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United States District Court

Trenton, New Jersey

3514

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 19, 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 21

Certified as true and correct as required

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

/S/ Francis J. Gable

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

OFFICIAL U.S. REPORTER

(856) 889-4761

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United States District Court

Trenton, New Jersey

3515

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

SZAFERMAN, LAKIND, BLUMSTEIN & BLADER, PC

BY: ARNOLD C. LAKIND, ESQUIRE

DANIEL S. SWEETSER, ESQUIRE

ROBERT L. LAKIND, ESQUIRE

MARK A. FISHER, ESQUIRE

CHRISTOPHER S. KWELTY, ESQUIRE

CHRISTOPHER S. MYLES, ESQUIRE

FOR THE PLAINTIFFS

BLANK ROME, LLP

BY: JONATHAN M. KORN, ESQUIRE

FOR THE DEFENDANTS

MILBANK, TWEED, HADLEY & McCLOY, LLP

BY: SEAN M. MURPHY, ESQUIRE

ROBERT C. HORA, ESQUIRE

JAMES N. BENEDICT, ESQUIRE

BENJAMIN REED, ESQUIRE

FOR THE DEFENDANTS

ALSO PRESENT: PATRICIA LOUIE, ESQUIRE

MANAGING DIRECTOR & ASSOCIATE GENERAL COUNSEL

AXA EQUITABLE LIFE INSURANCE CO.

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United States District Court

Trenton, New Jersey

3516

I N D E X

GARY SCHPERO 3524

DIRECT EXAMINATION OF GARY SCHPERO CONTINUED BY

MR. BENEDICT

3524

E X H I B I T S

Defendant's Exhibit 389.2 was marked into

evidence on trial day 20; was erroneously

transcribed as 398.2

3524

Defendant's Exhibit 138.3 was marked into

evidence

3527

Defendant's Exhibit 142.2 was marked into

evidence

3533

Defendant's Exhibit 144.18 was marked into

evidence

3534

Defendant's Exhibit 143.7 was marked into

evidence

3536

Defendant's Exhibits 138.9 and 138.10 were marked

into evidence

3559

Defendant's Exhibit 144.15 was marked into

evidence

3571

Defendant's Exhibit 142.11 was marked into

evidence

3625

Defendant's Exhibit 144.19 was marked into

evidence

3625

Defendant's Exhibit 142.7 was marked into

evidence

3626

Defendant's Exhibit 144.16 was marked into

evidence

3629

Defendant's Exhibit 457.1 was marked into

evidence

3647

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United States District Court

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3517

THE COURT: Good morning. Any applications before

we start?

MR. A. LAKIND: Yes, your Honor, if I might. There

are I think two open issues that were left open from

yesterday. One, we've gone a long way to resolving, and that

is when Mr. Benedict moved into evidence 1811 and 1812, which

are the large loose leafs, I had a conversation with Mr.

Benedict this morning and raised the following three issues

and two have of them have been resolved.

The first is the long sheets that I received were

blurred, and he indicated he would get me more legible copies,

so that part is resolved. The second, I said I would have no

objection to those documents going in as evidence of what Mr.

Schpero viewed as important, but that I do object to the

evidence going in for the truth of what is in there. And I

think there is agreement with regard to these exhibits on

that.

Which I believe leaves the following issue. We

certainly have no objection to admitting 1812 and 18 -- excuse

me; 1811 and 1812 as something Mr. Schpero deemed important

and reviewed, but insofar as there is testimony that it should

be admitted as a reflection of the Board's consideration and

deliberation, we have not been able to cross-examine the Board

because they're not in court. So insofar as it represents the

thinking of the Board as a whole, we would object to its

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3518

admission as evidence of that. And that's where we have our

dispute, your Honor.

THE COURT: All right. Mr. Benedict, would you like

to be heard?

MR. BENEDICT: Yes, your Honor. Mr. Schpero

appeared at his deposition as a 30(b)(6) witness on behalf of

all of the independent trustees of the EQAT Trust. In

connection with preparation of the two exhibits, Mr. Schpero

testified yesterday that he met on two different occasions

with the entire Board, to collectively put together the

documents in that binder, working with counsel. And I would

offer them as information concerning the collection of

documents selected by all of the independent trustees as being

the most important documents in their view on the Gartenberg

factors on a factor by factor basis. So I think it's a

collection of thinking of the entire Board and not just Mr.

Schpero.

THE COURT: All right. Do you wish to reply, Mr.

Lakind?

MR. A. LAKIND: Yes. Notwithstanding counsel's

description, it remains hearsay because the Board members

aren't here. Insofar as --

THE COURT: Mr. Schpero was here and he said he put

it together, he relied on it; why doesn't it just go in on

that basis; this is what I relied on?

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3519

MR. A. LAKIND: I have no objection to that. That's

what I said at the outset, if it's going in as what Mr.

Schpero relied on, that's fine. I think they want it to be

reflective of what the Board relied on.

THE COURT: Do you object to that, Mr. Benedict?

MR. BENEDICT: I think it should go in as the

collection of documents selected by the independent trustees

of the EQAT Trust. Mr. Schpero puts together -- after having

met with the entire Board twice. It's the collective views of

the Board and not just Mr. Schpero's.

THE COURT: Well, my view is I'll admit the

documents. It seems to me that Mr. Schpero's testimony was

that he was the 30(b)(6) witness, he brought the information

to the deposition with him in preparation for the deposition,

so I recall that. And I do understand that he said he went

over this with the Board.

I don't see what difference it makes to tell you the

truth. If the documents go in as what Mr. Schpero as the lead

director, independent director, put together for purposes of

his deposition, I think that's sufficient.

MR. BENEDICT: Thank you, your Honor

MR. A. LAKIND: Your Honor, the only other issue --

and I don't think it needs resolution, is Mr. Schpero

testified that he received two memos from Bingham describing

the Board material, which was a bit of a surprise to us. Mr.

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United States District Court

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3520

Benedict has indicated he doesn't have those memos. So today

we've served a subpoena on Bingham in an effort to get them

and I suspect that will come up next week.

THE COURT: All right.

MR. BENEDICT: May I be heard on that issue as well,

your Honor?

THE COURT: You may.

MR. BENEDICT: There was a lot of controversy

between plaintiffs and counsel for the independent trustees in

the fall of 2013 over production of attorney/client privilege

matters. They had a meet and confer, and the net result of

that was a stipulation that was signed by all counsel, it was

negotiated between Morgan Lewis as counsel for the independent

trustees and the plaintiffs.

And it was signed -- the stipulation was signed the

morning of Mr. Schpero's deposition and it was so ordered by

this court, Judge Arpert, on February 5th, 2014, and in this

document expressly plaintiffs agreed not to seek -- this is

paragraph 1, and I quote, "plaintiffs agree not to seek

privileged communications from the independent trustees on any

theory." In exchange for that, they were being permitted by

this stip to ask questions at any deposition about any advice

that independent counsel or any other counsel gave to the

independent trustees. It was a quid pro quo.

And then paragraph 2 is very explicit as well:

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United States District Court

Trenton, New Jersey

3521

"Plaintiffs agree not to seek the production of e-mail or

other writings between the independent trustees and their

counsel, or trust counsel, or a privilege log of those

communications as long as the independent trustees and trust

counsel do not provide such writings to defendants or their

counsel." No such writings were given to defendants or their

counsel.

This issue comes up expressly during the course of

Mr. Schpero's deposition, which is more than two years ago;

it's on January 30, 2014. Mr. Lakind -- and the reference

here is to precise documents that they're seeking here today,

which we do not have. "Mr. Lakind: I would ask counsel to

provide me with those documents that were excluded and

considered by the Board, because I think they are within the

realm of our stipulation." This is pages 19 and 20 of Mr.

Schpero's transcript.

"Mr. Boch: I think actually they are within the

realm of the stipulation, you agreed not to ask for those

documents. Those are documents protected by the stipulation."

"Mr. Lakind: The documents that were reviewed by the Board, I

don't think they are." "Mr. Boch: We think they are

privileged documents to begin with, and under the stipulation

you agreed not to seek copies of those documents. You can ask

him all you like about what the document is, what he

understands what it is." "Mr. Lakind: I will do that."

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United States District Court

Trenton, New Jersey

3522

If there was any issues they should have been

resolved two years ago during the scope of the fact discovery

period. We're now finishing our seventh week of trial, and

they're seeking these documents now; I don't think that's

appropriate, your Honor.

THE COURT: So, the documents you're talking about

are the ones that Mr. Lakind asked for yesterday?

MR. BENEDICT: That's correct. And these were

specifically asked --

THE COURT: They were identified in that --

MR. BENEDICT: I'm sorry, your Honor?

THE COURT: Were they identified at that time?

MR. BENEDICT: Yes.

MR. A. LAKIND: Your Honor, with all due respect, I

do not believe these -- we didn't even know about the specific

document at that time. Be that as it may, we read the

stipulation much differently. Secondly, once evidence is

admitted in court, it has somewhat different implications.

But suffice it to say, if it would be okay with your Honor if

we can just proceed with the testimony --

THE COURT: I think we should get through the trial

here today.

MR. A. LAKIND: Yes.

THE COURT: I'll look at it this evening if I need

to.

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United States District Court

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3523

MR. A. LAKIND: That will be our hope, your Honor.

Thank you.

MR. BENEDICT: Could I hand a copy of the joint

stipulation to the Court?

THE COURT: Sure. Just give it to Fee there and

that will be great.

Does that take care of all the applications this

morning?

MR. A. LAKIND: From plaintiffs' perspective it

does, your Honor.

THE COURT: Mr. Benedict, does that take care of all

your --

MR. BENEDICT: Yes.

MR. HORA: Your Honor, this is Robert Hora for the

defendants. There's one more than minor housekeeping issue,

which happily there's no disagreement among the parties about.

Yesterday Mr. Benedict had marked Defendant's Exhibit 389.2,

and that was admitted in evidence; it's the table of contents

to the 2002 -- 2012 trustees reference manual. It was

erroneously identified in the transcript as 389.2. We'd just

like to correct that.

THE COURT: So, it's defendant's exhibit?

MR. HORA: Yes, Defendant's Exhibit 389.2.

THE COURT: Any objections?

MR. A. LAKIND: No, your Honor.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3524

THE COURT: So, Frank, you can correct the

transcript.

(Defendant's Exhibit 389.2 was marked into evidence

on trial day 20; was erroneously transcribed as 398.2.)

THE COURT: Mr. Benedict?

MR. BENEDICT: Thank you, your Honor. Defendants

recall Mr. Schpero.

(GARY SCHPERO, previously sworn, resumes witness

stand.)

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

oath.

MR. BENEDICT: May I proceed, your Honor?

THE COURT: You may.

(DIRECT EXAMINATION OF GARY SCHPERO CONTINUED BY MR.

BENEDICT:)

Q. Mr. Schpero, when we left off yesterday, I believe you

were describing that you received memorandum from both -- in

addition to Morgan Lewis you received memorandum today from

K&L Gates and FMG concerning your fiduciary duties as a

director; do you recall that?

A. I do.

Q. And I think we entered the K&L Gates memo into evidence.

I'd like to turn now to the FMG memoranda, and I'd ask you to

turn to tab 12 of the booklet in front of you.

MR. BENEDICT: And this, your Honor, is Defendant's

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3525

Exhibit 138.3.

THE COURT: If I can just make one point before we

begin the questioning; yesterday, Mr. Schpero had a document,

and it was in one of the books I think, but it had the

Gartenberg factors listed on top, and then underneath it it

had the exhibits that referenced that.

MR. BENEDICT: Yes, your Honor.

THE COURT: So when you're doing findings of fact

and conclusions of law, that would be a very good way of doing

it, because I could go to each document that you're relying

on. I want it to be equal for both sides, so if you can take

look at that, Mr. Lakind --

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

MR. BENEDICT: We also, with that in mind, your

Honor, have prepared a demonstrative of that exact document

that actually attaches to the demonstrative the precise

documents that are -- are referenced in the index. We thought

that would be very convenient for the Court to have them right

there, and you wouldn't have to chase them down by looking at

various tabs and various materials. I don't have that in

front of me right now, we will introduce that through Ms.

Louie.

THE COURT: Okay, thank you.

BY MR. BENEDICT:

Q. Mr. Schpero, turning to Defendant's Exhibit 138.3, do you

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3526

recognize this document?

A. Yeah; this is under tab 12?

Q. Under tab 12, yes.

A. Yes, I do.

Q. And what is it?

A. This is a memo that was delivered in the spring of 2013

by FMG to the Board in advance of the June Board meeting, as

indicated previewing materials for the upcoming meeting.

Q. And would you just generally describe that document for

the Court.

A. Yeah, it -- it looks to summarize some recent litigation

in the 36(b) arena. It, again, summarizes the Gartenberg

factors, and again in summary form it summarizes at least some

of the key information that's going to be provided to the

Board at the June and July meetings. And it also has two

appendices that summarize judicial considerations with respect

to analyzing fund profitability, and with respect to analyzing

economies of scale.

Q. Did you find this document helpful?

A. I believe I did.

Q. And why is that?

A. It's -- again, as part of the process I described

yesterday, it's -- it's one of the lead -- at least this year,

was one of the lead efforts to get the Board back into the

formal process. So it reminded the Board of the key documents

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3527

that we would be receiving, and it provided a -- as I said a

summary of at least some of the considerations with respect to

two of the Gartenberg factors.

MR. BENEDICT: Defendants offer Defendant's Exhibit

138.3. And I will note for the record that the document is

included within Board materials that are already entered into

evidence.

THE COURT: Okay.

MR. A. LAKIND: No objection, your Honor.

THE COURT: All right. So admitted.

(Defendant's Exhibit 138.3 was marked into

evidence.)

BY MR. BENEDICT:

Q. Mr. Schpero, have the individual Board members or your

independent counsel requested additional information from

management from time to time, prior to voting on a contract

proposal?

A. Have they?

Q. Have they?

A. Yes.

Q. I'd like you to turn to tab 13 of the booklet in front of

you, which is Defendant's Exhibit 144.18. Do you recognize

this document, Mr. Schpero?

A. Yes, I do.

Q. And what is it?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3528

A. This includes data that is fund by fund presented as well

as aggregate, in particular with respect to the spread, which

is the portion of the fee that FMG retains after payment to

the -- to the sub-advisor. And it also as part of that it has

comparisons to some of the industry data that's been made

available. I think it's for better or worse often referred to

as the Gary charts.

Q. You requested that information?

A. Yeah, this -- I early on in joining the Board had thought

it was important that we would receive information very

specific to the amount of fee that FMG was retaining, and so

those charts have evolved over the years, but this was

generated quite -- quite a long time ago.

Q. And do you find those charts to be helpful?

A. I do.

Q. And why is that?

A. Well, one of the key considerations in proving these

contractual relationships is proving the fee that FMG receives

and recognizing that that fee is -- is reflective of services

it provides separate and apart from the services that the

sub-advisor provides. And the spread is -- is certainly an

important way to examine what that -- at least the fee portion

of what those services -- let me restate that. It's a helpful

way -- it's a critical way to examine the fee that FMG

receives, and in turn obviously we then examine what those

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3529

services are corrected connected with.

Q. Can you recall any other specific examples of additional

information or materials that had been requested by other

members of the Board from time to time?

A. Yeah, again -- and my role as lead trustee and as a

conduit requests come in all the time. There are charts that

because they've been around for a long time, get referred to

by trustees' names, so there is a Harvey chart, which is a

chart that as I recall breaks out performance by quartile of

all of the kind of -- in aggregate as well as specific of all

of the portfolios for each Board meeting, and it's obviously

Mr. Rosenthal.

And there's a Jettie chart, which is named after Ms.

Edwards, which is a chart that we see at every Board meeting

having to do with cash flow, and the amount of asset -- of

cash that is flowing into the funds from the fund of funds

that FMG also manages.

Q. Do you believe you've always had sufficient information

before voting to approve a proposed contract?

A. Yes, I do.

Q. And how do you know if you have all the information you

need before you vote on a proposal?

A. At the end of the day I think that's a reflection of my

and the other trustees' judgment. In terms of my judgment

it's reflecting a number of things; one is working very

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3530

closely with our independent counsel, who as I testified is

very experienced on these matters, and getting the benefit of

her views as to the appropriate documentation we should

receive. Another factor is my own personal experience; I've

been on the Board for 15 years, but I also have practiced in

this area for almost 22 years, so I certainly believe I'm very

familiar with what the appropriate documentation is.

And I also think that it's critical that I look to and

rely on my other trustees, each of whom -- independent

trustees; each of whom bring their own backgrounds and areas

of expertise and areas of interest. And certainly at the end

of this process we're not done with the process in July,

unless all of the independent trustees are comfortable that

we've received all the appropriate documentation.

Q. Let me shift gears here if I may, Mr. Schpero, and turn

to nature and quality of management services. You previously

testified that you receive information regarding the nature

and quality of management services that FMG provides to the

funds; correct?

A. Yes.

Q. Let me mark --

MR. BENEDICT: Mr. Reed, would you please hand up to

the Court and to the witness Defendant's Exhibit 142.2?

Q. Mr. Schpero --

A. Just give me one moment.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3531

Q. No problem.

A. Okay.

Q. Mr. Schpero, do you recognize this document?

A. Yes, I do.

Q. And what is it?

A. This is the document that I referred to yesterday, I

guess I just called it the FMG memo or book, but this is a

document that we receive every year from FMG as part of the

15(c) process.

Q. And did you refer to this document yesterday as the main

FMG document?

A. I may have.

Q. And is it also sometimes referred to as the FMG response

memo?

A. I'm not certain that's how it's referred to.

Q. Okay. Would you please describe this document for the

Court?

A. Yeah. There's -- there's an extensive memorandum at the

beginning that is FMG's presentation on their various services

and roles as investment manager and administrator, as well as

distributor. And then there are many exhibits that -- I don't

know if you want me to flip through them, but obviously cover

everything from profitability to performance, to a lot of the

relevant specific FMG documentation about the services they

provide, their Form ADV, their registration statement with all

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3532

the disclosure connected with that; the schedule of the fees

that they receive; schedule of the sub-advisory fees that are

paid out; all of the expense limitation arrangements that

they've agreed to with the Board; their financial statements,

and I'm sure there's more, but that's some of the basic

materials.

Q. Is this one of the documents that's prepared by FMG in

response to the memorandum we discussed yesterday afternoon,

which is Defendant's Exhibit 409, which was the memorandum

from your independent counsel to FMG requesting certain

information --

A. Yes, it is.

Q. -- for the 15(c) proceedings? And do you find this

document helpful?

A. Yes, I do.

Q. And why is that?

A. Well, it's a critical component in understanding and

reviewing FMG's various roles; and certainly in terms of

reviewing the nature and quality of the services, as well as a

number of the other factors that we review, there is important

data in this -- throughout this booklet.

Q. Thank you. Would you also turn to tab 15 of the booklet

in front of you, which is Defendant's Exhibit 143.7?

A. I'm sorry; back in the other book?

Q. Yes.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3533

MR. BENEDICT: Your Honor, before I forget,

defendants offer exhibit 142.2 into evidence. I will note

that this is part of a collection of Board materials that's

already in evidence. This is just --

THE COURT: I understand that. Do you have an

objection -- we have been admitting them anyway since the

beginning of the trial.

MR. BENEDICT: Correct.

THE COURT: So we might as well keep with our

practice.

MR. BENEDICT: I'll just note for the record that

the entire document is also entered into evidence as

Plaintiff's Exhibit 26. I would have used that document this

morning, but I didn't have any extra copies of it.

THE COURT: All right. So do you object?

MR. A. LAKIND: No, your Honor, as long as I know it

was provided in discovery. I know what your Honor's other

rulings were, so we do have an objection in general, but not a

forcible one at this point.

THE COURT: Okay. So 142.2 is admitted.

(Defendant's Exhibit 142.2 was marked into

evidence.)

MR. A. LAKIND: Excuse me, your Honor; 144.18, Jim,

is that in evidence yet?

MR. BENEDICT: No. My colleague, Mr. Murphy, just

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3534

reminded me I forgot to move in 144.18. I would also move

that into the evidence, the Gary charts.

MR. A. LAKIND: No objection, your Honor.

THE COURT: Admitted.

