes and

then we'll come back out?

MR. HORA: Sure.

THE COURT: Mr. Holder, you may step down. We're

going to break for 10 minutes, and then we'll be back out for

cross.

THE WITNESS: Certainly.

THE COURT: Okay, thank you.

(Recess.)

THE COURT: Mr. Holder, you may take the stand.

MR. STEVENS: Thank you, your Honor.

(CROSS-EXAMINATION OF WILLIAM HOLDER BY MR. STEVENS:)

Q. Good afternoon, Dr. Holder.

A. Good afternoon.

Q. I want to go through a little bit of your background, as

it relates to certain issues. Now, you have limited

experience in the insurance accounting industry; correct?

A. I think that's generally a fair statement. I think

that's probably true for any industry there are limitations.

Q. Your most robust experience is working with the AcSEC,

which we defined before; correct?

A. The Accounting Standards Executive Committee, that's

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 61 of 198 PageID: 19314
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:44

01:44

01:44

01:44

01:45

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3966

probably not unfair.

Q. Okay. And you did so with the AcSEC back in the '70s I

believe?

A. Pardon me?

Q. In the '70s; correct?

A. No, sir. Did you AcSEC?

Q. Yes.

A. No, that was not in the '70s.

Q. When was that?

A. That was '87 through '90 during the savings and loan, or

following the crisis.

Q. And that was actually only for three years; correct?

A. It was for three years, yes, sir.

Q. Okay. And when you were working with them, you developed

what you said was an industry guide; is that correct?

A. Well, we worked on a number of industry accounting and

audit guides, yes.

Q. Okay. And during your deposition you were unable to

recall what industry guide you actually worked with and the

name of it as it relates to insurance accounting; correct?

A. Yes, I'm not sure I would have that recollection today

either.

Q. Okay. And that's didn't involve mutual fund work;

correct?

A. It didn't or did not?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 62 of 198 PageID: 19315
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:45

01:45

01:45

01:45

01:46

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3967

Q. It did not.

A. It was an amendment to the investment company's guide as

I recall, or there were -- we issued a statement of position

that I believe had an effect on a number of industry audit

guides, financial institutions, but including investment

companies, yes.

Q. But it didn't include any work I'm saying in an

investment company or with a mutual fund; correct?

A. I don't understand what you mean by that.

Q. You were merely providing guidance pursuit to that

industry regulation; correct?

A. We were providing accounting standards for mutual funds

and investment companies generally.

Q. Okay. And some of the experience you talked about

earlier involved some pension accounting that you were

involved in; correct?

A. Technical accounting?

Q. Pension.

A. Pension accounting, yes.

Q. And that was some of the government work that you said

you consulted on?

A. Well, if I recall what you're recalling, I was on the

Governmental Accounting Standards Board, and during my time

there, we did indeed have a major pension accounting project

and another one very similar to it, other post-employment

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 63 of 198 PageID: 19316
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:46

01:46

01:47

01:47

01:47

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3968

benefits, primarily defined healthcare plans, post-retirement

healthcare plans.

Q. And that's not insurance accounting; correct?

A. I wouldn't know how to respond to that. I mean when

you're sponsoring a defined benefit plan, you are providing at

least assurances, if not insurance, that will people will

receive their pension benefit when they retire. The concepts

are very closely related in my mind. There are certainly

actuaries involved in calculating benefit obligations and

costs and so on.

Q. So, you just indicated the deferred acquisition -- the

deferred benefits is pension; correct?

A. I think that's one example of a deferred benefit, yes.

Q. Okay. And my question to you is very specific, pension

accounting is not insurance accounting; correct?

A. There are elements that interact, but there are certainly

differences.

MR. STEVENS: Can you approach the witness, Chris,

with his deposition testimony, please? Which will be

identified as P-852.

THE COURT: I didn't hear you, Mr. Stevens.

MR. STEVENS: P-852, your Honor.

THE COURT: Thank you.

MR. STEVENS: And also P-852.1, which is the

exhibits that were attached to his deposition.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 64 of 198 PageID: 19317
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:48

01:48

01:48

01:48

01:49

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3969

MR. KWELTY: Expert report?

MR. STEVENS: I'm sorry; the expert report, and then

can you also approach with his deposition? Which is marked --

what's the marking?

Okay. Can you give the Court a deposition copy

also?

THE COURT: I don't really need it. You're using it

to impeach his credibility?

MR. STEVENS: I am, your Honor.

BY MR. STEVENS:

Q. I'd like you to turn your attention to page 160 of your

deposition testimony.

A. I am there.

Q. Okay. And actually just before that, I just want you to

look at the first page of your deposition testimony and

confirm that what I've given you is in fact the deposition

testimony of William H. Holder.

A. It's William W. Holder, and that's what the first page

says, but yes.

Q. And it's dated November 19, 2014; correct?

A. Yes, it says that was well.

Q. And do you have a recollection of giving deposition

testimony in this case?

A. I do.

Q. And did you have the opportunity to review your

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 65 of 198 PageID: 19318
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:49

01:49

01:49

01:50

01:50

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3970

deposition testimony prior to today?

A. I recall that being the case.

Q. And do you have any belief that what's recorded in your

deposition testimony isn't a fair and accurate recordation of

the testimony you gave on November 19th, 2014?

A. I don't have any evidence to the contrary sir, no.

Q. Okay. Then with that said I'd like you to turn your

attention to page 160. And I'm going to direct your attention

to line 3; okay? Are you there?

A. I'm there yes, sir.

Q. Okay. Line 3 the question was asked: Pension accounting

is not insurance accounting, though; you're making an analogy,

right; that's correct; question, right?

Is that right?

A. Yes.

Q. And the answer is: I think that's a fair -- fair

statement. Correct?

A. Yes.

Q. And it is true that pension accounting does not involve

issues related to deferred acquisition costs also; correct?

A. Yes, I don't recall that being the case. There are

certainly deferred costs that exist in pension accounting,

that are in some ways similar to deferred acquisition costs,

but I don't recall deferred acquisition costs being relevant

in pension accounting generally.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 66 of 198 PageID: 19319
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:50

01:50

01:51

01:51

01:51

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3971

Q. Okay. And as it relates to deferred costs -- I'm sorry.

I'd ask you about deferred acquisition costs and that's fine,

and you understand deferred acquisition costs are an element

within the industry industry; correct?

A. I have that understanding, yes.

Q. And you have that understanding; correct? Meaning -- I'm

sorry. And you don't have an expertise in your view in

insurance accounting; correct?

A. Well, I have some level of expertise, I'm -- you know,

what can I say. Deferred acquisition costs were at least some

of the considerations that we made in writing those standards

back in '87 through '90, the SOP; I studied the industry then

to prepare myself to participate and vote on those standards,

but I -- I don't know what you're alluding to really.

Q. Well, is it a fair statement that you feel comfortable

with issues involved involved involved in insurance accounting

as a general matter?

A. Certain aspects of it, yes; others, I haven't

familiarized myself in some time.

Q. Okay. And it is a fair statement then that you've never

worked within the insurance industry; correct? In other

words, for an insurance company?

A. I don't recall being the employ of an insurance company,

no.

Q. And you never actually addressed or implemented deferred

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 67 of 198 PageID: 19320
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:52

01:52

01:52

01:53

01:53

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3972

acquisition costs as it relates to financial accounting for an

insurance company; correct?

A. I don't recall doing so, no.

Q. And you've never worked for an investment company?

A. I don't recall ever being in the employ of an investment

company, no.

Q. And your experience with investment advisors and/or

managers is primarily as an expert witness; correct?

A. Could I hear that question again?

Q. Your experience with investment advisors and/or managers

is primarily as an expert witness; correct?

A. I've run across investment advisors in numerous

capacities and circumstances; the sub-advisors here, I think

that's the first time I've looked at those relationships.

Q. Okay. And as it relates to cost allocation methodology

and the actual implementation of a cost allocation

methodology, your main experience was with a Norman, Oklahoma

hospital; correct?

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

Q. And that was over a period of five years; correct?

A. Yes, I was involved in that financial statement audit

during a five-year period.

Q. Okay. And that was from 1970 to 1975?

A. I have that recollection.

Q. All right. And you were retained in this matter to

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 68 of 198 PageID: 19321
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:53

01:53

01:54

01:54

01:54

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3973

render certain opinions as it relates to the issues in this

case; correct?

A. Well, I was retained in the matter to develop opinions in

certain areas, yes.

Q. And part of your retention wasn't to render opinions

also?

A. Well, I don't know what you mean by that. My opinions

are mine, they're independent. I was retained to familiarize

myself with facts and circumstances and develop opinions,

based on that analysis and that work.

Q. And in developing those opinions was it contemplated that

you would then have to project those opinions either into a

report and/or into court?

A. Well, I think there was a tentativeness, I mean I think

it probably -- my inference is at least that it depended on

what opinions I developed.

Q. Okay. And in doing so you did eventually become engaged

by the Milbank firm to render such opinions or to develop such

opinions; correct?

A. I was probably retained by the Milbank firm prior to

doing work any substantial work, at least in the development

of the opinions I'm here expressing today.

Q. Okay. And you have before you P-852; correct?

A. Yes, yes, I do.

Q. And that's entitled -- or captioned the Holder Report

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 69 of 198 PageID: 19322
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:55

01:55

01:55

01:55

01:56

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3974

or -- I'm sorry. That's your report; correct?

A. That's the case, yes. It appears to. I see the cover

page; I haven't looked through.

Q. And you had testified earlier in preparing for this

report, a consultation firm by the name of Cornerstone was

retained; is that correct?

A. I'm sorry, it must be my ears; what kind of firm?

Q. Cornerstone?

A. No, I heard --

Q. Consultation firm?

A. Consultation; sorry. Yes, they were retained to assist

me at least in part.

Q. And had you worked with Cornerstone before?

A. I had.

Q. And was it your suggestion to retain Cornerstone as it

related to the drafting of the Holder Report?

A. You know, I honestly don't recall. The -- the exact

processes.

Q. Okay. And it's true that there's no primary draftsperson

of the Holder Report; correct?

A. Well, the report is mine, the responsibility is mine, I

made many of the keystrokes that are contained in the report;

I certainly was assisted by Cornerstone research in doing so.

I believe the report is mine.

Q. And you believe the report is yours because you read it;

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 70 of 198 PageID: 19323
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:56

01:56

01:56

01:57

01:57

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3975

correct?

A. I certainly -- I have read it, but I certainly don't

think that's the exclusive reason that it's mine. I've read a

lot of documents, the things that I've alluded to in my direct

examination, I conducted interviews with person, I consulted

the literature, read deposition testimony.

Q. Understood. But I'm just actually talking about

specifically as it relates to the report and why you believe

it's yours concerning your involvement in the drafting of it.

So part of the reason you believe it's yours is because you

read it; correct? And you edited it; correct?

A. Well, in part those would be I think the reasons, some of

the reasons. But certainly not all, nor really substantive

ones.

Q. And you added verbiage yourself; correct?

A. I think that's a fair statement, I made keystrokes

myself, I wrote many portions of it initially.

Q. And you drafted some of it yourself; correct?

A. Yes.

Q. Now, you were paid $750 an hour by the defendants for

your work; correct?

A. We agreed upon that fee, yes.

Q. And were you actually paid by Cornerstone also?

A. I do receive compensation from Cornerstone from time to

time.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 71 of 198 PageID: 19324
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:57

01:57

01:58

01:58

01:58

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3976

Q. And is that in connection with this litigation?

A. I don't know that I would characterize it so precisely, I

think -- I don't know the exact algorithm or formula, but

Cornerstone does compensate me from time to time, and part of

that is based on the level of activity I think that I have

with -- with their firm.

Q. Okay. And as it relates to the involvement of

Cornerstone, there's an individual from Cornerstone who

primarily helped you in drafting this report; correct?

A. Well, he certainly assisted me in performing the work

that was necessary to do -- to prepare the report and develop

the opinions.

Q. And he actually drafted some of the original report;

correct?

A. I think he made keystrokes as well, yes.

Q. But you had stated earlier in your testimony he drafted

as I understand some of it originally; is that a correct

statement?

A. I -- yeah, that's what I meant by the keystroke.

Q. And as it relates to your involvement in the drafting of

the report you recall drafting some portions of the rebuttal

to Kent Barrett's report; correct?

A. I seem to recall that, yes.

Q. As well as drafting a portion of the background section;

correct?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 72 of 198 PageID: 19325
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

01:58

01:59

01:59

01:59

01:59

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3977

A. Yes.

Q. As well as drafting the discussion of the literature of

professional guidance section; correct?

A. I believe that to be the case, yes.

Q. Okay. And the drafting of this document occurred in the

spring and summer of 2014; is that correct?

A. I think that's generally a fair characterization.

Q. If I told you that you testified that the drafting was

occurring during the spring and summer of this year, which was

2014 during your deposition, do you dispute that?

A. No.

Q. And it's your belief that you don't believe that Milbank

drafted any of the report; correct?

A. I don't have a recollection of them. They may have had

some role in the cover page of it, and styling it or

something, but I don't recall them drafting or making

keystrokes.

Q. Okay. And a lot of the interaction with the Milbank firm

was done through Mr. Weemes; correct?

A. Yes, we both interacted with the -- with the attorneys,

yes, but Mr. Weemes did interact with the attorneys.

Q. And as it related to assistance that was provided to you

that was provided by Cornerstone; correct?

A. Yes -- yes.

Q. As well as Weemes; correct?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 73 of 198 PageID: 19326
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:00

02:00

02:00

02:00

02:01

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3978

A. Well, Mr. Weemes is an employee of Cornerstone.

Q. Well, don't you believe that there were a couple other

individuals from Cornerstone who assisted Mr. Weemes and

yourself in the gathering of documents and drafting of the

report?

A. I think that's a fair -- fair statement, but Mr. Weemes

is not separate and apart from Cornerstone.

Q. Okay. And part of what they did was going through a wide

range of documents; correct?

A. Going through what?

Q. A wide range of documents?

A. Yes, I think they probably did. I directed them to seek

documents from the attorneys from time to time. And they

would read them as well as I.

Q. And they put together the organizational structure of the

report; correct?

A. I think they contributed to that, I -- you know,

certainly it's my report; if I had objected, and I don't

recall you know doing so, sitting here today, but then it

would have changed.

Q. And you spoke with them, they conveyed information to

you; correct?

A. Well I did speak with them, they did convey information

to me, but most of what I was doing was asking them for

documents and to, you know, organize the documents they were

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 74 of 198 PageID: 19327
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:01

02:01

02:01

02:02

02:02

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3979

getting in a coherent form, along the lines of the footnotes

that are in my report.

Q. And part of what you had asked them to do is was provide

you with documents that were pertinent to the developing

opinions that were emerging from your work; correct?

A. I did, I had an abiding instruction to them that any time

they saw any documentation, any documents that would be

pertinent to the opinions that I was developing, that they

were to provide that to me, absolutely.

Q. And specific --

A. I would want to see those personally.

Q. Right. And you specifically told them to direct your

attention to areas of deposition that would be of relevance to

the developing opinions; correct?

A. Absolutely, I read many of the depositions, some of their

-- well, there weren't that many. But I did ask them to call

my attention, to focus my attention on areas of depositions

that in their view would be particularly pertinent,

absolutely.

Q. Okay. And then after they identified those areas, you

then reviewed them; correct?

A. Well, I looked at the depositions, but I looked at them

more broadly than just those specific areas they identified.

Q. Okay. And it's fair to say that Cornerstone actually

prepared the documents considered list that's attached to your

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 75 of 198 PageID: 19328
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:02

02:02

02:03

02:03

02:03

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3980

expert report; correct?

A. I did ask them to keep up with all the documents they

were providing -- that they had received from the attorneys

and that they were providing to me, yes. That was a good use

of their time I thought.

Q. Okay. And it's fair to say you didn't read every

document on the document list in its entirety; correct?

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

Q. As well as the deposition testimony that was brought to

you; correct?

A. I think I did read -- there weren't that many

depositions, we can certainly look, but I recall reading those

-- I mean I read, you know, like at the end of depositions

where they have like an index of words that are used and

whether -- I didn't read those, I didn't read the front part,

but most of the substantive testimony I recall reading.

Q. And that was after it was brought to your attention by

Cornerstone; correct?

A. Pardon me?

Q. That was after it was brought to your attention by

Cornerstone?

A. What was brought to my attention by Cornerstone?

Q. The pertinent parts of the relevant parts of the

deposition testimony; correct?

A. Well, I certainly asked them to be sure and tell me their

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 76 of 198 PageID: 19329
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:03

02:03

02:04

02:04

02:04

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3981

view of the pertinent parts of the deposition, but I did not

restrict my reading to just those parts.

Q. Okay. And there were numerous conversations that you

testified to before that occurred between you and Mr. Joenk;

correct?

A. There were discussions, interviews, yes.

Q. And Cornerstone was involved in those discussions;

correct?

A. I had that general recollection, I think they were at

that February meeting, but I don't have a particularly

distinct recollection of who was present.

Q. And that February meeting would be before or at the

beginning of the time period when you were engaged to begin to

form your opinions?

A. Somewhere thereabouts. It probably followed my actual

engagement, but I don't recall the specificity.

Q. And Cornerstone actually had conversations with the

defendants when you were not present; correct?

A. I -- they may have, I don't know that. But I may be

forgetting something. I think most of their conversations

were with the attorneys that are representing the defendants,

but they may have spoken directly with Mr. Joenk, I just don't

really recall.

Q. And so their discussions with the attorneys then that

were representing the defendants, some of those occurred

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 77 of 198 PageID: 19330
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:04

02:05

02:05

02:05

02:05

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3982

outside of you; correct?

A. Yes, yes, there were many instances in which I would say

try to get this information, ask for this information, please

try to obtain this information, and they would do so at my

direction, yes.

Q. Okay. So you relied on Cornerstone to then go to the

attorneys to get the information you had requested; correct?

A. In those instances where I had asked or directed that

they do that, yes.

Q. Okay. And you actually asked the attorneys outside of

what we had just talked about to provide the pertinent

information that they believed would be necessary in

developing your opinion; correct?

A. Could I hear that question again?

Q. Sure.

THE COURT: Frank, do you want to restate it?

(Question read back by the reporter.)

THE WITNESS: I don't understand the phrase in the

question.

THE COURT: Restate your question, Mr. Stevens.

MR. STEVENS: Yes, your Honor.

BY MR. STEVENS:

Q. You also asked the attorneys to provide Cornerstone with

all of the information that would be pertinent to developing

your opinion; correct?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 78 of 198 PageID: 19331
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:06

02:06

02:06

02:07

02:07

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3983

A. Yes, all of the information that was available, yes, I

would have done that.

Q. Okay. And part of the documents that you asked

Cornerstone to look into was you wanted a pretty thorough

search of professional literature; correct?

A. Yes, I asked them to contribute their ideas as to the

relevant portions of the literature that would be informative

in forming my opinions.

Q. Right. And you did so in order to immediately understand

the concepts and guidance for cost accounting; correct?

A. Well, I think I had an understanding of those concepts

and the guidance that were contained in there. Generally when

you embark on an engagement like this there's a degree of

specificity and support that at least I like to generate and

be able to refer to. So while I felt comfortable with the

contents of Professor Horngren's book, for example, I would

want to get it, refresh my recollection and I would want to

cite to it and to other literature of the profession, and

refresh my recollection. And yes, I did ask them to get that

literature, to assemble it and to provide to it me, rather

than getting it myself; that's typically how I would use a

research assistant.

Q. Okay.

A. And was really no different here.

Q. And some of the guidance that you sought from Cornerstone

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 79 of 198 PageID: 19332
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:07

02:07

02:08

02:08

02:08

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3984

or from others was a book by the name of Fund Governance,

Legal Duties of Investment Company Directors book; correct?

A. I recall seeing that and reading it and becoming familiar

with it, yes.

Q. Okay. And did you read that book in its entirety?

A. I don't recall doing so. I would need to see the book at

this point and -- you know, I think I probably footnoted just

those portions of it that were of particular relevance to the

opinions I was being asked to develop.

Q. Okay. And as it relates to that book, you had never

consulted that book prior to this litigation; correct?

A. I don't recall doing so.

Q. Okay. And you're aware that the author of the book is an

attorney; correct?

A. I do have that recollection.

Q. Okay. And do you also recall that you were unable to

testify during a deposition of who selected the quotes during

the Fund Governance book that was contained within your

deposition?

A. I don't -- I don't recall that. I would have been aware

that they were there. I recall looking at the book, but I

don't recall who may have identified the specific elements

that I chose to include in the report.

Q. And you have P-852 before you, correct, your expert

report?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 80 of 198 PageID: 19333
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:08

02:09

02:09

02:10

02:10

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3985

A. Yes, sir, I still do.

Q. I want you to turn your attention to page 11 of your

report.

A. I'm there.

Q. Specifically paragraph 25.

A. I'm there.

Q. And this paragraph 25 discusses that AXA maintains FMG's

bank accounts; correct?

(Witness reviewing.)

A. I see that phrase in the paragraph, yes.

Q. And you don't have a recollection as to whether or not

you drafted this section of the report; correct?

A. You know, sitting here today I probably don't have a

specific recollection of which specific parts I individually

and originally authored in general, but there were many that I

did. I don't recall who might have put pen to paper with the

first draft of what's in paragraph 25. I can tell you that I

did read Mr. Joenk's deposition, and at least at one time was

aware of this lift of things that is -- that is identified

here.

Q. Okay. And if Mr. Joenk was wrong as to any of this

things identified in that paragraph, would that change your

opinion in this case?

A. Not necessarily. I mean this seems -- no, it would not;

at least not necessarily.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 81 of 198 PageID: 19334
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:10

02:10

02:11

02:11

02:11

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3986

Q. And as it relates to -- you indicated as you sit here

today you don't have a recollection as to what parts of this

report you drafted in 2014 when you gave your deposition that

was in November; correct?

A. I recall that being the case, yes.

Q. And you indicated that this report was being drafted from

the spring to the summer; correct?

A. I recall that.

Q. Okay. So that was roughly two to three months -- the

deposition was roughly two to three months after the final

draft of this report was done; correct?

A. Little over three months I guess.

Q. Okay. And actually your report's dated August 8th, 2014;

correct?

A. It is, yes.

Q. And in 2014 as relates to paragraph 25, you didn't have a

recollection as to whether or not you drafted that report even

back then -- or that paragraph even back then; correct?

A. I don't recall, I may or may not have; we have to look at

my deposition testimony.

Q. I'd like you then turn to page 96 of your deposition

testimony, please.

A. Sure. I'm there.

Q. Okay. If you go to -- we'll start with line 1. The

question is: In your report on page 11, I guess it's

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 82 of 198 PageID: 19335
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:11

02:12

02:12

02:12

02:12

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3987

paragraph 25, you did say that -- and it says you referred to

that AXA maintains FMG's bank accounts.

Do you see that?

A. I do.

Q. And the answer is: Um-hmm. The question: So does that

mean that FMG has its own bank accounts? The answer is: No,

I don't think so, I mean that doesn't necessarily imply that.

Correct?

A. That's what I said then, yes.

Q. So the follow-up question was: Did you write that? And

your answer was: I don't recall if I drafted these actual

words or not, I certainly read it, I approved it, I adopted it

as mine.

Correct?

A. That's what the transcript says, yes.

Q. Okay. So then back in 2014, three months after you

drafted this report, you then were unsure as to whether or not

you drafted that specific paragraph in the report; correct?

A. Well, you know, it's a little unclear what you're

alluding to here, whether it's confined to just the bank

account reference or the entirety of paragraph 25. But it is

what it is. I mean I don't have a better recollection today

than I did then.

Q. Okay. And you're paid as we indicated by the defendants;

correct?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 83 of 198 PageID: 19336
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:12

02:13

02:13

02:13

02:14

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3988

A. I'm paid by what?

Q. By the defendant for your work on this report; correct?

A. That's my general understanding, yes.

Q. And in order to get paid you have to submit something to

the defendants; correct?

A. I submit monthly invoices with a summary of the time that

I've spent, yes.

Q. Okay. And are those invoices in your view trustworthy?

A. Well, they may contain errors, but I certainly intend

them to be accurate.

Q. Okay. And based on the invoices you submitted, were you

actually paid by the defendant for the work contained within

those invoices?

A. I don't think I've been paid for some of the most recent

ones, but generally, yes.

Q. Okay. Well, as it related to the work you performed in

2014, were you paid for that work?

A. Yes, I have that recollection.

MR. STEVENS: Chris, could you hand the witness and

the judge P-849 for identification purposes?

Q. Do you recognize that document, Dr. Holder?

A. Yes, it would appear to be the invoice I alluded -- the

type of invoice I alluded to earlier for the month of July.

Q. Okay. And as you're reviewing that invoice does it

appear to be trustworthy?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 84 of 198 PageID: 19337
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:14

02:15

02:15

02:15

02:15

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3989

A. I don't know what you mean by trustworthy. I don't have

any indication or recollection that it contains errors.

Q. So, is it a fair and accurate representation then of the

invoice you submitted back in July -- or for the July work you

did from July 1st to July 9th?

A. I don't have much of a recollection independent of what

I'm looking at here.

Q. I understand that.

A. At this time, but it --

Q. What I'm saying, though, is that invoice -- does that

appear to be a fair and accurate representation of the invoice

you submitted to the defendants for payment?

A. As far as I know, yes.

Q. And I want to direct your attention to July 1st of that

year. Do you see that?

A. I do.

Q. And on that it indicates that you continue to draft a

report?

A. Yes.

Q. Is that the first time that you began to draft a report

as it related to this case?

A. I -- I doubt that. I certainly -- you can see here that

I was rendering services prior to the July period; I don't

know how I might have characterized those services previously.

But I -- if I recall correctly the drafting of the report

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 85 of 198 PageID: 19338
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:16

02:16

02:17

02:17

02:18

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3990

began earlier and I would have been involved in that drafting.

Q. Okay. And that would be -- and if you were involved in

that drafting earlier, there would be an invoice that said

drafted report; correct?

A. Not necessarily, no.

Q. So you wouldn't have billed for the drafting of any of

the report prior to July 1st, 2014?

A. I may not have characterized it that way, there are

different ways to characterize things.

Q. Well, I'm going to have then P-856 shown to you, please.

(Brief pause.)

MR. STEVENS: Let's go to P-847. How's that.

Q. Do you recognize what's been handed to you as P-847?

A. I do.

Q. And that's dated June 6th, 2014; correct?

A. It is.

Q. And that's a statement of services for May of 2014;

correct?

A. Yes.

Q. And there's no entries in that May of 2014 document that

indicates anything concerning drafting of a report; correct?

A. I don't see the word drafting in the items that are

identified there.

Q. Okay.

MR. STEVENS: And I'd like 848 to be given to the

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 86 of 198 PageID: 19339
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:18

02:18

02:19

02:19

02:19

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3991

witness, please.

Q. And P-848 is a document at the front, that's dated July

7th, 2014; correct?

A. It is, yes.

Q. And it indicates that it's a statement for services for

the month of June 2014; correct?

A. Yes.

Q. And if you look on page 2, it has a listing of services;

correct?

A. I'm sorry; say again?

Q. It has a listing of services on page 2?

A. Yes.

Q. And again, there's no indication of the drafting of a

report at all; correct?

A. I don't see the word drafting there either.

Q. Do you see the word writing a report?

A. I do not.

Q. Okay.

MR. STEVENS: Your Honor, at this point plaintiffs

would seek to admit P-847, 848 and 849 into evidence.

MR. HORA: No objection.

THE COURT: No objection, all right. Admitted.

MR. STEVENS: Thank you?

THE COURT: So, 847; what was the other one, 849?

MR. STEVENS: I'm sorry, your Honor?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 87 of 198 PageID: 19340
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:19

02:20

02:20

02:20

02:21

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3992

THE COURT: I'm trying to figure out -- you had

three documents you wanted admitted, 849, 847 and?

MR. STEVENS: And 848.

THE COURT: Okay. Admitted.

(Plaintiff's Exhibits 847, 848, 849 were marked into

evidence.)

BY MR. STEVENS:

Q. And as it relate now to your Norman, Oklahoma experience

and your prior work experience, there was never a time that

you recalled where you ever used revenues as a basis to

allocate expenses; correct?

A. As I recall testifying that's generally the case. There

was the purchasing department in the hospital, they didn't

prepare a separate financial statement for purchasing, but had

they, that allocation would probably have been based on

revenues. But that's the extent of my recollection sitting

here.

Q. Okay. But that didn't occur you said?

A. What didn't occur was the separate financial statements

were not prepared for the purchasing department.

Q. And you never suggested in any of your written

illustrations to use revenue to drive an expense allocation;

correct?

A. You know, I honestly don't recall, I'd have to look back.

There were several articles, there's the manuscript on cost

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 88 of 198 PageID: 19341
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:21

02:21

02:22

02:22

02:22

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3993

allocation, I think we've discussed it, but when California

passed a law that required not charging more for government

services than the cost of providing those services, I was

commissioned along with a co-author to write a manual, so that

cities could do a cost allocation and make a reasonable

determination of the cost of fulfilling various functions they

charged for, like marriage licenses and so on for that

purpose. Whether revenue was the basis for allocation, I mean

I just don't recall.

Q. The answer is you don't recall ever suggesting that.

A. Yes, I think that's a fair -- fair statement. Other

than, you know, Professor Horngren's use of revenue as an

example and the work that I've done in this particular case.

Q. Okay, understood. And as it related to Norman cost

allocation which is a hospital, you didn't -- you used various

bases to allocate the revenue produced in the areas; correct?

A. Could I hear that again?

Q. As related to the Norman cost allocation which was a

hospital that you had discussed working on for five years --

correct?

A. Yes.

Q. You used various bases to allocate to the revenue

producing areas --

A. Yes, that's a true statement.

Q. Cause and effect to the producing areas; correct?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 89 of 198 PageID: 19342
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:22

02:22

02:23

02:23

02:23

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3994

A. No, I don't think you can attribute that degree of

causation.

Q. Okay.

A. To many of the allocation bases that are used.

Q. But you were able to determine cost drivers for the

allocation process; correct?

A. Certainly not in all circumstances.

Q. But you didn't just allocate pursuant to the portion of

revenue as you testified to before; correct?

A. Like I testified before?

Q. Correct. You said that the only time -- the only

possibility you thought of allocating pursuant to revenue

would have been within that one department that you ended up

not doing it; correct?

A. Sure, we're communicating, sure.

Q. Okay, good. I appreciate that. And each year as related

to the Norman -- the five years that you were involved in the

cost allocation methodology, there was considerable effort

made to put together a cost allocation methodology per year;

correct?

A. Well, yes, I mean they varied if I recall correctly from

year to year, but in the method at some level remained the

same; it was a step down cost, function rather than

simultaneous equations or something like that.

Q. But because they varied, it's fair to say that in each of

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 90 of 198 PageID: 19343
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:23

02:24

02:24

02:24

02:25

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3995

those years there would be considerable effort made to put

together a cost allocation process; correct?

A. I think that's a fair characterization of our work, yes.

Q. And that's fair as it relates to cost allocation;

correct?

A. What's fair as it relates to cost allocation?

Q. That each year there should be considerable effort put in

to the cost allocation to develop -- or to review the cost

allocation process; correct?

A. No, I don't think so.

Q. But you did that in the Norman, Oklahoma case; right?

A. Yes, as I had indicated the Medicare formula had just

been put in place and there were changes being made to the

that -- to those regulations and so on, and so we did try to

stay abreast of the regulations and what they called for and

required, and that would have an effect on the cost allocation

process as used or at least it could have.

Q. And that was based on your intent to be diligent as it

related to the appropriate allocation of the costs to the

appropriate revenue producing areas; correct?

A. I need to hear the very first part of that sentence

again; you spoke so quickly. I apologize, sir.

Q. You know what, don't worry about it; I'll move on.

Now, as it relates to the need for FMG to use the

AXA-CAM, in your deposition you're unable to point to one

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 91 of 198 PageID: 19344
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:25

02:25

02:25

02:26

02:26

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3996

specific document that you were able to identify that told you

that this was necessary; correct?

A. That told me what was necessary?

Q. The need to allocate -- that FMG need to allocate

pursuant to the FMG-CAM.

A. I think that's the process that they developed.

Q. Correct. But you don't have any specific document that

you can point to that shows that there's a need to allocate

additional expenses to FMG; correct?

A. And you're asking me at the time that I gave my

deposition?

Q. Correct.

A. You know, I just don't recall.

Q. Okay.

A. I recall -- you know, I've refreshed my recollection to

prepare myself for trial today. I'm aware of the range of

costs, that it certainly resonates with me that those kinds of

costs would be necessary for the funds to operate

appropriately, and that thus some allocation would be an

appropriate approach to determine the full cost of providing

the service, providing the function.

Q. And really the main area that you were able to identify,

at least in your deposition, was what's attached to -- is

P-8521, which is your documents supplied or your exhibits, and

it was specifically exhibit 6, page 15.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 92 of 198 PageID: 19345
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:27

02:27

02:27

02:27

02:28

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3997

A. I'm sorry; I'm trying to find the sixth exhibit.

Q. If you go to then -- if you go to your documents, go to

your exhibits, go to page 45 of 157, which is exhibit --

A. Sure, that's helpful.

Q. -- 6.

A. Yeah, I'm there.

Q. Okay. And you recognize that document; correct?

A. I do, yes, sir.

Q. And that's the expense allocation document that reflects

the cost allocation methodology used by FMG; correct?

MR. HORA: Mr. Stevens, if I can just see what

you're referring to? Okay. I have it.

A. In summary form, yes. I think that's a fair

characterization.

Q. And this is one of the documents that you reviewed when

rendering your decision; correct?

A. This is one of the documents that was available to me,

yes.

Q. And that's one of the documents that in your view speaks

to the need to allocate if you want to determine the full cost

of rendering services to the funds; correct?

A. No, I think this is more of a description of the

allocation process.

Q. Okay. And so then at your deposition testimony when you

stated that, you meant to state that as really just a

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 93 of 198 PageID: 19346
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:28

02:28

02:28

02:29

02:29

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3998

description of what occurred; correct?

A. Well, it's certainly not this disconsonant with my

understanding of the kinds of costs that are necessary to

support these activities, but I -- I believe sitting here

today that this is best characterized as a description of the

cost allocation at a summary level.

THE COURT: So, Mr. Stevens, can we break for lunch

at the present time?

MR. STEVENS: Absolutely.

THE COURT: Okay. So we'll break at the present

time, we'll reconvene at 2 o'clock.

So just so I have the timing down, we agreed

yesterday afternoon that the defendants would have the same

amount of time for cross-examination as the plaintiffs used

for direct. So, on Mr. Holder, I started this morning, I

believe it was at 10:50 and they went to -- I have 12:27; so

it's about an hour and 40 minutes I believe. And so you

started at 12:38, and now it's 1:22; so you've gone about 44

minutes.

MR. STEVENS: Sound good, Judge.

THE COURT: So you have another hour or so.

MR. STEVENS: All right. Thank you, your Honor.

THE COURT: If I didn't tell the time right and --

MR. MURPHY: I could shade it.

MR. HORA: We're not going to nitpick a couple

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 94 of 198 PageID: 19347
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

02:29

03:26

03:26

03:26

03:26

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

3999

minutes.

THE COURT: Okay. So thank you. I'll be back at

2:00.

Mr. Holder, you may step down.

(Luncheon recess.)

THE COURT: Good afternoon. Please be seated.

Are you ready, Mr. Stevens?

MR. STEVENS: I am, your Honor. Thank you.

THE COURT: Mr. Holder, could you take the stand?

So, you're still under oath, sir.

THE WITNESS: Yes, sir.

THE COURT: Mr. Stevens?

MR. STEVENS: Thank you, your Honor.

BY MR. STEVENS:

Q. Dr. Holder, as it related to how you learned the cost

allocation methodology employed by FMG, you were able to learn

it by having discussions with individuals such as Mr. Joenk;

correct?

A. That be would part of it, yes.

Q. Ms. Louie; correct?

A. Yes.

Q. A couple other individuals from FMG; correct?

A. Yes.

Q. You never had any conversations with anyone from

PricewaterhouseCoopers, did you?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 95 of 198 PageID: 19348
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:26

03:27

03:27

03:27

03:28

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4000

A. Not about this matter, no.

Q. Or JP Morgan?

A. Not about this matter, as I recall, no.

Q. Or Ernst & Young?

A. Not about this matter.

Q. Okay. And you had testified before as related to step A

of the AXA-CAM; do you recall that testimony?

A. Yes.

MR. STEVENS: And it may help if I have what's

already been marked into evidence I believe -- P-210 given to

the witness and also to the Court?

Q. Do you recognize this document, Mr. Holder?

A. I do.

Q. And this is actually the document that's contained as

Exhibit 6 to your expert report; correct?

A. I -- I could look and verify that; I recall this being

that exhibit, yes.

Q. Okay. So you do recollect that this is in your expert

report; correct?

A. Yes, I do.

Q. So if there's any deposition testimony as it relates to

Exhibit 6, it would be referring to this document; correct?

A. Again, I haven't looked at this document. I don't know,

it may contain pages that aren't in the exhibit, I haven't

compared them sitting here, but I'll accept your

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 96 of 198 PageID: 19349
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:28

03:28

03:28

03:28

03:29

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4001

representation that that's the case.

Q. That's fine. If we have to we can go through that

process; okay?

A. Sure.

Q. I'd like to direct your attention then to page 2 of this

document; do you see that?

A. I am there, yes.

Q. And it's entitled Expense Allocation and Methodology;

correct?

A. Yes.

Q. And it's an EQAT Board update; correct?

A. Yes.

Q. And is it your understanding that this document was

presented to the EQAT Board?

A. I have that general understanding.

Q. And so what I'd like to do then is just direct your

attention to what is page 15 of that document, and it's Bate

stamp 6745 which is at the bottom right.

A. I'm there, yes.

Q. And if you look at the column to the left where it says

A, is that fair to say that's the AXA-CAM?

A. Yes, I've heard it characterized that way, I certainly

accept it.

Q. And you then as it related to the document we had before

the Court, which is P-2050, which was your cost allocation

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 97 of 198 PageID: 19350
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:29

03:29

03:29

03:30

03:30

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4002

methodology overview, reflected what's in step A on that

document; correct?

A. I think it's -- the page with Bates number ending 6745 is

a summary of these processes; mine is essentially a summary of

this summary.

Q. Okay.

A. But yes.

Q. Understood. And so, as it relates to step A, isn't it

true that the AXA-CAM is able to actually allocate costs in

step A; correct?

A. That's -- that's my general understanding, yes.

Q. And that results then in the allocation of the expenses

to the various products; correct?

A. I have that understanding, yes.

Q. And that AXA's able to allocate those expenses to the

products based on cost drivers that are identified by business

owners; correct?

A. Generally, that's my understanding.

Q. And they also use surveys with the managers and business

owners of those products; correct?

A. My understanding that's part of the identification of the

cost drivers and the various allocations, but yes.

Q. And that's all done by AXA as it relates to the total AXA

expenses; correct?

A. Well, you see the adjustments to total AXA expenses here,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 98 of 198 PageID: 19351
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:30

03:30

03:31

03:31

03:31

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4003

I mean there are --

Q. Understood.

A. I'm sorry?

Q. Understood; we can get to that. I just wanted to

establish that that process is in relation to the total AXA

expenses; correct?

A. Well, my understanding is that some of the AXA expenses

are charged directly to FMG, and then you have the deferred

acquisition costs, actuarial adjustment, but having said that

I -- I don't take further exception to agreeing with

your assertion.

Q. Okay. As it relates to those surveys that they

performed, based on those surveys adjustments are made each

year to the cost drivers; correct?

A. If they are found to be appropriate, yes. Based on that

process.

Q. And that's a similar process that you -- or that you

actually engaged in as it related to the Norman, Oklahoma cost

allocation methodology that you employed from 1970 to 1975;

correct?

A. It's similar.

Q. Process where it was reviewed every year?

A. No.

Q. You didn't review the cost allocation methodology every

year when you were working with Norman, Oklahoma?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 99 of 198 PageID: 19352
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:31

03:32

03:32

03:32

03:33

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4004

A. We did that, but we didn't do so in the same manner as

it's done here. I don't recall surveys being sent annually

and monthly kind of updates and so on. But --

Q. I'm sorry; it may have been a bad question on my behalf.

I didn't mean actually as it related to surveys, I just meant

that based on variables as it related to what was discovered

each year, adjustments were made by AXA; correct?

A. As it relates to this part A, I think that's the case

insofar as changes were made.

Q. Right. And what I had meant to say that's the same

process as related to the adjustments that you engaged in in

Norman, Oklahoma depending on what variables arose each year;

correct?

A. No, I don't think so. The changes we would make in the

hospital that we -- that I've been answering questions about,

many of those, perhaps most were propelled by changes in the

Medicare regulations. As I recall they were changing, you

know, rather quickly as Medicare was rather a new program

then. And in addition to that it would be -- things were

fairly stable in a number of the revenue generating

activities, although there were advancements being made --

it's just so long ago I've forgotten, but it was in responses

to changes, and they weren't just changed every year in the

face of a stable environment.

Q. But they were adjusted if there was a change was all I

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 100 of 198 PageID: 19353
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:33

03:33

03:33

03:34

03:34

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4005

was asking --

A. When there are changes in the regulatory environment, or

when there were changes in the basic structures of operations,

yes.

Q. And as it relates to the cost allocation methodology that

was used by FMG, you are not prepared to say how it is that

FMG should have actually allocated any expenses down to the

EQAT; correct?

A. I don't completely understand that question; the process

that we've just been --

THE COURT: If you don't understand -- you have to

rephrase.

MR. STEVENS: I'll rephrase, Judge. Okay.

BY MR. STEVENS:

Q. So you're not able to -- or you're not willing to

personally say how you would allocate any expenses if they

should have been allocated pursuant to expenses down -- let me

rephrase.

THE COURT: So you're starting over?

MR. STEVENS: I am. Because I got little flustered.

Q. Assuming that expenses needed to be further allocated

outside of what has already been charged to FMG by AXA

pursuant to the Shared Services Agreement, you are not willing

to offer a personal opinion as to how you would do that;

correct?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 101 of 198 PageID: 19354
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:34

03:34

03:34

03:35

03:35

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4006

MR. HORA: Objection; confusing.

THE COURT: Well, do you understand the question,

Mr. Holder?

THE WITNESS: I don't understand the personal

opinion particularly --

THE COURT: Then you have to rephrase.

THE WITNESS: -- well.

BY MR. STEVENS:

Q. It was your task as it related to your hiring and your

judging or your review of the cost allocation methodology in

this case, was merely to assess the reasonableness of the

allocation method being used; correct?

A. I think that's generally a fair characterization in the

three phases.

Q. Okay. And it was not your intent to try to develop a

cost allocation methodology that would be different than what

was used in the cost allocation methodology by FMG; correct?

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

Q. And you did not consider alternatives to the revenue

based allocation system used by FMG in this matter; correct?

A. Your question's now focusing on part B or the element B

of the allocation?

Q. I should back that up. It's my understand and from your

deposition testimony that you understood that the FMG cost

allocation methodology was step B and C of what's contained on

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 102 of 198 PageID: 19355
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:35

03:35

03:36

03:36

03:36

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4007

page 15 of P-210; is that correct?

A. I heard it characterized that way, I'm comfortable with

that, yes.

Q. Well, in Defendant's Exhibit 2050 you actually put step B

as FMG-CAM; right?

A. Yes.

Q. So then you're familiar with that; correct?

A. Yes.

Q. Step A is the AXA-CAM; correct?

A. That's the way they've been characterized generally, I've

adopted those characterizations myself, sure.

Q. And we discussed the various manners in which the AXA-CAM

allocates the cost as it relates to surveys and questioning of

businesses and managers; right?