(Defendant's Exhibit 144.18 was marked into

evidence.)

THE COURT: So, why do they call them Gary charts?

BY MR. BENEDICT:

Q. Mr. Schpero, why do they call these the Gary charts?

A. I think it's simply because going back -- so I joined the

Board in 2000, but certainly within a few years of joining the

Board I raised this issue on behalf of the Board. I wasn't

the lead trustee, I really raised it as an independent

individual trustee.

THE COURT: So they named it after you?

THE WITNESS: They named it after me.

THE COURT: Wow.

THE WITNESS: Yeah. Actually kind of annoying

chart.

THE COURT: All right, thank you.

BY MR. BENEDICT:

Q. Turning now if you will please to Defendant's Exhibit

143.7. Mr. Schpero, do you recognize this document?

A. So -- I'm sorry; this is under tab 15?

Q. Yes.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3535

A. Yes, I do.

Q. And what is it?

A. This is -- this is the supplemental information that FMG

delivers with respect to its role as actual day-to-day

portfolio manager. So what I'm referring to there is where

they have responsibility for the fund of funds, where they're

actually making the investment -- the actual specific

investment decision on the fund of funds that they sponsor and

manage, as well as where they have responsibility with respect

to ETF, the exchange trade -- exchange traded funds section of

some of the portfolios where they have specific

responsibility.

And what they've done here is -- and what they do is

they deliver documentation including, as you can see in the

second half of the booklet, it's in questionnaire form because

I think this very much mirrors the same kind of questionnaire

that each of the sub-advisors have to provide in response in

explaining the services they provide as sub-advisors, FMG

provides that with respect to their -- their role as I just

described.

Q. Do you find this document helpful?

A. Yes, I do.

Q. And why is that?

A. Well, one of the many things we are -- we are analyzing

and reviewing each year is FMG's role as specific portfolio

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3536

manager for certain of the funds and for certain of the

portions of the funds. And so this provides the essential

information that allows us to make the ultimate determinations

that we engage in.

MR. BENEDICT: Your Honor, defendants offer 143.7.

THE COURT: Any objections?

MR. A. LAKIND: No, your Honor.

THE COURT: All right, admitted.

(Defendant's Exhibit 143.7 was marked into

evidence.)

BY MR. BENEDICT:

Q. Mr. Schpero, I'd like you now to turn to tab 16 of the

booklet in front of you, which is Defendant's Exhibit 142.10.

Do you recognize this document?

A. Yeah, just give me one minute, please.

Q. Certainly.

(Witness reviewing.)

A. Okay, yes, I recognize it.

Q. What is it?

A. This is a chart that FMG provided to the Board, in this

case in 20 -- in connection with the 2013 July Board meeting,

summarizing the services provided by FMG as investment

manager, and separately summarizing the services provided

under the -- by the sub-advisor under their contractual

relationships.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3537

Q. And do you find this document helpful?

A. I do.

Q. And why is that?

A. Well, it's -- it's kind of a nice executive summary

format of -- of the services that each -- each entity provide.

As I testified a few minutes ago, it is imperative that the

Board understand each of the services and the fees that are

being paid in connection with the services, so this is

certainly one format that helps to examine that.

Q. Do you know how this summary chart concerning manager and

sub-advisor services came to be developed?

A. I have -- yeah, I understand, I believe I understand the

generation of it.

Q. And what is that understanding?

A. Well, the -- after the complaint was filed, the Board

certainly was very attentive to the issue and spent

significant time with our counsel, and has worked deliberately

to monitor the complaint and the allegations. I think in

particular -- and I don't know if it was -- I'm not going to

be able to keep track of which year the complaint was, but I

know that in connection -- the complaint I know was in July,

actually take it back, the complaint was in July of 2011; and

I know that in connection with the next contract review, so

the complaint was brought after our July contract review.

But I know that in connection with the next contract

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3538

review, I had become the lead trustee in October of 2011, and

in working with my counsel and the Board working with our

counsel, because these are certainly all decisions made with

all of the independent trustees involved, we thought it would

be appropriate to ask FMG in connection with the next July

review to make sure they were responsive to the allegations

that were in the complaint. There were obviously serious

allegations we, thought it was appropriate in connection with

that July and June -- June and July really contract review

that they responded to the various issues rather specifically.

And in connection with that FMG prepared this chart as part of

the response.

Q. And was the side-by-side chart necessary for you to

understand the services performed by FMG and the sub-advisors

for the Trust?

A. No, it was not. It summarized what -- certainly what I

and I believe the other trustees were very much aware of.

MR. BENEDICT: Let me just note for the record, your

Honor, that the side-by-side chart is annexed as Exhibit 4 to

Defendant's Exhibit 142.2, the FMG memo we just put into

evidence.

THE COURT: All right.

Q. Generally speaking, Mr. Schpero, what types of services

does FMG perform for the Trust in exchange for the management

fee?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3539

A. There's a -- there's a list of services, I guess I'll

summarize a few things. They -- they have a significant role

in supervising the sub-advisors; they go through an important

diligence process in recommending sub-advisors to the -- to

the Board; they monitor those sub-advisors in every respect;

and certainly in terms of performance they engage in

significant analytics of the performance of the sub-advisors,

and do that -- as I understand do that weekly, although the

board obviously receives the material at quarterly Board

meetings; they engage in diligence sessions and visits with

the sub-advisors; and I believe there are at least monthly

calls, perhaps more often.

In addition to -- and they will often come to the Board

with recommendations as to changes to the sub-advisors,

changes to the teams that work within the sub-advisors, or

replacements when they are replacing sub-advisors, they will

engage in the due diligence process of coming up with a list

of other possible sub-advisors, and ultimately making a

recommendation to the Board.

In addition to those roles, they engage in other roles;

they're engaged in the governance process, so that -- dealing

with the Board; code of ethics issues; the education programs

that you described -- or that I described earlier in response

to a question from you are part of what they do; they're

monitoring a determination of the independence of the Board as

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3540

part of their responsibilities; they provide the chief

compliance officer, and as investment manager are engaged in

dealing on a day-to-day basis with important substantive

compliance issues that arise from 80 portfolios and many more

sleeves because many portfolios are broken up.

They provide the valuation committee that engages in

the daily valuation of many securities that have trading

issues associated with them. Those would be some of the

examples that come to mind.

Q. Thank you. I'd like you, Mr. Schpero, to refer back to

Defendant's Exhibit 142.10, which is the side-by-side summary

chart you have in front of you.

A. Yeah.

Q. Would you just briefly review for the Court the various

headings of the types of services that FMG provides to the

Trust.

A. Yeah. So, first is Board of Trustees; I think this

references some of the items I just referred to in terms of

corporate board governance; alerting the Board as to material

developments; informing the Board of developments with respect

to litigation or SEC or enforcement matters --

MR. A. LAKIND: Excuse me, your Honor, sorry to

interrupt, but if he needs this chart to refresh his

recollection, which I don't think he does because he

testified. Simply repeating what he said by reading the

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3541

chart, I'm not sure why that is admissible evidence reading a

chart that's already in evidence.

THE COURT: So, what was the question, Frank?

(Question read back by the reporter.)

THE COURT: Sustained. We have a chart. You might

want to ask him to review the chart to see if there's any

duties that he didn't mention when he was going through it

originally.

BY MR. BENEDICT:

Q. In reviewing Defendant's Exhibit 142.10, Mr. Schpero,

does this refresh your recollection to any additional services

or types of services that FMG provides to the Trust that you

didn't mention in your earlier answer?

A. Yeah. I mean I want to be careful, I will readily admit

there are a lot of services that are provided, and -- and

sitting here today many months from a July meeting or even at

the last Board meeting, this is -- this is helpful in

reminding me.

So, as I just mentioned, even under Board of Trustees,

keeping the Board updated on litigation and regulatory

matters; I didn't mention strategic initiatives; in terms of

restructuring the portfolios, continually monitoring the

portfolios for changes that might be appropriate.

The investment process; I did mention a lot of the

overview, but I did not mention -- although I guess I did in

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3542

response to your earlier question, but FMG in addition to

supervising extensively the sub-advisors and providing much of

that information to the Board, also as we -- as I've noted

manages the day-to-day portfolios with respect of the fund of

funds and the ETFs.

Just flipping through for other kind of big picture

items. Operations; they provide all of the appropriate

offices and facilities required for their role; they negotiate

the contractual arrangements with the sub-advisors; let's see

if there's -- monitoring brokerage execution is another

important role, where they monitor that and deliver

significant amounts of information to the Board in

presentations in that connection; oversight of the actual

sub-advisors compliance program would be another item I did

not mention; again, I'm not going to try to mention each one

of these.

Compliance, I think I covered the gist of that. Legal,

they provide the legal counsel for substantive legal issues;

they coordinate and manage the outside law firms that they

work with; they coordinate the regulatory exams when the SEC

comes in, SEC can be in for I believe months at a time and

that's all handled by FMG. They deal with -- there's very

significant exemptive relief that the funds have gotten in

different categories, the failure to satisfy any of that

exemptive relief can be virtually catastrophic in regard the

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3543

SEC regulatory concerns, and they monitor compliance laws for

all of those issues.

And they have a communications function which I did not

mention, where they deliver information about the funds to --

and strategic initiatives and other matters of that source,

where they're the focal point for delivering the information

to the distributor and other relevant groups.

Q. Thank you, Mr. Schpero. To the best of your knowledge,

does this summary chart accurately describe the services

provided by FMG and the sub-advisors to the Trust?

A. Yes, I believe it does.

Q. Switching gears a little bit, have there been significant

changes to some of the funds over the years?

A. Yes, there have.

Q. And could you give me some examples of some of the types

of changes that have been made to the funds over the years?

A. Yeah, there have been many, so again, I can -- I'll just

try to briefly summarize what's occurred. But going all the

way back the 2008/2009 with the financial crisis, as a

response to that the Board working with FMG approved many

changes to the funds. So many of the funds that are in place

today, including a number of the at-issue funds, look very

different than they did before 2008/2009, where they were

restructured to create what I call hybrid or pactive funds,

with active portfolios and index managed portfolios, those

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3544

were all significant changes that began in 2008.

Q. When you say restructured, what does that mean, Mr.

Schpero?

MR. A. LAKIND: Your Honor, the time at issue here

is 2010 forward; I was just wondering why these questions

would be relevant.

THE COURT: Denied.

BY MR. BENEDICT:

Q. You mentioned restructuring, what does that mean, Mr.

Schpero?

A. Yeah, so -- so an active fund that would have been in

place in 2008 or 2009, as I said today might look very

different because FMG would have -- might have proposed, and

certainly a number of these cases did, that the fund be

restructured by perhaps retaining -- sorry; replacing the

active manager. But at a minimum, restructuring it by

entering into new sub-advisory agreements with other parties

where typically in hybrid structures it would change, so that

60 or 70 percent of the fund would be passive managed, managed

to match the index, and then perhaps 20 percent of the fund

might have been left as an active portfolio. So that's a

significant change to the fund itself. So that would be one

change.

Remind me of your general question; sorry.

Q. My question was what types of changes have been made to

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3545

the funds over the years?

A. Yeah.

Q. You mentioned reorganizations, what other types --

A. Reorganizations --

THE COURT: Let's stick, as Mr. Lakind said, in the

timeframe in question, which is what, 2010 through --

THE WITNESS: Sure.

MR. BENEDICT: Yes.

MR. A. LAKIND: And if it can be the funds at issue;

I would object to anything beyond the funds at issue.

THE COURT: Well, we haven't gotten to that problem

yet.

Do you understand the question?

THE WITNESS: I understand Mr. Benedict's question,

I understand your point, yes.

THE COURT: So just keep it within those five years.

THE WITNESS: Sure. So, other changes from -- since

2010 would be -- would be many changes to the fee

arrangements. There have been lots of negotiations that have

occurred over those years where -- and I'm sorry I'm going to

be general at the moment, but I think many of these, if not

all of them, are applicable to the at-issue funds.

But there have been additional breakpoints added to

the management fees, to the administrative fees; there have

been reductions in the management fees; so even where

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3546

breakpoints might have been moved to lower levels so that the

effective fee to the investor was less, there have been -- the

Board has negotiated expense caps in place for a number of the

funds; reductions in the expense caps in funds, again, which

would be beneficial to the investor, so this is a lower total

expense ratio that the investor is incurring.

There have certainly been any number of changes in

investment personnel as a result of displeasure at FMG and the

Board level, where, you know, changes don't necessarily

involve replacing an investment manager, although that

certainly has happened over this period, meaning replacing the

entire sub-advisor, but changes can also happen where there's

unhappiness with the team at a particular sub-advisor, and

where the Board has pushed hard and ensured that there have

been changed at particular sub-advisors where performance has

been a concern or an issue. Those would be some of the

changes that I guess immediately come to mind.

Q. Thank you, Mr. Schpero. I'd ask you now to look at

Plaintiff's Exhibit 373. I'm going to hand it up to you, Mr.

Schpero.

(Witness reviewing.)

THE COURT: You may proceed.

MR. BENEDICT: I was just giving the witness a

chance to look at the document, your Honor.

THE COURT: Oh, okay.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3547

A. Okay.

Q. Mr. Schpero, do you recognize this document?

A. Yes, I do.

Q. And what is it?

A. This is a summary from 2010 through December 2013, of --

with respect to the at-issue funds. A summary of kind of key

data, as well as including fee information, as well as some of

the changes that have occurred in different categories over

that period.

Q. Thank you, Mr. Schpero.

MR. BENEDICT: This particular document, your Honor,

has been the subject of a lot of testimony, and I'm just going

to move on. I just wanted the witness to mark it for

identification, it's in evidence.

THE COURT: All right.

Q. Now, Mr. Schpero, all these changes that you have managed

-- or you mentioned in the funds over the years, have all

these been approved by the Board?

A. Yes, they have.

Q. Mr. Schpero, switching gears again, does FMG's parent,

AXA Equitable, provide any services to FMG and the Trust in

connection with the management of the funds?

A. I'm sorry; I should just put this aside for the moment?

Q. Yes, we're done with that.

A. Could you ask the question again?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3548

Q. Certainly. Does FMG's parent, AXA Equitable, provide any

services to FMG and/or the Trust in connection with the

management of the EQAT Funds?

A. Yes, it does.

Q. Would you please describe for the Court some of the

services that AXA Equitable as opposed to FMG provides to the

Trust?

A. Yeah. Well, I think -- I think your question if I

understood it have been services to FMG or the Trust; is that

correct?

Q. That's correct.

A. So, because in my mind I think what this reflects is the

fact that FMG is a -- was a division, but of course now is a

subsidiary of a large corporate structure, and so it and the

fund get the benefit of that. And so there are services that

I -- that I'm going to refer to that I think either FMG gets

the benefit of in connection with their role as investment

manager, or the fund ultimately gets the benefit directly or

indirectly.

So the kinds of things that I guess come to mind would

be all of the corporate services that are essential to FMG

doing what it does. So at the AXA level there is a major

legal department, treasury, human resources; these are all

things that are situated at AXA, but are critical to what FMG

does and therefore critical to the fund. There is a whole

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3549

processing -- I think much of this is technology, but there's

a significant tech -- sorry; processing role where AXA as

effectively as its role as transfer agent of the funds, is

responsible for moving all of the assets in and out of the

funds on a daily basis through the separate account, that is

the center place for investing in the funds. So every

investment decision that an investor makes results in either

purchases or redemptions, and all of that has to move through

a center place, and that is -- and AXA has that

responsibility. So that would be another part of services are

coming from the AXA level.

Q. Let me turn your attention to tab 18 in the binder in

front of you, which is Defendant's Exhibit 153. And I'd ask

you, Mr. Schpero, to turn to page 4 of that exhibit, which

ends the Bate stamp 4808.

A. This is, I'm sorry, 18?

Q. This is tab 18, Defendant's Exhibit 153, and ask you to

turn to page 4.

A. Yes, I see it.

Q. Do you recognize this document?

A. I do.

Q. And what is it?

A. This is a -- this was provided to the Board in July 2013,

but this is a summary presentation of support provided by AXA

Equitable to FMG and directly or indirectly to the funds.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3550

Q. And is this presentation or something very similar

presented to the Board each year?

A. I guess I don't -- I don't remember that it's been every

year, I'm not sure I can answer that.

Q. Thank you. And do you find this document helpful?

A. I do.

Q. And why is that?

A. Well, it further expands on the point you just asked me

about, which is ensuring that the Board understand the

services that are being -- and support that's being provided

by AXA, which is also critical to helping understand the

cost -- the profitability studies that are done, and in

particular the allocation of costs that are made from AXA to

FMG in those profitability studies.

Q. Okay. Yesterday, Mr. Schpero, you mentioned I believe in

connection with the quarterly meetings of the Board the

Board's role in monitoring performance of the various

portfolios; do you recall that?

A. Yes, I do.

Q. And how does the Board go about monitoring --

A. I can put this book away a second?

Q. Yes, you may.

A. Sorry. Got limited room here.

Sorry.

Q. Let me repeat the question. How does the Board go about

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3551

monitoring and reviewing fund performance?

A. Well, that is something that is a heavy part of our role,

and it's at every Board meeting. So at every Board meeting we

have, a significant part of the Board meeting is devoted to

presentations from FMG and discussions obviously with FMG,

starting at the aggregate level, where we look at what's

happened over the past quarter or past year, in terms of

aggregate economic issues; and then looking at dashboard type

materials that are presented, so that we get an overview of

how each portfolio is doing, how each sector is doing, the

index funds versus pactive versus the fund of funds, the

different types of funds that have been structured; and then

as part of that we also have received -- and we've received

this certainly ahead of the Board meeting, but we received

very specific data that compares the performance of each fund

and each sleeve to benchmarks, comparative benchmarks, as well

to Lipper peer groups. And that's for periods of time up

through the most recent -- or meeting in September it might be

through June 30 or whatever's a relevant period that it can be

updated to. So we have all that presented.

We have discussions with the key investment personnel

at FMG where they walk us through their analysis of these. We

also have very detailed presentations on each fund; there's

usually five or six pages that walk us through the analysis of

each fund in terms of performance analyses that FMG conducts.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3552

And then of course from that we then work through a special

review list that is created at the Board's request that

identifies funds where we have particular concerns, and we get

updates on performance of those -- of those funds; and then we

usually break out -- in recent years through this investment

committee process, we break out into the investment committees

and usually meet with four or five or six sub-advisors through

pretty much a good part of the first day or second day of our

Board meetings, and then we usually regroup; and when we

regroup there's an effort by each chair of each investment

committee along with FMG personnel to summarize for the rest

of the independent trustees what we've learned at these

sessions with the sub-advisors.

Q. Thank you. How important to you as a trustee is fund

performance in your review of the funds' fees?

A. In review of? I'm sorry.

Q. In reviewing the fees, how important is performance?

A. Well, whether we're reviewing the fees or not performance

is extremely significant, it's what ultimately the investor is

going to see.

Q. Let me turn your attention to tab 19 in the binder in

front of you, Mr. Schpero, which is Defendant's Exhibit 138.9.

A. Sorry; 19?

Q. Yeah, tab 19.

A. Yeah.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3553

Q. Exhibit -- Defendant's Exhibit 138.9.

A. Yes.

Q. Do you recognize the document, Mr. Schpero?

A. I do, it's one of the ones I left out in my summary.

Q. And what is it?

A. So, this is what's called the report card; and do you

want me to describe what that means?

Q. Yes, I'd appreciate that, please.

A. So, in addition to the dashboard that I referred to,

which gives actual performance for each fund so you can see

how they're doing over the last 12 months, three years, five

years, et cetera, we also receive in advance of each Board

meeting this report card which is an effort by FMG to update

the Board on its views based on the service that it's

providing on each of these categories.

So, how the fund is performing; the processes that the

investment personnel engage in; organizational issues;

investment fit, and developments with respect to cash flow.

It's just another executive summary that is available.

Q. And what does the legend in color on the right-hand side

of this document indicate?

A. So this is a rating process that reflects FMG's, not

necessarily the Board's views certainly, but it reflects FMG's

views as to whether -- in each of these categories, one as you

can see would be exceeds expectations, and it goes all the way

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3554

down to number 5, where the recommendation from FMG at least

would be it's time to potentially replace a sub-advisor or

take other significant action.

Q. And do you find this document helpful?

A. Yes, I do.

Q. And why is that?

A. Again, I think as I said early on, it's critical in the

independent trustees carrying out our responsibilities to do

this in an effective and efficient way. This is a very

effective executive summary that helps to -- which is just

another data point that helps alert us to areas that we ought

to be more devoting more or less focus to.

THE COURT: So, on that document in the lower

right-hand corner, it says, ratings reflect manager's

opinions; so that means no numbers is what?

THE WITNESS: I think this is just -- making it

absolutely clear, that this is just reflecting FMG's opinions.

THE COURT: Okay.

THE WITNESS: Certainly not -- whether I or any

other independent trustee agree with these numbers, we've had

often debates about these numbers with FMG, but this is their

-- their perspective.

THE COURT: All right. So, do you receive this each

month or each quarter?

THE WITNESS: We receive this in advance of each

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3555

Board meeting. With the exception, your Honor, of -- I

believe of the July meeting, since that's right after June and

that's devoted to contract review. Although I think we get

it, but it's probably not updated for July.

THE COURT: All right, thank you.

MR. BENEDICT: May I proceed, your Honor?

THE COURT: You may.

BY MR. BENEDICT:

Q. Mr. Schpero, would you turn now to tab 20 in the binder

in front of you, which is Defendant's Exhibit 138.10. Do you

recognize this document?

A. Yes, I do.

Q. And what is it?

A. So, I've referred I think several times to the special

review list, and this is one -- this is the list as of a

particular date, which is how we see this. We see the review

list before -- in advance of each Board meeting, it's updated

in advance of each quarterly Board meeting. Do you want me to

further explain it or --

Q. Well, how does a document get on the special review list?

A. How does?

Q. How does a fund get on the special review list?

A. This is a list that FMG prepares, so again, it reflects

their view; it is reviewed with the Board extensively. There

are certainly -- having said what I just said, there are

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3556

certainly cases where funds have been added at the direction

of the Board, where the Board has felt that funds that were

not on here should be on here; and when funds on are here we

engage in extensive discussions at each Board meeting.

Q. So what is the purpose of the special review list?

A. Yeah, it is to -- to identify funds that have particular

issues that are considered problematic. It doesn't

necessarily have to be performance; it could be an investment

manager where there has been a significant announcement with

respect to their operations; where there's been major news

about major personnel leaving, so there's organization issues;

or it could be specific to performance; there's lots of

different reasons. But the idea is to put on funds and then

monitor them where there are issues of some significance.

Q. Do you find the document helpful?

A. Yes, I do.

Q. And why is that?

A. It's -- I think it's, again, another helpful summary

point that allows us to be particularly -- our responsibility

is with respect to every fund, clearly, but at any particular

point in time some funds are going to be more problematic or

raise more issues than others, and this is another -- another

mechanism to make sure that the Board stays focused on those

funds that might have particular issues being raised at a

particular time.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3557

THE COURT: So, if you look at that sheet, 138.10 --

THE WITNESS: Yes, sir.

THE COURT: Next to let's say EQ/Lord Abbett Large

Cap Core, there's the parentheses 7?

THE WITNESS: Yes.

THE COURT: Do you know what 7 is?

THE WITNESS: I sure do; that is the number of

quarters that it has been -- that that fund has been listed on

the special review list.

THE COURT: So it's seven quarters ago; so it's like

two years.

THE WITNESS: Correct.

THE COURT: So if you go down to Morgan Value, that

only has four; so this would be it's only been on there for a

year?

THE WITNESS: That's correct.

THE COURT: And you go from the highest to the

lowest, is that what happens?

THE WITNESS: Yeah, it looks to do that, I think

that's probably right. I can't say for certain it's always

presented that way but --

THE COURT: It doesn't really matter.

THE WITNESS: Yeah, but the structure is that

there's usually -- in this case there are no deletions. If

you look at the two pages, you've got a section that's

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3558

continuations, you've got a section that's called additions,

so you can see that Large Cap Growth PLUS, that was an

addition so it's just got the number 1 next to it on the

second page, down near the bottom. And then periodically

there are deletions, where it's been determined that things

have been fixed or there's been a substantive change that

addresses the issue.

THE COURT: So why would you have like the first

one, the EQ/Lord Abbett, why would it be on there for seven

quarters?

THE WITNESS: Would you mind if I just read the

paragraph a second? I might be able to --

THE COURT: Okay.

THE WITNESS: -- be helpful. Obviously this is from

2013, but let me just see what it says a moment.

(Witness reviewing.)

THE WITNESS: I'm not sure this is going to be that

helpful to me, but each of these are going to be specific, in

this case the summary -- and I can't recall the specifics

certainly, but the summary here is pointing out that despite

under-performance in two particular years, that since

inception the portfolio has beaten its benchmark; and more

over it's been ahead of its peer group since 2010, so for

three years.

So -- and then it had a bad year in 2011; in 2012 it

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3559

looks like it trailed the index, but it exceeded its peers, so

it's had a mix of issues. And so the goal is -- typically

what happens is once a fund goes on the list, we're not going

to agree to take it off and FMG is not going to recommend

taking it off unless there's real proof that it has turned

around. It doesn't necessarily mean that it's going to

require any immediate change, but it means that we ought to be

looking at it closely, it means that when the sub-advisor

comes in -- so in this case, Lord Abbett came in, we would

have spent very significant time with them trying to surface

what the problems have been, how are they trying to correct

it, it would get that kind of attention.

THE COURT: Okay, thank you.

MR. BENEDICT: May I proceed, your Honor?

THE COURT: You may.

MR. BENEDICT: Defendants offer Exhibits 138.9 and

138.10 into evidence.

THE COURT: Any objections?

MR. A. LAKIND: No objection, your Honor.

THE COURT: All right, both are admitted.

(Defendant's Exhibits 138.9 and 138.10 were marked

into evidence.)

BY MR. BENEDICT:

Q. Mr. Schpero, has the Board taken any actions to address

subpar fund performance?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3560

A. Yes, it has.

Q. And what actions has it taken over the years?

A. Again, I would tell you it's been a whole mix of things.

There have been cases where -- well, first of all, if it's

subpar we are meeting more frequently with the sub-advisor,

that's --

MR. A. LAKIND: Your Honor, I don't mean to

interrupt, but if the witness could confined his answer to

funds in particular --

THE COURT: That would be helpful. Could we go

through the ones that are at issue first, Mr. Benedict?

MR. BENEDICT: Yes.

BY MR. BENEDICT:

Q. To the extent you can recall with the 12 at-issue funds,

what actions has the fund taken to address subpar performance?

And I can refer you back if you like to Plaintiff's Exhibit

373, which has a chart of all of the at-issue funds.

A. I'm sorry; are you waiting to see what I say?

MR. A. LAKIND: Yeah, I think that would be okay

before your recollection is refreshed.

THE COURT: I'm not sure what the issue is. Mr.

Schpero, do you need to look at the document to refresh your

recollection?

THE WITNESS: I'm just trying to think if I can give

specific examples for you. I mean I guess I can cite the --

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3561

THE COURT: It doesn't matter, if you need the

document --

THE WITNESS: Yeah, it would be helpful, there's a

lot of funds.

THE COURT: So you could provide that document to

him?

MR. BENEDICT: Yes.

THE COURT: Plaintiff's Exhibit 373.

BY MR. BENEDICT:

Q. Specifically with respect to the 12 at-issue funds, do

you know whether any of the 12 at-issue funds have what you

called subpar performance? I mean originally to just broadly

get the types of actions that the Board has taken, but the

Court would like to focus on the specific at-issue funds.

A. Well, first I would point out that a number of these

funds because of subpar performance went through significant

changes in 2009.

Q. Okay.

A. 2008, 2009. So a number of these funds were converted

from active funds to pactive funds, and certainly a major

contributor of that was -- was performance that was

problematic.

In addition, I believe that T.Rowe Price -- I know we

made a number of changes with respect to that fund, where

we -- I'm not sure where it's going to show up on this chart,

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3562

but I'm quite certain that we lowered the expense cap in that

fund, and I believe ultimately lowered its fee -- I guess if I

look at the chart a second I'll be able to remember the

specifics. (Witness reviewing.)

Yeah, T.Rowe Price Growth Stock, we decreased the fee

in September of '12, from 80 to 75 basis points; I believe we

also reduced the expense cap in that case; I mean we've made a

number of changes in the fee arrangements, but I'm not going

to be able to represent to you that they were always in

response to performance issues. There would be any number of

reasons we might have changed the arrangements and trying to

recreate that right now is very difficult.

Q. Fine, let me move on. Mr. Schpero, am I correct that

fund performance is generally presented to the Board net of

fees? Performance data?

A. Fund performance is presented net of fees for the

portfolio. I believe that if you were to look specifically at

sleeve performance, which we also look at, I believe that is

gross of fees.

Q. Are separate account and other insurance product related

fees generally included in the calculation of fund performance

as it's presented to the Board?

A. No, it's not.

Q. And why is that?

A. Well, the Board's responsibility is -- was with respect

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3563

to the specific EQAT Funds. Our responsibility under the

Investment Company Act is in reviewing the management and

sub-advisory contracts, the administrative contracts for those

funds, and in doing that we look at the performance of those

funds. The costs that are in place for the insurance products

that are outside of that, are really not the Board's

responsibility.

And so, we certainly -- while we're aware that there

are significant costs at what I believe are called the wrapper

level of the insurance product, that is not presented to us at

the performance level. I would note that if you look at the

prospectus for any of these funds, the performance does not

show -- is not net of those costs; in fact, that would be

inconsistent I believe with SEC requirements, and would also

be inconsistent with what I know of industry practice.

Q. Let me turn now to sub-advisors. Does the Management

Agreement between FMG and the Trust as investment advisor,

allow FMG to subcontract out some of the management functions?

A. Yes, it does.

Q. And why is that?

A. Why does the --

Q. Does the trust agreement with FMG permit FMG to

subcontract out to sub-advisors some of the work?

A. Well, I think that's -- that's consistent with the nature

of this complex. What has been -- what is and has been

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3564

marketed to AXA's ultimate clients is a fund complex that is a

fund of funds structure, where investors have the opportunity

to invest in a wide breadth of different kinds of fund

products, and get the benefit of expert portfolio management

by lots of different sub-advisors.

Q. And who's ultimately responsible for performing the

sub-advisory functions?

A. For performing the sub-advisory --

Q. Yeah, who ultimately does the Board look to being

responsible.

A. Well, I'm not sure I understand your question. I mean

contractually the contract is between the fund and the

investment manager, so I guess I would tell -- I shouldn't say

I guess; I will tell you that if there's a problem at any

level of these funds, whether it's at the portfolio -- whether

it's at the sub-advisory level or at the FMG level, wherever

it is contractually we're going to look to FMG.

Q. In your view does the sub-advisory fund structure or

manager of managers structure that you've mentioned, provide

any benefits to fund investors?

A. Bear with me one second. Give me that again, please?

Q. Yeah, sure. In your view, does the sub-advisory or

manager of managers structure provide any benefits to fund

shareholders?

A. I believe it does.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3565

Q. And would you please explain?

A. Yeah. I think the -- I think there's a very attractive

aspect to these funds, in that you've got an expert manager,

FMG, with highly qualified personnel, who are involved in the

analysis and selection and overview of all of these different

sub-advisors. And I think that results in the kind of very

active movement you see with these funds, including all the

at-issue funds, where there are many changes over the years.

And I would -- I would compare this to fund complexes

that I represented for many years and am very familiar with,

where typically -- I shouldn't say typically, but many fund

complexes run by many of the major sponsors in the country,

are singular sponsored events.

So, you take a name, the T.Rowe Price funds; T.Rowe

Price is the -- and I didn't represent them so I'm not being

specific to them, but I'm using them as an example. But the

T.Rowe Price funds or the Fidelity funds, if you're on the

board of those funds, you are only going to see the investment

personnel of those funds, and you're going to see a -- I'll be

general now and move away from any specifics; but often you'll

see a senior investment officer, and they will come to the

board meetings and they will talk about their employees.

And the reality is that there's an inherent conflict

there. And it puts -- you know, it is very difficult for the

Board to examine performance in that case. You obviously

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3566

still go to Lipper and other outside providers to get

information, but the reality is that there's a real

disinclination in that situation on behalf of the sponsor to

make major changes in the investment personnel, no matter

what's happening with respect to performance.

Here, I think it's very attractive for the investor,

because here you have an investment manager, who for most of

the funds has no relationship with the underlying

sub-advisors, whose goal is top performance or appropriate

performance, and therefore, is going to carefully monitor the

sub-advisors and is not going to be hesitant if they think

it's appropriate to recommend to the independent trustees a

change. Because it's certainly not -- it's not affecting FMG

other than it's potentially beneficial to the investors. So I

think that's an important...

Q. Generally speaking, Mr. Schpero, what services do the

sub-advisors provide to the funds?

A. I think I'd list three or four: They engage in research

for determining the specific securities to invest in; they

engage -- they make the investment decisions for the

securities -- for the investment portfolio they have

responsibility for; so research, investment decision, the

actual execution of the trade, those would be the three areas.

And they have a responsibility to communicate that information

back to FMG.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3567

Q. We talked briefly this morning about information that FMG

provides to the Board concerning sub-advisory services; do the

sub-advisors themselves provide information to the Board

concerning the services they're performing on behalf of the

Trust?

A. Ask me one more time please?

Q. Sure. Do the sub-advisors themselves provide -- provide

the Board with information concerning their services?

A. Yes, as part of the 15(c) process, I think you're asking,

yes.

Q. Do I understand that a questionnaire is sent out by FMG

to each sub-advisor every year?

A. That's correct. Each sub-advisor, as I think I mentioned

early on, fills out a questionnaire and attaches to that all

the appropriate documentation that reviews the services that

they provide.

Q. And do each of the sub-advisors respond to the

questionnaire?

A. Yes, they do.

Q. And is that information provided to the Board as part of

the 15(c) process?

A. Correct.

Q. And is that -- is that information largely in Book 2 do I

understand?

A. I'm not going to remember what book it's in, because

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3568

usually I will see it in the Diligent on line.

Q. Thank you. Let me turn your attention, Mr. Schpero, to

tab 22. This is a new book.

A. Can I give up the old one?

Q. You can give up the old one if you like.

MR. BENEDICT: For the record, this is -- behind tab

22 is Defendant's Exhibit 144.15.

THE WITNESS: Your Honor, I can use a bathroom break

at some point.

THE COURT: Okay, we can break now.

So, we'll break -- do you want to break for lunch at

this time, is that good?

MR. BENEDICT: Whatever your Honor would prefer.

THE COURT: So we'll be back at 10 to 1:00.

So, you may step down.

THE WITNESS: Thank you.

(Luncheon recess.)

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

THE WITNESS: Yes, sir.

THE COURT: Mr. Benedict, you may continue.

MR. BENEDICT: Thank you, your Honor.

BY MR. BENEDICT:

Q. Mr. Schpero, would you please turn to tab 22 in the

binder in front of you? This is Defendant's Exhibit 144.15.

A. Sorry; tab?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3569

Q. Tab 22. That should be at the front of the new binder.

THE COURT: It looks like this (indicating).

A. Okay.

Q. Do you recognize this document?

A. Yes, I do.

Q. What is it?

A. This is a summary -- I referenced this earlier in my

testimony; this is a summary prepared by FMG as part of the

15(c) materials. In this case I can't tell what Board

meeting, but this is a sub-advisory summary.

Q. Would you please describe the document for the Court?

A. Yeah, this reflects an effort by FMG to go through really

the voluminous documentation that is received from all of the

sub-advisors as part of the annual 15(c) process where they

fill out a questionnaire and then attach -- often attach many

of their key documents, registration statements, ADV and

financial information, compliance documents and other; and FMG

then works through that and tries to summarize some of the key

documentation and any issues that they identify.

Q. And do you find that document helpful?

A. Yes, I do.

Q. And why is that?

A. Well, as I stated early in my testimony, this is the kind

of information where it is helpful to have the -- have others

who have particular expertise. So, for example, among other

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3570

things this lists legal and regulatory matters and other

issues that are identified in the sub-advisory responses, and

it's helpful to have FMG as well as our counsel review all of

that and give summaries of some of that data.

Q. Am I correct that you mentioned yesterday that your

independent counsel also provides a memorandum to you,

summarizing sub-advisory information?

A. That's -- yes, that's correct.

Q. Now, you previously mentioned, Mr. Schpero, that

sub-advisors make presentations at Board and Board committee

meetings?

A. Yes.

Q. And how frequently does each sub-advisor present?

A. Well, the Board has set up, the independent trustees -- I

should clarify, whenever I talked about the Board I'm talking

about the independent trustees.

THE COURT: All right, thank you.

A. So, the Board has set up a calendar exercising, you know,

our judgment as to what we think is an appropriate schedule.

So I can remember the specifics, I think we try to make sure

we see any -- FMG and its affiliates typically once a year,

again, specific with respect to where they are managing the

actual portfolio, sub-advisors, I think that the general

requirement is that we see them within at least 18 months.

But, if your Honor, for example, somebody on the special

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3571

review list, it would be rare that we would go 18 months, we

would typically see them more often. And there have been

sub-advisors that have been problematic that we've seen a

couple times in a year, it just depends on the circumstances.

Q. And do the trustees have an opportunity to question the

sub-advisors at these meetings with them?

A. Quite extensively, yes.

MR. BENEDICT: Defendants offer DX-144.15 into

evidence. It's already part of the Board materials.

MR. A. LAKIND: No objection.

THE COURT: All right, admitted again.

(Defendant's Exhibit 144.15 was marked into

evidence.)

BY MR. BENEDICT:

Q. Mr. Schpero, plaintiffs have asserted that FMG delegates

to the sub-advisors the day-to-day investment management of

the funds; do you agree with that?

A. I do not.

Q. And why is that?

A. Well, I would point out I think this is -- we're using

words that have no definition, so I think they can be used in

lots of different ways. But in my mind day-to-day -- you said

day-to-day investment management of the fund?

Q. Yes.

A. So yes, the sub-advisors are involved in the day-to-day

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3572

portfolio selection process that we discussed, but FMG also is

heavily involved on a day-to-day basis in providing the

various services they provided under the investment management

contract. As an example, valuation on a daily basis generally

is occurring, there are lots of things that are happening

daily. So I think that is a term for which there is no

definition and can be quite ambiguous in its meaning.

Q. Mr. Goldstein has asserted that the Board exhibited a

fundamental misunderstanding of FMG's role because

substantially all of FMG's services are performed by

sub-advisor firms; do you agree?

A. I strongly disagree.

Q. And why is that?

A. Well, I think I've already testified there are very

substantial services that are provided by FMG, and I think

they're very much to the benefit of the investors.

Q. Does the Board review and approve the sub-advisory

agreements each year?

A. Yes, it does.

Q. And do you approve the fees to be paid by the funds'

sub-advisors as well?

A. That's --

Q. Fees to be paid to the sub-advisors as well?

A. That's correct.

Q. And who pays the sub-advisors?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3573

A. Well, I guess I have come to understand that the actual

cash flow payment is a payment to FMG of its portion of the

fee, and a payment to the sub-advisor of its portion.

Q. And who has a legal obligation to pay the sub-advisor?

A. Yeah, the legal --

MR. A. LAKIND: Objection. This witness is here as

a trustee, not as an attorney or an expert.

THE COURT: Frank, can you repeat the question?

(Question read back by the reporter.)

THE COURT: Do you wish to be heard on that?

MR. BENEDICT: I'll rephrase.

THE COURT: Why don't you rephrase it.

BY MR. BENEDICT:

Q. Under the Management Agreement, Mr. Schpero, who pays the

sub-advisors?

A. Under the Management Agreement my understanding is that

the manager FMG is responsible for payments to the

sub-advisor. It's coming out of the manager's fee.

Q. Do you receive information regarding the amount of the

management fee that's retained by FMG after payment of the

sub-advisors?

A. Yeah, that -- that's the amount that is as I've suggested

is unfortunately called the Gary chart.

Q. The spread that we talked --

A. The spread, yes.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3574

Q. And is the amount retained by FMG important to you?

A. It's very important.

Q. And why is that?

A. Well, again, I think that our responsibility is to

understand and on behalf of the investors ensure that each of

the service providers is providing real services for

appropriate fees, for fair and reasonable fees. And the only

way to analyze the fee that FMG is retaining is to be

clearly very much aware of what that fee is.