A. We have, yes.

Q. And that they were able to identify cost drivers based on

that; correct?

A. They were -- yes, they were able to -- they may have

identified cost drivers and then used this mechanism to

measure the extent to which each one would be considered a

cost driver for purposes of this specific allocation.

Q. Right. And as related then to step B and C, the FMG-CAM,

you didn't do any independent investigation to determine

whether or not there were cost drivers available to allocate

expenses down to the products if necessary; correct?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 103 of 198 PageID: 19356
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:37

03:37

03:37

03:37

03:38

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4008

A. In the work I performed I didn't identify what I would

consider to be available cost drivers.

Q. And you didn't try to identify available cost drivers;

correct?

A. That wasn't the focus of my work. But I can say that

none came to my attention that I recognized at least.

Q. And I'd like to direct your attention to paragraph 48 of

your expert report. Do you have that still before you, sir?

A. I am getting there.

Q. Okay, thanks. And that's Plaintiff's Exhibit 852.

A. It is, and I have paragraph 48 in front of me.

Q. Okay, thank you. And I'd like to direct your attention

to the paragraph that you indicate, many of the allocated

expenses arise --

A. I'm sorry, forgive me; is it the first many down in the

middle of the paragraph?

Q. Yes, where it says --

A. I'm with you --

Q. Many of the allocated expenses?

A. Yes.

Q. Okay. It says: Many of the allocated expenses arise

because of revenue producing activities, such as sales

activities engaged by AXA Equitable. Correct?

A. Yes, it says that.

Q. And you go on further to state: It is noteworthy that

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 104 of 198 PageID: 19357
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:38

03:38

03:39

03:39

03:39

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4009

almost half of the 2.275 billion in AXA Equitable allocated

expenses in 2012 pertain to commission and acquisition related

expenses; correct?

A. Yes, they're words to that general effect here.

Q. Okay. And then you continue: The relationship between

sales related compensation and revenues, is clearly consistent

with the cause and effect criterion supported in the cost

accounting literature. Correct?

A. That -- those words are there, yes.

Q. Okay. And are those correct statements that are

contained within your report?

A. I'm not aware that they're inaccurate. I -- I believe

them to be a reasonable characterization of facts,

circumstances and judgment.

Q. Okay. Do you recall if you actually drafted this

section?

A. No, I don't recall here. I can tell you that I worked on

this section, I almost certainly made keystrokes to all of the

sections in here, but I can't recall who might have been the

original drafter of what became this paragraph.

Q. Okay. And basically what that paragraph is saying that

is sales commissions have a correlation with revenues as it

relates to the products; correct?

A. I did not -- I think it indicates there's a relationship;

I did not try to measure correlation, that's essentially a

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 105 of 198 PageID: 19358
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:40

03:40

03:40

03:41

03:41

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4010

statistical term, I did not attempt to develop correlation

coefficients.

Q. But then as related to your opinion as to the

reasonableness of the cost allocation methodology, you

indicated in this paragraph that part of the reason for the

reasonableness is that these sales commissions and sales

related activities have a relationship then to the revenue

aspect of the EQAT; correct?

A. If I understand your question I think generally that's

the case, yes.

Q. And by sales related compensation are you referring to

commissions and other compensation that AXA Equitable pays to

its insurance product sales force and sales agents?

A. Let me look at the context if I may for a moment.

Well, these are revenues -- the basis for the

allocation is generally revenues generated from the investors

or shareholders or participants.

Q. Okay. And so as at relates to the sales related

compensation that you're discussing, are you -- have you ever

heard the term distribution expenses?

A. Yes.

Q. Okay. Would you consider those to be distribution

expenses?

A. Would I consider -- what's those?

Q. The sales related compensation that you reference in

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 106 of 198 PageID: 19359
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:41

03:41

03:42

03:42

03:42

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4011

paragraph 48 of your report.

A. They may well be among them, yes; I don't recall

specifically sitting here.

Q. Okay. Is that something that you would have known when

you drafted your report?

A. I think I would have known it at one time given its

presence here, I don't recall beyond that, though.

Q. Okay. And if I could turn your attention the Defendant's

Exhibit 1329, which you should have before you from your

testimony earlier this morning.

A. The cost accounting book?

Q. Correct.

A. I have that in front of me.

Q. Okay. I want to just direct your attention to footnote 2

on page -- what's the second page of this document; correct?

Do you see that?

A. Almost. I'm there.

Q. Okay. And it talks about the Federal Accounting

Standards Advisory Board; are you familiar with that?

A. I am familiar with that organization.

Q. And it indicates that cost assignments should be

performed either, A, directly tracing costs whenever feasible

and economically practicable -- correct?

A. I see that, yes.

Q. And B, assigning costs on a cause and effect basis --

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 107 of 198 PageID: 19360
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:42

03:43

03:43

03:43

03:44

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4012

correct?

A. Yes.

Q. And C, allocating costs on a reasonable and consistent

basis. Right?

A. I see what you've read, yes.

Q. And then you had referenced on the next page the benefits

received criterion listed in this; correct?

A. Yes.

Q. And in that benefits received criterion, the example they

give to consider corporate-wide advertising program; right?

A. Yes, that's the example that professor included in -- in

that -- in part B -- or part 2; I'm sorry, yes, Professor

Horngren included.

Q. Right. And so the benefit -- or the comparison as it

relates to the corporate-wide advertising program is that the

rationale behind it as indicated in the last sentence of that

paragraph, is that the divisions with high revenues apparently

benefitted from the advertising more than the divisions with

lower revenues, and therefore ought to be allocated more --

more of the advertising costs; correct?

A. I think that's what Professor Horngren's book says, yes.

Q. Okay. And is that the same type of comparison that you

were doing in paragraph 48 as it related to the sales

compensation?

A. Well, I think the sales compensation passage -- and let

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 108 of 198 PageID: 19361
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:44

03:44

03:45

03:45

03:45

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4013

me, if I may, get back to it; I set it aside. But I think

that was more in the realm of cause and effect than benefits

received, I think if I recall correctly. But having said that

I think there are elements that are intertwined in that

allocation basis of revenues, that are both related to cause

and effect, as well as benefits received. I did not identify

with specificity cost drivers.

Q. Okay. And as it relates to the reasonableness and

consistent basis of the allocated costs that was referenced in

footnote 2, it's your belief and understanding that you should

consider the result of the reasonableness of a cost related

allocation?

A. Yes, I think I testified generally to that to the extent

you're able to when I was providing my deposition.

Q. Okay. In fact, you should actually review the result for

reasonableness; correct?

A. Well, I think we ought to look at what I had to say. I

mean I think the ability to assess the reasonableness of any

complex process is a function of a great many variables, and

it ranges from being very specific in assessing

reasonableness, to only the most general considerations.

Q. And as it related to your review of the results of the

CAM, you didn't actually opine as to the reasonableness of the

costs that were assessed or allocated to the EQAT; correct?

A. I don't recall doing that. I think the focus of my

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 109 of 198 PageID: 19362
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:46

03:46

03:46

03:46

03:47

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4014

opinion was on the reasonableness of the process that was

used, but again, in my deposition I think the person taking my

deposition raised questions about that, and I testified as I

indicated.

Q. Okay. So then it's a fair statement to say that you

didn't say the costs were reasonable, correct, that you were

focusing on the methodology?

A. I think that is generally a fair statement.

Q. And that's a statement that applies in this case;

correct?

A. I don't know what you mean by that.

Q. You said a generally fair statement; I just asked if you

said that you didn't say that the costs were reasonable.

A. I don't think I probably had a basis to make that

assertion. I did not audit the records of the company, PwC

audited them, I relied to some extent on the comfort provided

by their unqualified clean opinion that these were the costs

incurred. Yeah, that was way beyond the scope of anything I

was asked to do.

Q. And you're familiar with the external department slide

that's contained within P-210; correct? And I'll direct your

attention to page 4 of P-210. P-210 is the expense allocation

and methodology presentation.

A. I do have it in front of me now. What page did you

direct my attention to? I'm sorry.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 110 of 198 PageID: 19363
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:47

03:48

03:48

03:48

03:49

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4015

Q. Page 4.

A. Okay. I am -- I'm there.

Q. Okay. And as it relates to page 4 of this, did you ever

review this and assess in relationship to the Shared Services

Agreement?

A. I did, yes.

Q. Okay. And isn't it your testimony that you don't know

why this external department slide would not have been

contained within the Shared Services Agreement?

A. Well, no, I don't think that's quite a fair

characterization.

Q. Okay. I'd like to turn your attention to page 44 of your

deposition. If you look at -- it's actually 44 -- it begins

44-21; I'm just going to establish the foundation quickly to

show what you're looking at. It talks about Exhibit 6 --

THE COURT: So it's line 21?

MR. STEVENS: I'm sorry, your Honor, page 44, line

21.

THE COURT: Okay, thank you.

Q. The question is, okay, so we can go back -- I guess it's

page 34 in Exhibit 6 -- and they're talking about your expert

report, you understand that; correct? Because you were

talking about your expert report throughout the deposition;

right?

A. Well, I don't know throughout the deposition, but yes,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 111 of 198 PageID: 19364
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:49

03:49

03:50

03:50

03:50

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4016

I'll accept that you're referring to that there, or that the

questioner was referring to that.

Q. And then it actually continues and it says: 4, if you go

to page 45-8 -- so it's relating to page 4 of Exhibit 6 to

your deposition. Do you see that?

A. I do see that, yes.

Q. And you're discussing throughout the testimony the items

that are contained on the -- the services that are contained

on this exhibit; correct?

A. That's -- that's probably the case, I -- you know, let me

look. Page 4 of the exhibit, okay, yeah, it would appear to

be, yes.

Q. Okay, great. And you were asked the question on page 46,

line 6, it says: Assuming these costs aren't contained within

the $14.4 million, which is your understanding, correct; you

said, that is my understanding.

Right?

A. Yes, that's -- that's correct.

Q. And your testimony has been that the $14.4 million is a

direct and some indirect expenses that were assessed to FMG

pursuant to the Shared Services Agreement that exists between

FMG and AXA; correct?

A. I -- I think that's a fair characterization, yes.

Q. Okay. So then the answer to the question why wouldn't

they be included was: I don't know why they wouldn't include

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 112 of 198 PageID: 19365
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:50

03:51

03:51

03:51

03:52

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4017

it.

Do you see that?

A. I see the words that you are -- that I said according to

this transcript, yes.

MR. HORA: Objection; there's more testimony in that

answer, that's not a complete answer.

THE COURT: Well, you'll have redirect.

BY MR. STEVENS:

Q. And so I'd like to now go back to page 15 of P-210, which

is the expense allocation -- the cost allocation methodology

that you were discussing -- we were discussing before.

A. I'm there.

Q. You're there; correct? Okay. On the left side there's a

box that says total AXA Equitable expenses; correct?

A. I see that. Yes.

Q. And did you review this report -- this specific

presentation as it related to how the specific numbers were

resulted or were gotten on the left column?

A. Generally, yes.

Q. So if I turn your attention to page 6 of that report,

it's entitled Expense Allocation 2012. Do you see that?

A. I see the page to which you're calling my attention.

Q. Okay. And up top it indicates that this is a

consolidating income statement management format; correct?

A. I see that, yes.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 113 of 198 PageID: 19366
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:52

03:52

03:52

03:53

03:53

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4018

Q. And it's your understanding that this was presented to

the Board; right?

A. I think it's part of this packet that was presented to

the Board.

Q. Okay.

A. That's my recollection.

Q. And I want to direct your attention to a line which is

about three-quarters of the way down the page entitled Total

Expenses.

A. I see that, yes.

Q. If you go all the way over to the right which is a total

column for 2012 --

A. Yes, sir.

Q. On that line for total expenses there's a number 1.615;

right?

A. I see that, yes.

Q. If you turn back to page 15, that reflects the 1.615

billion of total AXA Equitable expenses; correct?

A. That's my understanding, yes.

Q. Okay. And then on page 15 you have minus FMG direct

expenses 14.4 million; right?

A. That's what it says, yes.

Q. And that's pursuant to the Shared Services Agreement;

correct?

A. Those are charges that were assigned directly to the --

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 114 of 198 PageID: 19367
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:53

03:54

03:54

03:54

03:55

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4019

through the Shared Services Agreement. They relate primarily

to those 50 or 51 employees, as I understand it.

Q. Right. And that was specifically to FMG; right? As a

business entity or for doing business with AXA; correct?

A. I don't take offense at your characterizations, yes.

Q. And are you aware as to whether or not AXA has any other

business entities that -- or associates that they expense or

will bill for work that they perform?

A. I'm not aware; I may have at one time been aware of that.

Q. Assuming they have some additional business entities

that they do expense, would you expect to see those expenses

also deducted from the total AXA Equitable expenses as it

relates to the expense allocation methodology?

(Brief pause.)

A. Could I hear that question again?

Q. The 14.4 million is a deduction based on a bill that they

gave to a business entity; correct, FMG?

A. Well, it's the expenses that were directly charged to

FMG, yes.

Q. Assuming there are other expenses directly charged to

other businesses by AXA, they would then also be reflected as

a minus from the total AXA Equitable expenses; correct?

A. Not necessarily -- not necessarily.

Q. Okay. These are the total AXA Equitable expenses;

correct?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 115 of 198 PageID: 19368
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:55

03:55

03:55

03:55

03:56

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4020

A. I have that general understanding.

Q. And if there were other expenses deducted from the total

AXA Equitable expenses, they should be reflected in this

slide, because if they're not that means that FMG is then

being allocated a portion of expenses that have already been

paid for by other businesses; correct?

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

MR. HORA: There's a foundation objection. I think

if he's got some sort of document that shows that, I think he

should show the witness rather than speculating.

THE COURT: You may answer the question if you

understood it, Doctor -- or Mr. Holder.

THE WITNESS: Unless there was some extenuating

circumstance, that would seem to follow.

BY MR. STEVENS:

Q. Okay, that's great. And then we have directly below that

the actuary DAC impact of 674.8; do you see that?

A. I do.

Q. And that actually gets added to the total AXA Equitable

expenses; correct?

A. Well, only -- I mean it's to remove its effects from the

AXA Equitable expenses, yes.

Q. Correct. And the effect by removing it is that it adds

AXA -- it adds expenses to the total AXA Equitable allocated

expenses that are then pushed down to my clients, the EQAT;

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 116 of 198 PageID: 19369
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:56

03:56

03:57

03:57

03:57

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4021

correct?

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

Q. Well, the total AXA Equitable allocated expenses is 2.275

billion; correct?

A. I see that, yes.

Q. Okay. 1.615 billion minus 14.4, will come up with a

certain number; correct? Roughly 1.6 billion; right?

A. Okay.

Q. Is that correct?

A. 1.615.3 billion less 14.4 billion gives a little over a

billion 600 million.

Q. Right, okay. And then as it relates to that, if you add

in the 674.8 million, that would total up to the 2.275 billion

as reflected in the total AXA Equitable allocated expenses;

correct?

A. I think that generally follows.

Q. Okay.

A. But it's not appropriate to say that that removal of that

increases expenses. The expenses are what they are, and when

you --

Q. No; go ahead. Okay. Well, the removal of that as it

relates to the total AXA Equitable allocated expenses does

increase those expenses that are allocated; correct?

A. It increases the costs that are allocated by excluding

this DAC impact.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 117 of 198 PageID: 19370
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:57

03:58

03:58

03:58

03:58

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4022

Q. Okay. And are you aware as to how much of the -- I'm

sorry; you're aware that DAC means deferred acquisition costs;

correct?

A. I'm aware of that, yes.

Q. And are you aware of how much the -- how much deferred

acquisition costs were actually realized in the year 2012?

A. I -- I don't recall.

Q. Okay. Do you believe that it's the number that's

reflected there of roughly $674 million?

A. I don't recall. I'd have to look back at some of the

underlying data.

Q. Let me ask you this. If it wasn't the $674 million that

was realized, would that then call into question your

assessment of the cost allocation methodology?

A. No, I don't think so.

Q. So the fact that -- or not the fact, but the possibility

that $674 million was included in the allocated expenses that

then were allocated down to my clients, does not impact your

view in any respect as it relates to the reliability of the

cost allocation methodology?

THE COURT: Wait a second.

MR. HORA: Objection; there's no foundation for the

statement that they're allocated down to his clients.

THE COURT: Do you understand the question, Mr.

Holder?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 118 of 198 PageID: 19371
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

03:59

03:59

04:00

04:00

04:00

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4023

THE WITNESS: At this point I'd need to hear it

again, your Honor.

THE COURT: So Frank, could you repeat question? So

I'll deny that motion.

(Question read back by the reporter.)

THE WITNESS: As I understand it, that wouldn't have

that effect. I mean there is an accounting process in which

deferred acquisition costs get amortized over a period of

time. There are actuarial evaluations of that also that take

place over time. The actuarial DAC impact here of -- that's

removed, is in my recollection at least, not part of the

normal amortization of DAC that exists, and that's

appropriate.

BY MR. STEVENS:

Q. So what I'm trying to -- you just said that that 674.8

million was not part of the actual amortization for the year

2012; correct?

A. Well, I guess I don't understand your question.

THE COURT: All right, then rephrase.

MR. STEVENS: That's fine, your Honor.

Q. I want to direction your attention quickly to page 6.

A. I am there.

Q. Of P-210?

A. Yes.

Q. And directly above the 1.615 there are certain numbers;

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 119 of 198 PageID: 19372
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:00

04:00

04:01

04:01

04:01

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4024

do you see that?

A. I do.

Q. And it discusses -- the 1.65 is a total of all the

numbers that are contained directly above it, correct, in that

column?

A. Well, it's the net of those I think.

Q. Correct. And it's all those numbers all the way up to

the top beginning with the underlying investment margin?

A. Well, there's sub totals that are struck, so you can't

just add them all.

Q. So it's a total of the net revenues; correct?

A. No, it's not the total of the net revenues. It

incorporates the other things that are listed there as well.

Q. Understood. I was about to list them out, but it

incorporates what's in that column; correct?

A. I think that's a fair statement, yes, sir.

Q. Okay. And directly above the 1.615 there's two numbers;

right?

A. Yes.

Q. Amortization of DAC, deferred acquisition costs; correct?

A. Right.

Q. And that's 74 million; right?

A. I see that, yes.

Q. And amortization of VOBA, underlying results; do you see

that?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 120 of 198 PageID: 19373
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:01

04:02

04:02

04:02

04:02

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4025

A. The valuation of business acquired, yes.

Q. Right. And that's 4 million; correct?

A. I see that, yes.

Q. So that's a total of 78 million that's amortized for both

the DAC and VOBA for that year; correct?

A. That's my understanding.

Q. And then that additional money that's reflected of 674

million minus 78 million was not amortized for 2012; correct?

A. I don't understand that one, I'm sorry.

Q. Is it your understanding that based on the 74 and 4

million that 78 million of DAC and VOBA was amortized for

2012.

A. That's what that appears to reveal, the document which

you've drawn my attention.

Q. Okay. And as it relates the 674.8 million that was

reflected as DAC amortization on page 15 of P-210, that was

then put into the total AXA Equitable allocated expenses --

you see where I am; correct?

A. Yes, but that's -- the characterization of it on the

document is actuarial deferred acquisition costs impact, not

amortization.

Q. So then it's your position that they're merely putting

the impact of the additional 600 million of actuary DAC impact

in the allocated expenses; correct?

A. No, no, they're removing the effects from the expenses

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 121 of 198 PageID: 19374
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:03

04:03

04:03

04:04

04:04

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4026

that were actually incurred.

Q. Right. And so in removing --

A. I'm sorry.

Q. In removing those that then adds, as we indicated, to the

total AXA Equitable expenses; correct?

A. No, the expenses are what they are, and this is -- this

number is contained in the two -- in the 1.615; and removing

its effects moves to the actual expenses incurred by AXA in

providing these services to the 2.275 billion as I understand

it.

Q. So then is it your understanding of the cost allocation

methodology that the amount of expenses that are then put

through step A, B and C is not 2.275 billion?

A. No, I didn't say that.

Q. Okay. So then we're talking on -- we're together that

2.275 billion is the total AXA Equitable expenses that are

then allocated down eventually to the EQAT.

A. I think that's a fair statement.

Q. Okay. So if I can direct your attention to Defense

Exhibit 1510. And that's the EITF 99-19.

THE COURT: Mr. Holder, here you go.

THE WITNESS: Thank you.

I have it.

Q. Okay. And this is part of what you used to suggest that

the sub-advisory and sub-administrative fees were

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 122 of 198 PageID: 19375
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:04

04:05

04:05

04:05

04:06

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4027

appropriately assessed as expenses; correct?

A. Appropriately reflected as --

Q. Reflected as expenses; correct?

A. Yes, this is part of the collection of information I used

in arriving at that judgment, yes.

Q. Okay. And if we look at the first page of that document,

this is a document that is actually by the Financial

Accounting Standards Board; correct?

A. Yes, I think that's a fair statement. The EITF is a

committee or a group established by and that reports to the

Financial Accounting Standards Board.

Q. Okay. And then as it relates to the financial -- the

financial accounting, you've already indicated that there's a

difference between management accounting and financial

accounting; correct?

A. There are differences, sure.

Q. And are you aware that this specific EITF 99-19 was

superseded in 2014?

A. No, it really wasn't. I mean I can't accept your

characterization of what transpired.

Q. And why is that?

A. Well, because there's a -- the FASB had been working for

year and years and years on a major revenue recognition

project, and they issued a new standard on revenue recognition

that was very broad and very pervasive in its effect. That

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 123 of 198 PageID: 19376
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:06

04:06

04:07

04:07

04:07

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4028

standard has not yet become effective, and will become

effective for SEC registrants only -- well, it will be

effective in the next year; it will be effective for other

entities in the years following that.

I did look at the -- as part of my preparation here, at

the portion of that new standard that helps distinguish

between those costs that should be treated as a reduction of

revenue versus those that should be treated as an expense, and

I performed that analysis and came to the same conclusion

there are fewer indicators of --

MR. STEVENS: If I could just object, your Honor --

THE COURT: Well, wait; let him finish the answer.

MR. STEVENS: The only concern I have, Judge, is I

have about two minutes left so I wanted to quickly get in --

THE COURT: You asked the question, so we might as

well get the answer.

MR. STEVENS: I didn't expect it to be so long.

THE COURT: So Mr. Holder, you may continue.

THE WITNESS: That supersession, which is not yet

effective, restated the indicators of reporting net versus

reporting gross, in my view it did not change them

substantively. And in the instant case I still think that the

revenue, even if this new standard was effective today or --

and it's not, or back in 2012 and it's not, you would still

get the same result, that these costs should be reported as an

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 124 of 198 PageID: 19377
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:07

04:08

04:08

04:08

04:09

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4029

expense and not as a reduction of revenue.

BY MR. STEVENS:

Q. Okay. And that's for financial reporting; correct?

A. Well, it's for -- well, all of it is financial reporting.

I mean managerial accounting relies on financial reports.

Q. And your opinion based on this is that this specific

standard applies the FMG; correct?

A. I think FMG would use this standard and its predecessor

which was identical, and when the new one becomes effective

they will use it, in their financial reports which are

presented in conformity with GAAP.

Q. Okay. I want to direct your attention to page 3 of this

document.

A. I am there.

Q. And that is -- the top part is where you indicated that

-- I believe that you believe that FMG fell within the

confines of this -- of this EITF; correct?

A. Well, I think you need to read the whole EITF in its

entirety and understand it collectively. The part I alluded

to, though, begins on page 4 where the title indicators are

gross revenue reporting, and the next eight paragraphs march

through each of those, the first one there paragraph 7 is the

company's the primary obligor, the second one's the inventory

thing, but that's what I referred to, not page 3 specifically.

But I think you ought to read the entire document as you try

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 125 of 198 PageID: 19378
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:09

04:09

04:09

04:10

04:10

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4030

to understand it and implement it.

Q. Okay. And that was within -- you did that in what is

your the demonstrative exhibit Defendant's Exhibit 2053 which

references FASB 605-45; correct?

A. Yes, sir.

Q. And as it relates then to FMG, if FMG wasn't excluded

from this regulation, then it would be inappropriate to report

the sub-advisory fee and sub-administration fee as expenses

pursuant to this; correct?

A. If this didn't -- I'm sorry.

MR. HORA: I was just going to say objection, lack

of foundation.

THE COURT: Frank, can you repeat the question?

(Question read back by the reporter.)

THE COURT: Can you explain what you --

MR. HORA: I just don't know what basis he has to

suggest that FMG's excluded from this guidance.

MR. STEVENS: I'll get there, Judge.

THE COURT: So you're going to go through this

issue?

MR. STEVENS: I am.

THE COURT: Okay. You may.

BY MR. STEVENS:

Q. Okay. So as it relates -- I want you to look at

paragraph 4 on page 3.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 126 of 198 PageID: 19379
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:10

04:11

04:11

04:11

04:11

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4031

A. I'm sorry; page 4 of?

Q. Paragraph 4 on page 3 of the EITF 99-9 (sic).

A. Yes, yes.

Q. And paragraph 4 says: This issue -- and that's relating

to the EITF; correct?

A. Yes.

Q. Excludes from a scope transactions for which guidance is

provided by categories A and B above of the GAAP hierarchy.

Correct?

A. You've read that accurately, yes.

Q. Including -- and I want you to skip down to the fourth

bullet point. Do you see that?

A. I do, yes.

Q. And it says: Revenue transactions in specialized

industries addressed in AICPA accounting and auditing guides,

and in then parentheses, for example, airlines, casinos,

investment companies and so on. Do you see that?

A. I do.

Q. So if FMG pursuant to the FASB is treated as an

investment company, then they would be excluded from the

guidelines of the EITF; correct?

MR. HORA: Objection; foundation. FMG is not an

investment company. There is no foundation for him to suggest

that it's an investment company. That's...

THE COURT: Have you finished your argument?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 127 of 198 PageID: 19380
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:11

04:12

04:12

04:13

04:13

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4032

MR. HORA: I have, yes.

THE COURT: All right. Mr. Stevens?

MR. STEVENS: There's going -- I'm going to direct

him to the specific provision that's going to say that

pursuant to FASB, which is what I referenced, which is what

these EITFs are generated from and guidance from, would define

FMG as an investment company pursuant to the FASB.

THE COURT: So, I don't recall this ever coming up

during the course of the trial to tell you the truth.

But, Mr. Holder, do you believe that -- or do you

have an opinion as to whether or not FMG is an investment

company, under these guidelines?

THE WITNESS: Well, it doesn't say this here. I

mean investment companies typically get characterized as those

covered by the Investment Company Act of 1940. What I can

tell you I did do in answer to your question, and I think it

is pertinent, is I did look at the investment company's

accounting and audit guide, and I did look at the insurance

company's accounting and audit guide, although I don't believe

it is mentioned here, although insurance and reinsurance

premiums are, and I did not find guidance for this kind of a

transaction in those guides.

MR. STEVENS: So if I could then, your Honor, direct

his attention to what I've had premarked as P-787.

THE COURT: Does your adversaries have a copy of

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 128 of 198 PageID: 19381
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:13

04:13

04:13

04:14

04:14

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4033

this?

MR. STEVENS: They do, your Honor.

BY MR. STEVENS:

Q. And Dr. Holder, are you familiar with this document in

any way?

A. Generally, yes.

Q. And it's actually a FASB accounting standards update;

correct?

A. It is, yes.

Q. And it's entitled Financial Services Investment

Companies; correct?

A. I see that, yes.

Q. Okay. I want to turn your attention to page 12, of this

document.

A. I am there.

Q. Page 12 begins, assessment of investment company status.

Correct?

A. I see that, yes.

Q. And it defines pursuant to number 946-10-15-4, that: An

entity regulated under the Investment Company Act of 1940 is

an investment company under this topic. Do you see that?

A. Yes.

Q. And that's the FASB guidance as it relates to investment

company status; correct?

A. Yes.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 129 of 198 PageID: 19382
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:14

04:15

04:15

04:15

04:15

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4034

Q. Okay, thank you. As it relates to that document I just

showed you, is this a document that -- the FASB accounting

standards update, is this a document that's relied on by

individuals in your field?

A. Yes, working in the appropriate realm, yes.

Q. Okay. Is it authoritative as it relates to the

accounting standards pursuant to the FASB?

A. It's an authoritative part of generally accepted

accounting principles, yes.

Q. And as you indicated you're familiar with this --

MR. STEVENS: Your Honor, at this time plaintiffs

would move into evidence P-787.

THE COURT: P-787?

MR. STEVENS: Yes, your Honor.

THE COURT: Any objections?

MR. HORA: No objection.

THE COURT: All right, admitted.

(Plaintiff's Exhibit 787 was marked into evidence.)

BY MR. STEVENS:

Q. And you're aware that FMG uses the result of its cost

allocation methodology, which we've just been talking about,

in their profitability analysis that's presented to the EQAT

Board; correct?

A. I understand that, yes.

Q. And are you also aware that they do not report the

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 130 of 198 PageID: 19383
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:16

04:16

04:16

04:17

04:17

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4035

roughly 49 million of allocated expenses that result from the

FMG-CAM on their audited financial statements?

A. I have that understanding.

Q. Okay. And are you also aware then that FMG never

actually pays a $49 million in allocated expenses to AXA?

A. I don't recall seeing documents or evidence that suggests

that they do.

Q. So then basically the only reason for the cost allocation

methodology is to report profitability to the Board; correct?

A. I don't know if that's the only reason, but it's one that

I understand exists.

Q. Okay. And by including the $49 million as expenses in

its presentation to the Board, that decreases the profit FMG

reports to the Board related to the services rendered to the

EQAT under the Investment Management Agreement as well as the

Administration Agreement; correct?

A. Yes. The profitability analyses, or at least some of

them I looked at, don't show the portions of those 49 million

for individual elements of that, but eventually down at the

bottom they are included in the overall profitability

assessment.

Q. And also including those costs then of 49 million would

also decrease the profit margin FMG reports to the Board;

correct?

A. That would have that effect, yes.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 131 of 198 PageID: 19384
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:17

04:17

04:18

04:18

04:18

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4036

MR. STEVENS: I have nothing further, your Honor.

THE COURT: All right. Redirect?

MR. HORA: I don't have any questions.

THE COURT: Okay. So, wait; don't step down yet,

Mr. Holder. You testified a bit about the DAC.

THE WITNESS: Yes, sir.

THE COURT: All right. Could you just go through

how that DAC and the formula that's used for cost allocation

works? You know I'm a novice at this; I've been spending six

weeks here, but we've heard a lot about DAC and they testified

about it. But if you could, just tell me how it works in this

cost allocation issue.

THE WITNESS: Sure. Deferred acquisition costs, or

DAC, arise when there's an origination of insurance policies,

other investment vehicles. Compensation may be paid, for

example, to an agent that placed the policy up front; and yet

that compensation is going to benefit the paying company, say

AXA, over a relatively long period of time.

THE COURT: I see.

THE WITNESS: There are a number of actuarial

assumptions that go into the period over which, as I

understand it at least, DAC gets allocated generally. And in

the questions that were being posed to me, there were a couple

of those that are the normal DAC allocation, that is done to

amortize those -- those deferred acquisition costs that will

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 132 of 198 PageID: 19385
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:19

04:19

04:20

04:20

04:20

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4037

appear on a balance sheet, over a period of time.

THE COURT: A period of years.

THE WITNESS: There is a management function that

frequently requires actuarial evaluation, and it doesn't

necessarily require entry into the -- to the accounting

records, but there's also a number of calculations that will

update the actuarial assumption from time to time. As I

understand it, and there are better people to explain this

down at this level than me I think from the company, but

essentially, those actuarial adjustments are not considered

part of the day-to-day business of AXA; they're not the kinds

of transactions like paying someone a salary to render

services, whether that's one of these 50 people or whether

it's someone in data processing or in shareholder -- you know,

the amortization of DAC that is calculated does become part of

that expense stream.

The actuarial valuations that occur is this large

674 million that is excluded = from the recurring operating

expenses, the business based expenses of AXA, as I understand

it, your Honor.

THE COURT: All right. So when you're doing this

cost allocation, how does this impact how it affects the

Board? Is that too --

THE WITNESS: No, sir, I certainly --

THE COURT: Do you understand what I'm trying to get

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 133 of 198 PageID: 19386
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:20

04:21

04:21

04:22

04:22

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4038

to?

THE WITNESS: No, your Honor --

THE COURT: I was trying to figure out if the Board

members are sitting there, and they're confronted with this

cost allocation theory, and they're looking at this DAC, what

impact does the DAC have on the cost allocations? And I guess

what happens with the -- they're watchdogs for investors; so

what happens to the investor?

THE WITNESS: I would hesitate to -- and I would not

try to speak as to what goes on in their minds and so on. I

can speak to the information that's presented to them, and

certainly Board members, you know, have an obligation to probe

and raise questions in my own view at least, when they're

hearing information, when they're receiving information,

having said all of that the information shows that DAC

adjustment, it shows it being removed from the daily operating

expenses; that DAC adjustment could go the other way. It

could reduce expenses, as well as increase expenses through

its presence.

And so when you remove its effects that could

cause the -- well, it wouldn't cause it without taking great

exception to that, but the costs that remain to be allocated

could be greater or less than the costs to be allocated with

that DAC actuarial adjustment in it. But the primary reason

it's excluded is it's a valuation, not part of the

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 134 of 198 PageID: 19387
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:22

04:23

04:23

04:23

04:24

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4039

amortization of the costs that in fact were paid, and that are

being charged over a period of time.

THE COURT: All right. So they're deleting the DAC

from the cost allocation that -- of the expenses that are

borne by the investors?

THE WITNESS: They are -- they are eliminating this

actuarial DAC adjustment, but not the DAC amortization.

THE COURT: The adjustment. So that's the one that

doesn't happen in the ordinary course of day-to-day --

THE WITNESS: That is my understanding yes, your

Honor.

THE COURT: Okay, thank you. So, you know, we're

here looking at this -- the plaintiffs have this suit, that

the Board of the funds has breached a fiduciary duty to their

investors because they've allowed these expenses. And I'm

oversimplifying this, but they've allowed these expenses of

FMG that are beyond reasonable.

So, from looking at the documents in this case, do

you think that the Board has been presented with the

appropriate types of documents necessary to evaluate those

expenses?

THE WITNESS: Obviously this Board, like any board,

is dependent upon the information that flows from management.

They will take comfort from the audit opinion expressed by the

internal -- by the external independent auditor on its

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 135 of 198 PageID: 19388
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:24

04:24

04:25

04:25

04:26

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4040

financial statements; they will take comfort from reports they

received from internal audit.

This process of allocation that has occurred I

think, it seems to me it was explained to the Board members in

a way that was lucid and sufficiently informative to allow a

Board member to raise questions if they didn't understand some

of the things being presented in these documents that weren't

clear to them.

THE COURT: So, the entire case comes -- well, I

shouldn't say the entire case. But what always happens is we

get back down to the basis points and the fees that are

charged. So, we're always trying to get back to well, are the

basis points for the fee charged within this reasonableness

factor as to what other funds, not controlled by FMG, are

doing and things -- what the other people in the industry are

doing. And do you think the information the Board had shows

that type of differentiation well enough? If you know.

THE WITNESS: I don't know what information might

have gone to the Board about other companies in the industry,

and, you know, the competitive pressures under which AXA might

be operating to price its products in a way that, you know,

would be attractive to investors. So I'm -- I'm unaware of

that.

I do think that the Board would have become aware of

the total costs incurred by AXA, and that would have been

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 136 of 198 PageID: 19389
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:26

04:26

04:27

04:27

04:28

Holder - Cross - Stevens

United States District Court

Trenton, New Jersey

4041

considered reasonable -- reasonably considered. It would have

been reasonable to consider those costs reliable; I think

there is the disclosure of the DAC exclusion; I -- I think the

cost allocation process based on these documents was explained

in sufficient detail, that someone could comprehend what was

going on.

THE COURT: All right.

THE WITNESS: I hesitate to go further.

THE COURT: No, that's fine. I had one more

question. So, from your review of the industry -- and I

suppose what we're talking about AXA type of companies, and

these variable annuities that they have and things of that

nature; so, do you think that competitors of FMG or AXA let's

say, that they would have the same type of profitability

calculations that were being used in this case? You know,

like the DAC, for instance, do you think they all have this

DAC issue?

THE WITNESS: They probably all have the DAC issue,

because that's just part of the process, it's part of the

actuarial work that is necessary, all the way down to pricing

products. How they treat it, how they assess profitability,

your Honor, I -- I don't have that general knowledge. I feel

obviously rather strongly about if these costs are

appropriately allocated, the manner in which they're presented

as an expense rather than a reduction of revenue, makes --

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 137 of 198 PageID: 19390
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:28

04:29

04:30

04:30

04:30

James - Direct - Hood

United States District Court

Trenton, New Jersey

4042

makes sense. It's entirely appropriate.

THE COURT: All right, thank you. You may step

down.

(Witness excused.)

THE COURT: Next witness?

MR. MURPHY: Your Honor, I believe Ms. Hood will

introduce herself. I believe we're going to call our next

expert, Mr. Chris James to the stand.

(CHRISTOPHER M. JAMES, Ph.D.), affirmed.

THE COURT: Could you just spell your last name once

you're seated?

THE WITNESS: My Last name is spelled J-a-m-e-s,

first name Christopher.

THE COURT: Thank you.

MS. HOOD: Your Honor, before I begin, since this is

my first appearance in this trial, I'd just like to introduce

myself; I'm Andrea Hood with the Milbank firm on behalf

defendants.

THE COURT: Good afternoon, Ms. Hood.

MS. HOOD: Thank you. May I?

THE COURT: You may. Please start.

MS. HOOD: Thank you.

(DIRECT EXAMINATION OF CHRISTOPHER M. JAMES, Ph.D. BY MS.

HOOD:)

Q. Dr. James, what is your current occupation?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 138 of 198 PageID: 19391
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:30

04:31

04:31

04:31

04:31

James - Direct - Hood

United States District Court

Trenton, New Jersey

4043

A. I'm a professor of finance, I have two appointments

currently, one at Cambridge University in the UK, and the

other at the University of Florida, where I'm the William H.

Dial Eminent Scholar in Finance.

Q. And how long have you held your position at the

University of Florida?

A. My daughter's 26; so 26 years.

Q. And how about at the University of Cambridge?

A. I've been there since the fall, last fall.

Q. Dr. James, can you please tell the Court about your

educational background beginning with college?

A. Sure. I have an undergraduate degree in economics and

mathematics, Master's in business administration and finance,

and a PhD in economics, specializing in industrial

organization, finance, and applied statistical analysis.

Q. And from what academic institution did you receive your

BA?

A. From Michigan State University.

Q. And your MBA?

A. From the University of Michigan.

Q. And your PhD?

A. Another Michigan institution, University of Michigan.

Q. And when did you receive your PhD in economics?

A. I received my PhD in 1978.

Q. Since receiving your PhD in 1978, have all of your

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 139 of 198 PageID: 19392
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:32

04:32

04:33

04:33

04:33

James - Direct - Hood

United States District Court

Trenton, New Jersey

4044

employment positions been in the area of economics?

A. Finance and economics, yes. Primarily in the area of

finance as it applies to financial institutions such as banks,

mutual funds, insurance companies, that type of thing.

Q. And have you ever been involved in government service?

A. I have, I've had several stints with the government, I

can do it in reverse chronological order if you'd like. From

2008 to 2014 I was a scholar at the San Francisco Federal

Reserve Bank, advising the President on issues regarding

primarily capital management at banks, under the regulatory

purview of the San Francisco Fed, as well as some issues

arising from the financial crisis.

Prior to that I held appointments at the Federal

Reserve Bank Board of Governors.

MR. MURPHY: I'm just go to move your mic a little.

A. Okay. I have held several appointments at the Federal

Reserve Bank -- Federal Reserve Board of Governors as a

consultant on issues regarding regulatory policy. Prior to

that at the FDIC, Federal Deposit Insurance Corporation,

again, as a consultant; and then at the U.S. Department of

Treasury as a senior economic advisor to the Comptroller of

the Currency, advising the comptroller on economic matters

that arose in the regulation and examination and oversight of

commercial banks and financial institutions.

I've also held what I'll call a quasi government

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 140 of 198 PageID: 19393
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:34

04:34

04:35

04:35

04:35

James - Direct - Hood

United States District Court

Trenton, New Jersey

4045

position; I was appointed and approved by the SEC as an

independent distribution consultant for the Janus Funds to

administer a fair fund settlement over a period of about four

years. Janus Funds are mutual funds that were subject to a

regulatory settlement, and my job was to determine the

appropriateness of various allocation schemes, and to if

disagreements arose between the Janus Funds and the SEC as to

the appropriateness of a particular allocation, that I was the

arbitrator.

In addition I've worked as a consultant for -- at the

Office of the Chief Economist at the SEC, on issues regarding

mutual fund pricing and performance issues.

Q. Okay, thank you. And I just want to break that down a

little bit and see if we can provide the Court with a little

more detail regarding what your responsibilities were in each

of those government service capacities.

A. Sure.

Q. So, with respect to your -- before I get to that, all of

these positions that you've just described that you've held in

government service capacity, they've all been in the capacity

of a financial economist?

A. Yes.

Q. You mentioned that you've held a role with the Department

of Treasury; can you provide any detail as to -- any

additional detail as to what your responsibilities were there?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 141 of 198 PageID: 19394
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:36

04:36

04:37

04:37

04:37

James - Direct - Hood

United States District Court

Trenton, New Jersey

4046

A. Sure. The Comptroller of the Currency is the primary

regulator of national banks, and as a senior advisor to the

comptroller I would advise -- it was John Heimann at the time;

on issues regarding either regulatory developments or

proposals, examination practices as it pertains to banks. So,

for example, when I was at the comptroller's office, one of

the issues was the extent to which it might be appropriate to

have commercial banks through their holding company serve as

asset management firms, broadening the bank product offerings.

And so we looked very carefully at, for example, what

implications those types of activities would have for the

safety and soundness of the banks that we regulated, what

issues arose with respect to the risks that the bank would be

subject to; if they engaged in asset management, and as well

as potential synergies with other services or activities that

the bank engaged in.

Q. And I believe I just heard you refer to asset management

firms; when you referred to asset management firms is that

term synonymous with an investment manager like FMG?

A. Yes. So, the issue is really should banks be able to

provide mutual fund products to their customers, and serve as

an investment manager and administrator for those products.

Q. And you just went through some of your responsibilities

in your role as a scholar and consultant at the Federal

Reserve Bank in San Francisco?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 142 of 198 PageID: 19395
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:38

04:38

04:38

04:39

04:39

James - Direct - Hood

United States District Court

Trenton, New Jersey

4047

A. Right.

Q. With respect to that role, can you provide anymore detail

about your responsibilities there that perhaps would be

relevant in this case?

A. Sure. The banks and holding companies are regulated in

part based on the amount of capital that they have. The idea

is to have capital sufficient to cover potential losses

arising from say operational issues or increased losses and

the like. And I've been part of a team that has evaluated the

adequacy of both the risk management systems, as well as the

capital of major banks within the regulatory purview of the

San Francisco Federal Reserve.

And that would include looking at risk management

issues as it pertains both to the bank itself, as well as in a

holding company context subsidiaries that, for example, a bank

like Wells Fargo offers mutual funds, and serves as an

investment manager for some of its funds, and then sub-advises

out of those funds.

Q. And in that capacity in looking at the risks that an

investment manager that's housed within a bank might face,

what types of risks do you look at?

A. We typically look at -- it goes by various terms,

sometimes it's referred to as operational risk, sometimes it's

referred to as business risk, under the risk-based capital

standards that are applied to banks we call it operational

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 143 of 198 PageID: 19396
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:39

04:40

04:40

04:41

04:41

James - Direct - Hood

United States District Court

Trenton, New Jersey

4048

risk; so those are things such as risks arising from

operational failures or mistakes. Certainly reputational

risks that arise from either those operational mistakes or

poor product performance.

In addition, regulatory and litigation related risks

that may impose losses on the bank. As well as, you know,

risk in terms of the operation of the businesses to the extent

that you say you have a large decline in the volume of

business, what implication would that have in terms of the

company's ability to earn a profit.

Q. And can you describe for the Court how it came about that

you came became involved in analyzing these types of risks

while you were at the Federal Reserve?

A. Sure. That's part and parcel of what I do as a financial

economist and what I teach my students when I teach financial

institutions management courses. With respect to operational

risks, I was a part of a major project that was undertaken at

the Bank of America to assess operational risks in primarily

it's non-bank activities, so it's in trust activities, for

example, and other non-bank related activities.

I wrote a paper that's been widely cited on how you go

about measuring operational risks, and how they should be

considered in terms of evaluating say the profitability of a

financial institution. And it was through that work that, you

know, I did a number of presentations, some at the Federal

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 144 of 198 PageID: 19397
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:41

04:42

04:42

04:43

04:43

James - Direct - Hood

United States District Court

Trenton, New Jersey

4049

Reserve, and one thing led to another and I've been doing it

ever since.

Q. You also mentioned that you've in I believe two stints

have held consulting positions with the Office of the Chief

Economist at the SEC?

A. Yes, I was brought in on a couple of occasions to address

certain issues that the chief economist, who's the -- as the

name suggests, the chief advisor to the commission on economic

management. One had to do with issues called soft dollar

brokerage, the payment for research services, by mutual funds

and their advisors.

The second was to do with issues concerning pricing of

mutual fund underlying portfolios, to ensure that the net

asset value, which is what's posted at the end of each day

where you buy and sell a mutual fund at, is not stale, meaning

it reflects accurately the value of the underlying portfolio

of a mutual fund.

Q. And you also mentioned that you served as the independent

distribution consultant for the Janus Funds; what was the time

period where you've held that position?

A. 2003 to 2006 I believe.

Q. And can you provide a little more detail on what your

responsibilities were as the independent distribution

consultant for the Janus Funds?

A. Yes. I was approved by the SEC to manage what's called a

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 145 of 198 PageID: 19398
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:43

04:44

04:44

04:45

04:45

James - Direct - Hood

United States District Court

Trenton, New Jersey

4050

fair fund settlement, which was a hundred million dollar

settlement that Janus entered into with the SEC pertaining to

damages that arose from allowing what are called market timers

to come into the fund and trade in and out of the various

mutual funds. And both to assess the damage that was caused

by that, to allocate it to fund holders, in a way that was

reasonably related to the harm that was caused by having this

rapid trading in and out of mutual funds by certain large

investors.

Q. And moving away from your roles in government service,

and without revealing any confidential information, have you

done any -- have you ever been hired by investment managers to

perform any consulting work?

A. I have, I've been hired by several complexes to address

issues concerning certainly pricing issues, meaning fee

related issues; and risk assessment issues, in other words,

assessing risk exposure at various of the complexes; as well

as working on some product development issues.

Q. Did any of your consulting work involve in any way

economies of scale?

A. Oh, sure. When -- when looking at and examining some of

the fee structures at the various complexes that I've been

employed at to look at issues regarding, for example,

profitability, the cost structure, how cost structures might

change as the scale of operation changes.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 146 of 198 PageID: 19399
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:45

04:46

04:46

04:46

04:47

James - Direct - Hood

United States District Court

Trenton, New Jersey

4051

Q. And prior to your current academic positions at the

University of Florida and the University of Cambridge, have

you held academic positions at any other universities?

A. I have, I've taught at -- in terms of full-time at other

institutions, such as the University of New South Wales, the

University of Oregon, and the University of Michigan.

Q. And have all those positions been as a professor of

economics or finance?

A. They have been.

Q. And you've taught courses in those positions?

A. I've taught courses, my coursework focuses primarily on a

couple of issues; generally corporate finance, so

corporation's finance and sales. I tell a teach a course in

financial institutions, which is the economics and management

of financial institutions, such as banks, mutual funds,

insurance companies, hedge funds, private equity funds; and I

teach a course in what's called organizations in markets,

which is a course that is really targeted towards Master's and

business administration students on industrial organization;

what factors determine an organization size, the extent to

which it out-sources versus in-source, that type of thing.

Q. And the courses you've taught, at what levels have they

been at?

A. For the last 24 years it's been graduate students, either

Master's or PhD level. I've taught early in my career

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 147 of 198 PageID: 19400
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:47

04:48

04:48

04:48

04:49

James - Direct - Hood

United States District Court

Trenton, New Jersey

4052

undergraduates, but I haven't done that in a while.

Q. And have you authored any articles as an economist?

A. Yes, I am actively engaged in research; I think I've

published in my career in terms of peer-reviewed scholarly

journals maybe over 50, and in other publications another 50.

Q. And without going through every publication, can you give

the Court a sense of what subject matters your publications

have addressed?

A. They focused primarily again on financial institutions;

some issues -- papers on that address issues in banking;

papers that address issues in terms of risk management; papers

that address issues in terms of mutual fund performance

evaluation, and structure; so it's across a wide range of

areas.

Q. Dr. James, do you hold any -- do you serve on any

editorial boards?

A. I do. I currently serve I believe on five boards, and

have served on pretty much have every -- each one of the top

tiered journals in my field, as either an associate editor, or

as the editor.

Q. And what are some of those journals?

A. The Journal of Finance; the Journal of Financial

Economics; the Journal of Financial and Quantitative Analysis;

the Journal of Financial Services Research; the Journal of

Financial Mediation, which is a journal targeted towards

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 148 of 198 PageID: 19401
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:49

04:49

04:50

04:50

04:51

James - Direct - Hood

United States District Court

Trenton, New Jersey

4053

issues regarding financial institutions; the Journal of

Economics and Decision Science; there's a couple others, but

that's what comes to mind as I sit here.

Q. And what are your responsibilities on these editorial

boards?

A. The editorial board serves as a -- really a gatekeeper,

with the editor or associate editor typically makes a decision

as to who will review a paper, and then ultimately the

decision as to whether the publish a paper is made by the

editor or one of the associate editors. And that decision is

based on, you know, whether the study advances our knowledge

in a particular area in a significant way, and whether the

paper employs methodologies that are consistent with the

scientific method in my field.

Q. And have any of the proposed articles you've had to deal

with as an editor or associate editor on these boards dealt

with mutual funds?

A. A number of them have. Having a specialization in

financial institutions, when I'm on the board I get most of

the papers that deal with financial institutions. So, when I

was associate editor at the Journal of Finance, I'd get maybe

25 manuscripts on issues regarding mutual funds in a one or

two year time period. Similarly, with the Journal of

Financial Economics, most of the papers that I either referee

myself or advise on publication are papers in the financial

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 149 of 198 PageID: 19402
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:51

04:51

04:52

04:52

04:52

James - Direct - Hood

United States District Court

Trenton, New Jersey

4054

institutions area.

Q. Dr. James, have you ever been permitted to testify as an

expert witness at trial?

A. I have.

Q. And approximately how many times?

A. I've been -- I've been in the profession a long time;

about 25 times.

Q. And by what tribunals have you been permitted to testify?

A. Certainly in federal courts, state court, SEC

proceedings; that's what comes to mind.

Q. And has that all been as an economist?

A. Yes.

Q. So recognizing that we've probably gone through some of

this already in going through your prior experience and

positions that you've held, can you describe for the Court

what, if any, experience you have relating to economies of

scale?

A. Oh, well, my -- that begins back when I was a PhD student

at the University of Michigan, my field was industrial

organization; one of the first papers I did in order to

advance to candidacy was on economies of scale, measurement,

both in terms of analysis statistical analysis of the

relationship between scale of operation and costs, as well as

applying what was called a survivor technique to look at,

where whether within a particular industry's firm's clustered

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 150 of 198 PageID: 19403
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:53

04:53

04:53

04:54

04:54

James - Direct - Hood

United States District Court

Trenton, New Jersey

4055

at a particular size, that would suggest that that's the size

in which most economies of scale are realized; or the size

distribution of firms distributed along a wide range

suggesting that there's really no significant economies of

scale, because you have small firms in the industry and big

firms in the industry and they compete with one another and

survive.

Q. And are there any other -- is there any experience you've

had that's related to economies of scale?

A. I certainly looked at those issues as I mentioned in a

consulting context, and those were issues, you know, that we

looked at quite carefully when I was at the comptroller's

office and in other work I've a done at the government

agencies.

Q. And somewhat relatedly, what if any experience do you

have relating to the extent to which economies of scale can --

in the investment management context, can be shared with fund

investors through breakpoints in the fund's fee schedules?

A. That's something I've certainly looked at in this case,

and I've looked at both in other cases as well as in a

consulting role.

Q. And again, without revealing any confidential

information, can you generally describe how that analysis of

breakpoints as they relate to economies of scale would work?

A. Sure. The economies of scale, so we're clear, refer to

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 151 of 198 PageID: 19404
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:55

04:55

04:55

04:56

04:56

James - Direct - Hood

United States District Court

Trenton, New Jersey

4056

how total unit costs change as the volume of a particular

product increases; so as scale of operation increases, what

happens to total unit costs. And we say that there are

economies of scale if you observe declines in total unit cost

as a scale of operation increases.

And often times you'll find situations in which either

there are economies of scale in a particular range of

operation, or scale of operation, and then diseconomies of

scale, meaning unit costs are actually increasing as the scale

of operation increases.

So, it's really about looking at, to the extent that's

possible, of looking at unit costs. You get some insights

into the existence of economies of scale by looking at the

structure of an industry, so if you see lots of firms within

an industry with varying size ranges, and you see a

distribution of fees across a variety of size ranges, that's

going to give you some indirect evidence of whether or not

economies of scale exists.

Q. And as a general matter, again, without revealing any

confidential information from your prior consulting jobs,

how -- how in the past have you analyzed how breakpoints fit

into what you just described, breakpoints in the fund's fee

schedules?

MR. A. LAKIND: Your Honor, I'm sorry to interrupt;

is this beyond the voir dire? I'm not sure if this is beyond

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 152 of 198 PageID: 19405
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:56

04:56

04:57

04:57

04:58

James - Direct - Hood

United States District Court

Trenton, New Jersey

4057

the voir dire or we kind of morphed into direct --

THE COURT: Ms. Hood hasn't offered the doctor as an

expert witness yet, so I thought we're still doing the voir

dire.

Is that right, Ms. Hood?

MS. HOOD: That's correct, your Honor.

MR. A. LAKIND: Okay.

THE WITNESS: Well, typically when you're looking at

breakpoints you're looking at what happens to the total fee

paid by a fund holder, as the size of the fund or assets under

management increases. And one can compute what savings arise

from a breakpoint by looking at what the fees would be if

there wasn't a breakpoint, and comparing them to what the fees

are with a breakpoint, and that difference is an economy

arising from the breakpoint.

BY MS. HOOD:

Q. And these are analyses that you performed in the past?

A. Yes.

Q. Okay. Again, we may have covered some of this through

your prior experience, but could you describe for the Court

what your experience is as it pertains to mutual fund fees?

A. Well, as I indicated it's something that I've done my own

research on, I've refereed and edited papers on those issues;

I've a worked as a consultant to various mutual fund complexes

on those issues; and as I mentioned, I've been a consultant to

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 153 of 198 PageID: 19406
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:58

04:58

04:59

04:59

04:59

James - Direct - Hood

United States District Court

Trenton, New Jersey

4058

the chief economist of the SEC on those issues.

Q. And with respect to the risks that investment manager

managers like FMG may face, what, if anything, is your

experience in that area?

A. Well, most recently looking at various entities that

are -- that come under the purview of the San Francisco Fed in

terms of analyzing their overall risk exposure on a variety of

dimensions, including operational risks as they pertain to

both their banking activities, as well as their non-banking

activities.

MS. HOOD: Your Honor, defendants at this time offer

Dr. James as an expert in economics, and submit that he is

qualified by reason of his experience and training and

specialized knowledge to offer opinions in this case in --

with respect to four main areas: Whether plaintiffs' experts

have demonstrated that FMG realizes any economies of scale

with respect to the funds at issue; secondly, the extent to

which any such economies of scale have been shared by FMG with

fund investors through breakpoints in the fund's fee

schedules; third, the level of the fund's fees, the fees for

the funds at issue and how they compare to fees charged to

other mutual funds in the marketplace; and finally, the risks

that FMG as an investment manager faces with respect to

servicing the funds.

THE COURT: All right, thank you.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 154 of 198 PageID: 19407
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

04:59

05:00

05:00

05:00

05:00

James - Direct - Hood

United States District Court

Trenton, New Jersey

4059

Any objections, Mr. Lakind?

MR. A. LAKIND: Yes, your Honor, might I voir dire

the witness?

THE COURT: You may voir dire the witness.

So, it's 3:52.

(VOIR DIRE ON QUALIFICATIONS BY MR. A. LAKIND:)

Q. Good afternoon, Mr. James.

A. Good afternoon.

MR. A. LAKIND: May I proceed, your Honor?

THE COURT: You may.

Q. Mr. James, other than in this case, you have never been

called upon to assess the types of risks confronted by

investment managers in the mutual fund industry; is that

correct?

A. No, that's not correct.

Q. Other than this case, have you ever been called upon as

an expert witness to assess whether -- strike that. You're

not offered in that area; I'm sorry.

Have you ever been retained to do any work in

connection with a sub-advised mutual fund?

A. Have I ever been retained to do any work with respect to

a sub-advised mutual fund?

Q. Yes, sir.

A. Yes.

Q. And what was that work?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 155 of 198 PageID: 19408
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:01

05:01

05:01

05:01

05:02

James - Direct - Hood

United States District Court

Trenton, New Jersey

4060

A. In terms of the consulting work that I did on a couple of

complexes looking at various fee structures as it pertains to

both their advisory role and the sub-advisors that they

retained.

Q. Have you had occasion to author any publications dealing

with sub-advised mutual funds?

A. No.

Q. Have you ever testified in a case in connection with a

sub-advised mutual fund?

A. I have not.

Q. Have you ever been -- strike that.

Have you ever been called upon to assess the

relationship between the fees and services provided by a fund

advisor in comparison to the fees and services provided by a

sub-advisor?

A. Just for point of clarification, when you say called

upon, do you mean as an expert witness?

Q. Yes, sir, as an expert witness.

A. Yes, I've done those in consulting activities; I haven't

testified in court as an expert witness on that issue.

Q. Have you ever been called upon to assess whether

economies of scale exist in connection with the management of

a sub-advised mutual fund?

A. Again, I've not testified in court on that issue; I

certainly examined that issue in other cases.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 156 of 198 PageID: 19409
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:02

05:02

05:02

05:02

05:03

James - Direct - Hood

United States District Court

Trenton, New Jersey

4061

Q. In how many occasions?

A. Two or three as I recall.

Q. And for what purpose?

A. It was in the context of -- when you say called upon, in

the context of serving as an expert witness.

Q. Have you ever had occasion to author any publications

dealing with variable annuities?

A. No.

Q. Have you ever had occasion the testify as an expert in

connection with variable annuities?

A. I'm sorry?

Q. Have you ever had occasion to testify as an expert in a

case involving variable annuities?

A. I don't believe so.

Q. Now, you have also been an expert in bankruptcy cases; is

that correct?

A. That's correct.

Q. And you've been an expert in real estate matters; is that

correct?

A. That's correct.

Q. And in consumer fraud matters?

A. That's correct.

Q. You've been an expert in product liability matters?

A. That's correct.

Q. And you've been an expert in pharmaceutical matters?

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 157 of 198 PageID: 19410
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:03

05:03

05:03

05:03

05:04

James - Direct - Hood

United States District Court

Trenton, New Jersey

4062

A. I have.

Q. And you've testified as an expert in healthcare matters?

A. That's correct.

Q. And you're an employee of Cornerstone, are you not?

A. I'm an advisor to Cornerstone, I'm not an employee.

Q. In connection with your work in this case, you billed

about $200,000; is that correct?

A. I believe at the time of my deposition it was around 200.

Q. And what is it today, do you know?

A. Maybe another hundred hours, or so.

Q. And your compensation from Cornerstone is about $1.1

million annually?

A. That's correct.

Q. And you also have a note where Cornerstone owes you

somewhat over a million dollars; is that correct?

A. That's correct.

Q. And is the payment of that note contingent in any way on

the outcome of any expert witness work that you do?

A. No.

Q. Prior to testifying today -- I'm sorry. Roughly what

percentage of your professional time in the last five years

has been devoted to the study of issues relating to investment

companies?

A. Percentage of my professional time?

Q. Yes, sir.

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 158 of 198 PageID: 19411
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:04

05:04

05:04

05:05

05:05

James - Direct - Hood

United States District Court

Trenton, New Jersey

4063

A. 10 or 15 percent.

Q. Last four years have you ever testified in any case

involving mutual fund fees?

A. Yes.

Q. And on how many occasions?

A. I believe on three different occasions.

Q. Sir, you're familiar with 15(c) material, are you not?

A. Yes.

Q. And have you reviewed all of the 15(c) material that's

the subject of this case?

A. I'm not sure what you mean by all of the 15(c) material;

I've reviewed 15(c) material.

Q. But you culled the material that you thought was relevant

and clearly did not review everything; is that correct?

A. I'd have to look at the material to tell you which of it

I looked at and which of it I didn't, but I don't -- I've

reviewed a lot of 15(c) material.

Q. There's some portion you did not review --

A. I think that's fair.

Q. Okay. Did you review all of the deposition transcripts

in this case in their entirety?

A. No.

Q. Did you read all of the Board minutes in this case in its

entirety?

A. No, I reviewed a number of deposition transcripts and a

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 159 of 198 PageID: 19412
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:05

05:05

05:06

05:06

05:06

James - Direct - Hood

United States District Court

Trenton, New Jersey

4064

number of Board minutes, but I can't say I looked at all of

the depositions in their entirety or all of the Board minutes

in their entirety.

Q. Now, you do have the ability to quantify the risks which

a mutual fund confronts; is that correct?

A. I think that's true, yes.

Q. And have you undertaken to quantify the risks that the

mutual funds confront in this case?

A. I haven't been asked to do a quantification; I've

identified the nature of the risks, and believe they're

significant, but I haven't been asked to quantify those risks.

Q. Have you undertaken to quantify the risks confronted by

-- strike that.

You do have the ability as well to quantify the risks

confronted by an investment manager; is that correct?

A. Yes.

Q. And you have not done that in this case either; is that

correct?

A. I haven't been asked to provide a quantification.

Q. To your knowledge is there any peer-reviewed literature

that identifies the risks borne by mutual fund advisors?

A. Specifically with respect to mutual fund advisors,

nothing comes to mind. There are publications, I have one of

them that's widely cited, that look at business risks for

financial institutions generally. And those same procedures,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 160 of 198 PageID: 19413
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:07

05:07

05:07

05:08

05:08

James - Direct - Hood

United States District Court

Trenton, New Jersey

4065

be it for a bank or insurance company or asset management

firm, I think from an economic perspective are applicable to

across those institutions.

Q. Is there any peer-reviewed literature that explains how

the concepts that are relevant to the financial institutions

you spoke about are also relevant to the mutual fund industry?

A. Certainly what I've written on, for example, risk

adjusted return on capital, is -- is -- applies to mutual fund

management, I've applied it to mutual fund management.

Q. Are there any peer-reviewed studies of how to measure

risk in the mutual fund industry?

A. In terms of operational risks?

Q. Yes, sir.

A. Because certainly there are lots of risks, such as market

risks and investment risks that I've refereed and have

published articles on measurement of those types of risks.

With respect to specific operational risks, I think it's more

generic to financial institutions generally.

Q. Your hypothesis that mutual fund -- you have hypothesized

in your report that mutual fund companies confront certain

types of risk, operational risks and so on; is that correct?

A. Yes, and I provided evidence of those risks.

Q. Are you aware of any criteria that exists that one could

test that hypothesis?

A. Well, by looking at, for example, costs incurred for a --

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 161 of 198 PageID: 19414
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:09

05:09

05:09

05:10

05:10

James - Direct - Hood

United States District Court

Trenton, New Jersey

4066

quite recently was in the Wall Street Journal, the problems at

Third Avenue, an asset management group, in which because of

investments and certain illiquid securities, the reputational

consequences were I think somewhere in the order of, in terms

of total outflow, three and a half billion or thereabouts. Is

that my recollection? It was just this January.

Q. I was asking a somewhat different question. The question

I was interested in is, are you aware of any criteria that is

available to test the hypothesis that mutual funds confront

operation risks?

A. And I was prescribing how one goes about doing that,

okay; by looking -- some of the risks are risks that arise

infrequently. So, for example, the risks that mutual funds

faced when there was a large outflow from money market funds

and break-the-buck issues that arose. So one looks at what

the costs that were incurred by those institutions were

associated with the manifestation of that risk, to give a

sense of the quantification and the magnitude.

Certainly, for example, in my report I talk about and

identify through litigation tracker, a variety of settlements

in litigation related matters that mutual funds have been

subject to, that informs me of the -- both not only the

frequency, but the potential magnitude. Which is a real cost

of doing business that needs to be considered.

And there are regulatory standards in the banking

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 162 of 198 PageID: 19415
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:11

05:11

05:11

05:12

05:12

James - Direct - Hood

United States District Court

Trenton, New Jersey

4067

industry and some proposed for investment management, asset

management funds, to -- to address those real costs.

Q. Okay. Thank you, Mr. James.

MR. A. LAKIND: Your Honor, if I might, with regard

to the proffer of the witness, plaintiffs have no objection to

the witness' credentials on certainly economies of scale,

comparable fees; the description of economics in general, if

that's meant to go beyond those, I would hope we can get a

somewhat more precise explanation. If that's meant to be just

what was said after that, certainly we have no objection.

We would object to any testimony from this witness

on risk for two reasons. Number one, risk could be

quantified, and the witness has not undertaken to quantify the

risk. Whether or not any institution incurs risk is not

really -- would be appear to be a subject of expert testimony.

Secondly, the witness was asked if he is aware under

-- I didn't cite Daubert, but of any criteria that might be

used to testify -- excuse me; to test whether a risk exists,

and it doesn't appear that there is any such criteria. So,

specifically we would object to any testimony about risk from

this witness.

THE COURT: Risk, okay.

Ms. Hood, do you wish to be heard?

MS. HOOD: Yes, please, your Honor. My

understanding from Mr. Lakind is that the only -- the only

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 163 of 198 PageID: 19416
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:12

05:13

05:13

05:13

05:13

James - Direct - Hood

United States District Court

Trenton, New Jersey

4068

topic of the four topics I went through earlier that

plaintiffs have an objection to is Dr. James' testimony or

contemplated testimony on risk faced by investment managers.

And the basis that Mr. Lakind just gave -- one of the two

bases for why Dr. James should not be qualified in that area

is because it's possible to quantify risk, but Dr. James

hasn't done that here.

Dr. James concedes as he just testified he wasn't

asked to quantify it here. He looked exclusively at the

nature of the risks that an investment manager like FMG faces.

And so the fact that he hasn't taken an analysis that -- has

not taken that analysis one step further to quantify the risks

has nothing to do with his qualifications to offer an opinion

on the nature of the risks that FMG faces.

THE COURT: Does that answer your objection, Mr.

Lakind?

MR. A. LAKIND: It does not, your Honor. Because

the second part of the objection dealt with is there criteria

available to ascertain whether or not mutual funds sustain

risk, and I believe that is one of the Daubert factors.

THE COURT: Okay.

MS. HOOD: May I be heard, your Honor, on that

second argument?

THE COURT: You may.

MS. HOOD: So, Mr. Lakind asked Dr. James twice

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 164 of 198 PageID: 19417
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:14

05:14

05:14

05:15

05:15

James - Direct - Hood

United States District Court

Trenton, New Jersey

4069

about the standards and whether there are any standards that

could be applied to analyze the risks in this context, and he

gave an explanation that there are standards out there,

standards that he would uses as an economist. And so again

this isn't a basis for disqualifying Dr. James with respect to

this issue.

THE COURT: All right. So my view of it is that

I've listened to Dr. James' credentials. He's a professor at

two universities, University of Michigan and -- I'm sorry; the

Universities of Cambridge and Florida; he's also taught at

other colleges, like Michigan State and University of

Michigan; he's been a consultant for some type of settlement

between the Janus Fund that he oversaw, and he reviewed

different issues concerning what the Securities and Exchange

Commission may see as a legitimate basis for allocation of

settlement proceeds, as opposed to what Janus may think.

He's also been selected to work with the chief of

economics I believe of the Securities and Exchange Commission;

he worked on the pricing of mutual funds; he worked on

economies of scale as a consultant to certain mutual funds;

he's also indicated some information with regard to how you go

about in analyzing economies of scale; and then there was some

discussion with regard to risks.

But, at any rate, my view is in looking at the Rule

703: A witness who is qualified as an expert by knowledge,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 165 of 198 PageID: 19418
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:16

05:16

05:16

05:17

05:17

James - Direct - Hood

United States District Court

Trenton, New Jersey

4070

skill, experience, training or education may testify in the

form of opinion or otherwise, if, the expert's scientific,

technical or specialized knowledge will help the trier of

fact; Mr. James has met that factor.

The testimony is based on sufficient facts or data;

it appears to me that Mr. James has a substantial amount of

facts and data from all his years of being on these editorial

boards of economic magazines and journals; he's also been with

the SEC -- I shouldn't say been with; but has been retained by

them on mutual fund matters. He's also been with the Federal

Reserve in San Francisco, and he seems to have reviewed such

matters there. So, based on that, there seems to be

sufficient facts.

I also think that based on what I've heard, the

testimony will be the product of reliable principles and

methods; which he has indicated that most of his research has

been about how go about testing for this or how you analyze

that. So, I'm certain he will present those reliable

principles.

And lastly, the issue comes down to risk. And it

seems to me with the risk and the nature of those risks as

opposed to the quantity of those risks, would be something he

would have learned from his prior expertise, so I'll allow

that.

And then lastly, although we didn't really go over

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 166 of 198 PageID: 19419
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

05:18

05:18

05:18

05:19

05:19

United States District Court

Trenton, New Jersey

4071

it too much, the expert must reliably apply the principles and

methods to the facts of the case, which I'm certain is going

to be -- or hopefully will be his testimony today. So, based

on those four factors, I'll allow the testimony, and Mr. James

is qualified to be an expert.

MS. HOOD: Thank you, your Honor. And before I

proceed, I just note that it looks as if we're about 10

minutes passed 4:00 right now, and I'm happy to continue if

that's your preference.

THE COURT: That's a good point; why don't we break

for the day, and we'll restart tomorrow at 10:30.

So, let me just go over the time for today. So, Ms.

Hood, you had your voir dire from 3:22 the 3:52, so you had a

half hour. And Mr. Lakind, you went from 3:52 to 4:05, which

is 13 minutes. I think we're gearing for an and a half hour

per witness; isn't that right, Mr. --

MR. MURPHY: Something like that. There may be a

little fluidity there, but I think if we keep it as 50/50

we're still on target to finish Thursday afternoon.

THE COURT: All right, thank you.

So, you may step down, Mr. James, we'll see you in

the morning.

THE COURT: Have a good evening.

(Counsel say thank you.)

(Proceedings concluded for the day.)

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 167 of 198 PageID: 19420
$

$14 [3] - 3960:11,

3960:13, 3960:19

$200,000 [3] -

3941:22, 3942:1,

4062:7

$32 [1] - 3929:18

$40 [2] - 3929:17,

3929:23

$49 [2] - 4035:5,

4035:12

$50 [2] - 3959:1,

3960:17

$674 [3] - 4022:9,

4022:12, 4022:17

$750 [1] - 3975:20

'

'30 [1] - 3914:12

'70s [3] - 3966:2,

3966:5, 3966:8

'80s [2] - 3909:20,

3921:2

'87 [3] - 3913:14,

3966:10, 3971:12

'90 [3] - 3913:14,

3966:10, 3971:12

/

/S [1] - 3905:24

0

08608 [1] - 3905:15

1

1 [2] - 3960:24,

3986:24

1.1 [1] - 4062:11

1.6 [1] - 4021:7

1.615 [6] - 4018:14,

4018:17, 4021:6,

4023:25, 4024:17,

4026:7

1.615.3 [1] - 4021:10

1.65 [1] - 4024:3

10 [6] - 3915:11,

3915:13, 3965:4,

3965:8, 4063:1,

4071:7

10,000 [3] - 3941:23,

3942:2

10:30 [1] - 4071:11

10:50 [1] - 3998:16

11 [2] - 3985:2,

3986:25

11-4194 [1] - 3905:5

12 [2] - 4033:13,

4033:16

12:27 [1] - 3998:16

12:38 [1] - 3998:18

13 [1] - 4071:15

13-312 [1] - 3905:10

1310 [1] - 3931:4

1329 [2] - 3955:10,

4011:9

13th [1] - 3955:16

14 [2] - 3962:7,

3962:15

14.4 [6] - 4016:15,

4016:19, 4018:21,

4019:16, 4021:6,

4021:10

15 [8] - 3996:25,

4001:17, 4007:1,

4017:9, 4018:17,

4018:20, 4025:16,

4063:1

15(c [5] - 4063:7,

4063:9, 4063:11,

4063:12, 4063:17

1510 [6] - 3907:9,

3930:5, 3931:4,

3931:21, 3931:25,

4026:20

157 [1] - 3997:3

160 [2] - 3969:11,

3970:8

19 [1] - 3969:20

190,000 [1] - 3941:25

1940 [2] - 4032:15,

4033:20

1969 [1] - 3909:4

1970 [2] - 3972:23,

4003:19

1972 [1] - 3909:5

1974 [2] - 3909:5,

3909:7

1975 [2] - 3972:23,

4003:19

1978 [2] - 4043:24,

4043:25

1979 [1] - 3909:14

1999 [1] - 3926:9

19th [2] - 3926:9,

3970:5

1:22 [1] - 3998:18

1st [3] - 3989:5,

3989:14, 3990:7

2

2 [11] - 3930:4, 3933:2,

3933:5, 3957:1,

3991:8, 3991:11,

3998:11, 4001:5,

4011:14, 4012:12,

4013:10

2.275 [6] - 4009:1,

4021:3, 4021:13,

4026:9, 4026:13,

4026:16

200 [1] - 4062:8

2000 [1] - 3913:18

2002 [1] - 3920:9

2003 [1] - 4049:21

2006 [1] - 4049:21

2008 [1] - 4044:8

2009 [2] - 3927:15,

3927:22

2010 [1] - 3913:19

2012 [10] - 3960:10,

3962:15, 4009:2,

4017:21, 4018:12,

4022:6, 4023:17,

4025:8, 4025:12,

4028:24

2014 [17] - 3969:20,

3970:5, 3977:6,

3977:10, 3986:3,

3986:13, 3986:16,

3987:16, 3988:17,

3990:7, 3990:15,

3990:17, 3990:20,

3991:3, 3991:6,

4027:18, 4044:8

2016 [1] - 3905:13

2050 [2] - 3950:20,

4007:4

2053 [3] - 3931:19,

3932:3, 4030:3

21 [2] - 4015:16,

4015:18

23 [2] - 3905:13,

3905:20

24 [1] - 4051:24

25 [8] - 3985:5,

3985:7, 3985:17,

3986:16, 3987:1,

3987:21, 4053:22,

4054:7

26 [2] - 4043:7

273 [1] - 3959:6

28 [1] - 3905:23

2:00 [1] - 3999:3

3

3 [8] - 3930:6,

3930:18, 3970:9,

3970:11, 4029:12,

4029:24, 4030:25,

4031:2

34 [1] - 4015:21

3908 [2] - 3907:2,

3907:2

3931 [1] - 3907:9

3965 [1] - 3907:3

3992 [1] - 3907:10

3:22 [1] - 4071:13

3:52 [3] - 4059:5,

4071:13, 4071:14

4

4 [14] - 3931:3,

4014:22, 4015:1,

4015:3, 4016:3,

4016:4, 4016:11,

4025:2, 4025:10,

4029:20, 4030:25,

4031:1, 4031:2,

4031:4

40 [2] - 3929:24,

3998:17

402 [1] - 3905:14

4034 [1] - 3907:11

4042 [2] - 3907:4,

3907:4

4059 [1] - 3907:5

44 [4] - 3998:18,

4015:12, 4015:13,

4015:17

44-21 [1] - 4015:14

45 [1] - 3997:3

45-8 [1] - 4016:4

46 [1] - 4016:13

48 [4] - 4008:7,

4008:11, 4011:1,

4012:23

49 [7] - 3960:17,

3962:2, 3962:6,

3962:13, 4035:1,

4035:18, 4035:22

4:00 [1] - 4071:8

4:05 [1] - 4071:14

5

5 [2] - 3935:14,

3956:11

50 [14] - 3943:25,

3944:4, 3950:8,

3959:24, 3961:8,

United States District Court

Trenton, New Jersey

4072

3961:11, 3961:16,

3961:18, 3962:2,

3962:13, 4019:2,

4037:13, 4052:5

50/50 [1] - 4071:18

502 [2] - 3956:2,

3956:12

503 [1] - 3956:19

51 [5] - 3950:8,

3961:8, 3961:12,

3961:19, 4019:2

6

6 [12] - 3912:9,

3935:22, 3996:25,

3997:5, 4000:15,

4000:22, 4015:15,

4015:21, 4016:4,

4016:14, 4017:20,

4023:21

600 [2] - 4021:11,

4025:23

605-45 [1] - 4030:4

674 [2] - 4025:7,

4037:18

674.8 [4] - 4020:17,

4021:13, 4023:15,

4025:15

6745 [2] - 4001:18,

4002:3

6th [1] - 3990:15

7

7 [3] - 3933:2, 3933:5,

4029:22

700 [1] - 3912:10

703 [1] - 4069:25

74 [2] - 4024:22,

4025:10

753 [1] - 3905:23

78 [3] - 4025:4,

4025:8, 4025:11

787 [2] - 3907:11,

4034:18

7th [1] - 3991:3

8

8 [2] - 3929:19,

3929:24

80,000 [1] - 3913:20

847 [4] - 3907:10,

3991:24, 3992:2,

3992:5

848 [5] - 3907:10,

3990:25, 3991:20,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 168 of 198 PageID: 19421
3992:3, 3992:5

849 [5] - 3907:10,

3991:20, 3991:24,

3992:2, 3992:5

852 [1] - 4008:10

856 [1] - 3905:25

889-4761 [1] - 3905:25

8th [1] - 3986:13

9

9/15/2009 [1] - 3927:3

90 [1] - 3963:4

946-10-15-4 [1] -

4033:19

96 [1] - 3986:21

99-19 [6] - 3926:10,

3927:17, 3927:21,

3928:3, 4026:20,

4027:17

99-9 [1] - 4031:2

9th [1] - 3989:5

A

abiding [1] - 3979:6

ability [6] - 3935:20,

3956:21, 4013:18,

4048:10, 4064:4,

4064:14

able [12] - 3983:15,

3994:5, 3996:1,

3996:22, 3999:16,

4002:9, 4002:15,

4005:15, 4007:16,

4007:18, 4013:14,

4046:20

abreast [1] - 3995:15

absolutely [3] -

3915:3, 3979:9,

3979:19

Absolutely [2] -

3979:15, 3998:9

abstract [2] - 3926:8,

3926:9

academic [5] - 3909:6,

3909:25, 4043:16,

4051:1, 4051:3

accept [5] - 3917:6,

4000:25, 4001:23,

4016:1, 4027:19

acceptable [1] -

3940:13

acceptance [1] -

3953:18

accepted [12] -

3911:16, 3913:6,

3913:19, 3913:22,

3913:24, 3914:4,

3914:7, 3914:9,

3916:25, 3933:14,

3937:13, 4034:8

accepts [2] - 3933:20,

3933:24

according [1] - 4017:3

account [4] - 3941:6,

3952:23, 3953:1,

3987:21

accountancy [1] -

3908:24

accountant [4] -

3912:14, 3934:1,

3936:18, 3961:2

Accountant [1] -

3921:20

accountants [1] -

3962:25

Accountants [2] -

3921:25, 3922:1

accounted [1] -

3940:6

Accounting [12] -

3908:16, 3911:18,

3912:1, 3914:22,

3915:5, 3922:2,

3955:17, 3965:25,

3967:23, 4011:18,

4027:8, 4027:11

accounting [157] -

3908:22, 3909:1,

3909:23, 3910:1,

3910:3, 3910:4,

3910:7, 3910:10,

3910:13, 3910:14,

3910:15, 3910:22,

3911:2, 3911:6,

3911:7, 3911:9,

3911:12, 3911:16,

3911:19, 3912:11,

3912:13, 3912:17,

3912:21, 3913:1,

3913:4, 3913:6,

3913:8, 3913:15,

3913:18, 3913:19,

3913:22, 3913:24,

3914:1, 3914:4,

3914:8, 3914:9,

3914:13, 3914:16,

3915:17, 3915:24,

3916:1, 3916:2,

3916:5, 3916:6,

3916:7, 3916:11,

3916:13, 3916:15,

3916:16, 3916:17,

3916:19, 3916:20,

3916:23, 3916:24,

3916:25, 3917:1,

3917:3, 3917:8,

3917:9, 3917:11,

3917:12, 3917:13,

3917:16, 3917:20,

3917:22, 3917:23,

3918:1, 3918:4,

3919:6, 3919:7,

3919:8, 3919:16,

3919:19, 3919:23,

3920:2, 3921:5,

3922:16, 3923:5,

3923:19, 3923:20,

3924:14, 3925:16,

3925:25, 3926:16,

3926:21, 3927:12,

3927:16, 3933:23,

3934:2, 3936:19,

3937:13, 3937:18,

3938:13, 3938:17,

3938:22, 3939:1,

3939:8, 3939:18,

3940:14, 3942:14,

3944:5, 3945:22,

3946:13, 3947:20,

3950:13, 3953:6,

3953:15, 3954:8,

3954:11, 3954:14,

3954:24, 3955:7,

3955:19, 3961:14,

3965:20, 3966:16,

3966:20, 3967:12,

3967:15, 3967:17,

3967:19, 3967:24,

3968:3, 3968:15,

3970:11, 3970:12,

3970:19, 3970:22,

3970:25, 3971:8,

3971:16, 3972:1,

3983:10, 4009:8,

4011:11, 4023:7,

4027:13, 4027:14,

4027:15, 4029:5,

4031:15, 4032:18,

4032:19, 4033:7,

4034:2, 4034:7,

4034:9, 4037:5

accounts [3] - 3985:8,

3987:2, 3987:6

accreditations [1] -

3921:17

accruing [1] - 3929:14

accurate [6] - 3951:5,

3951:7, 3970:4,

3988:10, 3989:3,

3989:11

accurately [3] -

3961:15, 4031:10,

4049:16

acknowledges [1] -

3936:20

acquire [1] - 3929:20

acquired [1] - 4025:1

acquiring [3] -

3919:16, 3945:7,

3945:8

acquisition [17] -

3968:11, 3970:20,

3970:23, 3970:24,

3971:2, 3971:3,

3971:10, 3972:1,

4003:9, 4009:2,

4022:2, 4022:6,

4023:8, 4024:20,

4025:20, 4036:13,

4036:25

acronym [2] -

3914:21, 3914:24

AcSEC [6] - 3914:15,

3914:18, 3914:24,

3965:23, 3966:2,

3966:6

Act [3] - 3920:11,

4032:15, 4033:20

act [1] - 3912:5

active [1] - 3914:16

actively [1] - 4052:3

activities [17] -

3911:5, 3919:6,

3949:19, 3952:12,

3998:4, 4004:21,

4008:22, 4008:23,

4010:7, 4046:11,

4046:15, 4048:19,

4048:20, 4058:9,

4058:10, 4060:19

activity [13] - 3917:15,

3917:18, 3943:12,

3945:6, 3945:18,

3950:12, 3956:5,

3957:23, 3957:24,

3958:3, 3961:13,

3976:5

actual [5] - 3972:16,

3981:15, 3987:11,

4023:16, 4026:8

actuarial [12] - 4003:9,

4023:9, 4023:10,

4025:20, 4036:20,

4037:4, 4037:7,

4037:10, 4037:17,

4038:24, 4039:7,

4041:20

actuaries [1] - 3968:9

actuary [2] - 4020:17,

4025:23

add [2] - 4021:12,

4024:10

added [3] - 3955:2,

3975:15, 4020:19

addition [8] - 3910:11,

3915:20, 3932:15,

3961:11, 3962:22,

United States District Court

Trenton, New Jersey

4073

4004:19, 4045:10,

4048:5

additional [9] -

3934:24, 3935:17,

3936:2, 3964:22,

3996:9, 4019:10,

4025:7, 4025:23,

4045:25

address [6] - 4049:6,

4050:14, 4052:10,

4052:11, 4052:12,

4067:2

addressed [3] -

3971:25, 4031:15,

4052:8

addresses [3] -

3917:8, 3928:4,

3928:5

adds [3] - 4020:23,

4020:24, 4026:4

adequacy [1] -

4047:10

adjusted [2] -

4004:25, 4065:8

adjustment [6] -

4003:9, 4038:16,

4038:17, 4038:24,

4039:7, 4039:8

adjustments [5] -

4002:25, 4003:13,

4004:7, 4004:11,

4037:10

administer[1] -

4045:3

Administration [1] -

4035:16

administration [5] -

3908:22, 3908:25,

4030:8, 4043:13,

4051:19

administrative [22] -

3924:22, 3925:3,

3925:20, 3933:22,

3933:23, 3934:14,

3935:8, 3935:18,

3936:8, 3936:23,

3937:10, 3938:2,

3938:5, 3939:23,

3940:16, 3940:19,

3941:4, 3941:10,

3963:6, 3963:13,

3964:3, 4026:25

administrator [3] -

3936:24, 3941:5,

4046:22

administrators [7] -

3925:12, 3931:2,

3932:20, 3934:17,

3935:20, 3936:17,

3940:24

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 169 of 198 PageID: 19422
admit [1] - 3991:20

admitted [3] -

3931:24, 3992:2,

4034:17

Admitted [2] -

3991:22, 3992:4

adopted [4] - 3942:20,

3945:9, 3987:12,

4007:11

advance [1] - 4054:21

advancements [1] -

4004:21

advances [1] -

4053:11

adversaries [1] -

4032:25

advertising [9] -

3957:6, 3957:10,

3957:12, 3957:14,

3958:20, 4012:10,

4012:15, 4012:18,

4012:20

advise [2] - 4046:3,

4053:25

advised [5] - 4059:20,

4059:22, 4060:6,

4060:9, 4060:23

advises [1] - 4047:17

advising [2] - 4044:9,

4044:22

advisor[12] - 3935:3,

3936:3, 3936:4,

3936:7, 3938:1,

3963:13, 4044:21,

4046:2, 4049:8,

4060:14, 4060:15,

4062:5

advisors [22] -

3925:12, 3931:1,

3932:20, 3934:16,

3934:24, 3935:2,

3935:15, 3935:17,

3935:20, 3936:2,

3936:17, 3936:23,

3940:23, 3941:5,

3972:7, 3972:10,

3972:12, 3972:13,

4049:11, 4060:3,

4064:21, 4064:22

Advisory [1] - 4011:19

advisory [14] -

3924:22, 3925:3,

3925:19, 3937:10,

3938:4, 3939:22,

3940:15, 3940:18,

3941:9, 3963:5,

3964:2, 4026:25,

4030:8, 4060:3

affect [1] - 3941:8

affects [1] - 4037:22

affiliations [1] -

3921:22

affirmed [1] - 4042:9

afternoon [8] -

3965:16, 3965:17,

3998:13, 3999:6,

4042:19, 4059:7,

4059:8, 4071:19

agencies [1] - 4055:14

agent [1] - 4036:16

agents [1] - 4010:13

ago [1] - 4004:22

agree [2] - 3939:25,

3958:7

agreed [2] - 3975:22,

3998:12

agreeing [1] - 4003:10

agreement [14] -

3925:10, 3932:18,

3934:2, 3934:13,

3936:20, 3959:12,

3959:15, 3959:20,

3959:23, 3960:6,

3960:10, 3960:23,

3961:4, 3961:6

Agreement [10] -

3959:11, 3960:20,

4005:23, 4015:5,

4015:9, 4016:21,

4018:23, 4019:1,

4035:15, 4035:16

agreements [5] -

3925:11, 3932:19,

3934:11, 3936:3

agrees [4] - 3924:3,

3933:20, 3933:25,

3936:20

ahead [1] - 4021:21

AICPA [1] - 4031:15

aid [1] - 3951:11

airlines [1] - 4031:16

al [3] - 3905:3, 3905:6,

3905:8

algorithm [1] - 3976:3

allegations [1] -

3920:18

alleged [1] - 3920:12

allocability [2] -

3949:8, 3963:15

allocate [20] -

3918:22, 3944:14,

3950:17, 3952:6,

3953:23, 3957:16,

3961:25, 3992:11,

3993:16, 3993:22,

3994:8, 3996:4,

3996:8, 3997:20,

4002:9, 4002:15,

4005:16, 4007:24,

4050:6

allocated [43] -

3949:6, 3950:7,

3952:22, 3957:4,

3957:8, 3957:10,

3957:14, 3959:2,

3960:17, 3962:13,

3963:8, 3964:3,

3964:13, 3964:17,

4005:7, 4005:17,

4005:21, 4008:13,

4008:19, 4008:21,

4009:1, 4012:19,

4013:9, 4013:24,

4020:5, 4020:24,

4021:3, 4021:14,

4021:22, 4021:23,

4021:24, 4022:17,

4022:18, 4022:23,

4025:17, 4025:24,

4026:17, 4035:1,

4035:5, 4036:22,

4038:22, 4038:23,

4041:24

allocates [3] -

3948:14, 3952:20,

4007:13

allocating [4] -

3945:25, 3951:1,

3994:12, 4012:3

Allocation [3] -

3956:4, 4001:8,

4017:21

allocation [99] -

3919:13, 3942:12,

3942:15, 3942:20,

3942:22, 3942:23,

3943:1, 3943:3,

3943:5, 3944:9,

3944:25, 3945:3,

3945:9, 3945:15,

3945:21, 3946:6,

3946:12, 3946:16,

3947:2, 3948:9,

3948:19, 3949:12,

3952:14, 3952:24,

3953:7, 3956:22,

3957:11, 3957:17,

3958:6, 3958:12,

3958:15, 3958:22,

3959:1, 3960:18,

3963:19, 3964:14,

3972:15, 3972:16,

3992:15, 3992:22,

3993:1, 3993:5,

3993:8, 3993:15,

3993:18, 3994:4,

3994:6, 3994:18,

3994:19, 3995:2,

3995:4, 3995:6,

3995:8, 3995:9,

3995:16, 3995:19,

3996:19, 3997:9,

3997:10, 3997:23,

3998:6, 3999:16,

4001:25, 4002:12,

4003:19, 4003:24,

4005:5, 4006:10,

4006:12, 4006:16,

4006:17, 4006:20,

4006:22, 4006:25,

4007:21, 4010:4,

4010:16, 4013:5,

4013:12, 4014:22,

4017:10, 4019:13,

4022:14, 4022:20,

4026:11, 4034:21,

4035:8, 4036:8,

4036:12, 4036:24,

4037:22, 4038:5,

4039:4, 4040:3,

4041:4, 4045:6,

4045:8, 4069:15

allocation/

reallocation [1] -

3935:1

allocations [8] -

3919:18, 3944:22,

3945:10, 3950:18,

3951:1, 3953:17,

4002:22, 4038:6

allow [5] - 3919:3,

3950:14, 4040:5,

4070:23, 4071:4

allowed [2] - 4039:15,

4039:16

allowing [1] - 4050:3

alluded [11] - 3914:23,

3919:6, 3932:16,

3948:25, 3954:4,

3954:16, 3962:2,

3975:4, 3988:22,

3988:23, 4029:19

alluding [2] - 3971:14,

3987:20

almost [3] - 3919:25,

4009:1, 4009:18

Almost [1] - 4011:17

ALSO [1] - 3906:17

alternative [1] -

3917:2

alternatives [1] -

4006:19

Amazon [1] - 3929:20

Amazon.com [2] -

3929:14, 3929:16

ambiguity [1] -

3943:10

amendment [1] -

3967:2

America [1] - 4048:18

United States District Court

Trenton, New Jersey

4074

American [3] -

3921:24, 3922:2,

3922:14

amortization [8] -

4023:12, 4023:16,

4024:24, 4025:16,

4025:21, 4037:15,

4039:1, 4039:7

Amortization [1] -

4024:20

amortize [1] - 4036:25

amortized [4] -

4023:8, 4025:4,

4025:8, 4025:11

amount [16] - 3918:12,

3920:2, 3930:11,

3930:13, 3930:14,

3942:6, 3959:4,

3960:9, 3962:4,

3962:13, 3964:16,

3998:14, 4026:12,

4047:6, 4070:6

amounts [2] -

3938:11, 3964:19

analogies [2] -

3941:15, 3941:19

analogy [1] - 3970:12

analyses [2] -

4035:17, 4057:17

Analysis [1] - 4052:23

analysis [17] - 3923:3,

3925:15, 3925:17,

3932:24, 3940:7,

3945:6, 3954:8,

3960:23, 3973:10,

4028:9, 4034:22,

4043:15, 4054:22,

4055:23, 4068:11,

4068:12

analyze [2] - 4069:2,

4070:17

analyzed [1] - 4056:21

analyzing [3] -

4048:12, 4058:7,

4069:22

Andrea [1] - 4042:17

ANDREA [1] - 3906:15

ANN [1] - 3905:3

annual [2] - 3912:9,

3952:9

annually [2] - 4004:2,

4062:12

annuities [4] -

4041:12, 4061:7,

4061:10, 4061:13

answer[15] - 3945:16,

3947:10, 3970:16,

3987:5, 3987:6,

3987:11, 3993:10,

4016:24, 4017:6,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 170 of 198 PageID: 19423
4020:11, 4028:12,