Q. And do you believe that the amount of fee that's retained

by FMG is fair relative to the services FMG provides to the

Trust?

A. Yes, I do.

Q. And why is that?

A. Well, I think that's -- I think that's what we as

independent trustees are charged to do every July, that's the

finding that we make, and we make that finding based on a very

significant and conscientious analysis, ultimately exercising

our business judgment. But we do that upon receipt at the

request of our counsel and the Board of all the data that we

think is appropriate to review that satisfy all the Gartenberg

factors and more as far as I'm concerned.

And we have a Board that I think is extremely focused

on the ultimate goal here, which is to make sure the fee is

fair and reasonable, and in the exercise of our business

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3575

judgment is -- is going to be satisfactory for the investor.

Q. And do you also consider the difference between the

amount of the management fee retained by FMG and the amount of

the fees paid to the sub-advisors when you approve the

Management Agreement? Do you look at both what FMG keeps and

what FMG pays of the total fee --

A. Yeah, I think I just answered that, but yes.

Q. Mr. Goldstein has asserted that the Board was not

conscientious because it didn't consider alternative

investment advisors other than FMG.

THE COURT: There's an objection; hold on.

MR. A. LAKIND: It's a leading question, your Honor.

THE COURT: All right. Denied.

You may answer the question.

THE WITNESS: Could you ask it again, please?

BY MR. BENEDICT:

Q. Sure. Mr. Goldstein has asserted that the Board was not

conscientious because it did not consider alternative

investment managers other than FMG; do you agree with him?

A. I do not.

Q. And why is that?

A. Well, I would start by saying that if there was cause to

consider alternative investment managers, we would do that in

a second. But number one, as you just asked me, we have been

able to make the finding every year that we think the fee is

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3576

fair and reasonable, and as part of that we have reviewed all

of the different factors, including what we believe are very

high quality services that are provided by FMG. So, there's

been no reason to do that.

I would also say that the reality of a complex like

this is these are -- these are assets that have come in

through AXA, and so there is an expectation I believe on

behalf of the investors that they're going to -- that what has

been marketed by AXA is going to be sponsored by AXA and AXA's

going to play the -- provide the service that has been -- that

has been disclosed to investors.

But I'll go back to my first point; if there was ever a

stage where the Board felt that FMG was failing in its

responsibilities, we would certainly be looking at

alternatives.

Q. Mr. Schpero, do you consider risks assumed by FMG as part

of your evaluation of the value of FMG's services to the

funds?

A. Yes, we do. Or I do.

Q. And what types of risks do you believe FMG assumes as

investment manager of the funds?

A. I think there are a number. I guess I'd -- let me just

think about that. I think I'd categorize them in two ways:

There are what I'd call entrepreneurial risks in starting up

the fund and in sponsoring the funds; there are significant

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3577

costs involved with that and risk; there is no guarantee that

any of these funds are going to be successful, or they're

going to achieve -- or they're going to reach an asset level

where AXA or FMG is able to do anything other than continue to

reimburse the funds under the various expense caps that are

put in place to make the fund viable at the early stage; so I

think there are significant risks in connection with that.

And then equally importantly there are several what I

guess I'd call enterprise risks, where FMG as the manager is

the party that's going be looked to if there are regulatory

problems, if there are legal problems, if there are

operational or compliance or reputational problems; I mean if

there's a problem with this fund, the party that is going to

be identified as the entity that is at risk is FMG.

And I will tell you as an independent trustee, if

there's a problem with this fund, contract or no contract, the

party that I'm going to look to to make the fund whole will be

FMG.

Q. Are they enterprise risks as you have characterized them

significant in your view?

A. I believe they are.

Q. And would you please explain why?

A. Yeah, I mean there have been significant cases over the

years that I am familiar with or examples I guess I can say of

where the sponsors of funds, because of major compliance

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3578

problems, regulatory problems, market problems, the context of

money market funds, have put -- have had to put tens of

millions and some cases I believe hundreds of millions of

dollars back into funds. And the party that is -- you know,

that I would expect to look to in all those cases is going to

be the manager, as opposed to the sub-advisors who are

secondarily in the contract, and who in many cases the

sub-advisors do not have the financial viability. That's why

AXA and FMG are such a critical party here, we're talking

about major assets available if we need to go after them.

Q. And are you provided by FMG with information each year in

connection with the 15(c) process concerning these and other

risks?

A. Ask that again, please?

Q. Are you provided information each year concerning these

various risks as part of the 15(c) process?

A. Yes, we are, there's certainly discussions about them.

Q. All right. Let me shift gears, if I may, Mr. Schpero --

THE COURT: I'm sorry; Mr. Schpero, so you talked

about these risks, entrepreneurial and enterprise risks, but

aren't those some of those risks passed on to the

sub-advisors? So it minimizes the risk to FMG?

THE WITNESS: I guess a couple things. I think -- I

think the entrepreneurial are generally not; I think the

sub-advisor does not expect -- my understanding is --

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3579

THE COURT: On the start-up, okay.

THE WITNESS: Yeah, all the start-up and all the

expense caps, the reimbursements, none of that as I understand

it typically would come out of the sub-advisors' hide. I

think all of that is borne by the sponsor, which is FMG.

On the -- on the enterprise risk, I think -- I

think, your Honor, certainly there could be cases where a

sub-advisor has a significant compliance problem and certainly

in the first case everybody's going to look to the

sub-advisor. But a few things, first of all, there are -- the

nature of this complex is FMG is always looking for

sub-advisors that are new, that are unusual, many of those we

see this with a -- with their questionnaires, some of them

don't even -- you know, have minimal assets, their financial

statements are very limited what we can get, they're often

unaudited, so if there's a significant problem and you can

have a fund that grows significantly in assets, conceptually

the sub-advisor may be on the hook, but if there's an in

ability to pay it the Board is going to be looking to FMG; and

reputationally it's going to be AXA and FMG's name which is

going to be everywhere. And I would argue the regulators are

going to look to FMG, because that's the party that has the

direct contract relationship, and that's where the significant

money's going to be.

THE COURT: So, if FMG is undertaking that type of

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3580

risk, how does the Board secure that risk in some fashion?

THE WITNESS: I don't think as a practical matter

there's a way to secure it, but I think -- I think that goes

to lot to the relationship that develops between the Board and

FMG. I think that's why that relationship, albeit always at

arm's length is an important relationship.

I'll give you an example. When this suit was

brought, there is a D & O policy, and there's deductible for a

million and a half dollars. Now, the initial assumption I

believe -- the premium for that D & O is split between the

fund and FMG, because both are covered by the policy. And

pursuant to industry practice and analysis and whatnot,

there's some percentage split; I think the higher percentage

of that premium is paid for by the fund.

But when the suit was brought the Board analyzed the

suit with our counsel, and even though I think the initial

assumption was that the deductible would be borne the same

way, so most of it would be borne by the fund, we went to FMG

and we said we don't think that -- we don't want that, we just

don't think the investors should bear that; this is a lawsuit,

it's over your fees; we're certainly comfortable with your

fees, but we think the costs of this are not something we want

the investors to bear and we want you to eat that amount. And

they did. So, you know, we could have had an argument, but in

the end they agreed to it.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3581

But I think it's a matter of part of the diligence

process that we always go through. We are certainly very

familiar with who FMG is owned by, and the size and reputation

of this major global insurance company. And I certainly am

very comfortable that whatever the problem is, as lead

trustee, if I turn to AXA and FMG, that the fund will be made

whole if circumstances require it.

THE COURT: All right, thank you.

MR. BENEDICT: May I proceed, your Honor?

THE COURT: You may.

BY MR. BENEDICT:

Q. Let me shift gears, if I may, Mr. Schpero, to nature and

quality of administrative services. Now, you've previously

testified that you receive information regarding the nature

and quality of the administrative services that FMG provides

to the fund; correct?

A. Yes.

Q. Would you please describe for the Court the types of

services FMG performs in exchange for the administrative fee

it receives from the Trust?

A. Yeah. It's, again, a long list, I'll give you a sense

for some of the things that come to mind. There is the whole

accounting and financial arena, with budgetary statements and

financial statements, and all of the tax reporting and all of

that information; there is the day-to-day compliance that I

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3582

would call the clerical compliance that is ongoing on a

day-to-day basis; there is the preparation of the registration

statements, and the updates of the registration statements,

and proxy statements; there's the preparation of all the Board

materials and the provision of the officers of the fund for

the preparation of minutes and things of that sort; there is

preparation -- FMG as I understand it does their own analysis

of all of the -- kind of re-does all of the performance

information, so that they are not relying and the Board is not

relying exclusively on the sub-advisors performance analysis;

and so all of that is done at the administrative level. Those

would be some of the examples that I could remember.

Q. Mr. Schpero, would you please turn to tab 24 in your

binder, which is Defendant's Exhibit 142.11.

THE COURT: So, Mr. Schpero, if I can just go back

to the risks that you talked about before --

THE WITNESS: Sure.

THE COURT: So, before that we had been talking

about the spread, and, you know, when you look at it, it looks

like it's very sizeable; like why does the sub-advisor get

such a small number compared to what FMG seems to be

retaining. So, the thought comes to mind as what the

plaintiffs are saying is, well, it seems to be excessive;

right?

So when you're looking at this spread, you said you

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3583

thought it was reasonable under the circumstances, but you

didn't give any reasons for why you thought it was reasonable.

So, if it's that large, what are the underlying factors that

you look at that justify to make it reasonable in your mind?

THE WITNESS: Sure. So we look specifically at that

spread, we take a particular portfolio and you look at the fee

that is being received by FMG for its service, and I believe

my obligation, the Board's obligation is to fully examine all

aspects of that.

So what do we look at; we look at the nature and

quality of all the services, we examine very carefully all of

the services that FMG provides for that spread; we take into

account all of the other aspects of that, including what we

just talked about in terms of more than just the direct

services, but the conceptual types of risks that are involved,

I think more than just conceptual; we look very importantly to

comparative information, so we look at what -- both with

respect to the fund in total, the full expense ratio and with

respect to the spread, what does that look like against other

peers that are providing similar services. To the extent you

can't, a lot of this is very difficult looking at -- in coming

up with a true apples-to-apples comparison, but to the best we

can, we look at how those fees compare to fees in other we

believe comparable funds. So we look at -- we look at that.

We look carefully at -- in doing that we certainly

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3584

look at whether there are economies of scale being achieved,

and that's why we negotiated breakpoints over time, that's why

in times we've reduced fees; and we certainly look at

profitability, again, another important factor of what the

profitability is for each fund -- this is fund by fund, not

for the aggregate, but our obligation is to look at it fund by

fund; and -- and obviously we look at the performance of the

fund, but that's just -- that's another one of the factor we

look at; but we look at all those things and we examine the

nature of the service. And one thing I think we're careful to

do, is we understand these are two different service

providers, and they're providing two very different services.

So, I'm a little -- I don't -- I personally don't get

into an analysis of why, you know, this fee versus the

sub-advisory fee, I think you have to look at them in

isolation. The question that I believe I am responsible for

asking -- for answering, is the fee, the specific spread that

FMG gets, in the exercise of my business judgment, with my

understanding of all of these factors and all of these data

points, fair and reasonable for its service. The fact that

FMG is able, which they are often able to negotiate a

third-party relationship with sub-advisors, who may for their

own reasons be willing to accept a particular fee in a

particular case where they have their own large organizations,

their own economies, where I would argue they're providing a

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3585

very different service, in many cases fairly limited services.

You look at an index fund, managing an index fund, a

day-to-day investment management of an index fund, those fees

can be quite -- can be quite low.

But I don't think that that necessarily -- I shouldn't

say that I don't know; but that is a different service

involved than what FMG is being paid for for all of the other

services in running that fund. Whether it's an index fund or

an active fund run by Gabelli, those are two different fees

there. You know, there it's an interesting comparison, but

the active manager I would argue is typically going to get a

more -- a higher fee than the index manager, but that's the

relevant comparison.

I think -- I don't see comparing what Gabelli receives

or what the index manager receives as the sub-advisor to what

FMG does because they're very different services. I think

what's more important is what is FMG getting paid for, how

does that compare to others in the industry for that. And

then importantly, I would note another thing, at the end of

the day what is the investor bearing. So particularly since

doing -- these comparisons are very difficult, I said we look

at FMG's spread versus other spreads, but as I'll probably

have an opportunity to testify at some point, there are real

limitations in looking at peers, because it's very hard to

tell what are others really getting paid for.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3586

And so I will tell you that a critical part of my

analysis is what does the big picture look like. You know,

I'm a fiduciary here, I am concerned about the investors; what

is the total expense ratio that the investor is bearing in

that fund; how does that compare to all the other funds. And

that's another critical part of what I look at in trying to

get to the ultimate judgment.

THE COURT: Okay, thank you.

MR. BENEDICT: May I proceed, your Honor?

THE COURT: You may.

BY MR. BENEDICT:

Q. Mr. Schpero, please turn to tab 24, which is Defendant's

Exhibit 142.11.

A. Okay.

Q. Do you recognize this document?

A. Yes, I do.

Q. And what is it?

A. This is a chart that was presented to the Board at the

July 2013 Board meeting, that compares the services provided

by FMG as administrator, lists those services, and then

separately lists the services of JP Morgan as the -- as the

sub-administrator.

Q. And do you find this document helpful?

A. Yes, I think it's helpful.

Q. And why is that?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3587

A. Again, I think it's good executive summary; there are

clearly lots of services involved on the administration end.

And I think just as earlier you asked me to give you some

examples, certainly this isn't something you can memorize, but

I think this is a helpful recitation of some of the key

administrative services that are provided by the two parties.

Q. To the best of your knowledge, does this chart accurately

describe the services provided by FMG as administrator as

opposed to JP Morgan Chase as sub-administrator?

A. Yes, I believe it does.

Q. What's the genesis of this chart?

A. I think it's pretty similar to -- I think my answer's

going to be pretty similar to the question you asked me

earlier with respect to the chart comparing the manager and

the sub-advisors. In this litigation there was a subsequent

amendment to the complaint, where the administration

arrangements were also challenged, maybe a year or two later,

I don't know the specific dates; and once -- and obviously the

Board has continued as I testified earlier to be monitoring

this litigation, so we certainly had discussions about this

development.

And again, we thought that it would be appropriate at

the next July meeting to ask management to -- in the same way

that we did with respect to the allegations on the management

and sub-advisory arrangements, we asked management at the next

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3588

July meeting to make sure that they were particularly

responsive to the allegations that were being made with

respect to the administration services, and I believe that

this was part of their response to our request.

Q. Do you recall whether you specifically requested a

side-by-side chart similar to what had been provided with the

management and sub-advisory?

A. I don't recall whether I specifically asked for that or

not.

Q. Mr. Schpero, was this side-by-side chart necessary for

you to understand the administrative services performed by FMG

and JP Morgan?

A. No. You know, I've been on the Board a long time and I'm

certainly -- have been and continue to be very familiar with

the two service providers and what they do, but I think,

again, we always benefit from new approaches to presenting

information, and I think this was a helpful executive summary.

Q. Generally speaking, what services does JP Morgan provide

to the funds as sub-administrator?

A. As sub-administrator, I think the specific things that

come to my mind is -- is net asset value in particular,

they're responsible for calculating the net asset value of

each portfolio, as well as I believe the sleeves; they -- they

keep I think -- at least a part, if not most -- certainly a

part of the books and records of the fund that are required to

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3589

be maintained; and they are involved in -- I think they work

closely with FMG, but they're involved in preparing parts of

the financial statements of the funds; and I think they have

some technology involving some portions of the compliance

program.

Q. And who's ultimately responsible for performing the

administrative services on behalf of the Trust?

A. FMG is the direct contractor with the fund.

Q. Now, plaintiffs have asserted that FMG also delegates to

JP Morgan as sub-administrator the day-to-day administration

of the funds; do you agree with that?

A. I do not.

Q. And why is that?

A. Again, I think we're dealing with the ambiguity of the

language, but -- but if one were to go down -- you're not

going to want me to take the time to, but if you were to go

down this whole list of services provided by FMG, they are

day-to-day as well. You know, each provides a different list

of services, and each of them for the most part are required

for the day-to-day management of these funds. Obviously some

things are weekly, some are quarterly, but I think the spirit

of it is that each side provides some aspects of the

day-to-day administration of the fund.

Q. Does the Board approve the administration -- excuse me;

does the Board approve the Sub-Administration Agreement

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3590

between FMG and JP Morgan Chase?

A. No, it does not.

Q. And why not?

A. My understanding is that that's -- a sub-administration

contract with a non-affiliate, there's no requirement or

particular practice where that would be presented to the Board

for approval.

Q. Before the complaint was filed in this action, was the

Board aware that FMG had entered into a sub-administration

contract with JP Morgan Chase?

A. Yes.

Q. And are you familiar with that agreement?

A. I am -- I'm familiar with it now, yes.

Q. Have you read it?

A. I have read it, yes.

Q. And when did you read that?

A. So in connection with -- I guess it was in connection

with the amendment to the complaint, and maybe the discovery

afterwards -- I guess it would have come up during the --

during my deposition or one of the prior depositions of one of

the independent trustees, we were alerted to the fact that

there was an issue with respect to the -- the form of the

sub-administration contract. And so I and the rest of the

Board read it at that time and discussed with it our counsel.

Q. And does the Sub-Administration Agreement between FMG and

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3591

JP Morgan accurately describe the services performed by JP

Morgan for the funds?

A. I think it does now.

Q. And did it at the time?

A. Certainly the contract that I saw after my deposition or

around the time of my deposition did not accurately describe

it.

Q. And you -- you mentioned that it does now; what are you

referring to, Mr. Schpero?

A. Well, in the -- I'm pretty certain of my dates, but I

think it was in the spring of 2015 -- no, I think -- I'm

sorry; I think it was probably the spring of 2014, there came

a time where FMG had set up what are called the 1290 Funds,

which are a series of retail funds, and in connection with

that there was an opportunity, because these were brand new

funds, to put in place all new contracts.

And so at the Board -- certainly one reason was at the

Board's urging, although I suspect FMG wanted to do this

otherwise, the -- the contractual arrangements were changed to

I think appropriately reflect what the administrator does and

what the sub-administrator does. So that was in -- if I've

got my dates right, I believe it was spring of 2014 or -- or

summer of 2014. And then last spring there was an opportunity

to then have the contracts for the EQAT Funds mirror what was

done in the 1290 Funds, so that the sub-administration

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3592

contract was amended to appropriately reflect the services

being provided by the sub-administrator.

Q. Do you understand why the Sub-Administration Agreement

had not been amended earlier?

A. I've certainly been given an explanation, yes.

Q. And what is that explanation?

MR. A. LAKIND: Your Honor, that would be hearsay.

THE COURT: Yes, sustained.

MR. BENEDICT: Okay.

BY MR. BENEDICT:

Q. Mr. Schpero, does JP Morgan ever present to the Board at

Board or committee meetings?

A. I'm sorry?

Q. Does JP Morgan Chase ever make presentations to either

the full Board or to Board at its various committee meetings?

A. Yes, we've had quite a number of them over the years.

Q. And how often has JP Morgan presented?

A. I'm not going to be able to tell you that, but I would

think we typically see them once or twice a year.

Q. And why has JP Morgan been asked to make presentations to

the Board?

A. I think there's several reasons; one is we certainly know

that they're providing services as sub-administrator, and even

if we're not required to approve that contract we certainly

want to make sure we know what they're doing and we understand

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3593

the quality of what they're providing.

And I will also acknowledge to you that we've had a

number of occasions where we've been very troubled by the

quality of the services provided by the sub-administrator, and

so we've asked -- we the Board have asked to meet with the

sub-administrator to get to the bottom of some of the issues

and ensure that we didn't have continuing problems.

Q. Does the Board have an opportunity to ask questions to JP

Morgan at these meetings?

A. We do, and we ask many questions.

Q. Now, does the Board consider the differences in services

performed by FMG and JP Morgan when it approves FMG's

Administrative Agreement with EQAT?

A. Yes, we do.

Q. And do you receive information regarding the amount of

the administrative fee retained by FMG?