4028:16, 4032:16,

4068:15

answering [1] -

4004:15

apart [1] - 3978:7

apologize [2] -

3914:22, 3995:22

appear[7] - 3988:22,

3988:25, 3989:11,

4016:11, 4037:1,

4067:15, 4067:19

appearance [1] -

4042:16

applicable [6] -

3919:24, 3933:2,

3934:8, 3936:13,

3937:6, 4065:2

application [1] -

3939:16

applications [1] -

3908:2

applied [4] - 4043:15,

4047:25, 4065:9,

4069:2

applies [4] - 4014:9,

4029:7, 4044:3,

4065:8

apply [11] - 3919:25,

3928:22, 3930:17,

3932:10, 3934:2,

3936:19, 3937:9,

3940:10, 3943:3,

3945:7, 4071:1

applying [2] -

3943:17, 4054:24

appointed [1] - 4045:1

appointment [2] -

3933:20, 3933:24

appointments [3] -

4043:1, 4044:13,

4044:16

appoints [2] -

3933:18, 3933:23

appreciate [1] -

3994:16

Approach [1] - 3955:6

approach [7] -

3945:12, 3954:23,

3958:1, 3963:23,

3968:18, 3969:3,

3996:20

appropriate [26] -

3918:25, 3925:23,

3940:12, 3940:15,

3941:9, 3943:13,

3948:19, 3949:4,

3949:7, 3949:23,

3953:23, 3957:16,

3957:18, 3961:16,

3963:8, 3964:20,

3995:19, 3995:20,

3996:20, 4003:15,

4021:18, 4023:13,

4034:5, 4039:20,

4042:1, 4046:7

appropriately [7] -

3935:11, 3950:15,

3961:10, 3962:23,

3996:19, 4027:1,

4041:24

Appropriately [1] -

4027:2

appropriateness [2] -

4045:6, 4045:8

approved [3] -

3987:12, 4045:1,

4049:25

arbitrary [1] - 3958:6

arbitrator [1] - 4045:9

area [20] - 3910:15,

3911:2, 3911:3,

3911:4, 3916:2,

3916:11, 3916:12,

3916:14, 3917:20,

3917:21, 3917:25,

3996:22, 4044:1,

4044:2, 4053:12,

4054:1, 4058:4,

4059:18, 4068:5

areas [14] - 3918:25,

3923:5, 3923:21,

3973:4, 3979:13,

3979:17, 3979:20,

3979:23, 3993:16,

3993:23, 3993:25,

3995:20, 4052:14,

4058:15

argument [2] -

4031:25, 4068:23

arise [9] - 3926:19,

3929:19, 3944:2,

4008:14, 4008:21,

4036:14, 4048:3,

4057:11, 4066:12

arises [1] - 3946:1

arising [5] - 3926:18,

4044:12, 4047:8,

4048:1, 4057:15

ARNOLD [1] - 3906:4

arose [6] - 4004:12,

4044:23, 4045:7,

4046:13, 4050:3,

4066:15

arrange [2] - 3929:17,

3933:15

arranged [1] - 3927:18

arrangement [1] -

3937:3

arrangements [3] -

3925:9, 3940:10,

3961:18

arranging [1] - 3934:6

arriving [2] - 3963:2,

4027:5

art [1] - 3943:6

articles [4] - 3992:25,

4052:2, 4053:15,

4065:16

articulate [1] -

3941:16

articulated [1] -

3939:8

articulation [1] -

3940:4

ascertain [1] -

4068:19

aside [1] - 4013:1

aspect [1] - 4010:8

aspects [1] - 3971:18

assemble [1] -

3983:20

asserted [1] - 3938:24

assertion [3] -

3938:18, 4003:11,

4014:15

assess [12] - 3934:25,

3964:18, 4006:11,

4013:18, 4015:4,

4041:21, 4048:18,

4050:5, 4059:12,

4059:17, 4060:12,

4060:21

assessed [3] -

4013:24, 4016:20,

4027:1

assessing [2] -

4013:20, 4050:17

assessment [4] -

4022:14, 4033:16,

4035:21, 4050:16

asset [8] - 4046:9,

4046:14, 4046:17,

4046:18, 4049:14,

4065:1, 4066:2,

4067:1

assets [5] - 3934:23,

3935:2, 3936:1,

3936:6, 4057:10

assigned [1] -

4018:25

assigning [1] -

4011:25

assignments [1] -

4011:21

assist [3] - 3919:3,

3922:23, 3974:11

assistance [3] -

3923:8, 3923:11,

3977:22

assistant [3] -

3909:10, 3923:12,

3983:22

assisted [5] - 3922:24,

3923:6, 3974:23,

3976:10, 3978:3

assisting [1] -

3923:15

ASSOCIATE [1] -

3906:17

associate [8] -

3909:11, 3909:15,

3920:2, 4052:19,

4053:7, 4053:10,

4053:16, 4053:21

associated [2] -

3919:14, 4066:17

associates [1] -

4019:7

associating [1] -

3917:13

Association [1] -

3922:2

association [1] -

3917:16

associations [1] -

3913:10

assume [1] - 3933:21

Assuming [4] -

4005:21, 4016:14,

4019:10, 4019:20

assumption [3] -

3958:21, 4037:7

assumptions [1] -

4036:21

assurances [1] -

3968:6

assuring [1] - 3935:9

attached [3] -

3968:25, 3979:25,

3996:23

attaching [1] -

3947:20

attempt [1] - 4010:1

attended [1] - 3908:23

attention [31] -

3928:12, 3969:11,

3970:8, 3979:13,

3979:17, 3980:17,

3980:20, 3980:22,

3985:2, 3989:14,

4001:5, 4001:17,

4008:6, 4008:7,

4008:12, 4011:8,

4011:14, 4014:22,

4014:25, 4015:12,

4017:20, 4017:22,

4018:7, 4023:21,

4025:14, 4026:19,

4029:12, 4032:24,

United States District Court

Trenton, New Jersey

4075

4033:13

attorney [1] - 3984:14

attorneys [9] -

3977:20, 3977:21,

3978:13, 3980:3,

3981:21, 3981:24,

3982:7, 3982:10,

3982:23

attractive [1] -

4040:22

attracts [1] - 3912:9

attribute [2] - 3943:11,

3994:1

attributed [5] -

3938:13, 3946:10,

3949:13, 3950:9,

3958:4

attributing [1] -

3950:25

audit [13] - 3912:21,

3913:4, 3951:24,

3951:25, 3952:4,

3966:17, 3967:4,

3972:21, 4014:15,

4032:18, 4032:19,

4039:24, 4040:2

audited [6] - 3938:5,

3938:11, 3960:14,

3960:20, 4014:16,

4035:2

auditing [3] - 3910:4,

3912:23, 4031:15

auditor[1] - 4039:25

auditor's [1] - 3912:23

audits [2] - 3911:15,

3912:21

August [1] - 3986:13

author [4] - 3984:13,

3993:4, 4060:5,

4061:6

authored [4] -

3911:11, 3954:16,

3985:15, 4052:2

authoritative [4] -

3915:6, 3927:15,

4034:6, 4034:8

authority [3] -

3910:19, 3914:13,

3914:14

authorize [1] -

3941:22

availability [2] -

3945:4, 3945:20

available [11] -

3945:25, 3946:5,

3952:8, 3958:12,

3983:1, 3997:17,

4007:24, 4008:2,

4008:3, 4066:9,

4068:19

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 171 of 198 PageID: 19424
Avenue [1] - 4066:2

awards [4] - 3922:5,

3922:8, 3922:11,

3922:12

aware [30] - 3933:12,

3934:19, 3937:7,

3937:14, 3948:12,

3948:16, 3958:25,

3960:5, 3960:9,

3962:4, 3984:13,

3984:20, 3985:19,

3996:16, 4009:12,

4019:6, 4019:9,

4022:1, 4022:2,

4022:4, 4022:5,

4027:17, 4034:20,

4034:25, 4035:4,

4040:24, 4065:23,

4066:8, 4067:16

AXA [73] - 3905:6,

3905:10, 3906:18,

3948:14, 3949:6,

3949:14, 3950:3,

3950:4, 3950:17,

3950:25, 3951:19,

3951:20, 3951:22,

3952:6, 3952:7,

3959:1, 3959:11,

3959:16, 3959:18,

3960:17, 3960:24,

3961:6, 3961:25,

3962:19, 3963:8,

3964:4, 3985:7,

3987:2, 3995:25,

4000:7, 4001:21,

4002:9, 4002:23,

4002:25, 4003:5,

4003:7, 4004:7,

4005:22, 4007:9,

4007:12, 4008:23,

4009:1, 4010:12,

4016:22, 4017:14,

4018:18, 4019:4,

4019:6, 4019:12,

4019:21, 4019:22,

4019:24, 4020:3,

4020:19, 4020:22,

4020:24, 4021:3,

4021:14, 4021:22,

4025:17, 4026:5,

4026:8, 4026:16,

4035:5, 4036:18,

4037:11, 4037:19,

4040:20, 4040:25,

4041:11, 4041:13

AXA's [3] - 3951:25,

3964:13, 4002:15

AXA-CAM [7] -

3951:19, 3995:25,

4000:7, 4001:21,

4002:9, 4007:9,

4007:12

B

BA [1] - 4043:17

babies [1] - 3918:20

Bachelor [1] - 3908:21

Bachelor's [2] -

3909:3, 3909:4

background [4] -

3908:20, 3965:18,

3976:24, 4043:11

backup [1] - 3934:10

bad [1] - 4004:4

balance [2] - 3951:22,

4037:1

bank [14] - 3985:8,

3987:2, 3987:6,

3987:20, 4046:9,

4046:13, 4046:16,

4047:14, 4047:15,

4047:20, 4048:6,

4048:19, 4048:20,

4065:1

Bank [5] - 4044:9,

4044:14, 4044:17,

4046:25, 4048:18

banking [4] - 4052:10,

4058:9, 4066:25

bankruptcy [1] -

4061:15

banks [13] - 3913:11,

4044:3, 4044:10,

4044:24, 4046:2,

4046:5, 4046:8,

4046:12, 4046:20,

4047:5, 4047:11,

4047:25, 4051:15

Barrett [4] - 3926:11,

3939:21, 3954:16,

3958:5

Barrett's [1] - 3976:22

base [2] - 3910:20,

3958:21

Based [1] - 4003:15

based [32] - 3918:9,

3924:2, 3924:21,

3930:11, 3937:6,

3949:18, 3951:2,

3952:14, 3956:5,

3957:16, 3973:10,

3976:5, 3988:11,

3992:15, 3995:18,

4002:16, 4003:13,

4004:6, 4006:20,

4007:16, 4019:16,

4025:10, 4029:6,

4037:19, 4041:4,

4047:6, 4047:24,

4053:11, 4070:5,

4070:12, 4070:14,

4071:3

bases [5] - 3946:16,

3993:16, 3993:22,

3994:4, 4068:5

basic [1] - 4005:3

basis [20] - 3921:7,

3945:25, 3948:10,

3952:24, 3953:23,

3957:8, 3992:10,

3993:8, 4010:15,

4011:25, 4012:4,

4013:5, 4013:9,

4014:14, 4030:16,

4040:11, 4040:13,

4068:4, 4069:5,

4069:15

Bate [1] - 4001:17

Bates [1] - 4002:3

bear [1] - 3956:22

bearing [1] - 3937:23

became [4] - 3921:4,

3921:10, 4009:20,

4048:12

become [7] - 3920:11,

3947:16, 3973:17,

4028:1, 4037:15,

4040:24

becomes [2] -

3943:15, 4029:9

becoming [2] -

3929:4, 3984:3

began [3] - 3909:9,

3989:20, 3990:1

begin [3] - 3908:4,

3981:13, 4042:15

beginning [5] -

3908:20, 3928:7,

3981:13, 4024:8,

4043:11

begins [6] - 3951:20,

3952:19, 4015:13,

4029:20, 4033:16,

4054:18

behalf [4] - 3936:25,

3942:3, 4004:4,

4042:17

behind [2] - 3957:11,

4012:16

belief [3] - 3970:3,

3977:12, 4013:10

below [1] - 4020:16

BENEDICT [1] -

3906:14

beneficiaries [2] -

3957:3, 3957:4

benefit [9] - 3945:6,

3945:8, 3958:2,

3968:5, 3968:7,

3968:9, 3968:13,

4012:14, 4036:17

benefited [2] -

3957:12, 3958:19

benefits [14] - 3956:9,

3956:16, 3956:20,

3956:25, 3957:1,

3957:5, 3957:21,

3958:1, 3968:1,

3968:12, 4012:6,

4012:9, 4013:2,

4013:6

benefitted [1] -

4012:18

benefitting [1] -

3961:19

best [2] - 3940:4,

3998:5

better [4] - 3963:25,

3964:5, 3987:22,

4037:8

between [18] -

3925:10, 3925:11,

3932:18, 3932:19,

3936:9, 3959:11,

3959:16, 3962:6,

3981:4, 4009:5,

4016:21, 4027:14,

4028:7, 4045:7,

4054:23, 4060:13,

4069:13

beyond [7] - 3956:1,

4011:7, 4014:18,

4039:17, 4056:25,

4067:8

big [1] - 4055:5

bill [2] - 4019:8,

4019:16

billed [4] - 3930:12,

3930:14, 3990:6,

4062:6

billion [13] - 4009:1,

4018:18, 4021:4,

4021:6, 4021:7,

4021:10, 4021:11,

4021:13, 4026:9,

4026:13, 4026:16,

4066:5

bit [21] - 3910:11,

3912:16, 3912:19,

3915:19, 3916:21,

3917:10, 3917:11,

3930:2, 3942:11,

3942:12, 3943:8,

3944:9, 3946:17,

3951:13, 3954:11,

3962:11, 3964:12,

3964:15, 3965:18,

4036:5, 4045:14

United States District Court

Trenton, New Jersey

4076

BLADER [1] - 3906:3

blades [1] - 3944:18

BLANK [1] - 3906:9

blessed [1] - 3912:12

BLUMSTEIN [1] -

3906:3

Board [47] - 3915:5,

3924:19, 3925:21,

3937:12, 3938:20,

3939:3, 3939:14,

3939:15, 3939:24,

3948:13, 3948:24,

3949:5, 3949:20,

3951:3, 3951:12,

3954:3, 3959:3,

3963:21, 3967:23,

4001:11, 4001:14,

4011:19, 4018:2,

4018:4, 4027:8,

4027:11, 4034:23,

4035:9, 4035:13,

4035:14, 4035:23,

4037:23, 4038:3,

4038:12, 4039:14,

4039:19, 4039:22,

4040:4, 4040:6,

4040:16, 4040:19,

4040:24, 4044:14,

4044:17, 4063:23,

4064:1, 4064:2

board [6] - 3913:18,

3915:16, 3918:18,

4039:22, 4053:6,

4053:19

boards [7] - 3912:14,

3915:11, 4052:16,

4052:17, 4053:5,

4053:16, 4070:8

bodies [3] - 3910:10,

3912:17, 3913:16

body [3] - 3913:25,

3914:7, 3917:3

book [17] - 3929:18,

3929:21, 3954:16,

3954:18, 3983:16,

3984:1, 3984:2,

3984:5, 3984:6,

3984:10, 3984:11,

3984:13, 3984:18,

3984:21, 4011:11,

4012:21

bookkeeping [1] -

3929:19

books [1] - 3929:22

borne [2] - 4039:5,

4064:21

bottom [4] - 3951:6,

3956:2, 4001:18,

4035:20

bound [1] - 3937:12

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 172 of 198 PageID: 19425
box [1] - 4017:14

brackets [1] - 3927:2

breached [1] -

4039:14

break [7] - 3965:4,

3965:8, 3998:7,

3998:10, 4045:13,

4066:15, 4071:10

break-the-buck [1] -

4066:15

breakpoint [4] -

4057:12, 4057:13,

4057:14, 4057:15

breakpoints [6] -

4055:18, 4055:24,

4056:21, 4056:22,

4057:9, 4058:19

Brief [3] - 3964:10,

3990:11, 4019:14

briefly [1] - 3931:8

bring [3] - 3943:21,

3943:25, 3944:18

broad [2] - 3942:19,

4027:25

broadening [1] -

4046:9

broadly [5] - 3911:1,

3917:19, 3949:17,

3950:2, 3979:23

Broadly [2] - 3909:25,

3916:10

broken [1] - 3951:15

brokerage [1] -

4049:10

brought [5] - 3980:9,

3980:17, 3980:20,

3980:22, 4049:6

buck [1] - 4066:15

building [4] - 3915:12,

3919:16, 3919:17,

3919:18

bullet [2] - 3956:24,

4031:12

bulletins [1] - 3913:5

burning [1] - 3944:8

business [31] -

3908:21, 3908:25,

3910:18, 3910:23,

3912:6, 3912:10,

3915:7, 3916:4,

3916:9, 3917:4,

3926:15, 3926:19,

3952:10, 3955:5,

3962:20, 4002:16,

4002:19, 4019:4,

4019:7, 4019:10,

4019:17, 4025:1,

4037:11, 4037:19,

4043:13, 4047:24,

4048:9, 4051:19,

4064:24, 4066:24

businesses [4] -

4007:14, 4019:21,

4020:6, 4048:7

buy [4] - 3928:25,

3929:7, 3929:11,

4049:15

buying [1] - 3943:24

BY [29] - 3906:4,

3906:10, 3906:13,

3907:2, 3907:3,

3907:5, 3907:5,

3908:14, 3914:20,

3924:16, 3932:1,

3947:7, 3965:15,

3969:10, 3982:22,

3992:7, 3999:14,

4005:14, 4006:8,

4017:8, 4020:15,

4023:14, 4029:2,

4030:23, 4033:3,

4034:19, 4042:23,

4057:16, 4059:6

C

C.S.R [1] - 3905:24

calculated [2] -

3963:4, 4037:15

calculates [2] -

3963:21, 3964:1

calculating [1] -

3968:9

calculations [3] -

3938:21, 4037:6,

4041:15

California [5] -

3908:17, 3909:15,

3921:20, 3921:25,

3993:1

CAM [12] - 3951:19,

3995:25, 3996:5,

4000:7, 4001:21,

4002:9, 4007:5,

4007:9, 4007:12,

4007:22, 4013:23,

4035:2

Cambridge [4] -

4043:2, 4043:8,

4051:2, 4069:10

campaign [1] -

3958:20

candidacy [1] -

4054:21

capacities [2] -

3972:13, 4045:16

capacity [3] - 4045:20,

4047:19

capital [7] - 3920:14,

4044:10, 4047:6,

4047:7, 4047:11,

4047:24, 4065:8

captioned [1] -

3973:25

captured [1] - 3928:12

captures [1] - 3964:5

car[3] - 3944:7,

3944:9

career[4] - 3910:12,

3922:5, 4051:25,

4052:4

carefully [2] -

4046:10, 4055:12

case [54] - 3919:21,

3926:13, 3929:25,

3930:17, 3933:3,

3933:9, 3934:9,

3935:13, 3936:16,

3942:2, 3944:20,

3951:9, 3958:11,

3958:14, 3960:15,

3963:19, 3969:23,

3970:2, 3970:21,

3973:2, 3974:2,

3977:4, 3985:23,

3986:5, 3989:21,

3992:12, 3993:13,

3995:11, 4001:1,

4004:8, 4006:11,

4010:10, 4014:9,

4016:10, 4028:22,

4039:18, 4040:9,

4040:10, 4041:15,

4047:4, 4055:19,

4058:14, 4059:11,

4059:16, 4060:8,

4061:13, 4062:6,

4063:2, 4063:10,

4063:21, 4063:23,

4064:8, 4064:17,

4071:2

cases [4] - 3946:1,

4055:20, 4060:25,

4061:15

cash [2] - 3929:10,

3940:23

casinos [1] - 4031:16

categories [2] -

3949:21, 4031:8

caught [1] - 3956:22

causation [1] - 3994:2

caused [4] - 3928:12,

3950:24, 4050:5,

4050:7

causes [2] - 3920:20,

3945:18

center [1] - 3952:11

central [1] - 3927:9

cereal [1] - 3944:2

certain [14] - 3928:8,

3959:17, 3965:19,

3973:1, 3973:4,

4021:7, 4023:25,

4049:7, 4050:8,

4065:20, 4066:3,

4069:20, 4070:18,

4071:2

Certain [1] - 3971:18

certainly [39] - 3910:3,

3922:10, 3932:14,

3938:10, 3939:16,

3944:3, 3945:7,

3947:1, 3950:9,

3954:8, 3954:18,

3958:10, 3968:8,

3968:16, 3970:22,

3974:23, 3975:2,

3975:13, 3976:10,

3978:18, 3980:12,

3980:25, 3987:12,

3988:9, 3989:22,

3996:17, 3998:2,

4001:22, 4009:18,

4037:24, 4038:12,

4050:15, 4055:10,

4055:19, 4060:25,

4065:14, 4067:6,

4067:10

Certainly [13] -

3908:13, 3908:21,

3909:4, 3909:8,

3933:1, 3942:13,

3951:20, 3965:10,

3994:7, 4048:2,

4054:9, 4065:7,

4066:19

Certified [4] -

3905:23, 3921:20,

3921:25, 3922:1

chair [1] - 3912:15

chaired [2] - 3921:9,

3922:4

chairman [2] -

3912:13, 3921:8

chairs [1] - 3909:17

challenge [1] -

3946:12

challenges [1] -

3926:17

change [7] - 3927:21,

3927:22, 3985:22,

4004:25, 4028:21,

4050:25, 4056:1

changed [3] -

3936:11, 3978:20,

4004:23

changes [9] -

3934:18, 3995:13,

4004:9, 4004:14,

United States District Court

Trenton, New Jersey

4077

4004:16, 4004:23,

4005:2, 4005:3,

4050:25

changing [1] -

4004:17

characteristics [1] -

3948:8

characterization [9] -

3977:7, 3995:3,

3997:14, 4006:13,

4009:13, 4015:11,

4016:23, 4025:19,

4027:20

characterizations [2] -

4007:11, 4019:5

characterize [2] -

3976:2, 3990:9

characterized [10] -

3915:11, 3926:10,

3959:10, 3989:24,

3990:8, 3998:5,

4001:22, 4007:2,

4007:10, 4032:14

charge [5] - 3921:13,

3959:18, 3960:5,

3960:6, 3960:13

charged [15] - 3916:9,

3950:5, 3960:10,

3960:19, 3961:6,

3962:20, 3993:7,

4003:8, 4005:22,

4019:18, 4019:20,

4039:2, 4040:12,

4040:13, 4058:21

charges [1] - 4018:25

charging [1] - 3993:2

Charles [1] - 3954:17

chart [1] - 3951:11

chief [5] - 3912:14,

4049:7, 4049:8,

4058:1, 4069:17

Chief [2] - 4045:11,

4049:4

child's [1] - 3947:21

children's [2] -

3947:19, 3947:21

choosing [2] -

3944:24, 3945:2

chose [1] - 3984:23

chosen [2] - 3933:17,

3934:21

Chris [3] - 3968:18,

3988:19, 4042:8

CHRISTOPHER [6] -

3906:6, 3906:7,

3907:4, 3907:4,

4042:9, 4042:23

Christopher [1] -

4042:13

chronological [1] -

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 173 of 198 PageID: 19426
4044:7

circumstance [5] -

3929:20, 3941:16,

3958:19, 3958:24,

4020:14

circumstances [12] -

3928:5, 3928:7,

3928:9, 3929:16,

3930:10, 3932:12,

3943:14, 3956:16,

3972:13, 3973:9,

3994:7, 4009:14

cite [2] - 3983:18,

4067:17

cited [5] - 3926:11,

3951:6, 3951:8,

4048:21, 4064:24

cities [1] - 3993:5

CIVIL [2] - 3905:5,

3905:9

clarification [1] -

4060:16

CLARKSON [1] -

3905:14

classification [7] -

3925:3, 3925:19,

3925:22, 3937:9,

3938:8, 3941:9,

3964:11

classify [3] - 3924:21,

3924:23, 3940:15

classifying [1] -

3939:22

clean [2] - 3938:14,

4014:17

cleaning [1] - 3919:11

clear [7] - 3931:11,

3935:8, 3945:23,

3958:18, 3962:7,

4040:8, 4055:25

clearly [3] - 3963:13,

4009:6, 4063:14

clerical [1] - 3941:14

CLERK [1] - 3908:9

clients [3] - 4020:25,

4022:18, 4022:23

closely [2] - 3916:7,

3968:8

clothing [1] - 3947:19

clustered [1] -

4054:25

CO [2] - 3905:6,

3906:18

co [2] - 3911:11,

3993:4

co-author [1] - 3993:4

co-authored [1] -

3911:11

codification [2] -

3927:3, 3927:16

codified [2] - 3927:15,

3927:22

coefficients [1] -

4010:2

coherent [1] - 3979:1

colleagues [2] -

3912:3, 3921:13

collection [1] - 4027:4

collectively [1] -

4029:19

college [4] - 3908:20,

3917:21, 3917:22,

4043:11

colleges [4] - 3911:13,

3954:19, 3954:25,

4069:11

column [5] - 4001:20,

4017:18, 4018:12,

4024:5, 4024:15

combination [1] -

3957:20

comfort [7] - 3938:12,

3952:1, 3953:9,

3953:19, 4014:16,

4039:24, 4040:1

comfortable [3] -

3971:15, 3983:15,

4007:2

coming [4] - 3917:6,

3943:18, 3954:1,

4032:8

commercial [2] -

4044:24, 4046:8

Commission [5] -

3920:24, 3921:10,

3921:14, 4069:15,

4069:18

commission [8] -

3921:2, 3921:8,

3921:10, 3929:12,

3929:22, 3930:15,

4009:2, 4049:8

commissioned [4] -

3912:2, 3915:20,

3921:11, 3993:4

commissioner [1] -

3921:9

commissioners [1] -

3912:15

commissions [3] -

4009:22, 4010:6,

4010:12

Committee [2] -

3914:23, 3965:25

committee [5] -

3913:2, 3913:8,

3913:13, 3920:15,

4027:10

committees [1] -

3922:4

common [1] - 3913:9

commonly [1] -

3910:22

communicating [1] -

3994:15

community [1] -

3926:21

Companies [1] -

4033:11

companies [13] -

3913:10, 3962:9,

3967:6, 3967:13,

4031:17, 4032:14,

4040:19, 4041:11,

4044:4, 4047:5,

4051:16, 4062:23,

4065:20

company [26] -

3923:2, 3930:11,

3930:19, 3930:20,

3942:5, 3948:24,

3967:8, 3971:22,

3971:23, 3972:2,

3972:4, 3972:6,

4014:15, 4031:20,

4031:23, 4031:24,

4032:7, 4032:12,

4033:16, 4033:21,

4033:24, 4036:17,

4037:9, 4046:8,

4047:15, 4065:1

Company [3] - 3984:2,

4032:15, 4033:20

company's [5] -

3967:2, 4029:23,

4032:17, 4032:19,

4048:10

comparable [1] -

4067:7

compare [1] - 4058:21

compared [1] -

4000:25

comparing [1] -

4057:13

comparison [3] -

4012:14, 4012:22,

4060:14

compensate [1] -

3976:4

compensation [17] -

3934:12, 3936:24,

3941:21, 3941:25,

3942:1, 3942:2,

3961:8, 3975:24,

4009:6, 4010:11,

4010:12, 4010:19,

4010:25, 4012:24,

4012:25, 4036:17,

4062:11

Compensation [1] -

4036:15

compete [1] - 4055:6

competitive [1] -

4040:20

competitors [1] -

4041:13

complete [1] - 4017:6

completely [3] -

3937:12, 3958:18,

4005:9

complex [4] -

3944:16, 3944:21,

3945:14, 4013:19

complexes [5] -

4050:14, 4050:17,

4050:22, 4057:24,

4060:2

compliance [3] -

3912:23, 3933:24,

3935:3

comply [1] - 3914:2

composed [1] -

3913:25

comprehend [1] -

4041:5

Comptroller [2] -

4044:21, 4046:1

comptroller[2] -

4044:22, 4046:3

comptroller's [2] -

4046:6, 4055:12

compute [1] - 4057:11

concedes [1] - 4068:8

concepts [8] -

3917:23, 3919:23,

3919:25, 3944:5,

3968:7, 3983:10,

3983:11, 4065:5

concern [1] - 4028:13

concerning [5] -

3975:9, 3990:21,

4049:12, 4050:15,

4069:14

concerns [1] - 3923:9

concluded [2] -

3962:1, 4071:25

conclusion [3] -

3937:8, 3940:11,

4028:9

conclusions [1] -

3943:18

conducted [6] -

3910:5, 3911:4,

3925:15, 3954:6,

3962:20, 3975:5

confer [1] - 3912:6

conference [2] -

3912:9, 3912:12

confidential [4] -

3918:2, 4050:11,

United States District Court

Trenton, New Jersey

4078

4055:22, 4056:20

confined [1] - 3987:20

confines [1] - 4029:17

confirm [1] - 3969:16

conformity [7] -

3911:8, 3911:15,

3914:4, 3914:6,

3914:7, 3938:19,

4029:11

confront [3] - 4064:8,

4065:20, 4066:9

confronted [4] -

4038:4, 4059:12,

4064:12, 4064:15

confronting [1] -

3912:5

confronts [1] - 4064:5

confusing [1] - 4006:1

Congress [2] -

3920:6, 3920:10

congressional [1] -

3920:15

connection [8] -

3955:22, 3959:12,

3976:1, 4059:20,

4060:8, 4060:22,

4061:10, 4062:6

consensus [1] -

3926:8

consequences [1] -

4066:4

consequently [1] -

3943:16

consider [8] -

3939:16, 4006:19,

4008:2, 4010:22,

4010:24, 4012:10,

4013:11, 4041:2

Consider [1] - 3957:5

considerable [5] -

3916:22, 3928:15,

3994:18, 3995:1,

3995:7

considerations [2] -

3971:11, 4013:21

considered [11] -

3925:16, 3942:15,

3949:1, 3954:8,

3979:25, 4007:20,

4037:10, 4041:1,

4048:23, 4066:24

considering [2] -

3919:5, 3920:10

consistent [5] -

3934:3, 4009:6,

4012:3, 4013:9,

4053:13

consolidating [1] -

4017:24

construct [1] -

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 174 of 198 PageID: 19427
3919:17

consultant [11] -

4044:18, 4044:20,

4045:2, 4045:10,

4046:24, 4049:19,

4049:24, 4057:24,

4057:25, 4069:12,

4069:20

Consultation [2] -

3974:10, 3974:11

consultation [2] -

3953:4, 3974:5

consulted [6] -

3916:17, 3917:25,

3919:15, 3967:21,

3975:5, 3984:11

consulting [12] -

3910:11, 3918:3,

3947:18, 3953:16,

4049:4, 4050:13,

4050:19, 4055:11,

4055:21, 4056:20,

4060:1, 4060:19

consumer [1] -

4061:21

contain [2] - 3988:9,

4000:24

contained [18] -

3914:2, 3932:15,

3940:7, 3951:23,

3974:22, 3983:12,

3984:18, 3988:12,

4000:14, 4006:25,

4009:11, 4014:21,

4015:9, 4016:8,

4016:14, 4024:4,

4026:7

contains [1] - 3989:2

contamination [1] -

3919:9

contemplated [3] -

3936:21, 3973:11,

4068:3

contents [2] -

3939:17, 3983:16

contested [1] - 3952:5

context [10] - 3954:25,

3964:20, 4010:14,

4047:15, 4055:11,

4055:17, 4061:4,

4061:5, 4069:2

contingent [1] -

4062:17

continue [4] -

3989:17, 4009:5,

4028:18, 4071:8

continues [1] - 4016:3

contract [2] - 3935:15,

3936:22

contrary [1] - 3970:6

contribute [1] -

3983:6

contributed [2] -

3916:16, 3978:17

contribution [1] -

3955:7

contributions [1] -

3961:13

control [1] - 3961:16

controlled [1] -

4040:14

conversations [4] -

3981:3, 3981:17,

3981:20, 3999:24

convey [1] - 3978:23

conveyed [1] -

3978:21

conveying [1] -

3921:6

cool [1] - 3944:13

copy [2] - 3969:5,

4032:25

Cornerstone [31] -

3922:25, 3923:1,

3923:8, 3974:5,

3974:8, 3974:13,

3974:15, 3974:23,

3975:23, 3975:24,

3976:4, 3976:8,

3977:23, 3978:1,

3978:3, 3978:7,

3979:24, 3980:18,

3980:21, 3980:22,

3981:7, 3981:17,

3982:6, 3982:23,

3983:4, 3983:25,

4062:4, 4062:5,

4062:11, 4062:14

corporate [5] -

3952:15, 3957:6,

4012:10, 4012:15,

4051:12

corporate-wide [4] -

3952:15, 3957:6,

4012:10, 4012:15

corporation [1] -

3957:7

Corporation [1] -

4044:19

corporation's [1] -

4051:13

Correct [13] - 3970:17,

3987:8, 3987:14,

3994:11, 3996:7,

3996:12, 4008:23,

4009:8, 4011:12,

4020:23, 4024:7,

4031:9, 4033:17

correct [230] -

3905:23, 3926:12,

3951:15, 3965:20,

3965:24, 3966:5,

3966:12, 3966:15,

3966:20, 3966:24,

3967:8, 3967:11,

3967:16, 3968:3,

3968:12, 3968:15,

3969:20, 3970:13,

3970:20, 3971:4,

3971:6, 3971:8,

3971:21, 3972:2,

3972:8, 3972:11,

3972:18, 3972:20,

3973:2, 3973:19,

3973:23, 3974:1,

3974:6, 3974:20,

3975:1, 3975:11,

3975:15, 3975:18,

3975:21, 3976:9,

3976:14, 3976:17,

3976:22, 3976:25,

3977:3, 3977:6,

3977:13, 3977:19,

3977:23, 3977:25,

3978:9, 3978:16,

3978:22, 3979:5,

3979:14, 3979:21,

3980:1, 3980:7,

3980:10, 3980:18,

3980:24, 3981:5,

3981:8, 3981:18,

3982:1, 3982:7,

3982:13, 3982:25,

3983:5, 3983:10,

3984:2, 3984:11,

3984:14, 3984:24,

3985:8, 3985:12,

3986:4, 3986:7,

3986:11, 3986:14,

3986:18, 3987:18,

3987:25, 3988:2,

3988:5, 3990:4,

3990:15, 3990:18,

3990:21, 3991:3,

3991:6, 3991:9,

3991:14, 3992:11,

3992:23, 3993:16,

3993:20, 3993:25,

3994:6, 3994:9,

3994:14, 3994:20,

3995:2, 3995:5,

3995:9, 3995:20,

3996:2, 3996:9,

3997:7, 3997:10,

3997:16, 3997:21,

3998:1, 3999:18,

3999:20, 3999:22,

4000:15, 4000:19,

4000:22, 4001:9,

4001:11, 4002:2,

4002:10, 4002:13,

4002:17, 4002:20,

4002:24, 4003:6,

4003:14, 4003:20,

4004:7, 4004:13,

4005:8, 4005:25,

4006:12, 4006:17,

4006:20, 4007:1,

4007:7, 4007:9,

4007:17, 4007:25,

4008:4, 4009:3,

4009:10, 4009:23,

4010:8, 4011:15,

4011:23, 4012:1,

4012:7, 4012:20,

4013:16, 4013:24,

4014:6, 4014:10,

4014:21, 4015:22,

4016:9, 4016:15,

4016:18, 4016:22,

4017:13, 4017:14,

4017:24, 4018:18,

4018:24, 4019:4,

4019:17, 4019:22,

4019:25, 4020:6,

4020:20, 4021:1,

4021:2, 4021:4,

4021:7, 4021:9,

4021:15, 4021:23,

4022:3, 4023:17,

4024:4, 4024:11,

4024:15, 4024:20,

4025:2, 4025:5,

4025:8, 4025:18,

4025:24, 4026:5,

4027:1, 4027:3,

4027:8, 4027:15,

4029:3, 4029:7,

4029:17, 4030:4,

4030:9, 4031:5,

4031:21, 4033:8,

4033:11, 4033:24,

4034:23, 4035:9,

4035:16, 4035:24,

4057:6, 4059:14,

4059:15, 4061:16,

4061:17, 4061:19,

4061:20, 4061:22,

4061:24, 4062:3,

4062:7, 4062:13,

4062:15, 4062:16,

4063:14, 4064:5,

4064:15, 4064:18,

4065:21

correctly [4] - 3941:2,

3989:25, 3994:21,

4013:3

correlation [3] -

4009:22, 4009:25,

4010:1

Cost [3] - 3917:13,

3955:17, 3956:3

United States District Court

Trenton, New Jersey

4079

cost [165] - 3910:4,

3910:6, 3916:5,

3916:6, 3916:13,

3916:16, 3916:17,

3917:11, 3917:12,

3917:16, 3917:20,

3917:22, 3917:23,

3918:1, 3918:4,

3918:9, 3918:10,

3918:21, 3918:22,

3919:4, 3919:6,

3919:7, 3919:13,

3919:15, 3919:18,

3919:19, 3919:23,

3920:1, 3923:20,

3924:14, 3931:10,

3942:11, 3942:15,

3942:20, 3942:22,

3942:23, 3943:1,

3943:3, 3943:5,

3943:11, 3944:3,

3944:6, 3944:8,

3944:10, 3944:12,

3944:14, 3944:19,

3944:22, 3944:25,

3945:3, 3945:5,

3945:6, 3945:7,

3945:9, 3945:14,

3945:16, 3945:17,

3945:18, 3945:20,

3945:22, 3945:24,

3945:25, 3946:1,

3946:4, 3946:7,

3946:8, 3946:13,

3947:2, 3947:20,

3947:22, 3947:23,

3949:8, 3949:10,

3952:8, 3952:10,

3952:20, 3953:17,

3954:8, 3954:11,

3954:14, 3954:24,

3955:19, 3956:5,

3956:7, 3956:22,

3957:3, 3957:4,

3957:10, 3957:17,

3958:5, 3958:11,

3958:22, 3958:25,

3960:18, 3961:8,

3963:15, 3972:15,

3972:16, 3983:10,

3992:25, 3993:3,

3993:5, 3993:6,

3993:14, 3993:18,

3994:5, 3994:18,

3994:19, 3994:23,

3995:2, 3995:4,

3995:6, 3995:8,

3995:16, 3996:20,

3997:10, 3997:20,

3998:6, 3999:15,

4001:25, 4002:16,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 175 of 198 PageID: 19428
4002:22, 4003:14,

4003:18, 4003:24,

4005:5, 4006:10,

4006:16, 4006:17,

4006:24, 4007:13,

4007:16, 4007:19,

4007:21, 4007:24,

4008:2, 4008:3,

4009:7, 4010:4,

4011:11, 4011:21,

4013:7, 4013:11,

4017:10, 4022:14,

4022:20, 4026:11,

4034:20, 4035:8,

4036:8, 4036:12,

4037:22, 4038:5,

4038:6, 4039:4,

4041:4, 4050:24,

4056:4, 4066:23

costing [1] - 3956:5

costly [2] - 3945:8,

3945:12

costs [100] - 3917:14,

3919:10, 3919:16,

3920:3, 3924:23,

3928:8, 3928:10,

3928:18, 3938:1,

3938:2, 3944:4,

3945:11, 3946:9,

3949:6, 3949:11,

3949:21, 3949:23,

3950:5, 3950:6,

3950:7, 3950:9,

3950:10, 3950:17,

3951:1, 3951:23,

3952:3, 3952:20,

3953:23, 3955:2,

3957:3, 3957:8,

3957:12, 3957:14,

3957:16, 3957:24,

3958:13, 3958:15,

3959:22, 3961:2,

3961:5, 3961:17,

3961:22, 3961:25,

3962:13, 3962:14,

3962:20, 3962:21,

3963:17, 3968:10,

3970:20, 3970:22,

3970:23, 3970:24,

3971:1, 3971:2,

3971:3, 3971:10,

3972:1, 3995:19,

3996:17, 3996:18,

3998:3, 4002:9,

4003:9, 4011:22,

4011:25, 4012:3,

4012:20, 4013:9,

4013:24, 4014:6,

4014:13, 4014:17,

4016:14, 4021:24,

4022:2, 4022:6,

4023:8, 4024:20,

4025:20, 4028:7,

4028:25, 4035:22,

4036:13, 4036:25,

4038:22, 4038:23,

4039:1, 4040:25,

4041:2, 4041:23,

4054:23, 4056:1,

4056:3, 4056:9,

4056:12, 4065:25,

4066:16, 4067:2

Counsel [1] - 4071:24

COUNSEL [1] -

3906:17

couple [14] - 3912:3,

3913:23, 3922:15,

3928:23, 3933:11,

3963:3, 3978:2,

3998:25, 3999:22,

4036:23, 4049:6,

4051:12, 4053:2,

4060:1

course [7] - 3919:12,

3945:12, 4032:9,

4039:9, 4051:13,

4051:17, 4051:18

courses [8] - 3916:13,

3917:21, 3917:22,

4048:16, 4051:10,

4051:11, 4051:22

coursework [1] -

4051:11

COURT [98] - 3905:1,

3905:17, 3908:1,

3908:4, 3908:7,

3908:11, 3923:23,

3924:9, 3924:12,

3931:22, 3931:24,

3942:10, 3947:4,

3947:6, 3951:14,

3964:23, 3964:25,

3965:4, 3965:7,

3965:11, 3965:13,

3968:21, 3968:23,

3969:7, 3982:16,

3982:20, 3991:22,

3991:24, 3992:1,

3992:4, 3998:7,

3998:10, 3998:21,

3998:23, 3999:2,

3999:6, 3999:9,

3999:12, 4005:11,

4005:19, 4006:2,

4006:6, 4015:16,

4015:19, 4017:7,

4020:7, 4020:11,

4022:21, 4022:24,

4023:3, 4023:19,

4026:21, 4028:12,

4028:15, 4028:18,

4030:13, 4030:15,

4030:19, 4030:22,

4031:25, 4032:2,

4032:8, 4032:25,

4034:13, 4034:15,

4034:17, 4036:2,

4036:4, 4036:7,

4036:19, 4037:2,

4037:21, 4037:25,

4038:3, 4039:3,

4039:8, 4039:12,

4040:9, 4041:7,

4041:9, 4042:2,

4042:5, 4042:10,

4042:14, 4042:19,

4042:21, 4057:2,

4058:25, 4059:4,

4059:10, 4067:22,

4068:15, 4068:21,

4068:24, 4069:7,

4071:10, 4071:20,

4071:23

court [4] - 3973:13,

4054:9, 4060:20,

4060:24

Court [11] - 3923:18,

3925:18, 3969:5,

4000:11, 4001:25,

4043:10, 4045:14,

4048:11, 4052:7,

4054:15, 4057:20

COURTHOUSE [1] -

3905:14

courts [1] - 4054:9

cover[4] - 3956:1,

3974:2, 3977:15,

4047:7

covered [2] - 4032:15,

4057:19

CPAs [1] - 3922:14

create [1] - 3927:14

creation [1] - 3953:18

credentials [2] -

4067:6, 4069:8

credibility [1] - 3969:8

credit [3] - 3910:21,

3936:14, 3937:2

crisis [3] - 3921:4,

3966:11, 4044:12

Criteria [1] - 3956:3

criteria [10] - 3932:11,

3940:10, 3956:10,

3956:14, 3956:16,

4065:23, 4066:8,

4067:17, 4067:19,

4068:18

criterion [6] - 3956:6,

3956:18, 3957:2,

4009:7, 4012:7,

4012:9

criticism [1] - 3962:16

criticized [1] -

3962:12

CROSS [2] - 3907:3,

3965:15

Cross [1] - 3965:1

cross [3] - 3924:7,

3965:9, 3998:14

CROSSEXAMINATION [2] -

3907:3, 3965:15

cross-examination [2]

- 3924:7, 3998:14

culled [1] - 4063:13

cures [1] - 3920:20

Currency [2] -

4044:22, 4046:1

current [3] - 3908:15,

4042:25, 4051:1

customer [3] -

3930:12, 3930:14,

3930:22

customers [2] -

3930:21, 4046:21

cut [1] - 3944:18

D

DAC [29] - 4020:17,

4021:25, 4022:2,

4023:10, 4023:12,

4024:20, 4025:5,

4025:11, 4025:16,

4025:23, 4036:5,

4036:8, 4036:10,

4036:14, 4036:22,

4036:24, 4037:15,

4038:5, 4038:6,

4038:15, 4038:17,

4038:24, 4039:3,

4039:7, 4041:3,

4041:16, 4041:17,

4041:18

daily [1] - 4038:16

damage [1] - 4050:5

damages [1] - 4050:3

DANIEL [1] - 3906:4

data [7] - 3945:4,

3945:7, 3952:14,

4022:11, 4037:14,

4070:5, 4070:7

database [3] -

3927:12, 3927:14,

3927:19

date [1] - 3909:21

dated [4] - 3969:20,

3986:13, 3990:15,

3991:2

dates [1] - 3909:2

United States District Court

Trenton, New Jersey

4080

Daubert [2] - 4067:17,

4068:20

daughter's [1] -

4043:7

DAY [1] - 3905:20

day-to-day [2] -

4037:11, 4039:9

deal [6] - 3917:23,

3919:7, 3922:10,

3926:17, 4053:15,

4053:20

dealing [3] - 3912:21,

4060:5, 4061:7

deals [2] - 3911:18,

3911:19

dealt [3] - 3911:19,

4053:16, 4068:18

Dean [1] - 3908:16

decide [1] - 3944:17

decided [1] - 3962:9

decision [6] -

3910:16, 3916:3,

3997:16, 4053:7,

4053:9, 4053:10

Decision [1] - 4053:2

Decisions [1] - 3956:4

decisions [8] -

3910:20, 3910:21,

3917:3, 3917:6,

3917:8, 3935:1,

3955:3, 3956:17

decline [1] - 4048:8

declines [1] - 4056:4

decrease [1] - 4035:23

decreases [1] -

4035:13

deducted [2] -

4019:12, 4020:2

deduction [1] -

4019:16

deductions [2] -

3963:6, 3963:7

deep [1] - 3953:15

DEFENDANT [1] -

3905:11

defendant [3] -

3924:4, 3988:2,

3988:12

Defendant's [12] -

3907:9, 3930:5,

3931:4, 3931:18,

3931:21, 3931:25,

3932:3, 3950:19,

3955:10, 4007:4,

4011:8, 4030:3

DEFENDANTS [3] -

3905:7, 3906:10,

3906:15

defendants [12] -

3908:3, 3908:5,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 176 of 198 PageID: 19429
3975:20, 3981:18,

3981:21, 3981:25,

3987:24, 3988:5,

3989:12, 3998:13,

4042:18, 4058:11

Defendants [1] -

3908:6

Defense [1] - 4026:19

deferred [18] -

3968:11, 3968:12,

3968:13, 3970:20,

3970:22, 3970:23,

3970:24, 3971:1,

3971:2, 3971:3,

3971:25, 4003:8,

4022:2, 4022:5,

4023:8, 4024:20,

4025:20, 4036:25

Deferred [2] -

3971:10, 4036:13

define [2] - 3917:12,

4032:6

defined [3] - 3965:24,

3968:1, 3968:5

defines [1] - 4033:19

degree [6] - 3908:22,

3908:24, 3909:4,

3983:13, 3994:1,

4043:12

degrees [1] - 3909:3

delegated [2] -

3914:14, 3936:10

deleting [1] - 4039:3

demonstrated [1] -

4058:16

demonstrative [3] -

3931:16, 3932:8,

4030:3

deny [1] - 4023:4

Department [2] -

4044:20, 4045:23

department [5] -

3992:13, 3992:20,

3994:13, 4014:20,

4015:8

departments [2] -

3918:14, 3918:23

depended [1] -

3973:15

dependent [1] -

4039:23

Deposit [1] - 4044:19

deposition [43] -

3925:14, 3948:25,

3954:4, 3966:18,

3968:19, 3968:25,

3969:3, 3969:5,

3969:12, 3969:15,

3969:16, 3969:22,

3970:1, 3970:4,

3975:6, 3977:10,

3979:13, 3980:9,

3980:24, 3981:1,

3984:17, 3984:19,

3985:18, 3986:3,

3986:10, 3986:20,

3986:21, 3995:25,

3996:11, 3996:23,

3997:24, 4000:21,

4006:24, 4013:14,

4014:2, 4014:3,

4015:13, 4015:23,

4015:25, 4016:5,

4062:8, 4063:20,

4063:25

depositions [8] -

3932:23, 3960:4,

3979:15, 3979:17,

3979:22, 3980:12,

3980:13, 4064:2

depreciation [1] -

3944:7

DEPUTY [1] - 3908:9

derivatives [1] -

3915:18

describe [10] -

3908:19, 3909:6,

3911:1, 3916:10,

3918:3, 3952:17,

4048:11, 4054:15,

4055:23, 4057:20

described [3] -

3954:12, 4045:19,

4056:22

describes [1] -

3956:17

description [4] -

3997:22, 3998:1,

3998:5, 4067:7

design [1] - 3945:21

designed [10] -

3910:16, 3910:24,

3915:21, 3916:3,

3916:8, 3926:24,

3931:13, 3932:9,

3946:21, 3955:4

desirable [1] -

3927:14

desire [1] - 3958:13

detail [6] - 4041:5,

4045:15, 4045:24,

4045:25, 4047:2,

4049:22

determination [3] -

3918:21, 3935:22,

3993:6

determinations [2] -

3936:5, 3944:23

determine [10] -

3918:11, 3946:21,

3949:10, 3955:1,

3994:5, 3996:20,

3997:20, 4007:23,

4045:5, 4051:20

determining [1] -

3918:25

develop [9] - 3941:15,

3973:3, 3973:9,

3973:18, 3976:11,

3984:9, 3995:8,

4006:15, 4010:1

developed [9] -

3922:17, 3922:22,

3946:13, 3947:3,

3953:2, 3953:3,

3966:14, 3973:16,

3996:6

developing [8] -

3919:3, 3923:16,

3973:11, 3979:4,

3979:8, 3979:14,

3982:13, 3982:24

development [3] -

3953:9, 3973:21,

4050:18

developments [1] -

4046:4

deviations [1] -

3928:6

devoted [3] - 3917:21,

3959:24, 4062:22

Dial [1] - 4043:4

differ [2] - 3916:19,

3948:3

difference [2] -

4027:14, 4057:14

differences [2] -

3968:17, 4027:16

different [14] - 3913:3,

3919:24, 3927:9,

3928:6, 3943:18,

3945:10, 3948:8,

3951:11, 3983:24,

3990:9, 4006:16,

4063:6, 4066:7,

4069:14

differentiation [1] -

4040:17

differently [1] -

3921:14

difficult [2] - 3927:10,

3948:4

diligent [1] - 3995:18

dimensions [1] -

4058:8

diminish [1] - 3921:15

DIRE [2] - 3907:5,

4059:6

dire [6] - 4056:25,

4057:1, 4057:4,

4059:2, 4059:4,

4071:13

direct [25] - 3924:24,

3931:12, 3945:19,

3946:11, 3962:14,

3970:8, 3975:4,

3979:12, 3989:14,

3998:15, 4001:5,

4001:16, 4008:7,

4008:12, 4011:14,

4014:21, 4014:25,

4016:20, 4018:7,

4018:20, 4026:19,

4029:12, 4032:3,

4032:23, 4057:1

DIRECT [4] - 3907:2,

3907:4, 3908:14,

4042:23

directed [2] - 3978:12,

3982:8

direction [4] - 3932:6,

3940:25, 3982:5,

4023:21

directly [16] - 3940:23,

3941:5, 3945:5,

3950:10, 3961:20,

3962:21, 3981:22,

4003:8, 4011:22,

4018:25, 4019:18,

4019:20, 4020:16,

4023:25, 4024:4,

4024:17

DIRECTOR [1] -

3906:17

Directors [1] - 3984:2

directs [1] - 3941:4

disagree [1] - 3939:4

disagreements [1] -

4045:7

disburses [1] -

3940:23

disclosure [1] -

4041:3

disclosures [1] -

3912:25

disconsonant [2] -

3939:13, 3998:2

discovered [1] -

4004:6

discretion [9] -

3934:23, 3935:13,

3935:16, 3935:21,

3936:1, 3936:2,

3936:4, 3936:5,

3936:11

discuss [1] - 3915:15

discussed [3] -

3993:1, 3993:19,

4007:12

discusses [2] -

United States District Court

Trenton, New Jersey

4081

3985:7, 4024:3

discussing [7] -

3932:10, 3938:25,

3940:8, 4010:19,

4016:7, 4017:11

discussion [3] -

3915:19, 3977:2,

4069:23

discussions [7] -

3924:2, 3925:13,

3932:21, 3981:6,

3981:7, 3981:24,

3999:17

diseconomies [1] -

4056:8

dispute [1] - 3977:10

disqualifying [1] -

4069:5

dissertation [1] -

3908:25

distinct [1] - 3981:11

distinguish [1] -

4028:6

distinguished [1] -

3922:14

distributed [1] -

4055:3

distribution [8] -

3961:12, 4010:20,

4010:22, 4045:2,

4049:19, 4049:23,

4055:3, 4056:16

DISTRICT [4] - 3905:1,

3905:1, 3905:17,

3905:18

dividends [1] -

3961:14

division [2] - 3936:9,

3957:9

division's [1] -

3957:10

divisions [5] -

3957:11, 3957:13,

3958:19, 4012:17,

4012:18

doctor [1] - 4057:2

Doctor [1] - 4020:12

Doctorate [3] -

3908:25, 3909:5,

3909:7

document [43] -

3926:4, 3926:11,

3927:2, 3931:20,

3932:5, 3932:13,

3932:15, 3950:21,

3951:2, 3951:5,

3959:7, 3977:5,

3980:7, 3988:21,

3990:20, 3991:2,

3996:1, 3996:7,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 177 of 198 PageID: 19430
3997:7, 3997:9,

4000:12, 4000:14,

4000:22, 4000:23,

4001:6, 4001:13,

4001:17, 4001:24,

4002:2, 4011:15,

4020:9, 4025:13,

4025:20, 4027:6,

4027:7, 4029:13,

4029:25, 4033:4,

4033:14, 4034:1,

4034:2, 4034:3

documentation [1] -

3979:7

documents [37] -

3913:5, 3923:14,

3925:9, 3925:14,

3932:16, 3932:23,

3935:6, 3948:23,

3948:24, 3950:1,

3951:6, 3951:7,

3954:5, 3960:2,

3975:4, 3978:4,

3978:9, 3978:11,

3978:13, 3978:25,

3979:4, 3979:7,

3979:25, 3980:2,

3983:3, 3992:2,

3996:24, 3997:2,

3997:15, 3997:17,

3997:19, 4035:6,

4039:18, 4039:20,

4040:7, 4041:4

dollar[4] - 3943:25,

3944:4, 4049:9,

4050:1

dollars [1] - 4062:15

done [25] - 3909:25,

3910:11, 3911:1,

3917:20, 3919:19,

3920:20, 3947:16,

3949:19, 3953:4,

3961:24, 3964:4,

3977:19, 3983:2,

3986:11, 3993:13,

4002:23, 4004:2,

4036:24, 4050:12,

4052:1, 4055:13,

4057:22, 4060:19,

4064:17, 4068:7

doubt [1] - 3989:22

down [24] - 3951:1,

3965:7, 3994:23,

3998:12, 3999:4,

4005:7, 4005:17,

4007:25, 4008:15,

4018:8, 4020:25,

4022:18, 4022:23,

4026:17, 4031:11,

4035:19, 4036:4,

4037:9, 4040:11,

4041:20, 4042:3,

4045:13, 4070:20,

4071:21

Dr[16] - 3965:16,

3988:21, 3999:15,

4033:4, 4042:25,

4043:10, 4052:15,

4054:2, 4058:12,

4068:2, 4068:5,

4068:6, 4068:8,

4068:25, 4069:5,

4069:8

draft [4] - 3985:17,

3986:11, 3989:17,

3989:20

drafted [14] - 3975:18,

3976:13, 3976:16,

3977:13, 3985:12,

3986:3, 3986:6,

3986:17, 3987:11,

3987:17, 3987:18,

3990:4, 4009:15,

4011:5

drafter[1] - 4009:20

drafting [19] -

3974:16, 3975:9,

3976:9, 3976:20,

3976:21, 3976:24,

3977:2, 3977:5,

3977:8, 3977:16,

3978:4, 3989:25,

3990:1, 3990:3,

3990:6, 3990:21,

3990:22, 3991:13,

3991:15

draftsperson [1] -

3974:19

drawn [1] - 4025:14

drive [1] - 3992:22

driven [1] - 3940:11

driver[4] - 3945:17,

3945:18, 3946:4,

4007:21

drivers [19] - 3945:5,

3945:16, 3945:21,

3945:24, 3946:1,

3952:8, 3956:5,

3956:7, 3958:11,

3994:5, 4002:16,

4002:22, 4003:14,

4007:16, 4007:19,

4007:24, 4008:2,

4008:3, 4013:7

drove [1] - 3944:7

due [1] - 3926:23

duration [1] - 3910:12

during [15] - 3909:10,

3909:11, 3913:8,

3915:11, 3915:13,

3922:5, 3966:10,

3966:18, 3967:23,

3972:22, 3977:9,

3977:10, 3984:17,

4032:9

Duties [1] - 3984:2

duties [1] - 3936:9

duty [1] - 4039:14

DX-1510 [2] - 3926:3,

3930:4

E

earliest [1] - 3918:5

early [4] - 3909:20,

3914:12, 3945:10,

4051:25

earn [1] - 4048:10

earned [2] - 3930:12,

3930:15

ears [1] - 3974:7

easier[1] - 3927:19

easily [1] - 3941:15

EAST [1] - 3905:14

economic [15] -

3917:14, 3917:16,

3920:2, 3923:3,

3937:16, 3939:11,

3943:11, 3956:17,

3964:6, 4044:21,

4044:22, 4049:8,

4065:2, 4070:8

economically [1] -

4011:23

economics [11] -

3939:25, 4043:12,

4043:14, 4043:23,

4044:1, 4044:2,

4051:8, 4051:14,

4058:12, 4067:7,

4069:18

Economics [3] -

4052:23, 4053:2,

4053:24

economies [19] -

4050:20, 4054:16,

4054:21, 4055:2,

4055:4, 4055:9,

4055:16, 4055:24,

4055:25, 4056:4,

4056:7, 4056:13,

4056:18, 4058:16,

4058:18, 4060:22,

4067:6, 4069:20,

4069:22

Economist [2] -

4045:11, 4049:5

economist [7] -

4045:21, 4048:15,

4049:7, 4052:2,

4054:11, 4058:1,

4069:4

economy [1] -

4057:14

edited [2] - 3975:11,

4057:23

edition [1] - 3955:16

editions [1] - 3911:13

editor [9] - 3912:20,

4052:19, 4052:20,

4053:7, 4053:10,

4053:16, 4053:21

editorial [4] - 4052:16,

4053:4, 4053:6,

4070:7

editors [1] - 4053:10

education [2] -

3955:7, 4070:1

educational [2] -

3908:19, 4043:11

effect [19] - 3945:19,

3945:21, 3956:6,

3956:9, 3956:15,

3956:19, 3957:21,

3967:4, 3993:25,

3995:16, 4009:4,

4009:7, 4011:25,

4013:2, 4013:6,

4020:23, 4023:7,

4027:25, 4035:25

effective [7] - 4028:1,

4028:2, 4028:3,

4028:20, 4028:23,

4029:9

effects [4] - 4020:21,

4025:25, 4026:8,

4038:20

efficiency [1] - 3923:9

effort [8] - 3946:22,

3948:7, 3952:12,

3959:24, 3961:11,

3994:18, 3995:1,

3995:7

efforts [1] - 3915:22

eight [6] - 3926:24,

3931:13, 3931:15,

3932:25, 3933:1,

4029:21

eighth [1] - 3936:14

EITF [18] - 3926:8,

3926:10, 3926:19,

3926:24, 3927:17,

3927:21, 3928:3,

3932:10, 3932:15,

3940:7, 4026:20,

4027:9, 4027:17,

4029:17, 4029:18,

4031:2, 4031:5,

4031:21

United States District Court

Trenton, New Jersey

4082

EITFs [1] - 4032:6

either [14] - 3921:6,

3933:5, 3958:10,

3966:22, 3973:12,

3991:15, 4011:22,

4046:4, 4048:3,

4051:24, 4052:19,

4053:24, 4056:6,

4064:17

electrical [1] - 3944:14

electronic [2] -

3927:9, 3927:12

element [3] - 3947:4,

3971:3, 4006:21

elements [5] -

3952:21, 3968:16,

3984:22, 4013:4,

4035:19

eligible [1] - 3918:16

eliminating [1] -

4039:6

embark [1] - 3983:13

embodied [1] -

3939:18

emerge [1] - 3928:7

Emerging [2] -

3926:7, 3926:14

emerging [3] -

3926:25, 3928:11,

3979:5

Eminent [1] - 4043:4

Emphasis [1] -

3955:17

employ [2] - 3971:23,

3972:5

employed [3] -

3999:16, 4003:19,

4050:23

employee [3] - 3978:1,

4062:4, 4062:5

employees [6] -

3950:8, 3950:10,

3959:24, 3961:17,

3961:19, 4019:2

employer[2] -

3941:22, 3942:3

employment [3] -

3909:6, 3967:25,

4044:1

employs [1] - 4053:13

encompasses [1] -

3911:6

end [2] - 3980:13,

4049:14

endeavor [5] -

3917:14, 3917:17,

3920:2, 3943:11,

3947:11

endeavors [1] -

3916:18

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 178 of 198 PageID: 19431
ended [2] - 3913:18,

3994:13

ending [1] - 4002:3

endowed [1] -

3909:17

engaged [8] -

3973:17, 3981:13,

4003:18, 4004:11,

4008:23, 4046:14,

4046:16, 4052:3

engagement [5] -

3947:18, 3948:3,

3981:16, 3983:13

engagements [1] -

3923:6

Enron [1] - 3920:14

ensure [1] - 4049:13

enter [1] - 3936:2

entered [1] - 4050:2

enterprise [1] -

3910:18

enterprises [6] -

3910:23, 3912:10,

3915:7, 3916:4,

3917:4, 3955:5

entertain [1] - 3924:6

entire [4] - 3941:3,

4029:25, 4040:9,

4040:10

entirely [3] - 3924:1,

3949:7, 4042:1

entirety [8] - 3980:7,

3984:5, 3987:21,

4029:19, 4063:21,

4063:24, 4064:2,

4064:3

entities [5] - 3913:7,

4019:7, 4019:10,

4028:4, 4058:5

entitled [6] - 3956:3,

3973:25, 4001:8,

4017:21, 4018:8,

4033:10

entity [10] - 3910:17,

3933:9, 3933:12,

3934:8, 3935:12,

3935:22, 3936:14,

4019:4, 4019:17,

4033:20

entries [1] - 3990:20

entry [1] - 4037:5

environment [3] -

3919:9, 4004:24,

4005:2

EQAT [19] - 3924:19,

3925:21, 3939:3,

3939:24, 3948:13,

3949:5, 3951:2,

3959:3, 3963:21,

4001:11, 4001:14,

4005:8, 4010:8,

4013:24, 4020:25,

4026:17, 4034:22,

4035:15

equations [1] -

3994:24

EQUITABLE [3] -

3905:6, 3905:10,

3906:18

Equitable [34] -

3948:15, 3949:6,

3949:14, 3950:4,

3950:17, 3951:20,

3951:23, 3952:7,

3952:8, 3959:2,

3959:11, 3959:17,

3959:18, 3960:18,

3960:24, 3961:6,

4008:23, 4009:1,

4010:12, 4017:14,

4018:18, 4019:12,

4019:22, 4019:24,

4020:3, 4020:19,

4020:22, 4020:24,

4021:3, 4021:14,

4021:22, 4025:17,

4026:5, 4026:16

Equitable's [1] -

3950:3

equity [2] - 3956:21,

4051:16

Ernst [3] - 3953:5,

3953:8, 4000:4

errors [2] - 3988:9,

3989:2

ESQUIRE [14] -

3906:4, 3906:4,

3906:5, 3906:5,

3906:6, 3906:6,

3906:7, 3906:10,

3906:13, 3906:13,

3906:14, 3906:14,

3906:15, 3906:17

essentially [9] -

3918:17, 3928:14,

3936:15, 3943:2,

3943:13, 3964:5,

4002:4, 4009:25,

4037:10

Essentially [1] -

3942:19

establish [2] - 4003:5,

4015:14

established [5] -

3913:6, 3916:24,

3926:16, 3928:17,

4027:10

establishing [5] -

3915:6, 3916:25,

3926:22, 3934:9,

3934:15

establishment [1] -

3953:7

estate [1] - 4061:18

estimate [3] - 3946:7,

3947:23, 3958:13

et [3] - 3905:3, 3905:6,

3905:8

evaluate [2] - 3919:4,

4039:20

evaluated [3] -

3947:12, 3962:6,

4047:9

evaluating [2] -

3954:9, 4048:23

evaluation [2] -

4037:4, 4052:13

evaluations [1] -

4023:9

evening [1] - 4071:23

eventually [3] -

3973:17, 4026:17,

4035:19

evidence [19] -

3907:9, 3907:10,

3907:11, 3931:21,

3931:25, 3934:3,

3937:6, 3940:9,

3947:15, 3952:2,

3970:6, 3991:20,

3992:6, 4000:10,

4034:12, 4034:18,

4035:6, 4056:17,

4065:22

exact [3] - 3909:21,

3974:17, 3976:3

exactly [1] - 3954:13

EXAMINATION [6] -

3907:2, 3907:3,

3907:4, 3908:14,

3965:15, 4042:23

examination [6] -

3921:21, 3924:7,

3975:5, 3998:14,

4044:23, 4046:5

examined [1] -

4060:25

examining [1] -

4050:21

example [30] - 3914:5,

3915:8, 3918:17,

3919:8, 3919:16,

3928:21, 3928:24,

3938:16, 3938:21,

3941:20, 3943:21,

3944:21, 3958:1,

3958:17, 3968:13,

3983:16, 3993:13,

4012:9, 4012:11,

4031:16, 4036:16,

4046:6, 4046:10,

4047:15, 4048:20,

4050:23, 4065:7,

4065:25, 4066:13,

4066:19

examples [3] -

3933:11, 3934:20,

3941:19

Excel [1] - 3954:5

exception [2] -

4003:10, 4038:22

excerpt [1] - 3955:16

Exchange [4] -

3914:5, 3921:14,

4069:14, 4069:18

excluded [5] - 4030:6,

4030:17, 4031:20,

4037:18, 4038:25

Excludes [1] - 4031:7

excluding [2] -

3963:7, 4021:24

exclusion [1] - 4041:3

exclusive [1] - 3975:3

exclusively [1] -

4068:9

excuse [1] - 4067:18

excused [1] - 4042:4

Executive [2] -

3914:23, 3965:25

executive [1] - 3913:2

executives [3] -

3912:6, 3912:10,

3926:15

Exhibit [22] - 3907:9,

3907:11, 3930:5,

3931:4, 3931:19,

3931:21, 3931:25,

3932:3, 3950:20,

3955:10, 3959:6,

4000:15, 4000:22,

4007:4, 4008:10,

4011:9, 4015:15,

4015:21, 4016:4,

4026:20, 4030:3,

4034:18

exhibit [12] - 3932:17,

3933:7, 3934:21,

3950:24, 3996:25,

3997:1, 3997:3,

4000:17, 4000:24,

4016:9, 4016:11,

4030:3

exhibits [3] - 3968:25,

3996:24, 3997:3

Exhibits [2] - 3907:10,

3992:5

exist [8] - 3944:24,

3945:2, 3945:24,

3946:1, 3946:4,

3957:21, 3970:22,

United States District Court

Trenton, New Jersey

4083

4060:22

existence [2] - 3945:5,

4056:13

existing [3] - 3927:15,

3927:18, 3936:3

exists [7] - 3943:10,

4016:21, 4023:12,

4035:11, 4056:18,

4065:23, 4067:18

expand [1] - 3964:14

expect [3] - 3910:2,

4019:11, 4028:17

expense [18] -

3931:12, 3935:15,

3936:22, 3942:1,

3960:6, 3963:7,

3964:3, 3992:22,

3997:9, 4014:22,

4017:10, 4019:7,

4019:11, 4019:13,

4028:8, 4029:1,

4037:16, 4041:25

Expense [2] - 4001:8,

4017:21

Expenses [1] - 4018:9

expenses [95] -

3924:24, 3925:22,

3928:9, 3928:10,

3928:18, 3937:10,

3938:2, 3938:7,

3939:2, 3939:23,

3940:12, 3940:16,

3948:14, 3949:21,

3951:20, 3951:21,

3952:3, 3952:6,

3952:14, 3959:2,

3960:17, 3962:5,

3963:8, 3963:14,

3964:4, 3964:13,

3964:17, 3992:11,

3996:9, 4002:12,

4002:15, 4002:24,

4002:25, 4003:6,

4003:7, 4005:7,

4005:16, 4005:17,

4005:21, 4007:25,

4008:14, 4008:19,

4008:21, 4009:2,

4009:3, 4010:20,

4010:23, 4016:20,

4017:14, 4018:14,

4018:18, 4018:21,

4019:11, 4019:12,

4019:18, 4019:20,

4019:22, 4019:24,

4020:2, 4020:3,

4020:5, 4020:20,

4020:22, 4020:24,

4020:25, 4021:3,

4021:14, 4021:19,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 179 of 198 PageID: 19432
4021:22, 4021:23,

4022:17, 4025:17,

4025:24, 4025:25,

4026:5, 4026:6,

4026:8, 4026:12,

4026:16, 4027:1,

4027:3, 4030:8,

4035:1, 4035:5,

4035:12, 4037:19,

4038:17, 4038:18,

4039:4, 4039:15,

4039:16, 4039:21

experience [21] -

3916:10, 3923:10,

3923:22, 3953:14,

3965:20, 3965:23,

3967:14, 3972:7,

3972:10, 3972:17,

3992:8, 3992:9,

4054:14, 4054:16,

4055:8, 4055:15,

4057:20, 4057:21,

4058:4, 4058:13,

4070:1

Expert [1] - 3969:1

expert [37] - 3908:6,

3923:19, 3923:21,

3924:13, 3939:21,

3946:24, 3969:2,

3972:8, 3972:11,

3980:1, 3984:24,

4000:15, 4000:18,

4008:8, 4015:21,

4015:23, 4042:8,

4054:3, 4057:3,

4058:12, 4059:17,

4060:17, 4060:18,

4060:20, 4061:5,

4061:9, 4061:12,

4061:15, 4061:18,

4061:23, 4061:25,

4062:2, 4062:18,

4067:15, 4069:25,

4071:1, 4071:5

expert's [1] - 4070:2

expertise [3] - 3971:7,

3971:9, 4070:23

experts [2] - 3963:4,

4058:15

explain [7] - 3911:24,

3914:21, 3917:19,

3920:8, 3942:18,

4030:15, 4037:8

explained [2] -

4040:4, 4041:4

explains [1] - 4065:4

explanation [2] -

4067:9, 4069:3

exposure [2] -

4050:17, 4058:7

expressed [1] -

4039:24

expresses [1] -

3956:15

expressing [1] -

3973:22

extension [1] -

3959:25

extensive [1] -

3953:16

extent [13] - 3920:12,

3946:2, 3962:20,

3992:16, 4007:20,

4013:13, 4014:16,

4046:7, 4048:7,

4051:20, 4055:16,

4056:11, 4058:17

extenuating [1] -

4020:13

external [3] - 4014:20,

4015:8, 4039:25

extinguish [1] -

3920:21

extreme [1] - 3939:6

F

face [3] - 4004:24,

4047:20, 4058:3

faced [2] - 4066:14,

4068:3

faces [3] - 4058:23,

4068:10, 4068:14

facets [1] - 3916:5

facilities [1] - 3915:12

fact [10] - 3942:3,

3942:4, 3953:8,

3969:16, 4013:15,

4022:16, 4039:1,

4068:11, 4070:4

factor [2] - 4040:14,

4070:4

factors [4] - 3937:9,

4051:20, 4068:20,

4071:4

facts [7] - 3943:18,

3973:9, 4009:13,

4070:5, 4070:7,

4070:13, 4071:2

faculty [2] - 3909:8,

3909:14

failed [1] - 3920:14

failure [1] - 3921:4

failures [1] - 4048:2

fair[39] - 3916:23,

3938:23, 3965:21,

3970:4, 3970:16,

3971:15, 3971:20,

3972:19, 3975:16,

3977:7, 3978:6,

3979:24, 3980:6,

3980:8, 3989:3,

3989:11, 3993:11,

3994:25, 3995:3,

3995:4, 3995:6,

3997:13, 4001:21,

4006:13, 4006:18,

4014:5, 4014:8,

4014:12, 4015:10,

4016:23, 4024:16,

4026:18, 4027:9,

4045:3, 4050:1,

4063:19

fairly [3] - 3945:22,

3954:23, 4004:20

fairness [1] - 3956:21

faithful [2] - 3937:19,

3937:21

fall [2] - 4043:9

familiar [11] - 3911:21,

3914:25, 3946:17,

3984:3, 4007:7,

4011:19, 4011:20,

4014:20, 4033:4,

4034:10, 4063:7

familiarize [1] -

3973:8

familiarized [1] -

3971:19

far [4] - 3917:10,

3938:25, 3944:20,

3989:13

Fargo [1] - 4047:16

FASB [25] - 3914:25,

3915:2, 3915:3,

3915:4, 3915:5,

3915:9, 3915:10,

3915:15, 3915:16,

3915:21, 3926:17,

3926:22, 3927:3,

3927:13, 3927:22,

4027:22, 4030:4,

4031:19, 4032:5,

4032:7, 4033:7,

4033:23, 4034:2,

4034:7

FDIC [1] - 4044:19

feasible [1] - 4011:22

feature [2] - 3941:17,

3953:7

February [2] -

3981:10, 3981:12

FEBRUARY [1] -

3905:13

Fed [2] - 4044:11,

4058:6

federal [1] - 4054:9

Federal [11] - 4011:18,

4044:8, 4044:13,

4044:16, 4044:17,

4044:19, 4046:24,

4047:12, 4048:13,

4048:25, 4070:10

fee [12] - 3930:15,

3975:22, 4030:8,

4040:13, 4050:15,

4050:22, 4055:18,

4056:22, 4057:9,

4058:19, 4060:2

fees [26] - 3924:22,

3925:3, 3925:20,

3937:10, 3938:5,

3939:23, 3940:16,

3940:19, 3941:4,

3941:10, 3963:6,

3963:13, 3964:3,

4026:25, 4040:11,

4056:16, 4057:12,

4057:13, 4057:21,

4058:20, 4058:21,

4060:13, 4060:14,

4063:3, 4067:7

fell [1] - 4029:16

felt [1] - 3983:15

fetcing [1] - 3944:10

fewer[1] - 4028:10

fiduciary [1] - 4039:14

field [8] - 3908:25,

3909:23, 3910:1,

3955:19, 4034:4,

4052:19, 4053:14,

4054:19

fields [1] - 3910:6

fifth [1] - 3935:12

figure [2] - 3992:1,

4038:3

figures [1] - 3938:19

filed [1] - 3923:25

final [1] - 3986:10

finally [1] - 4058:22

finance [7] - 4043:1,

4043:13, 4043:15,

4044:3, 4051:8,

4051:12, 4051:13

Finance [4] - 4043:4,

4044:2, 4052:22,

4053:21

financial [73] - 3910:3,

3910:7, 3910:13,

3910:14, 3910:22,

3911:2, 3911:5,

3911:8, 3911:12,

3911:15, 3911:19,

3912:13, 3912:25,

3913:11, 3914:2,

3914:3, 3916:6,

3916:20, 3916:23,

3917:9, 3919:7,

3920:3, 3920:13,

United States District Court

Trenton, New Jersey

4084

3920:19, 3920:22,

3921:5, 3921:16,

3923:5, 3923:19,

3924:13, 3938:5,

3938:10, 3938:15,

3938:16, 3939:1,

3939:18, 3951:22,

3951:25, 3960:14,

3960:20, 3967:5,

3972:1, 3972:21,

3992:14, 3992:19,

4027:12, 4027:13,

4027:14, 4029:3,

4029:4, 4029:5,

4029:10, 4035:2,

4040:1, 4044:3,

4044:12, 4044:24,

4045:21, 4048:14,

4048:15, 4048:24,

4051:14, 4051:15,

4052:9, 4053:1,

4053:19, 4053:20,

4053:25, 4064:25,

4065:5, 4065:18

Financial [12] -

3910:15, 3911:22,

3915:5, 3920:24,

4027:7, 4027:11,

4033:10, 4052:22,

4052:23, 4052:24,

4052:25, 4053:24

financials [1] -

3938:16

fine [4] - 3971:2,

4001:2, 4023:20,

4041:9

finish [2] - 4028:12,

4071:19

finished [2] - 3924:3,

4031:25

firm [10] - 3953:4,

3973:18, 3973:20,

3974:5, 3974:7,

3974:10, 3976:6,

3977:18, 4042:17,

4065:2

firm's [1] - 4054:25

firms [10] - 3912:11,

3953:6, 3953:14,

4046:9, 4046:18,

4055:3, 4055:5,

4055:6, 4056:14

first [21] - 3909:8,

3914:12, 3928:14,

3930:6, 3930:18,

3933:8, 3952:6,

3956:1, 3956:23,

3969:15, 3969:18,

3972:14, 3985:17,

3989:20, 3995:21,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 180 of 198 PageID: 19433
4008:15, 4027:6,