A. Yeah, we see that each year.

Q. And do you consider that information when determining

whether to approve the Administration Agreement with FMG?

A. That is correct.

Q. Mr. Schpero, you mentioned several times over the last

day or so that you consider comparative fee information in

connection with your decision concerning whether to approve

the management fees?

A. Yes.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3594

THE COURT: Are you on a new topic?

MR. BENEDICT: Yes, I am, your Honor.

THE COURT: If I can just go back to the

administrative fees, so when was the first time that you

learned JP Morgan was a sub-advisor -- or a sub-administrator?

THE WITNESS: I've always known they were the

sub-administrator.

THE COURT: And when was the first time you learned

that there was a sub-administrator contract?

THE WITNESS: I've always known there was a

sub-administrator contract. We just had not received --

because there was no requirement for the Board to approve it,

we never -- it was never delivered to us as something for us

to review and approve.

THE COURT: All right. So then you knew the scope

of the services that JP Morgan was providing for the

administrative function?

THE WITNESS: That's correct.

THE COURT: All right, thank you.

MR. BENEDICT: May I proceed, your Honor?

THE COURT: You may.

BY MR. BENEDICT:

Q. Let me shift gears, Mr. Schpero, to comparative fees.

You've mentioned several times that you consider comparative

fee information in assessing the fairness of the management

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3595

and administrative fees; correct?

A. Yeah. And are you asking about -- I'm sorry; comparative

fee, not performance, yes.

Q. Yes, comparative fees.

A. Yes.

Q. Is comparative fee information helpful to you in your

consideration of the fairness of FMG's fees?

A. Yes, it is.

Q. And why is that?

A. Well, it's -- it's one of the specifically mentioned

Gartenberg factors, and I think it's -- I think the courts

have made it a factor because it's -- it's certainly -- you

know, examining these arrangements and these fees, you know,

there's no science to this. And so I think it is clearly

helpful to the Board to be able to get a sense for what the

industry is doing, and in particular what other peers are

doing. And so getting the benefit of that information and

being able to compare it as we do our examination is certainly

an important step.

Q. And generally speaking, how do FMG's management fees

compare to other funds in their respective Lipper peer groups?

MR. A. LAKIND: Your Honor, objection; I think the

witness should confine his answer to the 12 funds at issue if

possible.

MR. BENEDICT: Okay.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3596

THE COURT: So, if you could just restate your

question.

BY MR. BENEDICT:

Q. Paying particular attention, Mr. Schpero, to the 12 funds

at issue here, generally speaking, how do FMG's management

fees compare to other funds in their respective Lipper peer

groups?

A. I think it's within a reasonable range.

Q. Are you familiar with the term, total expense ratio?

You've mentioned that a couple of times.

A. Yes, I am.

Q. And what is total expense ratio?

A. So that is the total expenses that's always done on a

percentage basis point -- percentage test. So, for example,

if management fees are 50 basis points, the total expense

ratio may be 80 basis points or 90, so -- but what that

reflects is that all of the expenses the funds bears; the

management, administrative, distribution, accounting, legal,

all of the expenses. And is -- it's what the investor

ultimately is bearing in that fund.

Q. Do you consider total expense ratio information

important?

A. Certainly do.

Q. And why is that?

A. I think I just said, it is the ultimate test for what the

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3597

investor is bearing.

Q. Are different services provided by different investment

advisors under various contracts within the industry?

A. Yes, they are.

Q. And do you consider how a fund's expense ratio compares

to its peers when considering the management fee proposal?

A. That's correct.

Q. And generally speaking, how do the expense ratios of the

funds at issue here compare to their respective peer groups?

A. Again, you know, every fund is different, but I think

it's within a reasonable range.

Q. Do you consider comparative administrative fee

information?

A. Comparative administrative fee, yes.

Q. Are there problems comparing administrative fees within

the industry?

A. Yeah, I mean -- if you don't mind I think can I answer

this and the expense -- and the management fee is the same

point. I mean there is difficulty in comparing fees. And

that's why I think the expense ratio is always an important

factor to look at, because in a particular fund, even though

Lipper -- the Lipper analysis we see combines management and

administrative contracts together, they're not separated out;

so you're looking at a total fee.

And of course, every fund sponsor is structured

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3598

differently. There are some funds where their administrative

fees are part of the management fees; maybe more importantly

there are many funds where some of the management but more

particularly some of the administrative fees are broken out

separately and not part of those contracts. So you can have a

fund where in one case the manager receives all of the

management administrative fees for X, and another fund where a

lot of those same services are broken out separately outside

of the management and administrative contract. And as a

result there are inherent limitations in only looking at the

management and administrative fee comparisons.

Because there may be a fund where the sponsor is

collecting a lot of additional fees, but they've got, for

example, a separate accounting fee even though, for example,

in FMG's case the accounting service is part of the

administrative contract. So, from the Board's perspective

that's why we have felt -- or I have certainly felt it was

very important to look at the total expense ratio, because

there everything is included and we're getting the benefit of

seeing what is the total comparisons, certainly apples to

apples at that level and what are the investors bearing at

that level.

Q. Thank you. Mr. Schpero, would you please turn to tab 27

in the binder in front of you, which is Defendant's Exhibit

144.19.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3599

A. 27?

Q. 27. Defendant's Exhibit 144.19. And particularly pages

430 to page 444 of that document.

A. Okay.

Q. Do you recognize the document?

A. I do.

Q. And what is it?

A. So this is a presentation that was made to the Board that

is an effort to try to summarize administrative fees in other

complexes.

Q. Would you just generally describe this document for the

Court?

A. Yeah, I think -- again, as I said a minute ago, I think

it's difficult to get administrative fees; Lipper in

particular does not break out -- does not break out the

administrative fee in their analysis, they as I said aggregate

that for each complex. And so FMG at the -- at the Board's

direction has made an effort to gather this information from

-- I believe this is all from public documentation, basically

public filings by other managers, where there's an effort to

try to get their specific fee information so that we do have

some comparative fee information to be looking at.

Q. Do you find this document helpful in your analysis?

A. I do.

Q. And why is that?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3600

A. For the same reason that I -- that I discussed with you

on the management contract, I think -- I think, you know, an

important factor to look at is what are the charges that

others for similar -- for presumably somewhat similar

services -- again, it's hard to discern with any -- in any

definitive way, but as best you can what appears to be the

fees for comparable type services elsewhere in the industry is

certainly a consideration that we take into account in

exercising our judgment.

Q. And generally speaking, how do the at-issue funds'

administrative fees compare to other fund complexes in the

industry?

A. Again, I think it's within a reasonable range.

Q. Mr. Schpero, I'm going to shift gears you on again --

THE COURT: Before you go off this chart; so if you

look at page 431, start there --

THE WITNESS: Yeah.

THE COURT: So, you said you look at Lipper --

THE WITNESS: Lipper, yeah.

THE COURT: And sometimes you look at whatever FMG

puts together? So by looking at the administrator fee, how do

you know who put that fee together, or how it got there,

whether it's Lipper or whether it's FMG?

THE WITNESS: Yeah. So I believe, your Honor -- I'm

pretty certain on my recollection on this, we obviously see a

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3601

lot of documentation; but I believe that administrative fees,

Lipper does not break that out, so that FMG would have had to

have prepared this through searching public -- public filings

by these various managers.

THE COURT: Okay. Public documents; so it would be

like listed in some report that's filed with the SEC?

THE WITNESS: Yeah, I mean those would all be

public -- you know, I think they typically would -- I think

where they find them -- and I'm not sure it's always required

to be this specific, which is why I think there's a limit to

how many places they can -- you don't necessarily find it for

every fund. But I think many funds do provide this

information in their statement of additional information.

You got a prospectus and a statement of additional

information; any investors gets the prospectus when they

invest in a fund, and any investor can request a statement of

additional information. They're both filed as part of the

registration statement with the SEC. So, I believe FMG has

personnel who go through and try to sift through public

filings, they're available to investors, in order to give us

data that we can use in this process.

THE COURT: Okay.

MR. BENEDICT: May I proceed, your Honor?

THE COURT: You may.

BY MR. BENEDICT:

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3602

Q. Mr. Schpero, you mentioned several times that you

consider FMG's profitability in connection with your review of

the management agreement; is that correct?

A. That's correct.

Q. And is that an important consideration for you?

A. Yes, it's -- again, it's another explicit Gartenberg

factor and so we certainly look at it.

Q. And why is it important? Other than it's required by

Gartenberg, are there any other reasons?

A. Well, you know, ultimately we are engaged in a process

where we are expected to exercise our reasonable business

judgment in examining all factors that contribute to allowing

us to decide whether the fee is fair and reasonable, whether

there should be negotiations to change the fee, and so the

question is how do you get to that -- how do you go through

that process.

And you try to access everything that you can think of

or that the courts or others have suggested that's going to be

helpful in allowing you to make that determination in good

faith. And -- and looking at profitability data and having a

sense for -- again, understanding inherent limitations in any

of this, but looking at profitability data and getting a sense

for what the advisor or affiliated administrator is actually

-- what their actual pre-tax income is, is another data point

that I think is helpful in examining whether the fee is

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3603

reasonable, fair and reasonable. It's one data point, but

it's certainly another one that we look closely at.

Q. Mr. Schpero, would you please turn to tab 28 in the

binder in front of you. This is Defendant's Exhibit 142.7.

A. Just give my a second; it's somewhat small type.

Q. It's not much better blown up on the screen either.

A. Okay.

Q. Do you recognize this document?

A. Yes, I do.

Q. And what is it?

A. So this is the -- this is part of the profitability study

that is delivered annually, in this case July of 2013, to the

Board as part of the 15(c) process in this particular -- I

guess I've got a series of pages so I'm -- let me stop there

and I'll answer your questions.

Q. Taking a look at the first page, what is the first page?

A. So this is -- this is the aggregate presentation we see

each year, both profitability for -- for FMG in total, and

then we also see it on a fund-by-fund basis.

Q. And if you look at the 12 pages that follow, are these

the profitability reports for the 12 funds at issue in this

litigation?

(Witness reviewing.)

A. It appears to be.

Q. Do you find this presentation helpful, Mr. Schpero?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3604

A. I do.

Q. And why is that?

A. I guess -- you know, as I indicated I think profitability

is another factor we look at, and I think this is a --

certainly a best efforts approach to presenting profitability

for the manager with respect to each fund.

Q. And how does FMG's pre-tax profit margin compare with

other investment managers in the industry?

MR. A. LAKIND: Objection; foundation.

THE COURT: Frank, can you repeat the question?

(Question read back by the reporter.)

THE COURT: Overruled. You may answer the question.

THE WITNESS: Sorry; I think again, like with the

other fees in my responses I will tell you it's within a

reasonable range of what we've seen.

BY MR. BENEDICT:

Q. And how are you able --

A. Again, I want to be careful because it's fund by fund,

and there are some cases where it's on the higher end and

others where it's not, so it's a fund-by-fund analysis that we

go through.

Q. And how is it that you as a trustee are able to compare

FMG's profitability with other investment managers in the

industry?

A. We receive data from a number of sources, I believe

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3605

from -- I believe Lipper, and Strategic Insight, and I believe

may be even Management Practice, but each of them do studies

or periodically do studies where they look at the

profitability of other investment managers based on publicly

available information.

I mean this is clearly an area where there's lot of

confidential information, so you can't easily access the

profitability of another manager for a particular portfolio.

But there is an effort by some of the outside parties to try

to at least get a hold of, again, what's available for

publicly traded investment managers and we do get to see that.

Q. Does FMG for profitability presentation purposes treat

sub-advisory and sub-administration fees as expenses or as

reductions to revenue in its profitability reports to the

Board?

A. Well, these are expenses reflected in this profitability

study.

Q. And why does FMG present those fees as expenses in the

reports?

A. Well, I guess I'd make a few points: Number one is this

is has it's always been presented to the Board; I would also

note that my understanding is this is part of the methodology

that was reviewed by two independent accounting firms going

back to 2000, this was part of -- this has consistently done

since then; and I also understand from discussing this with

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3606

our independent counsel that this is consistent with industry

practice.

Q. Has the Board ever asked FMG to show sub-advisory fees as

reductions to revenue?

A. It has not.

Q. And why not?

A. I think probably for the three reasons I just gave you.

Q. Do you consider, Mr. Schpero, distribution expenses when

you review the fairness of FMG's management or administrative

fees?

A. We do not.

Q. And why not?

A. It's been made very clear to the Board by our counsel and

really by the -- I think SEC pronouncements, that distribution

expenses are not to be taken into account, in analyzing

profitability with respect to your 15(c) analysis.

Q. Does the Board receive information about distribution

expenses and distribution profitability as part of the 15(c)

process?

A. It does, yes.

Q. And why is that?

A. I think -- I think there's probably a few reasons; I

think the main reason is you have to keep in mind that the

15(c) meeting is more than just a 15(c) meeting, it's our

annual meeting that approves all of the different key

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3607

procedures and arrangements. One of those arrangements is the

12(b)(1) plan, which is the distribution plan that the fund

enters into, and so I think it's fairly standard practice to

show it in profitability study because you need to see that

for the 12(b)(1) plan the distribution costs associated with

that. It's always shown -- certainly at FMG it's always been

shown at the bottom of the page, because the understanding is

that we are not to take that into account in examining

profitability, but I think that's a primary reason.

I would also just say, again, going to the point I made

earlier, that there are Gartenberg factors and then there's

kind of the Board wanting to know and examine everything else;

I think it's perfectly reasonable that we -- that we would be

aware of the total picture, and the total picture certainly

includes distribution costs. But we are constantly reminded

that in examining profitability for purposes of 15(c) we need

to look above the line, we cannot look below the line.

THE COURT: Why is that?

THE WITNESS: Why does the SEC take that position?

THE COURT: Yes, like what --

THE WITNESS: I'm --

Q. You're putting a lawyer hat back on?

A. Yeah. You're testing me; I feel like I'm back at my bar

exam. But I think it's a long-held position -- I think their

concern -- I think I'm going to get this right --

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3608

THE COURT: All right. It might just go to policy.

THE WITNESS: Yeah, I think the policy is that they

don't believe that the investor should be bearing the expenses

of selling the fund, other than on the fully disclosed basis

of either a sales load, in other words, a fee up front, or in

accordance with this very specific regulatory structure where

the Board has to approve and the shareholders have to approve

what's called a 12(b)(1) plan.

And so the concern is beyond that if the management

fee is allowed to include distribution, then you are

indirectly violating that policy. So I think it's a way to

ensure that you are not having the manager indirectly bear

expenses that they can't bear but for a fully disclosed plan.

THE COURT: Thank you.

MR. BENEDICT: May I proceed, your Honor?

THE COURT: You may.

BY MR. BENEDICT:

Q. Is it custom and practice in the mutual fund industry to

provide a fund board with profitability data, both inclusive

and exclusive of distribution expenses?

A. Yes, it is.

Q. Mr. Schpero, does the Board receive and consider

information about profitability of the sub-advisors when it

reviews FMG's management contracts?

A. I think only with respect to the affiliated sub-advisor,

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3609

so that would be Alliance.

Q. And why doesn't the Board get sub-advisor profitability

information for non-affiliated sub-advisors?

A. We've discussed this extensively and certainly discussed

this extensively with current counsel and prior counsel, and

our understanding and the reason we're comfortable with this

is that where you have a manager at -- on an arm's-length

basis negotiating with an unrelated sub-advisor, that that

really helps to eliminate the inherent conflict involved that

would require seeing profitability.

It is in FMG's interest to negotiate as low as fee as

they can with the sub-advisor. And so that's obviously a

different situation than where FMG is receiving its fee, and

where clearly we need to see all information possible. I

think it also stems from -- at least in part from just what

had been at least in the early years of the fund some real

difficulty getting that information from a number of the

sub-advisors who were very reluctant to deliver their

profitability information. And again, they're not sponsors of

the fund, so there's less leverage with respect to that.

Q. Is that still the case today, being very difficult to

get --

A. I don't know that, I don't know that. Because I think in

the end we were comfortable with the first point I made to

you.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3610

Q. Shifting gears, does FMG include allocated expenses from

AXA Equitable in its profitability reports to the Board?

A. Yes, it does.

Q. And why does it do so?

A. I think that again is very much consistent with industry

practice. I think that it reflects the fact that -- is

intended to reflect the fact as I discussed earlier today,

there are significant costs that are incurred elsewhere in the

organization that are directly related to the services being

provided by FMG, and the fact that FMG is just a subsidiary of

this entity shouldn't cut off an analysis of those other costs

and have them not be a part of the profitability study.

Q. I hate to do this to you, but would you go back to book

number 1, and I'm going to ask you to turn to back to tab 18

which is Defendant's Exhibit 153. Mr. Schpero, I'll ask you

to specifically turn to page 15 of this exhibit.

A. Hang on a second here.

Q. Okay.

A. I'm sorry?

Q. Tab 18, page 15. It's what is sometimes referred to as

the ABC chart.

A. Okay, I'm there.

Q. Do you recognize this document?

A. Yes, I do.

Q. And what is it?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3611

A. This is part of a detailed presentation that FMG makes to

the Board each year. That is showing the process by which

expenses at the AXA level are allocated down to the specific

funds dealing with the very issue that you were just asking me

about.

Q. And do you find this presentation helpful?

A. Yes, I do.

Q. And why is that?

A. Well, it's certainly important that we understand this --

this process and the methodology, and we each year have

extensive presentations; it's a complicated process and

methodology, but we have extensive presentations and we -- and

we review it in deal with it with FMG.

Q. Is this particular presentation provided to the Board

each year in connection with the 15(c) process?

A. I believe it is.

Q. When was the allocation methodology utilized here

developed?

A. It was developed -- I joined the Board in -- I believe in

the spring of 2000, and -- and it was in January or so of 2000

that presentations were made to the Board just before I joined

that I've seen the minutes of some of that, where the

methodology was first presented to the Board.

Q. And do you know how that methodology was developed?

A. Yeah, my -- again, I've read -- I've certainly read the

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3612

minutes summarizing that process, and it involved FMG --

MR. A. LAKIND: Excuse me, your Honor; objection. I

understand the minutes are in evidence, but what the witness

learned is hearsay.

THE COURT: Learned; overruled. He can testify to

this, he's just explaining the chart. We have been through

this a number of times.

THE WITNESS: Give me the question again please?

BY MR. BENEDICT:

Q. Do you know how the methodology was developed, Mr.

Schpero?

A. Yeah, FMG worked with two independent accounting firms,

Pricewaterhouse, which were the fund independent accountants,

and the independent trustees also retained Ernst & Young, and

both those firms -- both those firms worked with FMG in coming

up with this methodology and ultimately reporting to the Board

on this.

Q. And what conclusions, if any, did PwC and Ernst & Young

come to after doing their study?

A. I believe the minutes show that they found that this was

a reasonable methodology, and that it was -- clearly there are

lots of methodologies, but this was one reasonable methodology

and that it was consistent with practices by others out there.

Q. Has the Board ever considered hiring another consultant

to re-review the cost allocation methodology since it was

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3613

implemented?

A. The only time we've had a specific discussion that I

recall was in the spring of 2015.

Q. And what do you recall of that discussion?

A. Well, that was -- I mean I guess I need to describe to

you what was going on then. This was part of what we thought

was an important process of monitoring this litigation, and in

working with our counsel we felt that another important

turning point in this long process was when the expert reports

were delivered by both the plaintiffs and the defendants, and

we obviously received copies and reviewed those and reviewed

them with our counsel. And that was an appropriate time.

We also met with experts at that time the defendant's

experts, and in the context of those discussions and meetings

we had -- the Board had discussions with our counsel as to

whether any of this called for the Board deciding to bring in

an outside consultant to again look at this.

Q. And did the Board in fact do so?

A. No, our judgment was that there was no reason to at this

time.

Q. And why is that?

A. Obviously an exercise of our business judgment. I think

it reflected a number of factors; it was the fact that we

understood that this is an area that is much more art than

science; that there are lots of methodologies available; that

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3614

two major independent accounting firms looked at this at its

commencement; that it's been consistently presented to us over

the years, we've seen that in lots of different ways; and it

also reflected our review of the expert reports and our

opportunity to meet specifically with defendant's experts and

discuss this; and it also reflected the fact that periodically

over the years the Board has asked Pw, the independent

accountants, fairly discrete opportunities, but has asked them

periodically whether this methodology continued to be

consistent with what they saw, you know, as one of the

methodologies in the industry.