4029:22, 4042:13,

4042:16, 4054:20

First [1] - 3960:23

FISHER [2] - 3905:14,

3906:6

fit [1] - 4056:21

five [11] - 3909:9,

3911:13, 3913:17,

3920:17, 3926:24,

3972:20, 3972:22,

3993:19, 3994:17,

4052:17, 4062:21

five-year [2] -

3913:17, 3972:22

flesh [2] - 3912:19,

3943:7

flexibility [1] - 3917:1

Florida [4] - 4043:3,

4043:6, 4051:2,

4069:10

flow [2] - 3951:11,

3955:3

flowed [1] - 3959:23

flows [2] - 3945:8,

4039:23

fluidity [1] - 4071:18

flustered [1] - 4005:20

FMG [112] - 3924:18,

3924:21, 3925:10,

3925:12, 3930:20,

3932:18, 3932:19,

3933:9, 3933:12,

3933:18, 3933:20,

3933:23, 3933:24,

3934:4, 3934:8,

3934:10, 3934:12,

3934:15, 3934:18,

3934:21, 3934:24,

3935:2, 3935:4,

3935:8, 3935:12,

3935:14, 3935:16,

3935:19, 3935:22,

3935:24, 3936:12,

3936:14, 3936:21,

3936:25, 3937:1,

3939:2, 3940:15,

3941:4, 3948:12,

3948:19, 3949:5,

3949:15, 3950:3,

3950:6, 3950:8,

3950:16, 3953:3,

3959:2, 3959:11,

3959:16, 3959:18,

3959:19, 3959:24,

3960:7, 3960:9,

3960:14, 3960:19,

3960:25, 3961:6,

3962:21, 3963:5,

3963:20, 3964:1,

3987:6, 3995:24,

3996:4, 3996:5,

3996:9, 3997:10,

3999:16, 3999:22,

4003:8, 4005:6,

4005:7, 4005:22,

4006:17, 4006:20,

4006:24, 4007:5,

4007:22, 4016:20,

4016:22, 4018:20,

4019:3, 4019:17,

4019:19, 4020:4,

4029:7, 4029:8,

4029:16, 4030:6,

4031:19, 4031:22,

4032:7, 4032:11,

4034:20, 4035:2,

4035:4, 4035:13,

4035:23, 4039:17,

4040:14, 4041:13,

4046:19, 4058:3,

4058:16, 4058:18,

4058:23, 4068:10,

4068:14

FMG's [18] - 3925:2,

3925:19, 3936:9,

3936:11, 3937:9,

3938:5, 3938:20,

3941:2, 3957:17,

3958:5, 3958:25,

3960:14, 3960:18,

3960:20, 3962:14,

3985:7, 3987:2,

4030:17

FMG-CAM [4] -

3996:5, 4007:5,

4007:22, 4035:2

focus [10] - 3917:5,

3930:5, 3934:25,

3937:15, 3939:8,

3939:9, 3939:19,

3979:17, 4008:5,

4013:25

focused [3] - 3912:23,

3913:7, 4052:9

focuses [2] - 3923:2,

4051:11

focusing [3] -

3937:16, 4006:21,

4014:7

Focusing [1] -

3930:18

follow [3] - 3911:7,

3987:10, 4020:14

follow-up [1] -

3987:10

followed [2] -

3956:20, 3981:15

following [4] - 3933:7,

3956:14, 3966:11,

4028:4

follows [1] - 4021:16

footnote [2] - 4011:14,

4013:10

footnoted [1] - 3984:7

footnotes [1] - 3979:1

FOR [3] - 3906:7,

3906:10, 3906:15

force [2] - 3912:23,

4010:13

Force [2] - 3926:7,

3926:14

force's [1] - 3928:12

forgetting [1] -

3981:20

forgive [1] - 4008:15

forgotten [1] -

4004:22

form [4] - 3979:1,

3981:14, 3997:13,

4070:2

format [1] - 4017:24

formed [3] - 3914:12,

3921:2, 3948:18

forming [6] - 3922:22,

3925:7, 3948:21,

3955:22, 3959:12,

3983:8

forms [1] - 3914:9

formula [4] - 3918:6,

3976:3, 3995:12,

4036:8

forum [2] - 3912:5,

3912:8

forward [1] - 3946:16

foundation [9] -

3925:1, 3948:18,

3953:22, 4015:14,

4020:8, 4022:22,

4030:12, 4031:22,

4031:23

four[6] - 3956:18,

4045:3, 4058:15,

4063:2, 4068:1,

4071:4

fourth [2] - 3934:18,

4031:11

Francis [1] - 3905:24

FRANCIS [1] -

3905:24

Francisco [6] -

4044:8, 4044:11,

4046:25, 4047:12,

4058:6, 4070:11

Frank [3] - 3982:16,

4023:3, 4030:13

frankly [1] - 3941:14

fraud [1] - 4061:21

fraudulent [4] -

3920:13, 3920:18,

3920:21, 3921:16

Fraudulent [1] -

3920:24

frequency [2] -

3921:15, 4066:23

frequently [4] -

3915:10, 3919:18,

3947:17, 4037:4

front [7] - 3932:2,

3980:15, 3991:2,

4008:11, 4011:13,

4014:24, 4036:16

fuel [1] - 3944:8

fulfill [2] - 3946:22,

3948:6

fulfilled [1] - 3949:9

fulfilling [3] - 3917:15,

3947:24, 3993:6

full [11] - 3909:16,

3934:23, 3935:16,

3936:1, 3936:2,

3936:3, 3936:4,

3949:10, 3996:20,

3997:20, 4051:4

full-time [1] - 4051:4

function [22] -

3914:11, 3917:15,

3917:17, 3945:18,

3946:8, 3947:16,

3947:24, 3948:4,

3948:6, 3949:9,

3949:10, 3950:13,

3950:14, 3950:15,

3955:2, 3962:23,

3994:23, 3996:21,

4013:19, 4037:3

functional [3] -

3910:15, 3916:2,

3923:4

functioning [2] -

3949:23, 3963:18

functions [6] - 3919:4,

3950:13, 3958:4,

3961:10, 3963:16,

3993:6

fund [36] - 3951:1,

3966:23, 3967:8,

4045:3, 4045:12,

4046:21, 4049:13,

4049:15, 4049:17,

4050:1, 4050:4,

4050:6, 4052:12,

4055:17, 4057:10,

4057:21, 4057:24,

4058:19, 4059:13,

4059:20, 4059:22,

4060:9, 4060:13,

4060:23, 4063:3,

4064:5, 4064:21,

4064:22, 4065:6,

United States District Court

Trenton, New Jersey

4085

4065:8, 4065:9,

4065:11, 4065:19,

4065:20, 4070:10

Fund [3] - 3984:1,

3984:18, 4069:13

fund's [4] - 4055:18,

4056:22, 4058:19,

4058:20

Funds [5] - 4045:2,

4045:4, 4045:7,

4049:19, 4049:24

FUNDS [1] - 3905:10

funds [53] - 3913:10,

3919:20, 3930:22,

3933:13, 3935:11,

3940:22, 3949:15,

3949:24, 3950:3,

3950:5, 3950:11,

3950:15, 3959:25,

3961:3, 3961:10,

3961:20, 3962:1,

3962:23, 3963:18,

3964:14, 3967:12,

3996:18, 3997:21,

4039:14, 4040:14,

4044:4, 4045:4,

4047:16, 4047:17,

4047:18, 4049:10,

4050:5, 4050:8,

4051:15, 4051:16,

4053:17, 4053:22,

4058:17, 4058:21,

4058:22, 4058:24,

4060:6, 4064:8,

4066:9, 4066:13,

4066:14, 4066:21,

4067:2, 4068:19,

4069:19, 4069:20

furnish [2] - 3933:25,

3935:4

furnished [1] - 3961:1

G

GAAP [6] - 3911:8,

3915:7, 3938:19,

3938:25, 4029:11,

4031:8

Gable [1] - 3905:24

GABLE [1] - 3905:24

gained [2] - 3949:1,

3949:22

GASB [4] - 3915:1,

3915:10, 3915:13,

3915:16

gatekeeper[1] -

4053:6

gather [1] - 3965:3

gathering [1] - 3978:4

gearing [1] - 4071:15

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 181 of 198 PageID: 19434
gears [1] - 3942:9

general [26] - 3919:25,

3932:9, 3934:22,

3935:25, 3937:3,

3951:5, 3951:7,

3951:21, 3951:23,

3952:23, 3953:1,

3957:6, 3958:20,

3961:25, 3971:17,

3981:9, 3985:15,

3988:3, 4001:15,

4002:11, 4009:4,

4013:21, 4020:1,

4041:22, 4056:19,

4067:7

GENERAL [1] -

3906:17

Generally [6] -

3913:24, 3922:7,

3983:12, 4002:18,

4017:19, 4033:6

generally [44] -

3910:6, 3911:6,

3911:16, 3913:6,

3913:19, 3913:22,

3914:4, 3914:6,

3914:7, 3914:9,

3916:25, 3917:13,

3918:2, 3918:18,

3920:5, 3923:11,

3937:5, 3937:6,

3937:13, 3940:10,

3950:11, 3952:7,

3957:23, 3962:3,

3965:21, 3967:13,

3970:25, 3977:7,

3988:15, 3992:12,

4006:13, 4007:10,

4010:9, 4010:16,

4013:13, 4014:8,

4014:12, 4021:16,

4034:8, 4036:22,

4051:12, 4055:23,

4064:25, 4065:18

generate [3] -

3929:23, 3952:21,

3983:14

generated [3] -

3952:25, 4010:16,

4032:6

generating [3] -

3917:18, 3958:14,

4004:20

generic [1] - 4065:18

given [10] - 3921:7,

3943:11, 3946:22,

3948:6, 3962:8,

3962:15, 3969:16,

3990:25, 4000:10,

4011:6

GLENN [1] - 3905:8

goal [3] - 3920:1,

3946:7, 3949:10

goals [2] - 3939:13,

3939:19

Gold [1] - 3922:13

goods [4] - 3928:25,

3929:1, 3929:12,

3930:13

Governance [2] -

3984:1, 3984:18

government [13] -

3912:22, 3913:21,

3919:10, 3919:12,

3967:20, 3993:2,

4044:5, 4044:6,

4044:25, 4045:16,

4045:20, 4050:10,

4055:13

Governmental [1] -

3967:23

governmental [1] -

3913:17

Governors [2] -

4044:14, 4044:17

graduate [1] - 4051:24

graduated [1] -

3922:12

graduating [1] -

3909:7

grant [1] - 3909:21

granted [2] - 3909:11,

3909:16

granular[1] - 3947:17

great [13] - 3917:7,

3919:13, 3921:5,

3922:9, 3925:9,

3927:17, 3943:22,

3955:6, 4013:19,

4016:13, 4020:16,

4038:21

greater [1] - 4038:23

Gross [1] - 3931:5

gross [11] - 3928:8,

3928:22, 3930:11,

3931:9, 3931:16,

3932:25, 3937:4,

3942:6, 4028:21,

4029:21

GROUP [1] - 3905:11

group [7] - 3913:1,

3913:2, 3913:19,

3926:15, 3952:19,

4027:10, 4066:2

groups [3] - 3910:9,

3911:10, 3952:16

guess [8] - 3920:12,

3924:12, 3964:1,

3986:12, 3986:25,

4015:20, 4023:18,

4038:6

guidance [16] -

3926:20, 3926:25,

3928:21, 3931:14,

3932:9, 3945:23,

3967:10, 3977:3,

3983:10, 3983:12,

3983:25, 4030:17,

4031:7, 4032:6,

4032:21, 4033:23

Guide [1] - 3956:3

guide [6] - 3912:21,

3966:15, 3966:19,

3967:2, 4032:18,

4032:19

guided [1] - 3916:24

guidelines [3] -

3938:25, 4031:21,

4032:12

guides [6] - 3911:15,

3913:4, 3966:17,

3967:5, 4031:15,

4032:22

GYN [1] - 3918:19

H

H-o-l-d-e-r[1] -

3908:13

HADLEY [1] - 3906:12

half [5] - 3944:19,

4009:1, 4066:5,

4071:14, 4071:15

hand [6] - 3926:3,

3931:18, 3950:19,

3955:9, 3959:5,

3988:19

handbook [1] -

3916:16

handed [1] - 3990:13

happy [1] - 4071:8

harbor [1] - 3919:11

hard [1] - 3937:18

harm [1] - 4050:7

heading [1] - 3931:4

health [1] - 3941:24

healthcare [4] -

3941:23, 3968:1,

3968:2, 4062:2

hear [7] - 3968:21,

3972:9, 3982:14,

3993:17, 3995:21,

4019:15, 4023:1

heard [12] - 3920:23,

3924:2, 3958:6,

3974:9, 4001:22,

4007:2, 4010:20,

4036:10, 4046:17,

4067:23, 4068:22,

4070:14

hearing [1] - 4038:14

hedge [1] - 4051:16

Heimann [1] - 4046:3

held [13] - 3909:17,

3922:3, 3929:7,

4043:5, 4044:13,

4044:16, 4044:25,

4045:19, 4045:23,

4049:4, 4049:20,

4051:3, 4054:15

help [3] - 3915:21,

4000:9, 4070:3

helped [2] - 3929:15,

3976:9

helpful [4] - 3923:13,

3923:15, 3955:4,

3997:4

helps [1] - 4028:6

hereby [2] - 3933:18,

3933:23

hereunder [1] - 3936:9

herself [1] - 4042:7

hesitate [2] - 4038:9,

4041:8

hierarchy [1] - 4031:8

high [2] - 3947:12,

4012:17

higher[8] - 3918:18,

3957:9, 3957:11,

3957:22, 3957:23,

3958:2

highly [2] - 3927:13,

3954:18

hire [1] - 3957:24

hired [2] - 4050:12,

4050:14

hiring [1] - 4006:9

history [1] - 3909:7

hmm [1] - 3987:5

hold [2] - 3912:9,

4052:15

Hold [1] - 4020:7

Holder [45] - 3908:6,

3908:7, 3908:10,

3908:15, 3920:6,

3922:17, 3923:19,

3924:13, 3924:17,

3930:1, 3932:2,

3937:8, 3940:18,

3942:14, 3948:12,

3950:16, 3951:16,

3955:13, 3955:24,

3956:11, 3957:15,

3959:7, 3964:11,

3965:7, 3965:13,

3965:16, 3969:17,

3969:18, 3973:25,

3974:16, 3974:20,

3988:21, 3998:15,

United States District Court

Trenton, New Jersey

4086

3999:4, 3999:9,

3999:15, 4000:12,

4006:3, 4020:12,

4022:25, 4026:21,

4028:18, 4032:10,

4033:4, 4036:5

holder[1] - 4057:10

HOLDER [6] - 3907:2,

3907:2, 3907:3,

3908:8, 3908:14,

3965:15

holders [1] - 4050:6

holding [3] - 4046:8,

4047:5, 4047:15

home [3] - 3944:1,

3944:11, 3944:18

honestly [2] -

3974:17, 3992:24

Honor [48] - 3908:3,

3908:5, 3923:18,

3923:24, 3924:8,

3931:20, 3931:23,

3942:8, 3946:23,

3951:10, 3964:9,

3964:21, 3964:24,

3965:2, 3965:14,

3968:22, 3969:9,

3982:21, 3991:19,

3991:25, 3998:22,

3999:8, 3999:13,

4015:17, 4023:2,

4023:20, 4028:11,

4032:23, 4033:2,

4034:11, 4034:14,

4036:1, 4037:20,

4038:2, 4039:11,

4041:22, 4042:6,

4042:15, 4056:24,

4057:6, 4058:11,

4059:2, 4059:9,

4067:4, 4067:24,

4068:17, 4068:22,

4071:6

HONORABLE [1] -

3905:17

Hood [7] - 4042:6,

4042:17, 4042:19,

4057:2, 4057:5,

4067:23, 4071:13

HOOD [13] - 3906:15,

3907:5, 4042:15,

4042:20, 4042:22,

4042:24, 4057:6,

4057:16, 4058:11,

4067:24, 4068:22,

4068:25, 4071:6

hope [1] - 4067:8

hopefully [1] - 4071:3

Hora [1] - 3908:5

HORA [38] - 3906:13,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 182 of 198 PageID: 19435
3907:2, 3908:5,

3908:14, 3914:19,

3914:20, 3923:18,

3924:11, 3924:15,

3924:16, 3926:3,

3931:18, 3932:1,

3942:8, 3947:1,

3947:5, 3947:7,

3950:19, 3951:10,

3955:9, 3964:9,

3964:21, 3964:24,

3965:3, 3965:6,

3991:21, 3997:11,

3998:25, 4006:1,

4017:5, 4020:8,

4022:22, 4030:11,

4030:16, 4031:22,

4032:1, 4034:16,

4036:3

Horngren [6] -

3954:17, 3954:21,

3954:24, 3955:2,

3955:24, 4012:13

Horngren's [4] -

3958:17, 3983:16,

3993:12, 4012:21

hospital [8] - 3918:5,

3918:12, 3918:14,

3972:18, 3992:13,

3993:15, 3993:19,

4004:15

hospitals [1] - 3919:2

hosts [1] - 3912:3

hour [5] - 3975:20,

3998:17, 3998:21,

4071:14, 4071:15

hours [1] - 4062:10

housed [2] - 3915:12,

4047:20

housekeeping [1] -

3918:23

huge [1] - 3947:2

human [2] - 3918:23,

3961:17

hundred [3] - 3922:15,

4050:1, 4062:10

hypothesis [3] -

4065:19, 4065:24,

4066:9

hypothesized [1] -

4065:19

I

idea [1] - 4047:6

ideas [2] - 3912:8,

3983:6

identical [3] - 3943:4,

3943:14, 4029:9

identification [2] -

3988:20, 4002:21

identified [14] -

3924:7, 3940:6,

3946:13, 3951:18,

3968:20, 3979:20,

3979:23, 3984:22,

3985:19, 3985:22,

3990:23, 4002:16,

4007:19, 4064:10

identifies [2] -

3956:19, 4064:21

identify [9] - 3927:19,

3957:2, 3996:1,

3996:22, 4007:16,

4008:1, 4008:3,

4013:6, 4066:20

identifying [1] -

3912:24

ilk [1] - 3912:7

illiquid [1] - 4066:3

illustrate [1] - 3941:17

illustrations [1] -

3992:22

illustrative [1] -

3951:11

image [1] - 3957:7

immediate [2] -

3926:20, 3926:25

immediately [1] -

3983:9

impact [10] - 3942:5,

4020:17, 4021:25,

4022:18, 4023:10,

4025:20, 4025:23,

4037:22, 4038:6

impeach [1] - 3969:8

implement [2] -

3934:25, 4030:1

implementation [1] -

3972:16

implemented [1] -

3971:25

implication [1] -

4048:9

implications [1] -

4046:11

imply [1] - 3987:7

importance [1] -

3949:23

important [3] -

3940:8, 3941:17,

3950:6

importantly [1] -

3957:25

impose [1] - 4048:6

in-source [1] -

4051:21

inaccurate [1] -

4009:12

inappropriate [1] -

4030:7

include [10] - 3934:21,

3944:4, 3944:6,

3949:6, 3961:1,

3967:7, 3984:23,

4016:25, 4047:13

included [6] -

3960:14, 4012:11,

4012:13, 4016:25,

4022:17, 4035:20

including [10] -

3914:15, 3923:5,

3927:17, 3948:24,

3954:19, 3964:3,

3967:5, 4035:12,

4035:22, 4058:8

Including [1] -

4031:11

income [1] - 4017:24

incorporated [1] -

3960:22

incorporates [2] -

4024:13, 4024:15

increase [3] - 3945:19,

4021:23, 4038:18

increased [1] - 4047:8

increases [7] -

4021:19, 4021:24,

4056:2, 4056:5,

4056:10, 4057:11

increasing [1] -

4056:9

incremental [1] -

3917:5

incur [1] - 3947:23

incurred [23] -

3917:14, 3919:10,

3920:3, 3936:25,

3946:9, 3948:14,

3949:11, 3949:21,

3949:22, 3950:8,

3950:14, 3952:3,

3957:24, 3958:13,

3961:22, 3962:22,

3964:17, 4014:18,

4026:1, 4026:8,

4040:25, 4065:25,

4066:16

incurrence [1] -

3963:17

incurring [1] - 3942:1

incurs [1] - 4067:14

indeed [4] - 3934:4,

3937:2, 3951:22,

3967:24

independent [8] -

3912:5, 3973:8,

3989:6, 4007:23,

4039:25, 4045:2,

4049:18, 4049:23

index [1] - 3980:14

indicate [1] - 4008:13

indicated [17] -

3925:22, 3949:7,

3968:11, 3986:1,

3986:6, 3987:24,

3995:12, 4010:5,

4012:16, 4014:4,

4026:4, 4027:13,

4029:15, 4034:10,

4057:22, 4069:21,

4070:16

indicates [7] -

3960:24, 3989:17,

3990:21, 3991:5,

4009:24, 4011:21,

4017:23

indication [2] -

3989:2, 3991:13

indicator[1] - 3933:8

indicators [11] -

3928:16, 3931:13,

3931:16, 3932:11,

3932:14, 3932:25,

3934:2, 3937:4,

4028:10, 4028:20,

4029:20

Indicators [1] - 3931:5

indirect [2] - 4016:20,

4056:17

individual [5] -

3951:1, 3954:22,

3957:7, 3976:8,

4035:19

individually [1] -

3985:14

individuals [13] -

3910:17, 3910:18,

3912:7, 3912:13,

3917:4, 3943:3,

3952:11, 3961:8,

3961:12, 3978:3,

3999:17, 3999:22,

4034:4

industrial [3] -

4043:14, 4051:19,

4054:19

industries [3] -

3919:24, 3920:5,

4031:15

industry [24] -

3912:21, 3920:1,

3965:20, 3965:22,

3966:15, 3966:16,

3966:19, 3967:4,

3967:11, 3971:4,

3971:12, 3971:21,

4040:15, 4040:19,

4041:10, 4055:5,

United States District Court

Trenton, New Jersey

4087

4055:6, 4056:14,

4056:15, 4059:13,

4065:6, 4065:11,

4067:1

industry's [1] -

4054:25

inexorably [1] -

3940:11

inference [1] -

3973:15

influence [1] -

3938:13

influential [1] -

3922:16

inform [2] - 3938:8,

3955:25

information [44] -

3910:17, 3910:19,

3910:22, 3911:8,

3911:15, 3914:1,

3914:6, 3916:3,

3916:8, 3916:15,

3918:3, 3923:13,

3932:13, 3933:11,

3934:20, 3937:11,

3937:14, 3939:15,

3943:16, 3949:1,

3954:7, 3955:4,

3956:17, 3978:21,

3978:23, 3982:3,

3982:4, 3982:7,

3982:12, 3982:24,

3983:1, 4027:4,

4038:11, 4038:14,

4038:15, 4039:23,

4040:16, 4040:18,

4050:11, 4055:23,

4056:20, 4069:21

informative [2] -

3983:7, 4040:5

informed [2] -

3920:16, 3958:21

informs [1] - 4066:22

infrequently [1] -

4066:13

inherent [1] - 3943:9

INS [1] - 3905:6

insights [2] - 3920:19,

4056:12

insofar[2] - 3937:5,

4004:9

instance [1] - 4041:16

instances [9] -

3920:17, 3920:21,

3921:16, 3928:24,

3929:6, 3953:17,

3962:24, 3982:2,

3982:8

instant [2] - 3958:11,

4028:22

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 183 of 198 PageID: 19436
instead [1] - 3941:3

Institute [3] - 3911:22,

3921:24, 3922:14

institute [1] - 3911:25

institution [5] -

3921:7, 4043:16,

4043:22, 4048:24,

4067:14

institutions [18] -

3913:11, 3967:5,

4044:3, 4044:24,

4048:16, 4051:5,

4051:14, 4051:15,

4052:9, 4053:1,

4053:19, 4053:20,

4054:1, 4064:25,

4065:3, 4065:5,

4065:18, 4066:16

instruction [1] -

3979:6

Insurance [1] -

4044:19

insurance [27] -

3913:10, 3941:24,

3942:5, 3952:7,

3952:15, 3952:19,

3952:20, 3965:20,

3966:20, 3968:3,

3968:6, 3968:15,

3970:12, 3971:8,

3971:16, 3971:21,

3971:22, 3971:23,

3972:2, 4010:13,

4032:18, 4032:20,

4036:14, 4044:4,

4051:16, 4065:1

INSURANCE [1] -

3906:18

intend [2] - 3922:18,

3988:9

intent [2] - 3995:18,

4006:15

interact [3] - 3915:17,

3968:16, 3977:21

interacted [1] -

3977:20

interaction [1] -

3977:18

interchange [1] -

3912:8

interest [1] - 3913:9

interested [2] -

3920:12, 4066:8

Intermediate [1] -

3911:18

internal [2] - 4039:25,

4040:2

internally [1] -

3910:23

interpret [1] - 3934:1

interpreting [1] -

3936:18

interrelationship [1] -

3915:14

interrupt [1] - 4056:24

intertwined [1] -

4013:4

interviewed [1] -

3949:24

interviews [7] -

3925:13, 3932:20,

3949:2, 3954:6,

3960:2, 3975:5,

3981:6

introduce [2] - 4042:7,

4042:16

inventory [7] - 3929:3,

3929:4, 3929:5,

3929:9, 3929:22,

3933:4, 4029:23

investigation [1] -

4007:23

investment [48] -

3910:21, 3933:19,

3934:23, 3934:25,

3935:3, 3936:1,

3936:5, 3936:6,

3936:22, 3952:23,

3953:1, 3967:2,

3967:5, 3967:8,

3967:13, 3972:4,

3972:5, 3972:7,

3972:10, 3972:12,

4024:8, 4031:17,

4031:20, 4031:23,

4031:24, 4032:7,

4032:11, 4032:14,

4032:17, 4033:16,

4033:21, 4033:23,

4036:15, 4046:19,

4046:22, 4047:17,

4047:20, 4050:12,

4055:17, 4058:2,

4058:23, 4059:13,

4062:22, 4064:15,

4065:15, 4067:1,

4068:3, 4068:10

Investment [5] -

3984:2, 4032:15,

4033:10, 4033:20,

4035:15

investments [1] -

4066:3

investor[1] - 4038:8

investors [8] -

4010:16, 4038:7,

4039:5, 4039:15,

4040:22, 4050:9,

4055:18, 4058:19

invoice [7] - 3988:22,

3988:23, 3988:24,

3989:4, 3989:10,

3989:11, 3990:3

invoices [4] - 3988:6,

3988:8, 3988:11,

3988:13

involve [6] - 3944:7,

3944:12, 3944:23,

3966:23, 3970:19,

4050:19

involved [26] -

3911:14, 3918:5,

3919:5, 3919:15,

3923:6, 3934:15,

3935:9, 3935:22,

3938:12, 3944:10,

3947:19, 3953:6,

3953:8, 3967:15,

3967:16, 3968:9,

3971:16, 3972:21,

3981:7, 3990:1,

3990:2, 3994:17,

4044:5, 4048:12

involvement [5] -

3918:5, 3953:18,

3975:9, 3976:7,

3976:20

involving [4] -

3920:18, 3947:19,

4061:13, 4063:3

irrational [1] - 3958:7

isolated [1] - 3963:11

issue [19] - 3923:9,

3925:8, 3928:22,

3930:10, 3937:15,

3946:12, 4030:20,

4031:4, 4036:12,

4041:17, 4041:18,

4046:20, 4058:17,

4058:21, 4060:20,

4060:24, 4060:25,

4069:6, 4070:20

issued [6] - 3913:3,

3926:9, 3926:10,

3927:8, 3967:3,

4027:24

Issues [2] - 3926:7,

3926:14

issues [45] - 3912:4,

3916:17, 3917:25,

3919:15, 3924:7,

3926:25, 3928:11,

3965:19, 3970:20,

3971:16, 3973:1,

4044:9, 4044:11,

4044:18, 4045:11,

4045:12, 4046:4,

4046:7, 4046:13,

4047:8, 4047:14,

4049:7, 4049:9,

4049:12, 4050:15,

4050:16, 4050:18,

4050:23, 4051:12,

4052:10, 4052:11,

4052:12, 4053:1,

4053:22, 4055:10,

4055:11, 4057:23,

4057:25, 4058:1,

4062:22, 4066:15,

4069:14

item [4] - 3933:2,

3935:24, 3957:22

items [7] - 3929:7,

3929:10, 3929:11,

3933:4, 3944:15,

3990:22, 4016:7

itself [1] - 4047:14

J

JAMES [6] - 3906:14,

3907:4, 3907:4,

4042:9, 4042:12,

4042:23

James [19] - 3921:8,

4042:8, 4042:25,

4043:10, 4052:15,

4054:2, 4058:12,

4059:7, 4059:11,

4067:3, 4068:5,

4068:6, 4068:8,

4068:25, 4069:5,

4070:4, 4070:6,

4071:4, 4071:21

James' [2] - 4068:2,

4069:8

January [1] - 4066:6

Janus [8] - 4045:2,

4045:4, 4045:7,

4049:19, 4049:24,

4050:2, 4069:13,

4069:16

JERSEY [3] - 3905:1,

3905:15, 3905:18

job [1] - 4045:5

jobs [1] - 4056:20

Joenk [10] - 3925:13,

3932:21, 3949:2,

3949:25, 3954:6,

3960:3, 3981:4,

3981:22, 3985:21,

3999:17

Joenk's [1] - 3985:18

John [1] - 4046:3

joined [2] - 3909:8,

3909:14

JONATHAN [1] -

3906:10

Journal [9] - 4052:22,

United States District Court

Trenton, New Jersey

4088

4052:23, 4052:24,

4053:1, 4053:21,

4053:23, 4066:1

journal [1] - 4052:25

journals [4] - 4052:5,

4052:19, 4052:21,

4070:8

JP [1] - 4000:2

JR [1] - 3906:5

JUDGE [1] - 3905:17

Judge [4] - 3998:20,

4005:13, 4028:13,

4030:18

judge [3] - 3962:24,

3962:25, 3988:20

judging [1] - 4006:10

judgment [5] -

3928:15, 3943:15,

3943:17, 4009:14,

4027:5

judgments [1] -

3945:14

July [9] - 3988:23,

3989:4, 3989:5,

3989:14, 3989:23,

3990:7, 3991:2

June [2] - 3990:15,

3991:6

K

keep [2] - 3980:2,

4071:18

keeping [1] - 3961:15

Kent [1] - 3976:22

kept [1] - 3944:13

keystroke [1] -

3976:19

keystrokes [5] -

3974:22, 3975:16,

3976:15, 3977:17,

4009:18

keywords [1] -

3927:11

kind [9] - 3923:11,

3931:8, 3933:5,

3954:23, 3954:24,

3974:7, 4004:3,

4032:21, 4057:1

kinds [5] - 3927:9,

3929:23, 3996:17,

3998:3, 4037:11

knowledge [13] -

3913:25, 3914:7,

3917:3, 3923:3,

3953:15, 3955:20,

3961:23, 4041:22,

4053:11, 4058:14,

4064:20, 4069:25,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 184 of 198 PageID: 19437
4070:3

known [6] - 3914:24,

3920:11, 3921:4,

3921:10, 4011:4,

4011:6

KORN [1] - 3906:10

KWELTY [2] - 3906:6,

3969:1

L

labor [1] - 3944:10

lack [2] - 3910:18,

4030:11

Lakind [6] - 4059:1,

4067:25, 4068:4,

4068:16, 4068:25,

4071:14

LAKIND [11] - 3906:3,

3906:4, 3906:5,

3907:5, 4056:24,

4057:7, 4059:2,

4059:6, 4059:9,

4067:4, 4068:17

language [7] -

3933:17, 3933:22,

3934:14, 3935:7,

3935:18, 3935:24,

3936:23

large [14] - 3911:6,

3914:10, 3918:11,

3918:13, 3927:7,

3932:16, 3948:23,

3953:5, 3953:13,

4037:17, 4048:8,

4050:8, 4066:14

largest [1] - 3953:13

Last [2] - 4042:12,

4063:2

last [7] - 3908:12,

3945:16, 4012:16,

4042:10, 4043:9,

4051:24, 4062:21

lastly [2] - 4070:20,

4070:25

latitude [1] - 3934:9

law [1] - 3993:2

laws [1] - 3912:24

lay [3] - 3925:1,

3948:17, 3953:21

learn [1] - 3999:16

learned [3] - 3916:17,

3999:15, 4070:23

least [30] - 3911:11,

3923:2, 3925:11,

3929:17, 3932:19,

3940:12, 3943:18,

3944:5, 3945:11,

3946:10, 3949:12,

3950:14, 3952:2,

3962:7, 3963:16,

3968:6, 3971:10,

3973:15, 3973:21,

3974:12, 3983:14,

3985:18, 3985:25,

3995:17, 3996:23,

4008:6, 4023:11,

4035:17, 4036:22,

4038:13

led [1] - 4049:1

ledger[2] - 3951:21,

3951:24

left [5] - 3926:8,

4001:20, 4017:13,

4017:18, 4028:14

Legal [1] - 3984:2

legal [1] - 3961:21

legislation [1] -

3920:10

legitimate [1] -

4069:15

length [2] - 3946:14,

3949:25

lengthy [1] - 3926:23

less [6] - 3930:14,

3945:8, 3946:11,

4021:10, 4038:23

level [11] - 3942:21,

3942:24, 3952:5,

3952:15, 3971:9,

3976:5, 3994:22,

3998:6, 4037:9,

4051:25, 4058:20

levels [5] - 3918:14,

3957:22, 3957:23,

3958:23, 4051:22

Leventhal [2] -

3908:16, 3911:25

liability [1] - 4061:23

licenses [1] - 3993:7

life [1] - 3943:21

LIFE [2] - 3905:6,

3906:18

lift [1] - 3985:19

limine [1] - 3924:1

limitations [4] -

3944:24, 3945:2,

3945:6, 3965:22

limited [2] - 3950:7,

3965:19

line [7] - 3970:9,

3986:24, 4015:16,

4015:17, 4016:14,

4018:7, 4018:14

Line [1] - 3970:11

lines [1] - 3979:1

list [4] - 3961:1,

3979:25, 3980:7,

4024:14

listed [3] - 3956:23,

4012:7, 4024:13

listened [1] - 4069:8

listing [2] - 3991:8,

3991:11

lists [2] - 3949:20,

3956:18

literature [15] -

3925:16, 3927:20,

3945:22, 3946:13,

3954:9, 3954:12,

3975:6, 3977:2,

3983:5, 3983:7,

3983:18, 3983:20,

4009:8, 4064:20,

4065:4

litigation [9] - 3923:3,

3938:24, 3962:12,

3963:4, 3976:1,

3984:11, 4048:5,

4066:20, 4066:21

LLP [2] - 3906:9,

3906:12

loan [2] - 3921:4,

3966:10

loans [2] - 3913:12,

3921:5

local [2] - 3912:22,

3913:21

logical [1] - 3923:14

long-range [1] -

3917:5

look [37] - 3920:17,

3921:13, 3933:10,

3934:7, 3934:9,

3934:18, 3935:12,

3935:14, 3946:17,

3954:1, 3956:18,

3961:5, 3963:25,

3969:15, 3980:12,

3983:4, 3986:19,

3991:8, 3992:24,

4000:16, 4001:20,

4010:14, 4013:17,

4015:13, 4016:11,

4022:10, 4027:6,

4028:5, 4030:24,

4032:17, 4032:18,

4047:21, 4047:22,

4050:23, 4054:24,

4063:15, 4064:24

looked [19] - 3925:9,

3925:10, 3925:24,

3954:3, 3954:4,

3972:14, 3974:3,

3979:22, 4000:23,

4035:18, 4046:10,

4055:10, 4055:12,

4055:19, 4055:20,

4063:16, 4064:1,

4068:9

looking [22] - 3919:22,

3953:21, 3984:21,

3989:7, 4015:15,

4038:5, 4039:13,

4039:18, 4047:13,

4047:19, 4050:21,

4056:11, 4056:12,

4056:13, 4057:8,

4057:9, 4057:12,

4058:5, 4060:2,

4065:25, 4066:12,

4069:24

looks [2] - 4066:15,

4071:7

losses [3] - 4047:7,

4047:8, 4048:6

Louie [4] - 3925:13,

3932:22, 3954:7,

3999:20

LOUIE [1] - 3906:17

lower [3] - 3941:25,

3957:13, 4012:19

lucid [1] - 4040:5

lunch [1] - 3998:7

Luncheon [1] - 3999:5

M

magazines [1] -

4070:8

magnitude [2] -

4066:18, 4066:23

main [3] - 3972:17,

3996:22, 4058:15

maintains [2] -

3985:7, 3987:2

major [6] - 3908:22,

3912:4, 3967:24,

4027:23, 4047:11,

4048:17

manage [4] - 3916:4,

3917:4, 3955:5,

4049:25

managed [1] - 3936:6

Management [1] -

4035:15

management [28] -

3934:22, 3935:25,

3941:4, 3955:3,

4017:24, 4027:14,

4037:3, 4039:23,

4044:10, 4046:9,

4046:14, 4046:17,

4046:18, 4047:10,

4047:13, 4048:16,

4049:9, 4051:14,

4052:11, 4055:17,

4057:11, 4060:22,

United States District Court

Trenton, New Jersey

4089

4065:1, 4065:9,

4066:2, 4067:1,

4067:2

MANAGEMENT [1] -

3905:11

manager [11] -

3933:18, 3933:19,

3934:12, 4046:19,

4046:22, 4047:17,

4047:20, 4058:2,

4058:23, 4064:15,

4068:10

Managerial [3] -

3916:2, 3955:6,

3955:17

managerial [19] -

3910:3, 3910:6,

3915:24, 3916:1,

3916:5, 3916:7,

3916:11, 3916:13,

3916:15, 3916:19,

3917:1, 3917:2,

3917:8, 3923:20,

3924:13, 3938:17,

3938:21, 3940:14,

4029:5

managers [11] -

3952:10, 3952:11,

3957:2, 3972:8,

3972:10, 4002:19,

4007:14, 4050:12,

4058:3, 4059:13,

4068:3

MANAGING [1] -

3906:17

managing [2] -

3916:9, 3959:25

manifestation [1] -

4066:17

manner[5] - 3937:20,

3963:20, 3964:1,

4004:1, 4041:24

manners [1] - 4007:12

manual [2] - 3911:14,

3993:4

manufacturer[1] -

3947:19

manuscript [1] -

3992:25

manuscripts [1] -

4053:22

march [1] - 4029:21

marched [1] - 3964:8

margin [2] - 4024:8,

4035:23

margins [1] - 3963:5

MARK [1] - 3906:6

marked [10] - 3907:9,

3907:10, 3907:11,

3931:25, 3955:10,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 185 of 198 PageID: 19438
3959:6, 3969:3,

3992:5, 4000:10,

4034:18

market [3] - 4050:3,

4065:14, 4066:14

marketplace [1] -

4058:22

markets [2] - 3920:14,

4051:17

marking [1] - 3969:4

marriage [1] - 3993:7

MARY [1] - 3905:3

Master [1] - 3908:24

Master's [4] - 3909:5,

4043:13, 4051:18,

4051:25

material [8] - 3938:12,

4063:7, 4063:9,

4063:11, 4063:12,

4063:13, 4063:15,

4063:17

materially [3] -

3936:3, 3945:10

materials [3] - 3951:3,

3951:12, 3954:3

mathematics [1] -

4043:13

matter [18] - 3924:17,

3932:12, 3932:22,

3938:9, 3940:14,

3943:15, 3948:6,

3954:15, 3955:22,

3960:4, 3971:17,

3972:25, 3973:3,

4000:1, 4000:3,

4000:5, 4006:20,

4056:19

matters [11] - 3923:4,

4044:22, 4052:7,

4061:18, 4061:21,

4061:23, 4061:25,

4062:2, 4066:21,

4070:10, 4070:12

MBA [1] - 4043:19

McCLOY [1] - 3906:12

mean [31] - 3922:9,

3927:5, 3941:20,

3943:23, 3944:19,

3953:13, 3963:11,

3967:9, 3968:4,

3973:7, 3973:14,

3980:13, 3985:24,

3987:6, 3987:7,

3987:22, 3989:1,

3993:8, 3994:21,

4003:1, 4004:5,

4013:18, 4014:11,

4020:21, 4023:7,

4027:19, 4029:5,

4032:14, 4060:17,

4063:11

meaning [3] -

4049:15, 4050:15,

4056:9

Meaning [1] - 3971:6

meaningful [2] -

3948:5, 3962:8

means [4] - 3936:15,

3943:2, 4020:4,

4022:2

meant [8] - 3964:2,

3964:15, 3976:19,

3997:25, 4004:5,

4004:10, 4067:8,

4067:9

measure [7] -

3918:11, 3919:10,

3932:17, 3948:5,

4007:20, 4009:25,

4065:10

measured [1] -

3918:11

measurement [2] -

4054:21, 4065:16

measuring [2] -

3948:1, 4048:22

mechanism [2] -

3941:8, 4007:19

Medal [1] - 3922:13

Mediation [1] -

4052:25

medical [1] - 3918:24

Medicare [11] -

3918:6, 3918:8,

3918:10, 3918:15,

3918:16, 3918:18,

3919:1, 3995:12,

4004:17, 4004:18

meet [1] - 3912:6

meeting [2] - 3981:10,

3981:12

member[4] - 3921:24,

3921:25, 3922:1,

4040:6

members [4] -

3915:16, 4038:4,

4038:12, 4040:4

mentioned [16] -

3910:13, 3911:5,

3911:17, 3912:16,

3913:22, 3915:23,

3925:24, 3945:16,

3964:12, 4032:20,

4045:23, 4049:3,

4049:18, 4055:10,

4057:25

merely [4] - 3933:15,

3967:10, 4006:11,

4025:22

met [2] - 3937:5,

4070:4

method [5] - 3945:8,

3964:4, 3994:22,

4006:12, 4053:14

methodologies [3] -

3943:13, 3947:2,

4053:13

methodology [42] -

3942:15, 3942:16,

3942:20, 3942:24,

3943:1, 3943:4,

3944:25, 3945:3,

3945:15, 3945:21,

3952:18, 3953:19,

3955:25, 3957:17,

3958:6, 3959:1,

3960:18, 3964:14,

3972:15, 3972:17,

3994:18, 3994:19,

3997:10, 3999:16,

4002:1, 4003:19,

4003:24, 4005:5,

4006:10, 4006:16,

4006:17, 4006:25,

4010:4, 4014:7,

4014:23, 4017:10,

4019:13, 4022:14,

4022:20, 4026:12,

4034:21, 4035:9

Methodology [1] -

4001:8

methods [3] -

3946:11, 4070:16,

4071:2

mic [1] - 4044:15

Michigan [9] -

4043:18, 4043:20,

4043:22, 4051:6,

4054:19, 4069:9,

4069:11, 4069:12

microphone [1] -

3930:1

mid [1] - 3909:20

middle [1] - 4008:16

might [13] - 3944:2,

3985:16, 3989:24,

4009:19, 4028:15,

4040:18, 4040:20,

4046:7, 4047:20,

4050:24, 4059:2,

4067:4, 4067:17

Milbank [5] - 3973:18,

3973:20, 3977:12,

3977:18, 4042:17

MILBANK [1] -

3906:12

milk [5] - 3943:24,

3943:25, 3944:3,

3944:17, 3944:19

million [37] - 3959:1,

3960:11, 3960:13,

3960:17, 3960:19,

3962:2, 3962:7,

3962:13, 3962:16,

4016:15, 4016:19,

4018:21, 4019:16,

4021:11, 4021:13,

4022:9, 4022:12,

4022:17, 4023:16,

4024:22, 4025:2,

4025:4, 4025:8,

4025:11, 4025:15,

4025:23, 4035:1,

4035:5, 4035:12,

4035:18, 4035:22,

4037:18, 4050:1,

4062:12, 4062:15

mind [9] - 3925:17,

3928:23, 3931:11,

3932:23, 3949:3,

3968:8, 4053:3,

4054:10, 4064:23

minds [1] - 4038:10

mine [7] - 3973:8,

3974:21, 3974:24,

3975:3, 3987:13,

4002:4

ministerial [1] -

3941:13

minus [4] - 4018:20,

4019:22, 4021:6,

4025:8

minute [1] - 3965:3

minutes [11] - 3965:4,

3965:8, 3998:17,

3998:19, 3999:1,

4028:14, 4063:23,

4064:1, 4064:2,

4071:8, 4071:15

mistakes [2] - 4048:2,

4048:3

mitigate [3] - 3920:21,

3921:15, 3928:17

mitigator [1] - 3932:14

modify [1] - 3936:3

moment [1] - 4010:14

money [2] - 4025:7,

4066:14

monitor[1] - 3935:2

month [2] - 3988:23,

3991:6

monthly [3] - 3952:13,

3988:6, 4004:3

months [4] - 3986:9,

3986:10, 3986:12,

3987:16

Morgan [1] - 4000:2

morning [6] - 3908:1,

3923:24, 3944:2,

3998:15, 4011:10,

United States District Court

Trenton, New Jersey

4090

4071:22

morphed [1] - 4057:1

most [15] - 3915:6,

3922:15, 3947:11,

3965:23, 3978:24,

3980:16, 3981:20,

3988:14, 4004:16,

4013:21, 4053:19,

4053:24, 4055:2,

4058:5, 4070:16

motion [11] - 3923:25,

3924:6, 3924:8,

3946:18, 3946:21,

3947:8, 3947:15,

3947:22, 3947:25,

3948:9, 4023:4

move [5] - 3931:20,

3946:6, 3995:23,

4034:12, 4044:15

moved [1] - 3961:25

moves [1] - 4026:8

moving [2] - 3952:17,

4050:10

MS [12] - 3907:5,

4042:15, 4042:20,

4042:22, 4042:23,

4057:6, 4057:16,

4058:11, 4067:24,

4068:22, 4068:25,

4071:6

multiple [1] - 3962:14

MURPHY [6] -

3906:13, 3908:3,

3998:24, 4042:6,

4044:15, 4071:17

must [7] - 3911:7,

3914:2, 3943:1,

3946:6, 3946:12,

3974:7, 4071:1

mutual [47] - 3913:10,

3919:20, 3966:23,

3967:8, 3967:12,

4044:4, 4045:4,

4045:12, 4046:21,

4047:16, 4049:10,

4049:13, 4049:15,

4049:17, 4050:5,

4050:8, 4051:15,

4052:12, 4053:17,

4053:22, 4057:21,

4057:24, 4058:22,

4059:13, 4059:20,

4059:22, 4060:6,

4060:9, 4060:23,

4063:3, 4064:5,

4064:8, 4064:21,

4064:22, 4065:6,

4065:8, 4065:9,

4065:11, 4065:19,

4065:20, 4066:9,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 186 of 198 PageID: 19439
4066:13, 4066:21,

4068:19, 4069:19,

4069:20, 4070:10

MYLES [1] - 3906:7

N

name [9] - 3908:9,

3908:12, 3966:20,

3974:5, 3984:1,

4042:10, 4042:12,

4042:13, 4049:8

named [2] - 3921:8,

3922:15

names [1] - 3927:9

nation's [1] - 3913:20

National [1] - 3920:23

national [1] - 4046:2

nature [11] - 3920:12,

3941:13, 3941:14,

3941:15, 3947:12,

3962:20, 4041:13,

4064:10, 4068:10,

4068:14, 4070:21

near [2] - 3956:2,

3956:20

necessarily [13] -

3943:19, 3946:9,

3948:7, 3949:11,

3950:14, 3962:22,

3985:24, 3985:25,

3987:7, 3990:5,

4019:23, 4037:5

necessary [16] -

3928:16, 3935:10,

3958:16, 3961:2,

3961:11, 3961:20,

3963:18, 3976:11,

3982:12, 3996:2,

3996:3, 3996:18,

3998:3, 4007:25,

4039:20, 4041:20

necessity [2] - 3949:8,

3963:16

need [16] - 3944:17,

3946:10, 3949:12,

3964:19, 3965:3,

3969:7, 3984:6,

3995:21, 3995:24,

3996:4, 3996:8,

3997:20, 4023:1,

4029:18

needed [2] - 3918:10,

4005:21

needs [3] - 3942:24,

3963:19, 4066:24

negotiated [1] -

3934:10

net [8] - 3928:22,

3930:13, 3958:25,

4024:6, 4024:11,

4024:12, 4028:20,

4049:13

never[10] - 3929:3,

3971:20, 3971:25,

3972:4, 3984:10,

3992:9, 3992:21,

3999:24, 4035:4,

4059:11

New [1] - 4051:5

NEW [3] - 3905:1,

3905:15, 3905:18

new [10] - 3926:18,

3927:1, 3934:24,

3935:16, 3936:2,

4004:18, 4027:24,

4028:6, 4028:23,

4029:9

Next [1] - 4042:5

next [6] - 3924:25,

3956:19, 4012:6,

4028:3, 4029:21,

4042:7

NIELSON [1] -

3906:14

NIKKI [1] - 3906:14

nine [1] - 3947:20

nitpick [1] - 3998:25

NO [2] - 3905:5,

3905:9

non [4] - 3941:14,

4048:19, 4048:20,

4058:9

non-bank [2] -

4048:19, 4048:20

non-banking [1] -

4058:9

non-substantive [1] -

3941:14

none [1] - 4008:6

None [1] - 3908:3

normal [2] - 4023:12,

4036:24

normally [1] - 3910:2

Norman [9] - 3972:17,

3992:8, 3993:14,

3993:18, 3994:17,

3995:11, 4003:18,

4003:25, 4004:12

not-for-profit [1] -

3915:7

note [4] - 3923:25,

4062:14, 4062:17,

4071:7

noteworthy [1] -

4008:25

nothing [5] - 3939:1,

3939:6, 4036:1,

4064:23, 4068:13

November[3] -

3969:20, 3970:5,

3986:4

novice [1] - 4036:9

number[34] - 3912:1,

3914:10, 3914:11,

3914:15, 3916:5,

3916:13, 3918:13,

3921:11, 3922:8,

3925:9, 3925:14,

3927:7, 3928:11,

3928:16, 3935:14,

3943:12, 3945:4,

3954:14, 3966:16,

3967:4, 4002:3,

4004:20, 4018:14,

4021:7, 4022:8,

4026:7, 4033:19,

4036:20, 4037:6,

4048:25, 4053:18,

4063:25, 4064:1

Number [1] - 4067:12

numbers [5] -

4017:17, 4023:25,

4024:4, 4024:7,

4024:17

numerous [4] -

3911:13, 3923:6,

3972:12, 3981:3

nursing [1] - 3918:17

O

o'clock [1] - 3998:11

oath [1] - 3999:10

OB [1] - 3918:19

OB-GYN [1] - 3918:19

object [7] - 3914:17,

3946:23, 3957:3,

3957:4, 4028:11,

4067:11, 4067:20

objected [1] - 3978:18

objection [13] -

3924:11, 3931:23,

3991:21, 3991:22,

4020:7, 4020:8,

4030:11, 4034:16,

4067:5, 4067:10,

4068:2, 4068:15,

4068:18

Objection [4] -

4006:1, 4017:5,

4022:22, 4031:22

objections [4] -

3924:9, 3931:22,

4034:15, 4059:1

objectives [1] - 3935:3

obligation [4] -

3933:14, 3933:15,

3936:25, 4038:12

obligations [4] -

3919:9, 3933:21,

3936:9, 3968:9

obliged [1] - 3936:16

obligor [3] - 3933:9,

3933:13, 4029:23

observation [1] -

3948:5

observe [1] - 4056:4

obsolete [1] - 3929:4

obtain [2] - 3923:8,

3982:4

obtained [1] - 3962:2

obvious [1] - 3942:22

Obviously [1] -

4039:22

obviously [1] -

4041:23

occasion [4] - 4060:5,

4061:6, 4061:9,

4061:12

occasionally [1] -

3912:15

occasions [5] -

3949:25, 4049:6,

4061:1, 4063:5,

4063:6

occupation [2] -

3908:15, 4042:25

occur [3] - 3992:18,

3992:19, 4037:17

occurred [5] - 3977:5,

3981:4, 3981:25,

3998:1, 4040:3

occurring [2] -

3920:13, 3977:9

OF [8] - 3905:1,

3905:18, 3907:2,

3907:3, 3907:4,

3908:14, 3965:15,

4042:23

offense [1] - 4019:5

offer[6] - 3922:18,

3931:21, 4005:24,

4058:11, 4058:14,

4068:13

offered [2] - 4057:2,

4059:18

offerings [1] - 4046:9

offers [2] - 3952:8,

4047:16

office [3] - 3935:5,

4046:6, 4055:13

Office [2] - 4045:11,

4049:4

offices [1] - 3922:3

OFFICIAL [1] -

3905:25

often [1] - 4056:6

United States District Court

Trenton, New Jersey

4091

Oklahoma [11] -

3908:23, 3908:24,

3921:21, 3922:12,

3922:13, 3972:17,

3992:8, 3995:11,

4003:18, 4003:25,

4004:12

older [1] - 3918:19

ON [2] - 3907:5,

4059:6

once [1] - 4042:10

Once [1] - 3908:11

One [3] - 3942:19,

3964:9, 4049:9

one [75] - 3910:2,

3911:7, 3912:2,

3914:12, 3916:6,

3921:12, 3922:15,

3923:7, 3925:24,

3929:11, 3929:14,

3933:7, 3934:7,

3934:8, 3934:18,

3935:12, 3935:15,

3936:13, 3936:14,

3936:22, 3937:12,

3939:15, 3941:15,

3943:10, 3943:15,

3944:22, 3945:11,

3945:14, 3947:4,

3947:13, 3948:6,

3954:15, 3957:1,

3962:11, 3962:18,

3963:2, 3964:11,

3965:3, 3967:25,

3968:13, 3985:18,

3991:24, 3994:13,

3995:25, 3997:15,

3997:17, 3997:19,

4007:20, 4011:6,

4019:9, 4025:9,

4029:9, 4029:22,

4035:10, 4037:13,

4039:8, 4041:9,

4043:2, 4046:6,

4049:1, 4052:18,

4053:10, 4053:22,

4054:20, 4055:6,

4057:11, 4064:23,

4065:23, 4066:11,

4066:15, 4067:12,

4068:4, 4068:12,

4068:20

one's [1] - 4029:23

ones [3] - 3932:17,

3975:14, 3988:15

operate [4] - 3935:11,

3961:10, 3961:21,

3996:18

operated [1] - 3962:10

operating [3] -

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 187 of 198 PageID: 19440
4037:18, 4038:16,

4040:21

operation [12] -

3950:11, 3961:3,

3961:4, 4048:7,

4050:25, 4054:23,

4056:2, 4056:5,

4056:8, 4056:10,

4066:10

operational [12] -

4047:8, 4047:23,

4047:25, 4048:2,

4048:3, 4048:16,

4048:18, 4048:22,

4058:8, 4065:12,

4065:17, 4065:21

operations [1] -

4005:3

opine [1] - 4013:23

opinion [29] - 3925:2,

3925:7, 3925:18,

3926:2, 3938:9,

3938:14, 3941:9,

3948:18, 3948:22,

3949:4, 3953:22,

3954:2, 3955:25,

3957:15, 3957:18,

3963:20, 3982:13,

3982:25, 3985:23,

4005:24, 4006:5,

4010:3, 4014:1,

4014:17, 4029:6,

4032:11, 4039:24,

4068:13, 4070:2

opinions [25] -

3922:17, 3922:23,

3923:16, 3925:2,

3955:22, 3959:13,

3973:1, 3973:3,

3973:5, 3973:7,

3973:9, 3973:11,

3973:12, 3973:16,

3973:18, 3973:19,

3973:22, 3976:12,

3979:5, 3979:8,

3979:14, 3981:14,

3983:8, 3984:9,

4058:14

opportunity [1] -

3969:25

opposed [2] -

4069:16, 4070:22

order[12] - 3917:6,

3923:14, 3929:16,

3947:23, 3961:9,

3962:17, 3964:18,

3983:9, 3988:4,

4044:7, 4054:20,

4066:4

ordinary [1] - 4039:9

Oregon [1] - 4051:6

organization [9] -

3910:25, 3911:25,

3920:4, 3962:19,

4011:20, 4043:15,

4051:19, 4051:20,

4054:20

organizational [1] -

3978:15

organizations [8] -

3910:23, 3914:11,

3914:15, 3915:8,

3922:3, 3927:7,

3929:15, 4051:17

organize [1] - 3978:25

organized [1] -

3962:19

organizing [1] -

3923:13

original [2] - 3976:13,

4009:20

originally [4] -

3912:20, 3954:16,

3976:17, 3985:15

origination [1] -

4036:14

otherwise [1] - 4070:2

ought [4] - 3957:13,

4012:19, 4013:17,

4029:25

out-sources [1] -

4051:21

outcome [1] - 4062:18

outflow [2] - 4066:5,

4066:14

outputs [1] - 3957:3

outside [7] - 3910:17,

3910:24, 3946:24,

3950:5, 3982:1,

3982:10, 4005:22

overall [5] - 3934:21,

3935:25, 3937:8,

4035:20, 4058:7

overarching [2] -

3946:7, 3958:13

overlap [1] - 3916:22

oversaw [1] - 4069:13

oversight [1] -

4044:23

oversimplifying [1] -

4039:16

overview [1] - 4002:1

owes [1] - 4062:14

own [9] - 3931:11,

3935:15, 3936:21,

3944:7, 3954:19,

3954:20, 3987:6,

4038:13, 4057:22

owned [1] - 3919:12

owners [2] - 4002:17,

4002:20

ownership [1] -

3929:21

owning [1] - 3929:8

owns [1] - 3929:3

Oxley [1] - 3920:11

P

P-2050 [1] - 4001:25

P-210 [8] - 4000:10,

4007:1, 4014:21,

4014:22, 4017:9,

4023:23, 4025:16

P-787 [3] - 4032:24,

4034:12, 4034:13

P-847 [3] - 3990:12,

3990:13, 3991:20

P-848 [1] - 3991:2

P-849 [1] - 3988:20

P-852 [4] - 3968:20,

3968:22, 3973:23,

3984:24

P-852.1 [1] - 3968:24

P-8521 [1] - 3996:24

P-856 [1] - 3990:10

packages [1] -

3949:20

packet [1] - 4018:3

page [55] - 3930:4,

3931:3, 3933:10,

3956:1, 3956:2,

3956:3, 3956:11,

3956:19, 3969:11,

3969:15, 3969:18,

3970:8, 3974:3,

3977:15, 3985:2,

3986:21, 3986:25,

3991:8, 3991:11,

3996:25, 3997:3,

4001:5, 4001:17,

4002:3, 4007:1,

4011:15, 4012:6,

4014:22, 4014:24,

4015:3, 4015:12,

4015:17, 4015:21,

4016:4, 4016:13,

4017:9, 4017:20,

4017:22, 4018:8,

4018:17, 4018:20,

4023:21, 4025:16,

4027:6, 4029:12,

4029:20, 4029:24,

4030:25, 4031:1,

4031:2, 4033:13

Page [3] - 4015:1,

4016:11, 4033:16

pages [2] - 3933:7,

4000:24

paid [21] - 3930:14,

3936:15, 3936:24,

3940:19, 3941:21,

3942:2, 3942:3,

3942:4, 3961:14,

3975:20, 3975:23,

3987:24, 3988:1,

3988:4, 3988:12,

3988:14, 3988:17,

4020:6, 4036:15,

4039:1, 4057:10

paper [7] - 3937:21,

3939:11, 3985:16,

4048:21, 4053:8,

4053:9, 4053:13

papers [9] - 3965:3,

4052:10, 4052:11,

4053:20, 4053:24,

4053:25, 4054:20,

4057:23

paragraph [27] -

3930:6, 3930:18,

3956:14, 3960:24,

3985:5, 3985:7,

3985:10, 3985:17,

3985:22, 3986:16,

3986:18, 3987:1,

3987:18, 3987:21,

4008:7, 4008:11,

4008:13, 4008:16,

4009:20, 4009:21,

4010:5, 4011:1,

4012:17, 4012:23,

4029:22, 4030:25,

4031:4

Paragraph [1] -

4031:2

paragraphs [1] -

4029:21

parallel [1] - 3941:16

parcel [1] - 4048:14

Pardon [3] - 3927:25,

3966:4, 3980:19

parent [3] - 3948:14,

3949:6, 3950:17

parentheses [1] -

4031:16

part [46] - 3913:5,

3917:23, 3924:17,

3934:19, 3946:10,

3949:12, 3950:14,

3961:16, 3963:16,

3964:20, 3973:5,

3974:12, 3975:10,

3975:12, 3976:4,

3978:8, 3979:3,

3980:15, 3983:3,

3995:21, 3999:19,

4002:21, 4004:8,

4006:21, 4010:5,

United States District Court

Trenton, New Jersey

4092

4012:12, 4018:3,

4023:11, 4023:16,

4026:24, 4027:4,

4028:5, 4029:15,

4029:19, 4034:8,

4037:11, 4037:15,

4038:25, 4041:19,

4047:6, 4047:9,

4048:14, 4048:17,

4068:18

participants [1] -

4010:17

participate [1] -

3971:13

participated [2] -

3912:3, 3921:12

particular [14] -

3928:13, 3947:16,

3955:2, 3959:23,

3960:23, 3961:4,

3984:8, 3993:13,

4045:8, 4053:12,

4054:25, 4055:1,

4056:1, 4056:7

particularly [8] -

3932:21, 3941:17,

3949:2, 3954:6,

3954:15, 3979:18,

3981:10, 4006:5

partners [1] - 3912:11

parts [6] - 3980:23,

3981:1, 3981:2,

3985:14, 3986:2

party [1] - 3929:1

passage [1] - 4012:25

passed [3] - 3920:11,

3993:2, 4071:8

past [2] - 4056:21,

4057:17

path [1] - 3946:16

patients [3] - 3918:10,

3918:16, 3918:19

PATRICIA [1] -

3906:17

pause [3] - 3964:10,

3990:11, 4019:14

pay [8] - 3929:5,

3929:18, 3934:11,

3936:16, 3941:23,

3942:5, 3943:25,

3960:7

paying [2] - 4036:17,

4037:12

payment [4] - 3941:8,

3989:12, 4049:10,

4062:17

payments [1] - 3941:5

pays [2] - 4010:12,

4035:5

PC [1] - 3906:3

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 188 of 198 PageID: 19441
peer [4] - 4052:4,

4064:20, 4065:4,

4065:10

peer-reviewed [4] -

4052:4, 4064:20,

4065:4, 4065:10

pen [1] - 3985:16

penetration [1] -

3918:15

pension [8] - 3967:15,

3967:24, 3968:7,

3968:12, 3968:14,

3970:19, 3970:22,

3970:25

Pension [3] - 3967:18,

3967:19, 3970:11

people [8] - 3918:19,

3922:16, 3929:11,

3945:14, 3968:6,

4037:8, 4037:13,

4040:15

per[2] - 3994:19,

4071:16

perceive [1] - 3937:17

percent [4] - 3962:4,

3963:5, 3964:13,

4063:1

percentage [3] -

3918:16, 3918:18,

4062:21

Percentage [1] -

4062:24

perfectly [2] -

3925:23, 3940:12

perform [3] - 3948:19,

4019:8, 4050:13

performance [3] -

4045:12, 4048:4,

4052:12

performed [13] -

3914:11, 3916:14,

3917:24, 3920:4,

3936:10, 3950:18,

3951:24, 3988:16,

4003:13, 4008:1,

4011:22, 4028:9,

4057:17

performing [1] -

3976:10

performs [2] -

3934:19, 3949:14

perhaps [4] - 3920:20,

3943:23, 4004:16,

4047:3

period [15] - 3909:10,

3909:11, 3972:20,

3972:22, 3981:13,

3989:23, 4023:8,

4036:18, 4036:21,

4037:1, 4037:2,

4039:2, 4045:3,

4049:20, 4053:23

permitted [2] - 4054:2,

4054:8

person [3] - 3912:15,

3975:5, 4014:2

personal [3] -

3941:20, 4005:24,

4006:4

personally [2] -

3979:11, 4005:16

personnel [1] - 3935:5

perspective [3] -

3936:19, 3944:5,

4065:2

pertain [2] - 4009:2,

4058:8

pertaining [1] - 4050:2

pertains [4] - 4046:5,

4047:14, 4057:21,

4060:2

pertinent [9] -

3927:20, 3979:4,

3979:8, 3979:18,

3980:23, 3981:1,

3982:11, 3982:24,

4032:17

pervasive [1] -

4027:25

PETER [1] - 3905:17

PGS [2] - 3905:5,

3905:10

Ph.D [4] - 3907:4,

3907:4, 4042:9,

4042:23

pharmaceutical [1] -

4061:25

phases [1] - 4006:14

PhD [7] - 4043:14,

4043:21, 4043:23,

4043:24, 4043:25,

4051:25, 4054:18

philosophies [1] -

3939:17

phrase [3] - 3914:18,

3982:18, 3985:10

phrasing [1] - 3922:16

physically [1] -

3940:19

pick [2] - 3935:20,

3945:14

picked [1] - 3933:11

pioneered [1] -

3954:23

place [9] - 3915:19,

3918:7, 3927:1,

3937:20, 3958:3,

3963:19, 3964:19,

3995:13, 4023:10

placed [1] - 4036:16

Plaintiff's [7] -

3907:10, 3907:11,

3959:6, 3963:4,

3992:5, 4008:10,

4034:18

PLAINTIFFS [3] -

3905:4, 3905:8,

3906:7

plaintiffs [8] -

3938:24, 3962:12,

3991:19, 3998:14,

4034:11, 4039:13,

4067:5, 4068:2

plaintiffs' [2] -

3939:21, 4058:15

plan [1] - 3968:5

plans [2] - 3968:1,

3968:2

point [14] - 3915:21,

3924:6, 3946:24,

3947:10, 3956:24,

3964:11, 3984:7,

3991:19, 3995:25,

3996:8, 4023:1,

4031:12, 4060:16,

4071:10

points [5] - 3936:8,

3956:4, 3956:8,

4040:11, 4040:13

policies [2] - 3935:4,

4036:14

policy [3] - 3910:9,

4036:16, 4044:18

polluted [1] - 3919:11

poor [1] - 4048:4

portfolio [5] -

3934:12, 3935:17,

3952:23, 3953:1,

4049:16

portfolio's [5] -

3934:23, 3934:25,

3935:2, 3936:1,

3936:6

portfolios [2] -

3933:19, 4049:13

portion [5] - 3976:24,

3994:8, 4020:5,

4028:6, 4063:18

portions [5] - 3975:17,

3976:21, 3983:7,

3984:8, 4035:18

posed [1] - 4036:23

position [6] - 3913:4,

3967:3, 4025:22,

4043:5, 4045:1,

4049:20

positioned [1] -

3923:10

positions [9] -

3909:22, 4044:1,

4045:19, 4049:4,

4051:1, 4051:3,

4051:7, 4051:10,

4054:15

possession [1] -

3929:3

possibility [2] -

3994:12, 4022:16

possible [3] -

3943:20, 4056:12,

4068:6

post [2] - 3967:25,

3968:1

post-employment [1]

- 3967:25

post-retirement [1] -

3968:1

posted [1] - 4049:14

potential [3] -

4046:15, 4047:7,

4066:23

potentially [1] -

3943:23

practicable [1] -

4011:23

practice [9] - 3911:14,

3913:5, 3926:16,

3926:18, 3927:1,

3928:6, 3953:18,

3959:21, 3959:22

practices [4] -

3917:24, 3928:7,

3953:16, 4046:5

practicing [1] -

3926:20

practitioners [2] -

3912:6, 3926:15

precise [1] - 4067:9

precisely [1] - 3976:2

preclude [1] - 3924:1

predecessor[1] -

4029:8

predicting [1] - 3921:6

predictive [1] - 3948:7

preferable [2] -

3946:2, 3956:21

preference [4] -

3945:24, 3956:15,

3956:22, 4071:9

preferred [1] -

3940:13

premarked [1] -

4032:24

premise [1] - 3929:1

premiums [1] -

4032:21

preparation [2] -

3935:5, 4028:5

prepare [9] - 3914:6,

3925:6, 3928:13,

United States District Court

Trenton, New Jersey

4093

3932:13, 3948:21,

3971:13, 3976:11,

3992:14, 3996:16

prepared [5] - 3932:5,

3950:24, 3979:25,

3992:20, 4005:6

preparer [1] - 3943:16

preparing [2] -

3932:17, 3974:4

prescribing [1] -

4066:11

presence [2] - 4011:7,

4038:19

PRESENT [1] -

3906:17

present [6] - 3933:18,

3981:11, 3981:18,

3998:8, 3998:10,

4070:18

presentation [3] -

4014:23, 4017:17,

4035:13

presentations [4] -

3917:2, 3948:24,

3951:2, 4048:25

presented [15] -

3911:8, 3911:15,

3914:3, 3937:21,

3938:19, 3938:20,

4001:14, 4018:1,

4018:3, 4029:11,

4034:22, 4038:11,

4039:19, 4040:7,

4041:24

presenters [1] -

3912:11

presenting [1] -

3938:1

President [1] - 4044:9

press [1] - 3920:18

pressures [1] -

4040:20

pretty [3] - 3912:10,

3983:4, 4052:18

previously [1] -

3989:24

price [3] - 3934:9,

3934:15, 4040:21

Pricewaterhouse's [1]

- 3938:14

PricewaterhouseCo

opers [2] - 3938:11,

3999:25

pricing [5] - 4041:20,

4045:12, 4049:12,

4050:15, 4069:19

primarily [15] -

3910:16, 3910:21,

3910:24, 3913:25,

3961:7, 3961:19,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 189 of 198 PageID: 19442
3968:1, 3972:8,

3972:11, 3976:9,

4019:1, 4044:10,

4048:18, 4051:11,

4052:9

Primarily [1] - 4044:2

primary [8] - 3933:9,

3933:13, 3956:6,

3959:22, 3974:19,

4029:23, 4038:24,

4046:1

principles [15] -

3911:16, 3913:6,

3913:20, 3913:23,

3913:24, 3914:4,

3914:8, 3914:9,

3916:25, 3919:23,

3937:13, 4034:9,

4070:15, 4070:19,

4071:1

private [2] - 3914:14,

4051:16

probe [1] - 4038:12

problem [1] - 3945:25

problems [4] -

3919:13, 3920:15,

3926:17, 4066:1

procedure [1] -

3926:23

procedures [2] -

3951:24, 4064:25

proceed [3] - 3947:6,

4059:9, 4071:7

Proceedings [1] -

4071:25

proceedings [1] -

4054:10

proceeds [1] -

4069:16

process [31] -

3917:13, 3918:7,

3922:22, 3924:18,

3926:23, 3948:13,

3949:12, 3956:7,

3958:15, 3961:24,

3962:3, 3963:1,

3964:14, 3994:6,

3995:2, 3995:9,

3995:17, 3996:6,

3997:23, 4001:3,

4003:5, 4003:16,

4003:17, 4004:11,

4005:9, 4013:19,

4014:1, 4023:7,

4040:3, 4041:4,

4041:19

Process [1] - 4003:22

processes [7] -

3919:14, 3942:22,

3943:12, 3946:6,

3950:25, 3974:18,

4002:4

processing [1] -

4037:14

produced [1] -

3993:16

producing [7] -

3918:13, 3918:24,

3958:4, 3993:23,

3993:25, 3995:20,

4008:22

product [16] -

3934:19, 3935:23,

3952:15, 3952:19,

3952:20, 3952:21,

3952:22, 3952:25,

3957:7, 4010:13,

4046:9, 4048:4,

4050:18, 4056:2,

4061:23, 4070:15

production [1] -

3955:7

productive [2] -

3917:17, 3919:4

products [10] -

3952:7, 4002:13,

4002:16, 4002:20,

4007:25, 4009:23,

4040:21, 4041:21,

4046:21, 4046:22

profession [8] -

3910:9, 3912:5,

3925:16, 3926:21,

3954:9, 3954:12,

3983:18, 4054:6

professional [18] -

3911:7, 3916:24,

3921:17, 3921:22,

3922:11, 3922:24,

3925:15, 3926:1,

3928:15, 3943:15,

3948:1, 3953:4,

3953:6, 3953:14,

3977:3, 3983:5,

4062:21, 4062:24

professionals [2] -

3943:17, 3955:19

professor[10] -

3908:18, 3909:10,

3909:11, 3909:12,

3909:16, 3909:17,

4012:11, 4043:1,

4051:7, 4069:8

Professor[7] -

3954:17, 3954:21,

3955:2, 3983:16,

3993:12, 4012:12,

4012:21

professorships [1] -

3909:18

proffer[1] - 4067:5

profit [5] - 3915:7,

3963:5, 4035:13,

4035:23, 4048:10

profitability [19] -

3924:18, 3925:4,

3925:8, 3925:20,

3938:21, 3939:24,

3948:13, 3949:5,

3959:3, 3963:21,

3964:2, 4034:22,

4035:9, 4035:17,

4035:20, 4041:14,

4041:21, 4048:23,

4050:24

program [8] - 3918:6,

3918:9, 3957:6,

3957:8, 3957:10,

4004:18, 4012:10,

4012:15

project [6] - 3919:8,

3923:12, 3967:24,

3973:12, 4027:24,

4048:17

projects [5] - 3912:2,

3915:13, 3915:16,

3915:18, 3921:12

promoted [2] -

3909:10, 3909:16

promotes [1] - 3957:6

pronouncement [1] -

3940:7

propel [2] - 3922:9,

3929:15

propelled [1] -

4004:16

property [1] - 3919:11

proportion [1] -

3957:5

proposals [1] - 4046:5

proposed [2] -

4053:15, 4067:1

propound [1] -

3937:18

prospectus [1] -

3935:5

provide [29] - 3910:16,

3916:3, 3916:8,

3920:19, 3923:3,

3923:11, 3926:20,

3926:25, 3931:14,

3933:15, 3933:23,

3934:6, 3941:24,

3946:9, 3956:17,

3960:25, 3961:17,

3962:9, 3979:3,

3979:9, 3982:11,

3982:23, 3983:20,

4045:14, 4045:24,

4046:21, 4047:2,

4049:22, 4064:19

provided [15] -

3928:14, 3933:16,

3944:21, 3954:7,

3956:2, 3959:17,

3959:18, 3961:3,

3977:22, 3977:23,

4014:16, 4031:8,

4060:13, 4060:14,

4065:22

provider [1] - 3941:24

provides [4] - 3912:8,

3947:15, 3950:4,

3953:19

providing [18] -

3918:9, 3918:10,

3935:9, 3937:13,

3939:15, 3945:23,

3946:7, 3946:8,

3967:10, 3967:12,

3968:5, 3980:3,

3980:4, 3993:3,

3996:20, 3996:21,

4013:14, 4026:9

provision [2] - 3934:5,

4032:4

provisions [1] -

3932:10

proximity [1] -

3910:19

Public [3] - 3921:20,

3921:25, 3922:1

public [3] - 3912:11,

3926:16, 3953:5

publication [2] -

4052:6, 4053:25

publications [5] -

4052:5, 4052:7,

4060:5, 4061:6,

4064:23

publish [1] - 4053:9

published [8] -

3910:5, 3911:4,

3911:12, 3913:2,

3916:15, 3917:24,

4052:4, 4065:16

publishing [1] -

3911:14

purchasing [4] -

3918:23, 3992:13,

3992:14, 3992:20

purpose [3] - 3932:8,

3993:8, 4061:3

purposes [4] -

3918:25, 3959:2,

3988:20, 4007:21

pursuant [13] -

3994:8, 3994:12,

3996:5, 4005:17,

4005:23, 4016:21,

United States District Court

Trenton, New Jersey

4094

4018:23, 4030:9,

4031:19, 4032:5,

4032:7, 4033:19,

4034:7

pursued [1] - 3915:15

pursuit [1] - 3967:10

purview [3] - 4044:11,

4047:11, 4058:6

pushed [2] - 3930:1,

4020:25

put [14] - 3909:2,

3918:7, 3924:4,

3929:1, 3944:1,

3978:15, 3985:16,

3994:19, 3995:1,

3995:7, 3995:13,

4007:4, 4025:17,

4026:12

putting [2] - 3923:14,

4025:22

PwC [4] - 3951:24,

3953:4, 3953:8,

4014:15

Q

qualifications [1] -

4068:13

QUALIFICATIONS [2]

- 3907:5, 4059:6

qualified [5] -

3923:21, 4058:13,

4068:5, 4069:25,

4071:5

qualify [1] - 3923:19

quality [1] - 3935:10

quantification [3] -

4064:9, 4064:19,

4066:18

quantified [1] -

4067:13

quantify [9] - 4064:4,

4064:7, 4064:11,

4064:12, 4064:14,

4067:13, 4068:6,

4068:9, 4068:12

Quantitative [1] -

4052:23

quantity [1] - 4070:22

quart [2] - 3943:24,

3943:25

quarters [1] - 4018:8

quasi [1] - 4044:25

question's [1] -

4006:21

questioner [1] -

4016:2

questioning [1] -

4007:13

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 190 of 198 PageID: 19443
questions [11] -

3929:19, 3929:24,

3942:8, 3963:3,

3964:22, 4004:15,

4014:3, 4036:3,

4036:23, 4038:13,

4040:6

quickly [5] - 3995:22,

4004:18, 4015:14,

4023:21, 4028:14

quite [4] - 3937:14,

4015:10, 4055:12,

4066:1

quotes [1] - 3984:17

R

R.M.R [1] - 3905:24

racks [1] - 3929:1

raise [3] - 3924:7,

4038:13, 4040:6

raised [1] - 4014:3

range [13] - 3911:6,

3911:19, 3913:7,

3917:5, 3923:4,

3950:4, 3962:21,

3978:9, 3978:11,

3996:16, 4052:13,

4055:3, 4056:7

ranges [3] - 4013:20,

4056:15, 4056:16

rapid [1] - 4050:8

rate [1] - 4069:24

rather[19] - 3911:6,

3924:24, 3926:23,

3933:3, 3934:15,

3934:16, 3938:2,

3939:6, 3939:19,

3957:7, 3963:7,

3964:16, 3983:20,

3994:23, 4004:18,

4020:10, 4041:23,

4041:25

rational [2] - 3942:20,

3942:24

rationale [2] -

3957:11, 4012:16

razor [1] - 3944:18

reach [2] - 3925:2,

3943:4

reaction [1] - 3939:3

read [31] - 3925:8,

3925:13, 3930:9,

3932:22, 3948:23,

3949:25, 3954:4,

3956:24, 3974:25,

3975:2, 3975:3,

3975:6, 3975:11,

3978:14, 3979:15,

3980:6, 3980:11,

3980:13, 3980:15,

3982:17, 3984:5,

3985:18, 3987:12,

4012:5, 4023:5,

4029:18, 4029:25,

4030:14, 4031:10,

4063:23

reading [6] - 3960:2,

3960:3, 3980:12,

3980:16, 3981:2,

3984:3

ready [2] - 3955:11,

3999:7

Ready [1] - 3908:4

real [8] - 3937:20,

3937:22, 3939:12,

3943:21, 3952:3,

4061:18, 4066:23,

4067:2

realities [3] - 3937:17,

3939:11, 3964:6

realized [3] - 4022:6,

4022:13, 4055:2

realizes [1] - 4058:16

really [22] - 3917:8,

3933:4, 3945:12,

3952:5, 3954:22,

3955:6, 3958:11,

3969:7, 3971:14,

3975:13, 3981:23,

3983:24, 3996:22,

3997:25, 4027:19,

4046:20, 4051:18,

4053:6, 4055:4,

4056:11, 4067:15,

4070:25

realm [2] - 4013:2,

4034:5

realty [1] - 3913:9

reason [8] - 3923:22,

3975:3, 3975:10,

4010:5, 4035:8,

4035:10, 4038:24,

4058:13

reasonable [13] -

3942:15, 3958:20,

3962:2, 3963:22,

3993:5, 4009:13,

4012:3, 4014:6,

4014:13, 4039:17,

4041:1, 4041:2

reasonableness [20] -

3938:1, 3953:10,

3954:9, 3962:3,

3962:18, 3962:25,

3963:1, 3964:19,

4006:11, 4010:4,

4010:6, 4013:8,

4013:11, 4013:16,

4013:18, 4013:21,

4013:23, 4014:1,

4040:13

reasonably [4] -

3947:23, 3958:3,

4041:1, 4050:7

reasons [7] - 3921:3,

3939:7, 3963:12,

3964:7, 3975:12,

3975:13, 4067:12

rebuttal [1] - 3976:21

recalled [1] - 3992:10

recalling [1] - 3967:22

receive [5] - 3918:12,

3968:7, 3975:24,

4043:16, 4043:23

received [22] -

3908:21, 3908:24,

3909:4, 3922:5,

3922:7, 3922:11,

3922:13, 3956:10,

3956:16, 3956:20,

3956:25, 3957:2,

3957:21, 3958:1,

3980:3, 4012:7,

4012:9, 4013:3,

4013:6, 4040:2,

4043:24

receives [1] - 3957:5

receiving [4] - 3918:8,

3942:1, 4038:14,

4043:25

recent [1] - 3988:14

recently [3] - 3918:7,

4058:5, 4066:1

recess [1] - 3999:5

Recess [1] - 3965:12

recipient [1] - 3922:10

recognition [2] -

4027:23, 4027:24

recognize [9] -

3926:4, 3937:11,

3950:21, 3955:13,

3959:6, 3988:21,

3990:13, 3997:7,

4000:12

recognized [3] -

3927:13, 3928:15,

4008:6

recognizes [1] -

3917:3

recognizing [1] -

4054:13

recollect [1] - 4000:18

recollection [24] -

3960:12, 3961:7,

3966:21, 3969:22,

3972:24, 3977:14,

3981:9, 3981:11,

3983:17, 3983:19,

3984:15, 3985:11,

3985:14, 3986:2,

3986:17, 3987:22,

3988:18, 3989:2,

3989:6, 3992:16,

3996:15, 4018:6,

4023:11, 4066:6

reconcile [1] -

3960:16

reconvene [1] -

3998:11

record [1] - 3908:9

recordation [1] -

3970:4

recorded [1] - 3970:3

records [3] - 3918:24,

4014:15, 4037:6

recurring [1] -

4037:18

Redirect [1] - 4036:2

redirect [1] - 4017:7

reduce [1] - 4038:18

reduced [1] - 3928:9

reduction [7] -

3924:24, 3928:18,

3931:13, 3964:7,

4028:7, 4029:1,

4041:25

reductions [2] -

3938:3, 3963:14

refer [3] - 3983:15,

4046:17, 4055:25

referee [1] - 4053:24

refereed [2] - 4057:23,

4065:15

reference [2] -

3987:21, 4010:25

referenced [3] -

4012:6, 4013:9,

4032:5

references [1] -

4030:4

referred [7] - 3962:14,

3962:15, 3987:1,

4029:24, 4046:18,

4047:23, 4047:24

referring [5] -

3997:12, 4000:22,

4010:11, 4016:1,

4016:2

reflect [1] - 3939:24

reflected [8] - 4002:1,

4019:21, 4020:3,

4021:14, 4022:9,

4025:7, 4025:16,

4027:2

Reflected [1] - 4027:3

reflects [3] - 3997:9,

4018:17, 4049:16

refresh [2] - 3983:17,

United States District Court

Trenton, New Jersey

4095

3983:19

refreshed [1] -

3996:15

refrigerator [2] -

3944:1, 3944:13

regard [3] - 4067:4,

4069:21, 4069:23

regarding [8] -

4044:9, 4044:18,

4045:11, 4045:15,

4046:4, 4050:23,

4053:1, 4053:22

regardless [3] -

3920:1, 3929:5,

3942:23

register [1] - 3929:10

registrants [2] -

3914:5, 4028:2

regulated [3] -

4033:20, 4046:12,

4047:5

regulation [3] -

3967:11, 4030:7,

4044:23

regulations [4] -

3912:25, 3995:14,

3995:15, 4004:17

regulator[1] - 4046:2

regulators [1] - 3912:7

regulatory [8] -

4005:2, 4044:10,

4044:18, 4045:5,

4046:4, 4047:11,

4048:5, 4066:25

reimbursement [3] -

3918:8, 3918:12,

3919:1

reinsurance [1] -

4032:20

reject [1] - 3917:7

relate [6] - 3925:8,

3939:1, 3957:23,

3992:8, 4019:1,

4055:24

related [45] - 3912:25,

3916:6, 3926:1,

3956:5, 3959:23,

3960:6, 3961:7,

3968:8, 3970:20,

3974:16, 3977:22,

3988:16, 3989:21,

3993:14, 3993:18,

3994:16, 3995:19,

3999:15, 4000:6,

4001:24, 4003:18,

4004:5, 4004:6,

4004:11, 4006:9,

4007:22, 4009:2,

4009:6, 4010:3,

4010:7, 4010:11,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 191 of 198 PageID: 19444
4010:18, 4010:25,

4012:23, 4013:5,

4013:11, 4013:22,

4017:17, 4035:14,

4048:5, 4048:20,

4050:7, 4050:16,

4055:9, 4066:21

relatedly [1] - 4055:15

relates [38] - 3965:19,

3966:20, 3971:1,

3972:1, 3972:15,

3973:1, 3975:8,

3976:7, 3976:20,

3984:10, 3986:1,

3986:16, 3995:4,

3995:6, 3995:24,

4000:21, 4002:8,

4002:23, 4003:12,

4004:8, 4005:5,

4007:13, 4009:23,

4010:18, 4012:15,

4013:8, 4015:3,

4019:13, 4021:12,

4021:22, 4022:19,

4025:15, 4027:12,

4030:6, 4030:24,

4033:23, 4034:1,

4034:6

relating [5] - 4016:4,

4031:4, 4054:16,

4055:16, 4062:22

relation [1] - 4003:5

relationship [11] -

3915:14, 3959:16,

3962:6, 3962:8,

3962:18, 4009:5,

4009:24, 4010:7,

4015:4, 4054:23,

4060:13

relationships [2] -

3919:4, 3972:14

relative [3] - 3952:24,

3953:24, 3957:25

relatively [4] -

3914:10, 3927:7,

3964:16, 4036:18

relevance [3] - 3933:6,

3979:13, 3984:8

relevant [9] - 3932:12,

3933:8, 3970:24,

3980:23, 3983:7,

4047:4, 4063:13,

4065:5, 4065:6

reliability [1] -

4022:19

reliable [3] - 4041:2,

4070:15, 4070:18

reliably [1] - 4071:1

relied [4] - 3955:18,

3982:6, 4014:16,

4034:3

relies [1] - 4029:5

remain [1] - 4038:22

remained [1] -

3994:22

remarkable [1] -

3962:8

remediation [2] -

3919:9, 3919:12

remember[1] -

3909:21

removal [2] - 4021:18,

4021:21

remove [2] - 4020:21,

4038:20

removed [2] -

4023:11, 4038:16

removing [5] -

4020:23, 4025:25,

4026:2, 4026:4,

4026:7

render [5] - 3933:21,

3973:1, 3973:5,

3973:18, 4037:12

rendered [3] - 3910:8,

3963:17, 4035:14

rendering [3] -

3989:23, 3997:16,

3997:21

repair [1] - 3944:8

repeat [2] - 4023:3,

4030:13

repetitive [2] -

3947:12, 3948:3

rephrase [5] -

4005:12, 4005:13,

4005:18, 4006:6,

4023:19

replace [1] - 3936:4

replicable [1] - 3943:2

replicated [1] -

3939:10

report [62] - 3926:12,

3930:11, 3939:2,

3946:25, 3947:2,

3952:11, 3969:1,

3969:2, 3973:13,

3974:1, 3974:5,

3974:21, 3974:22,

3974:24, 3974:25,

3975:8, 3976:9,

3976:11, 3976:13,

3976:21, 3976:22,

3977:13, 3978:5,

3978:16, 3978:18,

3979:2, 3980:1,

3984:23, 3984:25,

3985:3, 3985:12,

3986:3, 3986:6,

3986:11, 3986:17,

3986:25, 3987:17,

3987:18, 3988:2,

3989:18, 3989:20,

3989:25, 3990:4,

3990:7, 3990:21,

3991:14, 3991:16,

4000:15, 4000:19,

4008:8, 4009:11,

4011:1, 4011:5,

4015:22, 4015:23,

4017:16, 4017:20,

4030:7, 4034:25,

4035:9, 4065:20,

4066:19

Report [3] - 3973:25,

3974:16, 3974:20

report's [1] - 3986:13

reported [15] -

3920:18, 3928:8,

3929:11, 3929:13,

3929:22, 3929:24,

3931:11, 3931:12,

3937:11, 3938:5,

3938:7, 3939:9,

3963:14, 4028:25

reporter[3] - 3982:17,

4023:5, 4030:14

REPORTER [1] -

3905:25

Reporting [3] -

3911:22, 3920:24,

3931:5

reporting [31] -

3910:7, 3910:17,

3911:20, 3918:8,

3919:8, 3920:13,

3920:19, 3920:22,

3921:16, 3923:5,

3928:10, 3928:17,

3928:18, 3928:22,

3931:9, 3931:16,

3932:25, 3937:5,

3939:13, 3939:18,

3939:23, 3940:12,

3948:13, 3949:5,

3959:3, 3964:6,

4028:20, 4028:21,

4029:3, 4029:4,

4029:21

reportings [1] -

3921:6

reports [12] - 3914:2,

3924:18, 3924:22,

3924:23, 3925:4,

3925:20, 4027:10,

4029:5, 4029:10,

4035:14, 4035:23,

4040:1

repositories [1] -

3953:15

repository [1] -

3927:10

represent [1] - 3931:1

representation [6] -

3937:22, 3951:5,

3951:7, 3989:3,

3989:11, 4001:1

representationally [1]