MR. A. LAKIND: Your Honor, objection as to what PwC

said. That's would be here, it's a professional opinion, they

should be here to --

THE COURT: I'll strike the answer. Can you

rephrase the question somehow?

You can indicate what you did as a result of hearing

Pricewaterhouse's explanation.

THE WITNESS: Yeah, I would just note as a result of

hearing their explanation that would -- that was certainly for

me, I can only testify for myself, but for me that was another

reason why it was my judgment in 2015 that there was no reason

to go through the expense and effort of retaining another firm

at that point.

BY MR. BENEDICT:

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3615

Q. Mr. Goldstein has criticized members of the Board for not

being able to explain the details of the cost allocation

methodology; do you believe that criticism is fair?

A. Do I believe?

Q. The criticism was fair?

A. No, I don't.

Q. And why is that?

A. Well, I'll give you a few answers. First of all, this is

complicated material, and it's going to be more complicated

for some trustees than others. There's a reason why we have a

diversified Board; if we wanted everybody to be accounting

experts we'd be doing a disservice to our investors in terms

of all of the other needs we need to satisfy in terms of

expertise on this Board.

But I think all of us are very diligent in examining

this, and we certainly have people that I identified I think

yesterday I guess it was, who have particular accounting and

financial backgrounds. But I would -- I would tell you that I

believe all of us at the end of a July Board meeting after a

lot of time spent reviewing this methodology and having

chances to ask questions of management, have a sufficient

understanding of the methodology and how it works in order to

go ahead and make the findings we do.

Q. Plaintiffs and their experts have been particularly harsh

in their criticism of Jettie Edwards as a trustee.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3616

A. Can I put this aside for a minute --

Q. You certainly may.

A. Okay.

Q. I'm sorry; I'll repeat the question. Plaintiffs and

their experts have been particularly harsh in their criticism

of Jettie Edwards; how many years did you serve on the EQAT

Board with Jettie Edwards?

A. From the spring of 2000 until she retired, which was in

the last 12 months or so.

THE COURT: Before you go on to this, can I go back

to this expense allocation chart?

THE WITNESS: Do you want me to pull it out or --

THE COURT: No, you don't need to.

THE WITNESS: Sure.

THE COURT: What I don't understand is I see these

AXA Equitable expenses that are allocated on that chart, but

how do you know that those expenses are reasonable for the

funds to pay or FMG to pay? How do you determine that?

THE WITNESS: I think that goes back to the answer I

gave earlier today, which is that there are lots of materials

that we receive where we are going to be inherently dependent

on the manager of. And we're -- I think that each of us as

trustees need to decide whether we are comfortable in relying

on the manager. And there are lots of options if we're not,

and lots of approaches, including bringing in outside

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3617

accountants or others, or not serving on the Board.

But I will tell you, your Honor, that having, you

know, been on the Board 15 years, having seen the quality of

the service, the transparency with which things are addressed,

the extent to which anything that we've ever asked to be

delivered is delivered immediately, the kinds of records we've

gotten from Pw and others on areas that they are involved

with, the meetings with internal auditors of AXA on what they

see when they come in on surprise audits of FMG, and my

understanding that it is industry practice not to bring in

outside accountants to try to audit this kind of information;

in recognition of the fact that -- that, you know, that this

is -- again, there are lots of approaches, that it's more art

than science, but I would -- I would tell you those would all

be my reasons.

At the end it's my judgment that I am comfortable

believing that we don't have fraud going on here. And if I

thought we had fraud we'd have a lot bigger issues than what

we're addressing in this courtroom.

THE COURT: Thank you.

BY MR. BENEDICT:

Q. Just a point of clarification, Mr. Schpero, the allocated

expenses that we're talking about, the allocated expenses from

AXA Equitable to FMG, these are expenses paid by AXA

Equitable; correct?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3618

A. Yes, these are -- these are all expenses paid by AXA

Equitable, and what I think we're talking about is in FMG

profitability statement none of these are expenses borne by

the fund. And I think another critical thing from my

perspective, your Honor, just going to your question is, they

all are -- starting with audited financial information at the

top, and they are all using a methodology that -- that has

been in my view blessed by two major independent accounting

firms.

THE COURT: You have Pricewaterhouse --

THE WITNESS: And Ernst & Young. Ernst & Young was

brought on by the independent trustees in 2000 specifically to

review this methodology.

THE COURT: I mean the methodology is okay, but

there's these expenses and they're AXA's expenses, but no

one's ever explained to me how you know that the AXA expenses

are truthful.

THE WITNESS: My view is that's much more -- again,

I think that the nature of the approval process that the Board

goes through is such that I guess that's going to be a

question for lots of material we see. I think that we do in

our judgment, consistent I believe with best practices in the

industry, go to outside providers in lots of areas. This is

one where I don't think there's any practice of having some

kind of independent audit of your manager's profitability.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3619

THE COURT: Okay, thank you.

BY MR. BENEDICT:

Q. In terms of Jettie Edwards for a second, Mr. Schpero, you

served with her on the Board, what did you say, 13 years?

A. Something like that, yeah.

Q. And do you have personal knowledge of her performance as

a trustee?

A. Yes, I do.

Q. And what's your opinion concerning her competence as a

trustee?

A. I thought she was an absolutely superb trustee.

Q. Did she have good experience and qualifications?

A. Excellent.

Q. And was she conscientious?

A. There was nobody more conscientious on the Board.

Q. Did she regularly attend Board meetings?

A. I believe she never missed a meeting. She came from

California.

Q. Did she come prepared to those meetings?

A. Extremely.

Q. And did she request additional materials from time to

time from FMG?

A. She was a trustee who often asked for additional

materials.

Q. Do you believe she knew and understand the issues that

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3620

were presented to the Board?

A. Absolutely.

Q. Did she press management for concessions?

A. She was one of the most aggressive to do that.

Q. And did she substantive contribute to the discussions of

the Board?

A. Yes, sir.

Q. Mr. Schpero, are you generally aware of the magnitude of

the expenses that are allocated from AXA to FMG in the

profitability reports?

A. Yes, I believe I am.

Q. And do you think the magnitude of the allocated expenses

is unreasonable?

MR. A. LAKIND: Your Honor, objection; that calls

for an expert opinion, it's an accounting question not a

question for a trustee.

THE COURT: The trustees need to review that and

make their own judgment on that. So I'll allow that question.

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

BY MR. BENEDICT:

Q. Do you believe the magnitude of the allocated expenses is

unreasonable?

A. No, I do not.

Q. And why not?

A. Again, I think we've had a lot of opportunity over the

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3621

years to discuss with both FMG and AXA personnel the services

that are provided; we understand the fact that FMG is a -- is

a small subsidiary in a very large corporation, and there are

as a result going to be significant costs from elsewhere in

the entity that are -- that are going to be appropriate --

appropriately allocated. And so -- and again, relying on all

the different factors that I just discussed with your Honor, I

am -- I'm certainly personally comfortable with -- with that

information.

Q. And does FMG also show the Board management and

administrative profitability without allocated expenses?

A. Yes, we -- we -- I forget the name of it, but we

certainly see -- there's a term that we see sometimes on the

charts, but we certainly -- I believe we see separate from the

profitability study, you can certainly see in the

profitability sudden itself pretty easily what the numbers are

without allocation, but at the end of the day you start with

the spread which is the ultimate number without any

allocation.

Q. Shifting gears, are you familiar with a document called

the Shared Services Agreement?

A. Yes, I am.

Q. What is that agreement?

A. That my understanding is -- that's an agreement that was

required by insurance -- for insurance regulatory purposes to

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3622

be entered into at the time -- I guess it was in 2011, 2012,

when FMG as a division was moved and restructured to be a

subsidiary of AXA.

Q. And did management furnish this document to the

independent trustees in connection with their approval of the

management and administrative contracts?

A. It did not.

Q. And do you know why not?

A. Well, it -- I'll stand by my statement it did not.

Q. And why not?

A. I believe they didn't present it because this was an

internal arrangement between FMG and AXA.

Q. Were you troubled once you learned of the document not

having received it?

A. No, I'm not troubled by it.

Q. And why is that?

A. Well, once I learned about it, once the Board learned

about it we certainly had discussions joined by our counsel

with FMG and their counsel, but given what I've learn is that

it essentially is a sharing arrangement that's intended to

keep in place the arrangement that was already there. So in

other words, there were direct expenses of probably around 14

million, $15 million that were being borne by FMG as a

division of AXA, and once it became a subsidiary there was

apparently a insurance requirement that there be an agreement

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3623

that reflected a sharing so that FMG passed back to AXA the

cash flow that reflected the sharing of all the personnel and

services that were originally in the division's place.

Q. The original 14 million.

A. The original 14 million.

Q. Now, plaintiffs have contended that under the Shared

Services Agreement FMG reimburses AXA for all of the expenses

that it incurs on behalf of the funds; do you understand that

to be the case?

A. I do not.

Q. And why not?

A. Well, as I said, I've certainly come to an understanding

that I'm comfortable with that -- that this was simply a

regulatory driven document that is dealing with -- with an

amount that was already in place. So these you can see there

were direct expenses of 14 million being borne by the

division, now under the shareholder servicing agreement

they're being transferred from the subsidiary to AXA; those

are clearly different fees and for different services than the

issue I think we were just discussing, which is costs that are

otherwise being borne elsewhere at AXA.

Q. So does the Shared Services Agreement have any impact on

the calculation of FMG's profitability as those -- that

profitability is presented to the Board?

A. I don't believe it does.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3624

Q. Does the Board receive information concerning the profit

or revenue per employee of FMG?

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

Q. Yeah. Does the Board receive any information concerning

the profit per employee or revenue per employee of FMG?

A. No, it does not.

Q. Plaintiffs have asserted that a careful Board would have

viewed per employee revenue and profitability numbers; do you

agree with that?

A. I do not.

Q. And why is that?

A. Well, I think -- primarily because I think it would be

ignoring the fact that there are other significant costs that

are incurred elsewhere at AXA. So you would be -- if you went

through what I think is a pretty simple arithmetic, so it's

not aware of what that might look like, but if you only looked

at the employees at FMG as the only cost, you would be

ignoring the fact that there are other significant costs

elsewhere in the AXA structure that are part of the

profitability study. So I think it would be misleading to do

that.

Q. Are you aware of any --

THE WITNESS: Your Honor, I can use a five minute

break.

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

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3625

back out at quarter to 3:00. Okay.

(Recess.)

THE COURT: Good afternoon. Please be seated.

Mr. Schpero, you're still under oath.

Mr. Benedict, you may proceed.

MR. BENEDICT: Thank you, your Honor. I'd just like

to offer at this time three exhibits we recently talked about;

that's Defendant's Exhibits 142.11, 144.19 --

THE COURT: One second.

MR. BENEDICT: And 142.7.

THE COURT: So 142.11, any objections, Mr. Lakind?

MR. A. LAKIND: No, your Honor.

THE COURT: Admitted.

(Defendant's Exhibit 142.11 was marked into

evidence.)

THE COURT: And then 144.19?

MR. BENEDICT: That's correct, your Honor.

THE COURT: Mr. Lakind, any objection?

MR. A. LAKIND: No, your Honor.

THE COURT: All right, admitted.

(Defendant's Exhibit 144.19 was marked into

evidence.)

THE COURT: And what was the last one?

MR. BENEDICT: 142.7.

THE COURT: Any objection?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3626

MR. A. LAKIND: No objection, your Honor.

THE COURT: All right, admitted.

(Defendant's Exhibit 142.7 was marked into

evidence.)

BY MR. BENEDICT:

Q. Okay. Mr. Schpero, I'd like to start with economies of

scale, something we talked about. Are you familiar with the

term economies of scale?

A. Yes, I am.

Q. In your own words, what does economies of scale mean?

A. I think the concept is that as assets increase in a fund,

there is an assumption that at some point as assets increase

the costs don't increase at the same level, and therefore some

economies that are being achieved on behalf -- or should be

achieved on behalf -- or could be achieved on behalf of

investors.

Q. And are economies of scale in the mutual fund industry

difficult to precisely measure?

A. That's certainly my understanding.

Q. And do you consider as a trustee the potential for

economies of scale in connection with approving the management

and administrative contracts?

A. Yes, I do.

Q. Is it an important consideration for you?

A. It's one of the factors that we certainly take into

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3627

account.

Q. And does FMG provide the Board with information that is

relevant to your consideration of economies of scale?

A. Yes, they do.

Q. And can you give us some examples of the types of

information you're provided that aid you in your consideration

of economies of scale?

A. Yeah, they give us data concerning breakpoints for each

fund; they give us information on the actual effective fee

levels, so that taking into account the breakpoints, what are

of the actual effective fees at different asset sizes; we

receive comparative data with respect to that kind of

information so we can see breakpoints and effective fees

for -- for other funds; we see expense cap information and

expense limitations, which are also I think very relevant to

the question of trying to take into account economies of

scale; we see industry studies that -- or at least industry

discussions of economies of scale in the industry and

perceptions as to what's happening here; we see information

about added services that FMG and others provide over time

which also impacts the economies of scale discussion; those

would be some of the things that I think we receive.

Q. Would you please turn your attention, Mr. Schpero, to tab

29 in your binder. This is Defendant's Exhibit 144.16.

A. Okay.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3628

Q. Do you recognize this document?

A. I do.

Q. What is it?

A. This would be one of the presentations that the Board has

received. This appears to be done as a set of slides that we

would have seen at a Board meeting; I'm sure one of the July

meetings that covers different aspects of economies of scale

presented by FMG.

Q. Would you just generally describe this document for the

Court?

A. Yeah, I think it does some of the things I just

mentioned, it lists -- just flipping through it, it mentions

the different ways that economies of scale can be -- can be

shared by the investment manager with the fund; different ways

that works into the structure as I mentioned, expense cap,

things of that sort; it also has some industry -- well,

specific fund information on breakpoints and then I believe

there's also some comparative data on expense ratios; what

happens at different effective fee levels for assets and funds

generally; and then it goes into specific breakpoints for each

of the specific funds and goes on from there.

Q. And do you find this document helpful to you in your

consideration of the fees?

A. I do.

Q. And why is that?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3629

A. I think it's a good example. I mean every year the way

the Board approaches this I should say, every year we receive

different information, sometimes it's the same, but often it's

new information that's come out during the year on

developments and particular areas of focus, economies of scale

is certainly one of them. Often we ask for additional

information, so I'm not going to profess that this is the same

as what we might have seen the year before or the year after,

but I think it's a good example of the kind of information we

receive on this particular factor.

MR. BENEDICT: Your Honor, defendants offer 144.16.

THE COURT: Any objections?

MR. A. LAKIND: No, your Honor.

THE COURT: All right, admitted.

(Defendant's Exhibit 144.16 was marked into

evidence.)

BY MR. BENEDICT:

Q. Mr. Schpero, do you believe the information that's been

provided to you concerning economies of scale has been

sufficient to allow you to make a reasonable business judgment

considering whether or not to approve fee agreements?

A. I do.

Q. And do you believe FMG has shared potential economies of

scale with fund investors?

A. Yes, I do.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3630

Q. And how has it done so?

MR. A. LAKIND: Excuse me; objection. If the

witness can confine his testimony to the 12 particular funds,

because

this --

THE COURT: All right. Can you rephrase your

question with that caveat?

MR. BENEDICT: Sure.

BY MR. BENEDICT:

Q. Focusing specifically on the 12 at-issue funds here, has

FMG shared any potential economies of scale with fund

investors?

A. Yeah, I mean I would point out in the first case for I

believe each of the funds there are breakpoints -- each of the

at-issue funds when I say funds that's what I'll mean now with

this answer; but for each of the at-issue funds there are

breakpoints in place; for a number of those funds there are

expense cap -- I don't know that's it's for all without having

it in front of me, but I believe for a number of them there

are expense caps in place; and I think for probably virtually

all I think the record would show that the Board has

negotiated with certainly economies of scale being one of the

factors in mind, that we have negotiated over the last four or

five years a number of changes in the fee structures where we

have added breakpoints, and where we have reduced the fee at

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3631

various breakpoint levels, both with respect to the management

contract and the administrative contract.

Q. You mentioned expense cap; what is an expense cap?

A. So, an expense cap is where an investment manager, either

on its own or on discussion with the board, or ultimately the

board would approve any of these caps, imposes a limitation on

the total expense ratio. So let's assume that the total

expense ratio, including the management fee and administrative

fee and other fees, at a particular current asset level, let's

say the fund is $500 million, and perhaps the actual expense

ratio is -- I'll make up a number, 110 basis points; the

expense cap that FMG in discussions with the Board may have

put in place might be 90 basis points or 80 basis points in

order to make the fund competitive with the market, in order

to reflect sensitivities that the Board may have about the

particular fee at a particular asset level, there could be

lots of reasons, but that would be -- it would result in an

expense cap and that of course is fund by fund.

Q. You also mentioned breakpoints; what's a breakpoint?

A. So that, again, is in recognition of the concept of

economies of scale. So at different asset levels under a

typical breakpoint structure, not always but often at

different asset levels, the fee will reduce. So you might

have -- and this is true of all of the at-issue funds, but you

may have a fee of -- you know, I'll make up an number; an

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3632

investment manager fee of 50 basis points for assets up to a

billion dollars, and then you will have another breakpoint a

billion dollars later. So if assets grow by another billion

dollars, the fee on the -- is then reduced to 45 basis points

on the incremental additional amount; and then it might be

reduced to 40 basis points on the next billion or two billion,

all subject to negotiation and discussion and comparison to

other fees in the appropriate universe.

Q. The net result of that would be that the effective fee

declines as the assets grow larger --

A. Yeah. So you would look -- so the ultimate question is

what's the effective fee, which is the combination of all

those numbers. And so we always see what the effective fee is

at the current asset level, and that's clearly the most

important thing for us to be looking at.

Q. Who determines what the breakpoints in the funds will be?

A. The Board ultimately does.

Q. And what considerations go into setting breakpoints?

A. I think it's some of the items I just mentioned, I think

there's a lot of factors; certainly it's -- first of all, it's

part and parcel with determining whether the fee is fair and

reasonable, because the breakpoints result in an effective fee

at an asset level, and the question is are we comfortable as

independent trustees in the exercise of our judgment with

where that fee is ending up at a particular -- at current

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3633

assets levels of the fund, that's what we're generally looking

at. But in -- I'm sorry; I've lost my train of thought as to

what the original question was.

Q. What considerations go into setting breakpoints.

A. Yeah, so other considerations are comparative data,

again, looking at what peers are charging at various asset

levels; another consideration is, again, trying to take into

account the fact that we, you know, inherently believe there

are some economies that are likely increased -- developing

over time, and so I think the Board is trying -- certainly

tries to recognize that as we look at fees and other factors,

profitability and everything else, in deciding what we think

is an appropriate breakpoint level.

Q. Do sub-advisory fees also have breakpoints?

A. Yes, they -- when I say yes, they often do.

Q. And are they the same breakpoints as the breakpoints in

the management fee schedule?

A. Typically not.

Q. And why do they differ?

A. I think it's a reflection of two separate negotiations;

you've got a sub-advisory fee arrangement, which as I

testified earlier is for specific services that that

sub-advisor is providing, and those fees are negotiated in the

first case between FMG and the sub-advisor, although at the

end of the day the independent trustees certainly have to

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3634

review and approve them; and then you have the fees that the

-- at the manager level, manager level, and those are going to

be -- the breakpoints, I'm sorry, at the manager level, and

those are going to be separately negotiated and they reflect

in the end the service the manager is -- is providing.

So really from the Board's perspective the question is

what is the effective fee that the manager in its spread is

receiving at a particular asset level, and I think that is the

key consideration that -- or certainly one of the key

considerations that we examine.

And sorry; just to make the point; they're for two

different services, I think that's the key part that from our

perspective we're always keeping in mind.

Q. Different fee schedules, different services.

A. Correct.

Q. Has FMG also made improvements to shareholder services

over the years?

A. Yes, it has.

Q. Can you give me some examples --

A. Actually, I mean I think they've made improvements to the

fund; I don't know that I would categorize it specifically as

shareholder --

Q. Okay.

A. Let me even restate it; I believe they've made

improvements in the services they provide or additions to the

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3635

services they provide.