- 3937:19

represented [1] -

3951:21

representing [2] -

3981:21, 3981:25

represents [1] -

3913:25

reputational [2] -

4048:2, 4066:3

requested [1] - 3982:7

require [4] - 3919:17,

3919:18, 3944:9,

4037:5

required [7] - 3905:23,

3916:23, 3919:12,

3948:9, 3962:23,

3993:2, 3995:16

requirements [2] -

3942:14, 3942:19

requires [2] - 3914:5,

4037:4

resale [1] - 3929:8

research [15] - 3910:5,

3911:4, 3912:2,

3915:20, 3916:14,

3917:24, 3921:11,

3923:12, 3974:23,

3983:22, 4049:10,

4052:3, 4057:23,

4070:16

Research [3] -

3922:25, 3923:1,

4052:24

Reserve [9] - 4044:9,

4044:14, 4044:17,

4046:25, 4047:12,

4048:13, 4049:1,

4070:11

reserve [1] - 3924:5

resolving [1] -

3931:14

resonates [1] -

3996:17

resources [2] -

3918:24, 3961:18

respect [24] - 3918:4,

3919:19, 3925:19,

3932:25, 3934:12,

3935:1, 3936:5,

3937:1, 3937:2,

3937:9, 3955:25,

4022:19, 4045:18,

United States District Court

Trenton, New Jersey

4096

4046:13, 4047:2,

4048:16, 4058:2,

4058:15, 4058:17,

4058:23, 4059:21,

4064:22, 4065:17,

4069:5

respected [1] -

3954:18

respective [2] -

3952:24, 3958:23

respond [1] - 3968:4

response [1] - 3921:3

responses [1] -

4004:22

responsibilities [6] -

4045:15, 4045:25,

4046:23, 4047:3,

4049:23, 4053:4

responsibility [5] -

3912:24, 3916:9,

3934:22, 3935:25,

3974:21

responsible [1] -

3934:5

restart [1] - 4071:11

restate [1] - 3982:16

Restate [1] - 3982:20

restated [1] - 4028:20

restrict [1] - 3981:2

restrictions [1] -

3935:4

result [11] - 3945:5,

3945:9, 3962:1,

3962:3, 3963:1,

3963:2, 4013:11,

4013:15, 4028:25,

4034:20, 4035:1

resulted [1] - 4017:18

resulting [2] - 3914:3,

3960:18

results [6] - 3910:5,

3943:4, 3958:25,

4002:12, 4013:22,

4024:24

retail [1] - 3928:24

retailer [3] - 3928:25,

3929:2, 3929:14

retain [1] - 3974:15

retained [11] -

3930:13, 3972:25,

3973:3, 3973:8,

3973:20, 3974:6,

3974:11, 4059:19,

4059:21, 4060:4,

4070:9

retention [1] - 3973:5

retire [1] - 3968:7

retirement [1] - 3968:1

return [1] - 4065:8

reveal [2] - 3957:22,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 192 of 198 PageID: 19445
4025:13

revealing [4] - 3918:2,

4050:11, 4055:22,

4056:19

reveals [1] - 3955:6

Revenue [2] - 3931:5,

4031:14

revenue [51] -

3917:18, 3918:13,

3918:24, 3928:8,

3928:9, 3928:19,

3929:13, 3929:23,

3929:24, 3930:11,

3930:12, 3931:9,

3931:13, 3931:16,

3932:25, 3937:5,

3938:3, 3942:6,

3952:22, 3953:24,

3957:22, 3958:2,

3958:4, 3958:14,

3958:15, 3958:18,

3958:22, 3958:23,

3963:6, 3963:7,

3964:7, 3992:22,

3993:8, 3993:12,

3993:16, 3993:22,

3994:9, 3994:12,

3995:20, 4004:20,

4006:19, 4008:22,

4010:7, 4027:23,

4027:24, 4028:8,

4028:23, 4029:1,

4029:21, 4041:25

revenue-generating

[1] - 3917:18

revenues [22] -

3924:24, 3928:22,

3939:2, 3952:24,

3957:9, 3957:12,

3957:13, 3957:16,

3957:25, 3963:14,

3992:10, 3992:16,

4009:6, 4009:22,

4010:15, 4010:16,

4012:17, 4012:19,

4013:5, 4024:11,

4024:12

reverse [1] - 4044:7

review [14] - 3959:12,

3969:25, 3995:8,

4003:24, 4006:10,

4013:15, 4013:22,

4015:4, 4017:16,

4041:10, 4053:8,

4063:14, 4063:18,

4063:20

reviewed [15] -

3924:18, 3955:21,

3979:21, 3997:15,

4003:22, 4052:4,

4063:9, 4063:12,

4063:17, 4063:25,

4064:20, 4065:4,

4065:10, 4069:13,

4070:11

reviewing [2] -

3985:9, 3988:24

rewards [1] - 3929:21

richness [1] - 3955:3

rights [1] - 3937:23

risk [32] - 3929:4,

3929:21, 3933:5,

3936:14, 3937:2,

3937:23, 4047:10,

4047:13, 4047:23,

4047:24, 4048:1,

4048:7, 4050:16,

4050:17, 4052:11,

4058:7, 4065:7,

4065:11, 4065:21,

4066:17, 4067:12,

4067:14, 4067:18,

4067:20, 4068:3,

4068:6, 4068:20,

4070:20, 4070:21

Risk [1] - 4067:22

risk-based [1] -

4047:24

risks [42] - 3929:8,

4046:13, 4047:19,

4047:21, 4048:1,

4048:3, 4048:5,

4048:12, 4048:17,

4048:18, 4048:22,

4058:2, 4058:8,

4058:22, 4059:12,

4064:4, 4064:7,

4064:10, 4064:11,

4064:12, 4064:14,

4064:21, 4064:24,

4065:12, 4065:14,

4065:15, 4065:16,

4065:17, 4065:21,

4065:22, 4066:10,

4066:12, 4066:13,

4068:10, 4068:12,

4068:14, 4069:2,

4069:23, 4070:21,

4070:22

ROBERT [3] - 3906:5,

3906:5, 3906:13

Robert [1] - 3908:5

robust [1] - 3965:23

role [8] - 3915:9,

3921:6, 3977:15,

4045:23, 4046:24,

4047:2, 4055:21,

4060:3

roles [2] - 3913:15,

4050:10

ROME [1] - 3906:9

room [1] - 3918:17

roughly [7] - 3909:19,

3960:17, 3960:19,

3986:9, 3986:10,

4022:9, 4035:1

Roughly [2] - 4021:7,

4062:20

round [1] - 3912:4

routinely [1] - 3955:18

rubber [1] - 3944:8

Rule [1] - 4069:24

run [1] - 3972:12

S

safety [1] - 4046:12

salary [4] - 3941:21,

3941:23, 3942:6,

4037:12

sale [1] - 3930:13

sales [13] - 4008:22,

4009:6, 4009:22,

4010:6, 4010:11,

4010:13, 4010:18,

4010:25, 4012:23,

4012:25, 4051:13

San [6] - 4044:8,

4044:11, 4046:25,

4047:12, 4058:6,

4070:11

SANFORD [1] -

3905:8

Sarbanes [1] -

3920:11

Sarbanes-Oxley [1] -

3920:11

savings [5] - 3913:11,

3921:4, 3921:5,

3966:10, 4057:11

saw [1] - 3979:7

scale [26] - 4050:20,

4050:25, 4054:17,

4054:21, 4054:23,

4055:2, 4055:5,

4055:9, 4055:16,

4055:24, 4055:25,

4056:2, 4056:4,

4056:5, 4056:7,

4056:8, 4056:9,

4056:13, 4056:18,

4058:16, 4058:18,

4060:22, 4067:6,

4069:20, 4069:22

schedule [1] - 3924:3

schedules [3] -

4055:18, 4056:23,

4058:20

schemes [1] - 4045:6

Scholar[1] - 4043:4

scholar [2] - 4044:8,

4046:24

scholarly [1] - 4052:4

School [2] - 3908:16,

3912:1

schools [1] - 3922:12

science [1] - 3943:5

Science [2] - 3908:21,

4053:2

scientific [2] -

4053:14, 4070:2

scope [3] - 3946:24,

4014:18, 4031:7

SEAN [1] - 3906:13

search [3] - 3927:11,

3927:19, 3983:5

seated [4] - 3908:1,

3908:11, 3999:6,

4042:11

SEC [16] - 3911:21,

3912:14, 3912:15,

3914:5, 3914:11,

3921:9, 4028:2,

4045:1, 4045:7,

4045:11, 4049:5,

4049:25, 4050:2,

4054:9, 4058:1,

4070:9

second [12] - 3933:10,

3934:8, 3956:14,

3957:1, 3964:9,

4011:15, 4020:7,

4022:21, 4029:23,

4049:12, 4068:18,

4068:23

secondly [2] -

3928:16, 4058:17

Secondly [2] - 3943:1,

4067:16

Section [1] - 3905:23

section [7] - 3947:2,

3956:3, 3976:24,

3977:3, 3985:12,

4009:16, 4009:18

sections [1] - 4009:19

sector [1] - 3914:14

securities [1] - 4066:3

Securities [4] -

3914:5, 3921:14,

4069:14, 4069:18

see [59] - 3927:3,

3931:5, 3933:1,

3933:2, 3933:10,

3934:10, 3934:13,

3935:14, 3937:17,

3944:22, 3945:7,

3951:6, 3956:2,

3958:17, 3974:2,

3979:11, 3984:6,

United States District Court

Trenton, New Jersey

4097

3985:10, 3987:3,

3989:15, 3989:22,

3990:22, 3991:15,

3991:16, 3997:11,

4001:6, 4002:25,

4011:16, 4011:24,

4012:5, 4016:5,

4016:6, 4017:2,

4017:3, 4017:15,

4017:21, 4017:22,

4017:25, 4018:10,

4018:16, 4019:11,

4020:17, 4021:5,

4024:1, 4024:23,

4024:24, 4025:3,

4025:18, 4031:12,

4031:17, 4033:12,

4033:18, 4033:21,

4036:19, 4045:14,

4056:14, 4056:15,

4069:15, 4071:21

seeing [2] - 3984:3,

4035:6

seek [3] - 3934:25,

3978:12, 3991:20

seem [2] - 3976:23,

4020:14

select [6] - 3934:24,

3935:15, 3935:16,

3936:2, 3936:22,

3945:11

selected [3] - 3946:12,

3984:17, 4069:17

selecting [1] -

3935:13

selection [1] -

3943:14

sell [2] - 3929:6,

4049:15

seller[1] - 3929:18

selling [1] - 3929:12

send [2] - 3929:17,

3941:3

senior[4] - 3912:10,

3912:20, 4044:21,

4046:2

sense [6] - 3942:21,

3942:25, 3962:8,

4042:1, 4052:7,

4066:18

sent [4] - 3929:18,

3952:9, 3952:13,

4004:2

sentence [6] - 3930:6,

3930:9, 3930:17,

3930:18, 3995:21,

4012:16

separate [3] - 3978:7,

3992:14, 3992:19

serve [6] - 3908:16,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 193 of 198 PageID: 19446
3908:18, 4046:8,

4046:21, 4052:15,

4052:17

served [13] - 3909:9,

3909:12, 3911:9,

3912:17, 3912:20,

3912:22, 3913:1,

3913:17, 3914:24,

3918:16, 3922:3,

4049:18, 4052:18

serves [2] - 4047:16,

4053:6

service [18] - 3910:8,

3917:16, 3917:18,

3918:17, 3922:14,

3934:19, 3935:23,

3946:8, 3946:10,

3946:11, 3953:4,

3953:6, 3953:14,

3996:21, 4044:5,

4045:16, 4045:20,

4050:10

Services [10] -

3959:10, 3960:20,

4005:23, 4015:4,

4015:9, 4016:21,

4018:23, 4019:1,

4033:10, 4052:24

services [39] - 3918:9,

3918:10, 3929:13,

3930:13, 3933:3,

3933:15, 3933:16,

3933:21, 3933:24,

3933:25, 3934:5,

3935:9, 3935:10,

3948:1, 3949:15,

3950:3, 3950:5,

3959:17, 3961:1,

3961:19, 3962:9,

3963:16, 3989:23,

3989:24, 3990:17,

3991:5, 3991:8,

3991:11, 3993:3,

3997:21, 4016:8,

4026:9, 4035:14,

4037:13, 4046:15,

4049:10, 4060:13,

4060:14

servicing [1] -

4058:24

serving [2] - 3910:9,

4061:5

set [5] - 3913:8,

3914:13, 3927:14,

4013:1

sets [3] - 3913:19,

3937:2, 3959:16

setter [1] - 3915:6

setters [3] - 3912:7,

3937:15, 3939:8

setting [8] - 3910:10,

3911:5, 3911:9,

3912:17, 3913:16,

3915:22, 3919:6,

3927:7

settlement [6] -

4045:3, 4045:5,

4050:1, 4050:2,

4069:12, 4069:16

settlements [1] -

4066:20

seven [1] - 3926:24

seventh [1] - 3936:13

several [8] - 3911:9,

3952:15, 3952:21,

3960:22, 3992:25,

4044:6, 4044:16,

4050:14

severity [1] - 3921:15

shade [1] - 3998:24

shall [3] - 3936:10,

3936:24, 3936:25

Shared [8] - 3959:10,

3960:20, 4005:23,

4015:4, 4015:9,

4016:21, 4018:23,

4019:1

shared [3] - 3915:12,

4055:17, 4058:18

shareholder [3] -

3950:12, 3961:12,

4037:14

shareholders [1] -

4010:17

sheet [1] - 4037:1

SHERIDAN [1] -

3905:17

shift [1] - 3942:9

show [3] - 4015:15,

4020:10, 4035:18

showed [1] - 4034:2

shown [1] - 3990:10

shows [5] - 3996:8,

4020:9, 4038:15,

4038:16, 4040:16

sic) [1] - 4031:2

side [7] - 3933:22,

3934:14, 3935:8,

3935:18, 3936:8,

3936:24, 4017:13

significant [3] -

4053:12, 4055:4,

4064:11

similar [12] - 3921:2,

3933:22, 3934:13,

3935:7, 3935:18,

3936:23, 3943:4,

3958:24, 3967:25,

3970:23, 4003:17,

4003:21

similarly [1] - 3943:17

Similarly [1] - 4053:23

simple [3] - 3939:19,

3943:23, 3944:21

simplify [1] - 3951:12

simply [1] - 3946:1

simultaneous [1] -

3994:24

single [3] - 3927:11,

3927:16, 3927:18

sister [1] - 3915:11

sit [2] - 3986:1, 4053:3

sitting [7] - 3978:19,

3985:13, 3992:16,

3998:4, 4000:25,

4011:3, 4038:4

situated [1] - 3943:17

situation [1] - 3928:21

situations [2] -

3943:10, 4056:6

SIVOLELLA [1] -

3905:3

six [3] - 3933:6,

3933:8, 4036:9

sixth [2] - 3935:24,

3997:1

size [7] - 4051:20,

4055:1, 4055:2,

4056:15, 4056:16,

4057:10

skill [1] - 4070:1

skilled [1] - 3948:1

skip [2] - 3942:9,

4031:11

slide [3] - 4014:20,

4015:8, 4020:4

small [2] - 3964:16,

4055:5

so-called [1] - 3912:4

societies [1] - 3922:11

Society [1] - 3922:1

soft [1] - 4049:9

sold [2] - 3928:25,

3929:2

sole [1] - 3936:11

someone [4] - 3934:6,

4037:12, 4037:14,

4041:5

something's [1] -

3955:18

sometimes [2] -

4047:23

somewhat [4] -

4055:15, 4062:15,

4066:7, 4067:9

somewhere [1] -

4066:4

Somewhere [1] -

3981:15

SOP [1] - 3971:12

Sorry [1] - 3914:24

sorry [31] - 3922:21,

3930:3, 3934:7,

3945:1, 3956:11,

3958:22, 3969:2,

3971:1, 3971:7,

3974:1, 3974:7,

3974:11, 3991:10,

3991:25, 3997:1,

4003:3, 4004:4,

4008:15, 4012:12,

4014:25, 4015:17,

4022:2, 4025:9,

4026:3, 4030:10,

4031:1, 4056:24,

4059:18, 4061:11,

4062:20, 4069:9

sort [2] - 3943:20,

4020:9

sought [1] - 3983:25

Sound [1] - 3998:20

soundness [1] -

4046:12

source [3] - 3951:6,

3951:7, 4051:21

sources [1] - 4051:21

South [1] - 4051:5

Southern [2] -

3908:17, 3909:15

space [1] - 3935:5

speaking [7] -

3909:25, 3916:10,

3917:19, 3922:7,

3936:18, 3949:17,

3950:2

Speaking [1] - 3934:1

speaks [2] - 3961:1,

3997:19

specialization [1] -

4053:18

specialized [3] -

4031:14, 4058:14,

4070:3

specializing [1] -

4043:14

specific [18] - 3924:8,

3968:14, 3979:10,

3979:23, 3984:22,

3985:14, 3987:18,

3996:1, 3996:7,

4007:21, 4013:20,

4017:16, 4017:17,

4027:17, 4029:6,

4032:4, 4065:17

specifically [9] -

3930:5, 3939:1,

3975:8, 3979:12,

3996:25, 4011:3,

4019:3, 4029:24,

4067:20

United States District Court

Trenton, New Jersey

4098

Specifically [2] -

3985:5, 4064:22

specifications [1] -

3935:23

specificity [3] -

3981:16, 3983:14,

4013:7

specified [1] -

3934:13

specify [1] - 3910:19

speculating [1] -

4020:10

spell [2] - 3908:12,

4042:10

spelled [1] - 4042:12

spend [1] - 3952:11

spending [1] - 4036:9

spent [1] - 3988:7

spoken [1] - 3981:22

sponsoring [1] -

3968:5

spreadsheets [1] -

3954:5

spring [3] - 3977:6,

3977:9, 3986:7

stable [2] - 4004:20,

4004:24

staff [1] - 3922:24

staffs [1] - 3915:16

stale [1] - 4049:15

stamp [1] - 4001:18

stand [3] - 3965:13,

3999:9, 4042:8

standard [9] - 3912:7,

3912:17, 3928:13,

4027:24, 4028:1,

4028:6, 4028:23,

4029:7, 4029:8

standards [45] -

3910:9, 3910:10,

3911:5, 3911:7,

3911:9, 3912:14,

3913:2, 3913:3,

3913:9, 3913:15,

3913:18, 3914:1,

3914:14, 3914:16,

3915:6, 3915:22,

3916:24, 3919:6,

3925:25, 3926:1,

3926:22, 3927:7,

3927:8, 3927:10,

3927:12, 3927:16,

3927:18, 3937:15,

3937:18, 3939:8,

3939:16, 3939:17,

3967:12, 3971:11,

3971:13, 4033:7,

4034:3, 4034:7,

4047:25, 4066:25,

4069:1, 4069:3,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 194 of 198 PageID: 19447
4069:4

Standards [7] -

3914:22, 3915:5,

3965:25, 3967:23,

4011:19, 4027:8,

4027:11

stands [1] - 3926:8

Stanford [1] - 3954:17

start [2] - 3986:24,

4042:21

started [3] - 3913:18,

3998:15, 3998:18

starting [1] - 4005:19

State [5] - 3908:9,

3908:23, 3922:13,

4043:18, 4069:11

STATE [1] - 3905:14

state [5] - 3912:22,

3913:20, 3997:25,

4008:25, 4054:9

statement [30] -

3938:23, 3939:7,

3940:1, 3951:25,

3965:21, 3967:3,

3970:17, 3971:15,

3971:20, 3972:19,

3972:21, 3975:16,

3976:18, 3978:6,

3980:8, 3990:17,

3991:5, 3992:14,

3993:11, 3993:24,

4006:18, 4014:5,

4014:8, 4014:9,

4014:12, 4017:24,

4022:23, 4024:16,

4026:18, 4027:9

statements [14] -

3912:25, 3913:4,

3914:3, 3938:6,

3938:11, 3938:15,

3951:22, 3952:1,

3960:14, 3960:21,

3992:19, 4009:10,

4035:2, 4040:1

STATES [1] - 3905:1

statistic [1] - 3963:11

statistical [3] -

4010:1, 4043:15,

4054:22

status [2] - 4033:16,

4033:24

stay [1] - 3995:15

step [29] - 3917:11,

3951:18, 3952:6,

3952:17, 3952:18,

3952:20, 3953:2,

3953:9, 3953:10,

3953:23, 3955:25,

3957:17, 3958:5,

3965:7, 3994:23,

3999:4, 4000:6,

4002:1, 4002:8,

4002:10, 4006:25,

4007:4, 4007:22,

4026:13, 4036:4,

4042:2, 4068:12,

4071:21

Step [3] - 3951:20,

3952:19, 4007:9

steps [3] - 3947:20,

3951:15, 3960:22

STEVENS [56] -

3906:5, 3907:3,

3914:17, 3923:24,

3931:23, 3946:23,

3965:2, 3965:14,

3965:15, 3968:18,

3968:22, 3968:24,

3969:2, 3969:9,

3969:10, 3982:21,

3982:22, 3988:19,

3990:12, 3990:25,

3991:19, 3991:23,

3991:25, 3992:3,

3992:7, 3998:9,

3998:20, 3998:22,

3999:8, 3999:13,

3999:14, 4000:9,

4005:13, 4005:14,

4005:20, 4006:8,

4015:17, 4017:8,

4020:15, 4023:14,

4023:20, 4028:11,

4028:13, 4028:17,

4029:2, 4030:18,

4030:21, 4030:23,

4032:3, 4032:23,

4033:2, 4033:3,

4034:11, 4034:14,

4034:19, 4036:1

Stevens [8] - 3923:23,

3968:21, 3982:20,

3997:11, 3998:7,

3999:7, 3999:12,

4032:2

still [12] - 3911:14,

3927:24, 3928:1,

3936:16, 3941:25,

3985:1, 3999:10,

4008:8, 4028:22,

4028:24, 4057:3,

4071:19

stints [2] - 4044:6,

4049:3

store [5] - 3929:2,

3929:7, 3943:24,

3944:6, 3944:17

storing [1] - 3944:11

strategic [1] - 3917:5

stream [1] - 4037:16

streams [2] - 3958:14,

3958:15

Street [1] - 4066:1

STREET [1] - 3905:14

strike [3] - 4059:17,

4060:11, 4064:13

strongly [2] - 3935:19,

4041:23

struck [1] - 4024:9

structure [4] -

3978:15, 4050:24,

4052:13, 4056:14

structures [5] -

3926:19, 4005:3,

4050:22, 4050:24,

4060:2

student [1] - 4054:18

students [4] - 3922:9,

4048:15, 4051:19,

4051:24

studied [1] - 3971:12

studies [6] - 3946:18,

3946:21, 3947:9,

3947:25, 3948:9,

4065:10

study [4] - 3947:15,

3947:23, 4053:11,

4062:22

styling [1] - 3977:15

sub [62] - 3924:22,

3925:3, 3925:12,

3925:19, 3925:20,

3931:1, 3931:2,

3932:20, 3934:16,

3934:17, 3934:24,

3935:2, 3935:3,

3935:15, 3935:17,

3935:20, 3936:17,

3936:24, 3937:10,

3938:1, 3938:2,

3938:4, 3938:5,

3939:22, 3939:23,

3940:15, 3940:16,

3940:18, 3940:19,

3940:23, 3940:24,

3941:5, 3941:9,

3941:10, 3963:5,

3963:6, 3963:13,

3964:2, 3964:3,

3972:13, 4024:9,

4026:25, 4030:8,

4047:17, 4059:20,

4059:22, 4060:3,

4060:6, 4060:9,

4060:15, 4060:23

sub-administration

[1] - 4030:8

sub-administrative

[14] - 3924:22,

3925:3, 3925:20,

3937:10, 3938:2,

3938:5, 3939:23,

3940:16, 3940:19,

3941:10, 3963:6,

3963:13, 3964:3,

4026:25

sub-administrator [2]

- 3936:24, 3941:5

sub-administrators

[7] - 3925:12, 3931:2,

3932:20, 3934:17,

3935:20, 3936:17,

3940:24

sub-advised [5] -

4059:20, 4059:22,

4060:6, 4060:9,

4060:23

sub-advises [1] -

4047:17

sub-advisor[4] -

3935:3, 3938:1,

3963:13, 4060:15

sub-advisors [14] -

3925:12, 3931:1,

3932:20, 3934:16,

3934:24, 3935:2,

3935:15, 3935:17,

3935:20, 3936:17,

3940:23, 3941:5,

3972:13, 4060:3

sub-advisory [13] -

3924:22, 3925:3,

3925:19, 3937:10,

3938:4, 3939:22,

3940:15, 3940:18,

3941:9, 3963:5,

3964:2, 4026:25,

4030:8

subject [7] - 3917:9,

4045:4, 4046:14,

4052:7, 4063:10,

4066:22, 4067:15

subjected [4] -

3940:6, 3947:22,

3951:24, 3952:4

subjective [2] -

3942:23, 3944:23

subjectivity [1] -

3943:9

subjects [1] - 3920:8

submit [4] - 3923:20,

3988:4, 3988:6,

4058:12

submitted [3] -

3988:11, 3989:4,

3989:12

subsidiaries [1] -

4047:15

substance [8] -

3927:21, 3937:16,

United States District Court

Trenton, New Jersey

4099

3939:10, 3939:11,

3939:20, 3940:5,

3940:6, 3940:9

substantial [2] -

3973:21, 4070:6

substantive [3] -

3941:14, 3975:13,

3980:16

substantively [1] -

4028:22

sufficient [5] - 3924:4,

4041:5, 4047:7,

4070:5, 4070:13

sufficiently [1] -

4040:5

suggest [4] - 4026:24,

4030:17, 4031:23,

4055:1

suggested [1] -

3992:21

suggesting [2] -

3993:10, 4055:4

suggestion [1] -

3974:15

suggests [6] - 3934:3,

3935:19, 3937:1,

3937:4, 4035:6,

4049:8

suit [1] - 4039:13

suited [1] - 3947:25

summarize [2] -

3925:18, 3932:9

summarized [1] -

3931:15

summarizes [1] -

3950:25

summary [6] - 3988:6,

3997:13, 3998:6,

4002:4, 4002:5

summer[3] - 3977:6,

3977:9, 3986:7

superiority [1] -

3956:9

superseded [2] -

3927:2, 4027:18

supersession [1] -

4028:19

supervisory [2] -

3934:22, 3935:25

supplied [1] - 3996:24

supplier[2] - 3930:15,

3931:10

suppliers [3] -

3930:24, 3935:13,

3936:16

supplies [1] - 3931:1

support [12] -

3918:22, 3923:4,

3933:12, 3949:11,

3949:15, 3950:4,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 195 of 198 PageID: 19448
3950:8, 3950:9,

3957:24, 3961:18,

3983:14, 3998:4

supported [1] -

4009:7

supporting [3] -

3937:25, 3949:9,

3950:11

supportive [1] -

3958:3

supports [2] -

3938:10, 3956:7

suppose [1] - 4041:11

surveys [7] - 3952:9,

4002:19, 4003:12,

4003:13, 4004:2,

4004:5, 4007:13

survive [1] - 4055:7

survivor [1] - 4054:24

sustain [1] - 4068:19

SWEETSER [1] -

3906:4

sworn [1] - 3908:8

synergies [1] -

4046:15

synonymous [1] -

4046:19

system [1] - 4006:20

systematic [1] -

3943:2

systems [3] - 3919:3,

3961:14, 4047:10

SZAFERMAN [1] -

3906:3

T

tables [1] - 3912:4

talks [2] - 4011:18,

4015:15

tangible [2] - 3928:20,

3933:4

target [1] - 4071:19

targeted [2] - 4051:18,

4052:25

Task [2] - 3926:7,

3926:14

task [4] - 3912:23,

3928:12, 3946:22,

4006:9

tasks [1] - 3948:3

taught [13] - 3910:3,

3910:4, 3911:3,

3916:12, 3917:21,

3954:24, 4051:4,

4051:10, 4051:11,

4051:22, 4051:25,

4069:10

teach [5] - 3908:17,

4048:15, 4051:13,

4051:17

teaching [1] - 3922:8

team [1] - 4047:9

Tech [1] - 3909:8

Technical [1] -

3967:17

technical [2] -

3912:20, 4070:3

technique [1] -

4054:24

tend [2] - 3922:9,

3948:2

tends [1] - 3923:2

Tennessee [1] -

3909:13

tentatively [1] -

3924:12

tentativeness [1] -

3973:14

tenure [2] - 3909:11,

3909:16

tenured [1] - 3909:19

term [3] - 4010:1,

4010:20, 4046:19

terminate [1] - 3936:4

terms [16] - 3913:17,

3919:5, 3930:16,

4047:22, 4048:7,

4048:9, 4048:23,

4051:4, 4052:4,

4052:11, 4052:12,

4054:22, 4058:7,

4060:1, 4065:12,

4066:4

test [4] - 3963:15,

4065:24, 4066:9,

4067:18

testified [23] - 3920:6,

3920:16, 3927:6,

3939:21, 3955:21,

3958:5, 3963:12,

3974:4, 3977:8,

3981:4, 3994:9,

3994:10, 4000:6,

4013:13, 4014:3,

4036:5, 4036:10,

4060:8, 4060:20,

4060:24, 4062:2,

4063:2, 4068:8

testify [8] - 3923:21,

3984:17, 4054:2,

4054:8, 4061:9,

4061:12, 4067:18,

4070:1

testifying [2] -

3992:12, 4062:20

testimony [46] -

3912:16, 3915:23,

3917:10, 3924:1,

3925:14, 3925:15,

3932:22, 3934:4,

3948:25, 3954:4,

3960:3, 3964:12,

3968:19, 3969:12,

3969:15, 3969:17,

3969:23, 3970:1,

3970:4, 3970:5,

3975:6, 3976:16,

3980:9, 3980:16,

3980:24, 3986:20,

3986:22, 3997:24,

4000:7, 4000:21,

4006:24, 4011:10,

4015:7, 4016:7,

4016:19, 4017:5,

4067:11, 4067:15,

4067:20, 4068:2,

4068:3, 4070:5,

4070:15, 4071:3,

4071:4

testing [1] - 4070:17

tests [1] - 3949:8

Texas [1] - 3909:8

text [3] - 3926:7,

3954:24, 3955:24

textbook [4] -

3911:17, 3955:8,

3955:17, 3955:18

textbooks [2] -

3911:11, 3911:12

texts [1] - 3954:15

That's.. [1] - 4031:24

themselves [2] -

3921:11, 3930:23

theory [1] - 4038:5

thereabouts [2] -

3981:15, 4066:5

therefore [3] -

3943:14, 3957:13,

4012:19

thereof [1] - 3910:5

they've [7] - 3909:23,

3923:5, 3952:4,

4007:10, 4039:15,

4039:16, 4045:20

Third [1] - 4066:2

third [3] - 3934:7,

3934:10, 4058:20

thorough [1] - 3983:4

three [16] - 3909:17,

3951:15, 3952:25,

3958:4, 3966:12,

3966:13, 3986:9,

3986:10, 3986:12,

3987:16, 3992:2,

4006:14, 4018:8,

4061:2, 4063:6,

4066:5

three-quarters [1] -

4018:8

throughout [3] -

4015:23, 4015:25,

4016:7

Thursday [2] - 3924:3,

4071:19

tiered [1] - 4052:19

timely [1] - 3921:7

timers [1] - 4050:3

timing [1] - 3998:12

tire [1] - 3944:8

Title [1] - 3905:23

title [3] - 3911:18,

3955:5, 4029:20

today [15] - 3922:18,

3966:21, 3970:1,

3973:22, 3978:19,

3985:13, 3986:2,

3987:22, 3996:16,

3998:5, 4028:23,

4062:9, 4062:20,

4071:3, 4071:12

together[4] - 3978:15,

3994:19, 3995:2,

4026:15

tomorrow [2] -

3944:2, 4071:11

took [4] - 3915:19,

3921:21, 3927:17,

3948:6

top [6] - 3926:8,

3956:20, 4017:23,

4024:8, 4029:15,

4052:18

topic [2] - 4033:21,

4068:1

topics [3] - 3911:20,

3923:4, 4068:1

total [33] - 3929:13,

3962:5, 3964:16,

4002:23, 4002:25,

4003:5, 4017:14,

4018:11, 4018:14,

4018:18, 4019:12,

4019:22, 4019:24,

4020:2, 4020:19,

4020:24, 4021:3,

4021:13, 4021:14,

4021:22, 4024:3,

4024:11, 4024:12,

4025:4, 4025:17,

4026:5, 4026:16,

4040:25, 4056:1,

4056:3, 4056:4,

4057:9, 4066:5

Total [1] - 4018:8

totals [1] - 4024:9

touched [1] - 3942:12

toward [1] - 3928:17

towards [2] - 4051:18,

United States District Court

Trenton, New Jersey

4100

4052:25

tracing [1] - 4011:22

tracker [1] - 4066:20

trade [1] - 4050:4

trading [1] - 4050:8

training [3] - 3923:22,

4058:13, 4070:1

transaction [9] -

3937:16, 3937:17,

3937:23, 3937:24,

3939:9, 3939:10,

3939:25, 4032:22

transactions [7] -

3926:18, 3937:21,

3940:5, 3940:9,

4031:7, 4031:14,

4037:12

transcends [1] -

3920:5

transcript [2] -

3987:15, 4017:4

transcripts [2] -

4063:20, 4063:25

transpired [1] -

4027:20

transpiring [5] -

3937:22, 3939:12,

3941:18, 3954:10,

3964:6

travel [2] - 3944:19,

3961:18

traveling [1] - 3944:6

Treadway [2] - 3921:9,

3921:10

treasury [2] - 3950:12,

3961:21

Treasury [2] -

4044:21, 4045:24

treat [1] - 4041:21

treated [3] - 4028:7,

4028:8, 4031:19

treating [2] - 3963:5,

3964:2

treatises [1] - 3954:14

treatment [1] -

3938:13

trends [1] - 3927:1

TRENTON [1] -

3905:15

trial [10] - 3924:3,

3925:14, 3932:22,

3939:22, 3948:25,

3951:22, 3996:16,

4032:9, 4042:16,

4054:3

TRIAL [1] - 3905:20

tribunals [1] - 4054:8

trier [1] - 4070:3

troubles [1] - 3921:7

true [9] - 3905:23,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 196 of 198 PageID: 19449
3938:18, 3939:24,

3965:22, 3970:19,

3974:19, 3993:24,

4002:9, 4064:6

Trust [18] - 3925:10,

3930:22, 3932:18,

3933:13, 3933:18,

3933:20, 3933:22,

3934:11, 3934:16,

3935:5, 3936:15,

3936:20, 3937:1,

3940:22, 3941:1,

3941:3, 3941:6

trust [1] - 4048:19

Trustees [1] - 3924:19

trustworthy [3] -

3988:8, 3988:25,

3989:1

truth [1] - 4032:9

try [13] - 3918:22,

3920:19, 3937:18,

3939:10, 3955:1,

3982:3, 3982:4,

3995:14, 4006:15,

4008:3, 4009:25,

4029:25, 4038:10

trying [12] - 3919:3,

3919:9, 3934:1,

3936:19, 3943:11,

3951:12, 3992:1,

3997:1, 4023:15,

4037:25, 4038:3,

4040:12

turn [12] - 3930:4,

3931:3, 3935:23,

3969:11, 3970:7,

3985:2, 3986:21,

4011:8, 4015:12,

4017:20, 4018:17,

4033:13

TWEED [1] - 3906:12

twice [1] - 4068:25

two [23] - 3913:17,

3921:12, 3922:12,

3934:7, 3937:2,

3942:19, 3944:18,

3953:5, 3956:20,

3956:23, 3962:4,

3964:13, 3986:9,

3986:10, 4024:17,

4026:7, 4028:14,

4043:1, 4049:3,

4053:23, 4067:12,

4068:4, 4069:9

Two [1] - 4061:2

type [10] - 3910:19,

3961:18, 3988:23,

4012:22, 4040:17,

4041:11, 4041:14,

4044:4, 4051:21,

4069:12

types [10] - 3913:3,

3917:7, 3949:19,

4039:20, 4046:11,

4047:21, 4048:12,

4059:12, 4065:16,

4065:21

typically [6] - 3910:18,

3983:21, 4032:14,

4047:22, 4053:7,

4057:8

U

U.S [3] - 3905:17,

3905:25, 4044:20

U.S.C [1] - 3905:23

UK [1] - 4043:2

ultimate [1] - 3957:15

ultimately [2] -

3964:17, 4053:8

Um-hmm [1] - 3987:5

unable [3] - 3966:18,

3984:16, 3995:25

unaware [1] - 4040:22

unclear [1] - 3987:19

under [20] - 3916:25,

3918:9, 3930:10,

3932:5, 3945:6,

3960:10, 3960:19,

3961:6, 3961:16,

3999:10, 4032:12,

4033:20, 4033:21,

4035:15, 4040:20,

4044:10, 4047:24,

4057:10, 4058:6,

4067:16

undergraduate [1] -

4043:12

undergraduates [1] -

4052:1

underlying [5] -

4022:11, 4024:8,

4024:24, 4049:13,

4049:16

understood [3] -

3993:14, 4006:24,

4020:12

Understood [5] -

3975:7, 4002:8,

4003:2, 4003:4,

4024:14

undertaken [4] -

4048:17, 4064:7,

4064:12, 4067:13

unfair [1] - 3966:1

unit [5] - 4056:1,

4056:3, 4056:4,

4056:9, 4056:12

UNITED [1] - 3905:1

units [2] - 3912:22,

3913:20

Universities [1] -

4069:10

universities [5] -

3911:13, 3954:19,

3954:25, 4051:3,

4069:9

university [3] -

3910:8, 3917:22,

3922:13

University [22] -

3908:17, 3908:23,

3909:9, 3909:13,

3909:14, 3954:17,

4043:2, 4043:3,

4043:6, 4043:8,

4043:18, 4043:20,

4043:22, 4051:2,

4051:5, 4051:6,

4054:19, 4069:9,

4069:11

Unless [2] - 3942:8,

4020:13

unqualified [2] -

3938:14, 4014:17

unremarkable [1] -

3943:24

unsure [1] - 3987:17

untenured [1] -

3909:15

up [13] - 3919:11,

3956:23, 3961:15,

3980:2, 3987:10,

3994:13, 4006:23,

4017:23, 4021:6,

4021:13, 4024:7,

4032:8, 4036:16

update [4] - 4001:11,

4033:7, 4034:3,

4037:7

updates [2] - 3952:13,

4004:3

USC [3] - 3909:19,

3912:1, 3915:8

useful [4] - 3910:16,

3916:3, 3947:11,

3954:7

uses [2] - 4034:20,

4069:4

utilities [1] - 3944:12

V

valid [1] - 3962:16

valuation [2] - 4025:1,

4038:25

valuations [1] -

4037:17

value [3] - 3944:10,

4049:14, 4049:16

variable [4] - 4041:12,

4061:7, 4061:10,

4061:13

variables [3] - 4004:6,

4004:12, 4013:19

varied [2] - 3994:21,

3994:25

variety [5] - 3913:3,

3923:15, 4056:16,

4058:7, 4066:20

various [22] - 3918:14,

3918:22, 3922:3,

3949:25, 3952:12,

3954:5, 3961:21,

3962:1, 3993:6,

3993:15, 3993:22,

4002:13, 4002:22,

4007:12, 4045:6,

4047:22, 4050:4,

4050:17, 4050:22,

4057:24, 4058:5,

4060:2

vary [1] - 3917:4

varying [2] - 3918:14,

4056:15

vehicles [1] - 4036:15

verbiage [1] - 3975:15

verify [1] - 4000:16

versus [6] - 3928:18,

3928:22, 3945:15,

4028:8, 4028:20,

4051:21

view [14] - 3955:20,

3956:8, 3963:9,

3963:22, 3971:7,

3979:18, 3981:1,

3988:8, 3997:19,

4022:19, 4028:21,

4038:13, 4069:7,

4069:24

violations [1] -

3912:24

visiting [1] - 3909:12

VOBA [3] - 4024:24,

4025:5, 4025:11

VOIR [2] - 3907:5,

4059:6

voir[6] - 4056:25,

4057:1, 4057:3,

4059:2, 4059:4,

4071:13

volume [4] - 3947:12,

3948:23, 4048:8,

4056:1

vote [1] - 3971:13

Vs [2] - 3905:5, 3905:9

United States District Court

Trenton, New Jersey

4101

W

Wait [1] - 4022:21

wait [3] - 3924:6,

4028:12, 4036:4

Wales [1] - 4051:5

walk [2] - 3932:24,

3951:18

Wall [1] - 4066:1

Wallace [1] - 3908:10

ware [1] - 3947:21

watchdogs [1] -

4038:7

ways [3] - 3923:15,

3970:23, 3990:9

weeks [1] - 4036:10

Weemes [6] - 3977:19,

3977:21, 3977:25,

3978:1, 3978:3,

3978:6

Wells [1] - 4047:16

whereby [1] - 3948:14

wherein [1] - 3959:17

whole [2] - 3918:7,

4029:18

wide [12] - 3911:19,

3913:7, 3923:4,

3950:4, 3952:15,

3957:6, 3978:8,

3978:11, 4012:10,

4012:15, 4052:13,

4055:3

widely [3] - 3954:18,

4048:21, 4064:24

WILLIAM [6] - 3907:2,

3907:2, 3907:3,

3908:8, 3908:14,

3965:15

William [5] - 3908:6,

3908:10, 3969:17,

3969:18, 4043:3

willing [2] - 4005:15,

4005:23

wish [1] - 4067:23

withdrawals [1] -

3961:13

withhold [1] - 3941:22

witness [30] - 3908:6,

3926:3, 3931:18,

3950:19, 3955:9,

3968:18, 3972:8,

3972:11, 3988:19,

3991:1, 4000:11,

4020:10, 4042:5,

4054:3, 4057:3,

4059:3, 4059:4,

4059:17, 4060:17,

4060:18, 4060:20,

4061:5, 4062:18,

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 197 of 198 PageID: 19450
4067:5, 4067:11,

4067:13, 4067:16,

4067:21, 4069:25,

4071:16

Witness [2] - 3985:9,

4042:4

WITNESS [28] -

3908:10, 3908:13,

3965:10, 3982:18,

3999:11, 4006:4,

4006:7, 4020:13,

4023:1, 4023:6,

4026:22, 4028:19,

4032:13, 4036:6,

4036:13, 4036:20,

4037:3, 4037:24,

4038:2, 4038:9,

4039:6, 4039:10,

4039:22, 4040:18,

4041:8, 4041:18,

4042:12, 4057:8

witness' [1] - 4067:6

witnesses [1] - 3924:5

word [5] - 3958:7,

3962:21, 3990:22,

3991:15, 3991:16

words [7] - 3971:22,

3980:14, 3987:12,

4009:4, 4009:9,

4017:3, 4050:16

worker[1] - 3947:13

works [2] - 4036:9,

4036:11

world [6] - 3937:20,

3937:22, 3939:12,

3943:21, 3944:20,

3953:14

Worldcom [1] -

3920:14

worry [1] - 3995:23

wrapper [2] - 3952:22,

3952:25

write [2] - 3987:10,

3993:4

writing [3] - 3914:16,

3971:11, 3991:16

written [6] - 3911:3,

3911:11, 3914:1,

3916:14, 3992:21,

4065:7

wrote [2] - 3975:17,

4048:21

Y

year [24] - 3913:17,

3926:10, 3941:22,

3962:15, 3972:22,

3977:9, 3989:15,

United States District Court

Trenton, New Jersey

4102

3994:16, 3994:19,

3994:22, 3995:7,

4003:14, 4003:22,

4003:25, 4004:7,

4004:12, 4004:23,

4022:6, 4023:16,

4025:5, 4027:23,

4028:3, 4053:23

years [30] - 3909:9,

3910:4, 3910:10,

3911:10, 3912:2,

3914:10, 3914:15,

3915:11, 3915:13,

3916:14, 3917:25,

3922:15, 3926:24,

3927:8, 3966:12,

3966:13, 3972:20,

3993:19, 3994:17,

3995:1, 4027:23,

4028:4, 4037:2,

4043:7, 4045:4,

4051:24, 4062:21,

4063:2, 4070:7

yesterday [2] -

3924:2, 3998:13

Young [3] - 3953:5,

3953:8, 4000:4

yourself [7] - 3919:17,

3925:7, 3930:2,

3948:21, 3975:15,

3975:18, 3978:4

Z

zipper [1] - 3947:21

Case 3:11-cv-04194-PGS-DEA Document 271 Filed 03/31/16 Page 198 of 198 PageID: 19451