Q. Can you give me some examples?

A. Yeah. I'll just start with the fact that in recent years

they've had to provide a chief compliance officer and a

compliance system that is vastly different than what was in

place certainly when I joined the Board. The SEC in response

to a lot of regulatory developments in the last six, seven

years, has imposed a very -- a much more rigorous compliance

regime that requires a chief compliance officer, that requires

the Board to be approving the compensation of that chief

compliance officer, and requires a very rigorous annual review

of the compliance system that was not in place before.

They've also put in place a volatility overlay with

respect to the funds that I think is another feature that's

been added to them, and developed comparative indexes in order

to -- to understand the performance of those funds.

Q. Does the fee schedule for the administrative fees paid by

the funds to FMG also include breakpoints?

A. Yes, it does.

Q. And plaintiffs have criticized the Board because it has

not engaged a consultant to assess the extent to which

economies of scale benefits are passed on to investors and

where specific breakpoints would be appropriate; do you agree

that a consultant should have been hired by the Board?

A. I do not.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3636

Q. And why is that?

A. I think that we receive a very significant amount of

data; I think with that data we are able to exercise a

reasonable business judgment in -- in determining and

negotiating fees that we think are fair and reasonable and

that reflect -- or make an effort at reflecting economies of

scale over time. And I think what we do based on guidance

from our very experienced counsel is totally consistent with

what the industry practice is on this.

Q. Let me shift, Mr. Schpero, to fallout benefits. Are you

familiar with the term fallout benefits?

A. Yes, I am. Should I close this up book up for a moment?

Q. You may.

A. Okay.

Q. What are fallout benefits as that term is used in the

mutual fund industry?

A. They are other benefits that are received by the manager

or its affiliates in connection with managing the fund. I

think usually there's a -- as it's been explained to us by our

counsel, there's a but-for test; are these -- are these

benefits that would not be received but for the manager's

relationship to the fund.

Q. And does FMG provide the Board with information that's

relative to your consideration of fallout benefits?

A. Yes, it does.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3637

Q. Do you think FMG recognizes any fallout benefits from its

management and administration of the funds?

A. Yes, I think there are a number of items that have been

identified to the Board that we discuss.

Q. Can you give me a couple of examples?

A. Yeah, I think -- yeah, the definition would include

things like the administrative contract; it would include the

distribution compensation that's received under the 12(b)(1)

plan; fallout benefits would include all of the arrangements

with Alliance Bernstein as a sub-advisor; fallout benefits

would include the brokerage that's received by affiliated

brokers, I think particularly there's affiliates of Alliance

that sometimes execute trades; fallout benefits -- there are

tax credits that are received by AXA, and those are also

deemed to be fallout benefits; those would be a few of the

examples that I could at least at this point remember.

Q. Are you familiar with the term, product wrapper fees?

A. Yes, I am.

Q. And what are they?

A. So those are the fees that AXA -- we discussed that

earlier in the context of your question on performance; but

those are the fees that AXA receives at the insurance level

for mark -- for selling and marketing and making available the

annuities and various insurance products that are at the upper

level before the funding is received for these particular --

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3638

this particular mutual fund complex.

Q. And have you considered whether revenues from variable

annuity product wrapper fees constitute fallout benefits?

A. We've discussed that subject with our counsel, I think

there's been some discussion of that in some of the

memorandums we receive or references to it. I don't believe

that -- based on discussions with counsel, I don't believe

that the wrapper fees meet the but-for test. And I believe

that view based on discussions with counsel is consistent with

the industry.

Q. Would you just explain to the Court why you don't believe

that product wrapper fees meet the but-for test?

A. Yeah, I don't -- I don't -- my understanding is I don't

think that -- that, you know, but for the existence of the

funds or the management of the funds by FMG, the wrapper fees

wouldn't be received. In other words, there are other funds

that are available, non-FMG funds, non-AXA funds, that can be

purchased. So it is not -- it's not a requirement if you're

going to be investing in the insurance products that you can

only buy FMG funds. So I don't see it satisfying the but-for

test.

Q. So whether or not the EQAT Funds existed, AXA would still

receive product wrapper fees; is that --

A. That's my understanding, that's correct.

Q. Are you aware of something called the general account?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3639

A. I am.

Q. And what is that?

A. I believe that's an investment income -- income

alternative to the funds. So when you invest in the insurance

products you have an option -- or at least some investors have

an option of having their investments directed to a fixed

income account made available by AXA separate and apart from

the -- from the EQAT Funds.

Q. And have you considered whether revenues from the general

account are fallout benefits?

A. We've discussed that.

Q. And do you believe that they are?

A. I don't believe -- for the same reasons I don't believe

they are, I don't believe they meet the but-for test.

Q. Have you sought and/or received the advice of your

independent counsel on this issue as well?

A. I have.

MR. A. LAKIND: Objection, your Honor; hearsay.

THE COURT: Well, he can answer that question.

I didn't hear your answer.

THE WITNESS: I have.

THE COURT: Okay, thank you.

BY MR. BENEDICT:

Q. Does the Board receive information from AXA concerning

the amount of revenues AXA receives from variable annuity

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3640

product wrapper fees and the general account?

A. Yeah, I think, you know, we've always received AXA's

financial statements as part of the 15(c) process, and we're

certainly aware they're very significant fees that are

received by AXA, both with respect to the wrapper and the

general -- and with respect to the general account fixed

income investments.

Q. Let me shift gears again, Mr. Schpero. Have you voted

each year to approve the management agreement between FMG and

the funds?

A. Yes, I have.

Q. And why have you voted to approve the agreement?

A. Well, it's obviously a very extensive process, but at the

end of the day I have approved it because I have concluded

that the -- the fees and the contract itself are fair and

reasonable, and that it's in the best interest of the

shareholders. I've done that based on a careful -- you know,

on the exercise of my business judgment, and each of the

trustees I'm sure weighs different factors, but I have

weighted all of the factors that we've been discussing for the

last two days for each fund each time we go through this, as

we -- as I think I have testified.

Certainly before we vote there are often negotiations

that results in judgments to fees when we think that's

appropriate, but by the time we get to the vote process I

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3641

certainly have been very comfortable that the fees and

arrangements are fair and reasonable and in the best interest

of our shareholders, or investors.

Q. And have you considered all of the Gartenberg factors at

the time you voted for the fees approvals?

A. Yeah, and as I've testified I think you can argue that

Gartenberg is almost too narrow; I've considered all factors

and all data that we receive in making that judgment.

Q. Who prepares the minutes for the EQAT Board meetings?

A. The secretary of the fund, Ms. Louie.

Q. And are the minutes circulated in draft to the Board

prior to being finalized?

A. They are.

Q. And do the independent trustees have an opportunity to

suggest revisions?

A. Yes, they do.

Q. And do the independent trustees from time to time suggest

revisions to the minutes?

A. They do. And I should note because it's important our

independent counsel also reviews the minutes as well, the

draft minutes, and comments on them.

Q. And do you believe the minutes once finally -- once

finalized, accurately describe the discussions and actions

taken by the Board?

A. I do.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3642

Q. Are the factors considered by the Board in approving the

management fee agreement generally described in the minutes

for each of the July meetings?

A. I believe they are, yes.

Q. Are each of the Gartenberg factors discussed at those

meetings?

A. I'm sorry; are you referring to the minutes or --

Q. No, in the meetings generally, in July meetings.

A. In the meetings every one of the factors is discussed at

great length, yes.

Q. Are the funds also required each year to describe in --

A. Sorry; your Honor, do you mind if just put candy in my

mouth? It's getting a little dry.

THE COURT: You may.

THE WITNESS: Thank you.

MR. BENEDICT: We're almost to the end, Mr. --

THE WITNESS: I'm all right, I just need to --

THE COURT: They've promised that before.

THE WITNESS: You've heard this before.

MR. BENEDICT: I promise. I'm still batting a

thousand, your Honor.

MR. MURPHY: First at bat.

MR. BENEDICT: I got that.

BY MR. BENEDICT:

Q. Let me rephrase the question, Mr. Schpero. Are the funds

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3643

required each year to describe in the annual report for the

fund the factors considered by the Board in approving the

management fee?

A. Yes, I think that's a relatively recent requirement, but

certainly in recent years that is required by SEC rule.

Q. Let me turn your attention to tab 30 of your binder.

This is Defendant's Exhibit 457.1.

A. Okay.

Q. Do you recognize this document?

A. Yes, I do.

Q. And what is it?

A. This is the fund's annual report for the year ending

2014.

Q. And I'd like you to --

A. I'm sorry; the cover says that, but what you're really

asking is to look at the -- is the required shareholder

disclosure, or investor disclosure, concerning the July Board

meeting.

Q. And does that begin at page 1363, which is Bates ending

Bates number 7862?

A. Yeah. I mean I think before that it lists all of the

relevant funds and portfolios, but the actual text begins on

1363.

Q. Would you generally describe this document for the Court?

A. I assume you want be me to be pretty general --

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3644

Q. I'd like you to be very general.

A. But this as required by the SEC, reviews -- it certainly

summarizes I think right up at the start the Gartenberg

factors that were examined --

Q. Are you referring now to the top of page 1663, Bates

7862?

A. Yes, I am, that first paragraph appears to list the

various factors, that the Board looked at. And then I believe

the next paragraph kind of in summary fashion, the paragraphs

list generally some of the key information that was supplied,

including the Lipper information; and then basically it

reviews factor by factor and summarizes factor by factor the

Board's determination.

So starting on 1364 it reviews the information that the

Board received and the analysis that the Board entered into

with respect to the nature, quality and extent of services,

that was received both with respect to the manager and the

sub-advisors.

Q. Would you turn to 1365?

A. Yeah. And that would -- that then begins the discussion

that the Board had reviewing the investment performance of

each portfolio, focusing in particular on comparison both to

benchmarks as well as to peer groups, and that goes on -- as

you can see it's broken out by what I'd call sectors of funds,

so there's a fund of funds section, and passive portfolios, et

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3645

cetera.

Q. Let me just stop you for a minute, Mr. Schpero. Do I

understand that this is an in-depth written description of the

factors considered and determinations made on a

factor-by-factor basis with the Board for each of the 80 plus

funds in the EQAT Trust?

A. That is correct.

Q. Let me turn your attention to page 1377.

A. Yes. And so the next factor that's being discussed here

is expenses, and in particular using the Lipper data or

referencing the Lipper data, comparative expenses, and

similarly it will go through each -- each fund.

Q. And would you turn to 1382?

A. 1382 begins the discussion at the end of the page of

profitability and cost, and the analysis that the Board went

through in terms of the information that was looked at for

that purpose. And then following that is a section that

discusses the Board's analysis with respect to economies of

scale.

Q. That's on 1383?

A. 83, that's correct. And then on 1384 there's a section

on fallout benefits, and the analysis that was entered into

there.

Q. And you mentioned these disclosures are required by SEC

rules and regulations?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3646

A. That is correct.

Q. And is this report prepared subject to the same sanctions

that apply to other books and records of the fund?

A. That is correct.

Q. Does the Board have an opportunity to review and approve

the accuracy of these factors discussions prior to publicly

filing the annual report?

A. Yes, the independent trustees get a draft of this, and

certainly importantly our counsel get a draft and everybody

has an opportunity to comment on this.

Q. And when does that review generally occur?

A. I'm not going to be able to get more specific; I mean

it's certainly with sufficient time so that all relevant

parties have an opportunity to comment on this.

Q. And do you believe the descriptions of the Board's

evaluation of the factors accurately describes the Board's

deliberations?

A. Yes, I do.

Q. Have you voted each year to approve the Administration

Agreement between the fund and FMG?

THE COURT: Before you go into that, Mr. Schpero, I

mean I haven't read this report, so it talks about the

advisory agreements, but does this also relate to the

sub-advisory agreements?

THE WITNESS: Yes, it does. It relates to both the

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3647

investment manager and the investment advisor.

THE COURT: Okay, thank you.

MR. BENEDICT: Your Honor, defendants move 457.1

into evidence.

THE COURT: Any objection?

MR. A. LAKIND: No objection, your Honor.

THE COURT: All right, admitted.

(Defendant's Exhibit 457.1 was marked into

evidence.)

BY MR. BENEDICT:

Q. Mr. Schpero, have you also voted each year to approve the

Administration Agreement between the fund and FMG?

A. Yes, I have.

Q. And why is that?

A. For the same analysis that I and each of the trustees,

but I'll speak to myself, have found upon review of lots of

materials, lots of relevant materials that the fees after --

after appropriate negotiations and changes where we think that

is called for are fair and reasonable. And that's based on

extensive review of -- of all of the kinds of factors we have

been discussing, running the gamut from comparative data to --

to profitability, to understanding and reviewing carefully the

nature and quality of services and examining the -- in

particular the quality of the service, and who the entity is

that's providing them.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3648

Q. Thank you. Let me turn your attention back to tab 29.

A. We're going backwards.

Q. Going backwards. It's our last exhibit, though.

Defendant's Exhibit 144.16.

A. Okay.

Q. And let me turn your attention specifically to pages 184

and 185 of that exhibit.

MR. A. LAKIND: Excuse me; can I just have a minute

to find that exhibit?

MR. BENEDICT: Certainly.

THE COURT: What's the Bates page you are looking

at, Mr. Benedict?

MR. BENEDICT: 184 is Bates 727, and 185 is Bates

ending 728.

THE COURT: Thank you.

MR. A. LAKIND: Thank you.

BY MR. BENEDICT:

Q. Mr. Schpero, do you recognize this document?

A. Yes, I do.

Q. What is it?

A. This is a presentation the Board got; I'm not sure which

meeting, I don't see the date, it would have been in

connection with one of the July reviews. And it shows the

economies that have been achieved in terms of savings for the

investor over a period from 2007 to 2012 in the aggregate.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3649

MR. A. LAKIND: Your Honor, sorry to interrupt; but

if the witness could confine his testimony to the 12 funds.

MR. BENEDICT: This particular fund chart is not

directed to the 12 funds, but the EQAT Trust at large, showing

the aggregate savings that the Board has achieved on behalf of

the shareholders.

MR. A. LAKIND: Then I object on relevance grounds.

MR. BENEDICT: It's totally relevant.

THE COURT: Overruled. He may testify. We've gone

through this report a little bit before, so he may testify.

BY MR. BENEDICT:

Q. Mr. Schpero, would you please explain these two charts to

the Court?

A. Yeah, this is showing over a period indicated, what has

happened in terms of the actual effective aggregate fee that

is received by FMG; and if you compare -- what you can do in

looking at the first chart, which is on page 184, but if you

look at the top black line, that's what the fee would have

been without taking into account any of the restructurings

that have occurred at that point, all of which would have been

approved and had the involvement of the Board; without taking

into account any breakpoints that were in place with respect

to any of the fees; and without taking into account -- the

blue would be any of the expense reimbursements or waivers.

Q. Now, is that top black line more or less at 62 basis

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3650

points?

A. That's -- that's correct.

Q. Okay. You may continue. I'm sorry.

A. And so it's showing what it could -- would have been

without any of these changes that have occurred over this

period, versus what the bottom black line is what the actual

effective fee was over this period. And so the differential,

if you aggregate the restructuring impact, the impact of

breakpoints, during this period and the impact of waivers that

have been negotiated with FMG over this period, is 17 and a

half basis points; or put in real dollars and cents, if you

look at page 185, it's almost $150 million to the benefit of

the investor.

Q. And this is over the six-year period?

A. That's correct.

THE COURT: Could you explain to me what

restructuring impact is?

THE WITNESS: Yeah. So, I mentioned earlier that

really starting in 2008, but really continuing right up until

very recent years, there have been a lot of changes to the

funds, and I think this is an important service that FMG

provides. They are -- they often come to the Board, sometimes

in response to concerns we have, but often in response to

their own views about either the sub-advisors or how the funds

are doing or performance or the market, and suggest changes.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3651

And many of these changes, particularly as we moved

into funds that have much bigger components of passives -- so

remember I mentioned earlier today that often the

restructurings have involved moving from funds that had a

single active manager to funds that were what I'll call a

hybrid, where there's maybe two or three sleeves; so perhaps

20 percent is managed by an active manager and often 60 or 70

percent is run by an index manager. When those funds are

restructured there's been a very significant reduction in the

expense ratio, because there's a significant reduction often

in the investment management fee. Just given the nature of

the way the fund is being run.

THE COURT: So, if the fund was restructured, and

let's say you have three sleeves or something --

THE WITNESS: Yeah.

THE COURT: So you might have three separate

sub-advisors?

THE WITNESS: Correct.

THE COURT: Would the fee to the sub-advisors be

considered part of the restructuring impact? Is that what's

being looked at there?

THE WITNESS: I think what this is showing is the

total management fee, the actual management fee. So whatever

happened to the sub-advisor is built into the total management

fee. But it's showing the impact from the investor's

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3652

perspective; the red is showing that there has been -- from

the investor's perspective there has been a reduction in the

total management fee of that amount.

THE COURT: So, FMG may have had additional costs to

restructure the fund. I'm trying to figure out what that

number is, or how you get at that number.

THE WITNESS: I think what it's showing is -- you

know, it's aggregating any number of funds where the fund

structure was changed, and the result of the change in the

structure was that the management fee went from X to something

less than X.

THE COURT: Oh, I see.

THE WITNESS: And so whatever that reduction is is

in that red.

THE COURT: So, if they had like an expense cap,

that could be one of those items that they put in there or

something of that nature?

THE WITNESS: Expense cap actually is going to be a

separate one, so let's separate that, because the expense cap

is the blue. So the red is solely -- if you take a fund --

let me just give you what I think is a representative example.

If you take a fund that was -- that had an active manager, and

let's -- let's assume that the management fee was total

management fee, including the sub-advisory fee, was 70 basis

points; when that fund was restructured to be what I'll call a

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3653

pactive or a hybrid fund, or as you said it had two or three

sleeves, often a big part of that is now an index sleeve, and

often the result of that restructuring is the investment

management fee number I just gave was --

THE COURT: 70.

THE WITNESS: 70. So the investment management fee

may now be -- the total fee may now be 50 basis points. That

20 basis points savings for the investor because that's who's

benefited, is in that red. Separate from that, throughout

this -- over this period, there have been reimbursements by

AXA to keep the expense cap at certain levels; that's in the

blue.

THE COURT: So why do you call that an investment?

THE WITNESS: I think they call it an investment

because they end up either waiving or reimbursing the fund,

often reimbursing the fund, paying the sub-advisor out of

their own pocket, not infrequently, but at the end of the

day --

THE COURT: So they paid money into the fund.

THE WITNESS: They haven't paid it into the fund,

but they may have paid it to the sub-advisor, even though

they're not receiving the fee. I think that would be one way

in which -- they could be just waiving their own fee; you

know, they're due to get a spread of 30 basis points, they may

be getting none of that because there's an expense cap. They

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3654

may have to even reimburse the -- sorry; pay the sub-advisor

out of their own pocket. There are lots of scenarios that may

apply, but any of them result in FMG receiving less than they

were contractually obliged to receive.

THE COURT: Okay.

THE WITNESS: And those are usually -- I mean

they're always as a result of approvals by the independent

trustee, often as a result of negotiations with the Board, or

for one reason or another during the 15(c) process or

otherwise the Board believed that there should be expense caps

in place.

MR. BENEDICT: May I proceed, your Honor?

THE COURT: You may proceed.

BY MR. BENEDICT:

Q. So, do I understand using the specific charts in front of

us, that but for these various actions taken by the Board,

that the management/advisory fee would have been 62 basis

points, and as a result of these actions it's more or less 44

basis points?

A. That's correct.

Q. And that in 2012 that differential between 62 basis

points and 45 basis points, resulted in a net savings to

investors in the Trust of $148 million?

A. Yeah. On the second page I believe the savings are 148

million, correct.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3655

Q. Shifting gears -- this is the last leg. Mr. Schpero,

when did you become aware of this lawsuit?

A. I'll just put this aside. I became aware of this lawsuit

in -- it was shortly after the July 2011 Board meeting.

Q. And that was at or about the time the lawsuit was filed?

A. I believe I learned within probably 24 hours.

Q. And have you received the various complaints that have

been filed in this lawsuit over the last few years?

A. Yes, I have.

Q. And have you read them?

A. Yes, I have.

Q. And are you familiar with the allegations of those

complaints?

A. Yes, I am.

Q. Do you agree with those allegations?

A. I certainly do not.

Q. And would you please explain to the Court why you

disagree with the allegations?

A. Yeah, I -- I obviously have been intimately involved in

the Board process throughout this period, as I have testified

for two days now, I believe that I'm very comfortable with the

findings certainly that I and the Board have made, where we

have found that after negotiation and discussion that the

fees, all of the fees at issue are fair and reasonable; I

believe these contracts are in the best interest of the

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3656

shareholders; I think we've worked very hard and diligently

with -- with terrific counsel, who has vast experience in the

area to ensure that we are always engaging in the best

practice, we are -- that's really consistently been the test

that I as the lead trustee have applied, is ensuring with our

counsel that what we are doing is -- is consistent with

anything that's out there that is best practice.

And so I -- I think the process that this Board has

engaged in that has allowed us to exercise our business

judgment, has been of the highest quality. We've received

significant amounts of information, much of it from outside

providers; it's allowed us to consistently focus on what I

think is the real test, which is are we acting -- are we able

to make findings that are in the interest of the shareholders

and the best interest of the shareholders.

We have a Board that is very talented, that is very

diversified, that brings lots of expertise to the table; and I

think it's enabled us to make the findings that we have. And

it's a Board that has -- I think very aware in contrast with

the allegations in the complaint, but very aware of the

services that are provided by FMG as investment manager; very

aware of the services that FMG as administrator provides; very

aware of what the sub-advisor and the sub-administrators do;

and then taking all of that into account as well as all of the

other data we receive, we do what I think is the only

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3657

reasonable thing we can do, is exercise our business judgment

in making an assessment, fund by fund in each case every year.

And I would lastly emphasize that while there's lots of

information here and lots of data, I think it's very important

for the Court the understand that this is an all-year process;

this is not a matter of stepping into this in July and

spending three days examining this. This is a Board that's

spending 12 months on these matters, and then obviously

looking at key information in the June and July meetings.

MR. BENEDICT: I have no further questions for this

witness.

THE COURT: All right. So cross, do you want to

wait until Monday?

MR. A. LAKIND: I think that probably would be the

prudent thing to do if that's okay with your Honor.

THE COURT: Sure. I have a few questions for you

now.

THE WITNESS: Sure.

THE COURT: I looked at your Board -- and I can't

find my exhibit where I have all the Board members on it, but,

you know, I didn't see any person -- and I might be wrong on

this, so correct me if I am. But I didn't see any like person

that was a regulator type person; someone that would have

overseen the industry and know requirements that government

mandates. Do you have such a person?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3658

THE WITNESS: I think that would be me.

THE COURT: Oh, you've never worked for government.

THE WITNESS: No, but I think what you're getting at

is do we have somebody on the Board who has experience in the

regulatory regime. I spent 22 years working with the SEC,

weekly, I mean my -- the nature of my practice was working

with SEC examiners, working with the person who headed the

division of investment management, representing investment

managers in this industry.

And so -- and what did I do; I mean part of my

practice was setting up compliance programs for investment

managers, doing audits of compliance programs for investment

managers; so I think that's an expertise that I very much

bring to the table. In fact, the typical regulator that

you're describing was my competitor. And what I mean by that

is, for example, a friend of mine was Barry Barbash; Barry

Barbash was a partner at Shearman & Sterling who did exactly

what I did. At some point in his career he opted to go spend

three years as the regulator you just described; he became the

head of division of investment management, he came back and

his practice was, again, exactly what the two of us do.

So the people who provide that role at the highest

levels at the SEC are exactly the people with my practice

background. So I think that's what I'm -- that's what I bring

to the table. It's pretty -- I have to tell you it's pretty

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3659

rare to see somebody who actually served in the SEC on a fund

board, that's been my experience.

And of course, the other point I would make to you

is that's exactly why we have independent counsel who

similarly has that kind of expertise, and who actually -- and

I believe this is the case with Morgan Lewis; but the large

firms often have a number of practitioners who have been in

and out of the regulators, and therefore able to bring that

additional capability.

THE COURT: All right. The other issue I had, and

it might be a little rough, but I'll just ask it anyway; what

comes across to us folks is that, you know, it looks like it's

a Wall Street deal. You have investment bankers, you have the

lawyers that deal with the investment bankers, you have the

accountants that deal with the investment bankers, so you all

come from the same kind of perspective. And do you think that

adequately represents, you know, a fair deal for the investors

who live all over the country?

THE WITNESS: So, help me on your question; when you

say -- are you looking at the Board again or --

THE COURT: I'm looking at the Board, who is on the

Board, and it just seems like it's all Wall Street type. So

there's no cross -- I don't know; there's not a lot of people

that with different viewpoints.

THE WITNESS: I mean I guess I would -- it's

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3660

interesting, because I guess it's all a matter of perspective

obviously.

THE COURT: Yeah, right. What I'm just trying to

figure out is how are we protecting the investor; because

that's what you're supposed to be doing and that's what the

Gartenberg factors go to.

THE WITNESS: And that is my obligation.

THE COURT: Right.

THE WITNESS: And I guess I'd make a couple of

points. First of all, I do think it's a pretty diversified

Board. I look at somebody like Mr. Komisarjevsky, who's the

head of our governance committee; he's not a Wall Street

person at all. He's a -- you know, he was the head of a large

public relations firm, but he really has no background in the

financial world.

And in fact, it's interesting that you raise it from

that perspective, because I've always thought that Chris was

in many ways one of the more helpful trustees, because he does

look at things from a very different perspective. But I think

that's what's good about the Board. You know, I think that

having that different perspective, I certainly agree with you

is important.

I would tell you that Ms. Edwards is about as far

from a Wall Street person as you can get. Her background --

you know, she worked with consulting firm, I don't think any

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3661

of them were in New York, I could be wrong there; but her --

you know, her focus was -- I think as I recall, at least in

part she had a number of jobs helping consulting firms,

pension funds, figure out how you analyze and examine

investment managers; so really looking at it from the

perspective of the buyer, which is I think what you're getting

at. So I think that's another person who plays kind of a

different role from what, you know, may have just described.

THE COURT: Well, what brought me to these questions

was we had one witness who considered himself to be an

activist; he didn't really explain what an activist was, but I

kind of took that as he has an interest in the industry, he's

on some boards in the industry now, but he may have come from

like a consumer advocacy perspective. And do you have anyone

like that on your Board?

THE WITNESS: We don't have a Mr. Goldstein on the

Board, I won't certainly represent that to you. I can only

represent to you what I see, and what I see are eight men and

women who I have lived with for a long time, and who none of

them need to do this; this isn't their living, this is

something they do that they find interesting, that they bring

different areas of expertise in. And I see tremendous

integrity. I see only an interest in looking out for the

investors. I see only people who are interested in an

arm's-length relationship; none of these are people who are

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3662

socializing with FMG and AXA. There's -- you know, this is a

very professional relationship, it's always been that way.

And it's a demanding Board. I mean there have been

times where we've had difficult relationships with FMG because

it is so demanding, because we are so demanding. And there

have been good years and bad years from that perspective. And

I think that's reflective of the Board and I think it's

reflective of me quite frankly; I don't need to do this, you

know, and do something where I'm basically just trying to get

in bed with managers. There's no reason I would do that.

I have only one interest, and that is having spent

many years learning this industry and understanding the

fiduciary duties of the Board, I saw this as a great

opportunity to be an independent trustee, and to be as good an

independent trustee as I thought I could be. And I think I've

done that.

THE COURT: So my last question was, and I think

you've kind of answered it, but I was going to say what is the

relationship of the Board to FMG? Because they provide all

the documents to you, and you seem like a very decent fellow,

Mr. Joenk seems like a very decent fellow, so is it just a

cozy relationship or how does that work?

THE WITNESS: It is not a cozy relationship, and

that's the point I was making a minute ago. You know, we are

very aware that that's the last thing that you want in place.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3663

It is an arm's-length relationship, it is a professional

relationship. I will tell you we try not to make it an

adversarial relationship because as you know that could be

self-defeating. And there have been points where it's been

adversarial, and that -- you know, it's not a matter of

pointing blame, but where the Board thinks things have not

been done properly, we have dealt with it in that way, and

there are times where there are strains as a result.

And we try to be thoughtful about how we negotiate.

So there are times where -- as I think I mentioned on day one,

where rather than the whole Board asking Mr. Joenk to come in,

I'm asked to go meet with him, particularly if there are

things where we are going to be critical and we don't want

to -- you know, we are purposely not trying to embarrass

anybody; there are members of his team where sometimes we've

had issues and we want to make that clear, but I don't want to

do that in front of everybody.

But this is not -- you know, we have lots of

executive sessions, we are very careful about the purpose of

those sessions. We invite him in periodically because we

think it's important to have negotiations or discussions to

make sure we understand things that are developing at AXA that

maybe all of his team don't know, but the Board should know;

but that's very different from developing any kind of

relationship that -- that anybody could categorize as cozy.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3664

That's a far cry from what we've developed.

THE COURT: So when I first became involved in the

case and I was looking at the trustees, and I saw that Mr.

Joenk was the chairman of your Board, that seemed odd to me;

because you would think that the relationship between FMG and

the Board should be at arm's length, but then if he's chairman

of the Board how does that work, you know. So what do you

think about that?

THE WITNESS: So, I think that's a very fair

question. I will tell you that I think the industry has

been -- has addressed that for many years. And there's two

ways you address it; you either have a lead independent

trustee, which we do, and others have an independent chair.

Both of those I think the regulators clearly consider

perfectly appropriate and best practice approaches.

I don't mean to demean in any way Mr. Joenk, because

he plays an important role, but in my mind his role is as --

as FMG. I mean there's a reason for the last two days that I

told you that when I talk about the Board, I'm really not

talking about Mr. Joenk.

THE COURT: No, I understand that.

THE WITNESS: Mr. Joenk is chairman, sits there and

runs the meeting, and certainly that makes sense; there are

real efficiencies in that, because it's FMG that needs to

provide all the information.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3665

But the independent trustees, I should be very clear

to you, run this Board. There is nothing that happens at the

Board session that's we don't bless; we without hesitation say

we don't want certain people, we want to change things. On

night one before day two I could call Mr. Joenk and tell him,

you know, we're changing half of the next day; the calendar is

only run on the basis of what we decide at the end of the --

at the end of the day.

THE COURT: So, Mr. Goldstein --

THE WITNESS: And the last point on that, I'm sorry;

I will tell you, again, we wouldn't -- it wouldn't be

structured that way if it wasn't considered totally consistent

with best practice. But I think that's only because we have

an independent lead trustee, who really plays effectively a

chairman role.

THE COURT: So, Mr. Goldstein, that was the --

THE WITNESS: Yeah.

THE COURT: So he indicated during his testimony

that you should go out and bid the work for the manager. What

do you think about that?

THE WITNESS: Yeah, I don't -- I don't -- I don't

think that's a realistic suggestion. As I may have testified

earlier in the day, if -- if I did not think that we were

receiving -- I should tell you, I believe we are receiving the

highest quality of service. Every day? Of course not, none

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3666

of us -- I'm not perfect every day, none of us are. There are

failures from time to time.

THE COURT: Exactly.

THE WITNESS: And some of them can be troubling.

But looking at the big picture and having been on this Board

for a lot of years, I think we are dealing with a high quality

provider, and certainly based on my own experience in the

industry looking at others.

But if there was ever a point where that was not the

case, where there was significant turnover of personnel, where

there were major compliance failures, where there was just an

obvious suggestion that this was not getting the attention

that this complex deserved, then those discussions would

begin. But to do that just because it would be nice to try to

have somebody else bid for it, I don't think it's -- I don't

think -- with all due respect I don't think it's real world,

in terms of what you would do with a complex like this.

As I said earlier, think about this complex; it's

been set up by AXA for its investors. It's been structured in

a way that's attempting to bring to investors the best of all

of the sub-advisors out there. People who are investing in it

are buying AXA products, they're not investing just directly

in their funds, they're buying AXA annuity and insurance

products. None of that in any way precludes the Board from at

any point saying that's fine, you know what, we are so unhappy

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3667

with FMG it's time at least to go to bid.

But in the absence of some level of real discomfort

with the quality of the service, or a sense that -- you know,

we look at comparative fee data and they are so outside the

zone and they fail on so many other fronts, you know, that

clearly it would be our obligation to do it. There's really

no basis for doing that, and there's really no practice in the

industry of doing that. Fidelity boards don't go out and bid

the Fidelity funds to see if T.Rowe Price or PIMCO or somebody

else want to manage all of the PIMCO funds -- or all of the

Fidelity funds, sorry, in my example. Any board will tell you

that if faced with real -- real lapses in quality, they're

going to threaten, and if need be they will do that. But

that's going to be an extraordinary rare case.

THE COURT: All right. So, you know, I don't have

them all in front of me, but a lot of the documents that we

looked at over the last -- well, for me it seems like

forever --

THE WITNESS: It's feeling that way for me.

THE COURT: It may have been only been like six

weeks. At any rate, a lot of them were for 2013 and 2014; so

was there a change in your practice before that time? Because

the case goes back the 2010. Or was the same methodology used

throughout the five-year period?

THE WITNESS: Yeah, I think -- I'd make a couple of

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3668

points. Certainly the basics have not changed, but I will

also tell you that I think we would be a bad board if every

year we didn't change some things. So -- you know, so, for

example, I became the lead trustee in September/October of

2011; I had not been the lead trustee for 10 years. I've

spent a lot of time in the industry, I had my own views and

thoughts on things. If I thought they were really in

important, I got them in place.

So there were certain things over the years, like

the Gary chart, that happened 10 years ago or whenever it was.

But when I became the lead trustee I certainly did things

differently than Mr. Fox. Similarly, our counsel passed away

in -- I guess it was 2010; Ms. Copenhefer joined the Board;

there's no question that Morgan Lewis brought ideas to us.

But even before that I could tell you that particularly

because I had been -- you know, I was the one member of the

Board who had lots of experience on the issues you were

mentioning, the kind of regulatory and compliance issues; I

would often meet with -- with the partner from Sullivan and

Worcester over the years, and there were many changes over the

years at their suggestion, again, reflecting industry

developments, reflecting best practices.

So I don't -- I don't think there's been any

arbitrary cutoff where suddenly the Board at some point became

more activist or things changed. I do think every year we try

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3669

to do more and we try to get better, and lawsuit or no lawsuit

that's what a good board does.

THE COURT: All right. And it seemed odd to me,

but, you know, I'm not very familiar with the mutual fund

industry. But generally, most industries would have some type

of program at some college or university where you would keep

industry statistics, and that would be kind of, you know,

here's the place where we find out about everything this

industry does, sales; does the mutual fund industry have

anything like that?

THE WITNESS: Absolutely.

THE COURT: They do?

THE WITNESS: Yeah, the Investment Company Institute

is a phenomenal organization.

THE COURT: But no one ever talks about that, they

talk about Lipper. But if there was a source that was

academic as opposed to -- I don't know what the Board is, but

it seems like it's some kind of entrepreneurial enterprise;

does that make a difference to you?

THE WITNESS: I mean I don't -- I don't make the

distinction -- I think it's important that we look to outside

consultants where it's our judgment that that could be

helpful. And obviously you need to be thoughtful as to who

and how you do that. I believe -- I mean I've worked with

Lipper for many years, and as I testified earlier this in

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3670

process I do believe they are the premiere provider of

analysis of fee type information, and that they are

extraordinarily independent. I have seen any number of

investment managers try respectfully to convince Lipper to

present things differently, and they won't do it.

They are -- you know, they pride themselves -- the

only way they can be hired by as many funds and relied upon by

as many independent directors complexes as they are, is

because they know that that these kinds of suits are going to

arise and it's imperative that they be viewed as a truly

independent consultant that provides top service. But I will

tell you the Investment Company Institute, I don't -- I

haven't been here for six weeks so I don't know what's come up

and what hasn't, but they're a major provider of information,

in particular of that kind of aggregate information certainly.

And this Independent Directors Council, which I

think has probably been around for five or six years at least,

is really I think a tremendous service to independent

directors and trustees, with constant flows of information. I

attended a three-day conference they had in Chicago this past

fall, and with panels on every possible subject, and with the

leaders of the industry, and sometime with academics; and, you

know, I think -- I think there's a constant effort to make

sure that -- that independent trustees are fully aware of best

practices; they get to see what other independent trustees are

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3671

doing at other complexes, and I think that's a critical part

of allowing us to do what I think is a good job.

THE COURT: But if you just take your profitability

reports that we looked at, I mean obviously I'm not an

accountant, but I know when people go through them I can kind

of follow what they're doing, but how is that is ever

disclosed to the investor? You know, because if I understand

AXA's deal, it's usually being sold to teachers or fire

people, Mr. Santiago -- was that his --

MR. A. LAKIND: Sanchez, your Honor.

THE COURT: He was a police officer; right? So it's

some normal regular folks. And how would they ever know

whether or not -- you know, how would they know the

reasonableness of what is being offered to them? And if you

have this lawsuit going by a couple of them, there might be a

lot of those investors out there that don't get it. What do

you think about that?

THE WITNESS: Yeah, that's a very good question. I

think -- I think the real key point for an investor is what

his -- and this is where the SEC is so important in the

disclosure obligations that they have imposed, I mean what

you're talking about is what does the investor know; right?

And the SEC has mandated very rigorous disclosure in what used

to be documents that looked like this (indicating); and they

realized that nobody read that, so they require now very

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3672

summary short prospectuses, that within the first few pages

give all of the essential expense information.

And, you know, what is important to the investor --

yes, we see profitability, but that goes to the Gartenberg

factors and the analysis that we're required to make. But

really the investor is interested in what their -- they're

paying; right? FMG's fee is part of that, but their ultimate

question is what -- if I'm an investor, I certainly invest in

mutual funds, what am I -- what am I paying, what is my

expense ratio; am I paying 60 basis points, 70 basis points.

And I have the ability, if I don't -- if I don't like that, if

I don't think that the particular fund structure is attractive

enough to justify that, or the manager is good enough to

justify that, I can go elsewhere. And that's the whole I

think purpose of the regulatory and disclosure regime that the

regulators have put in place.

I think what's relevant for me as an investor in a

fund, or anybody in this room is what -- you know, what is the

performance of that fund, and what is the expense ratio; and

what are the services provided. And if I don't like it I can

go elsewhere. I've got a thousand choices. But that's what

the SEC has decided is really relevant to the investor. And I

think that's -- I think that's fully disclosed, it's right up

on the first two pages of the document any investor receives.

THE COURT: All right. So with regard to fallout

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3673

benefits, I mean I understand the but-for test, but that's a

pretty -- there's a lot of discretion in that rule as to if

one and then but for this and then this occurs. If you had

five people together, maybe five judges, we could disagree on

probably different items, you know.

But isn't there like a manual or something that

would say, this is a fallout benefit, this is a fallout

benefit, give you the rationale, and then you could decide if

that rationale applies to the expenses you have? Is there any

place you would look either in from a governmental agency or

from an academic viewpoint to figure that out? Or is it all

done by whatever your counsel thinks?

THE WITNESS: Well, ultimately it's done by our

judgment; right? It's done -- we had get lots of guidance and

we need to exercise judgment. But I think you've identified

the reality -- part of the reality of this process, which is

there -- particularly in some of these areas, like fallout

benefits, or economies of scale, there isn't a lot of

guidance. I mean I've read Gartenberg, I've read the other

cases, there's very little guidance on this. And the SEC has

certainly imposed -- has made available almost no guidance on

these kinds of issues. They relied on the courts.

And so I think at the end of the day the Board has

to exercise its judgment. And I think what it comes down to

is the quality of our process, and the knowledge of the

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3674

directors, and trustees, and the guidance we receive from our

professionals. And I think that's -- I think that's what the

courts have pointed to at the end of the day, is -- you know,

is the process a good one; is this a conscientious board; is

it an independent board; are they exercising reasonable

business judgment. And I think that's what we work very hard

to do.

THE COURT: So, the plaintiffs have -- I forget the

guy's name, he was from the Federal Reserve, that was his

prior experience, he was an economist; Dr. Kopne?

MR. MURPHY: Kopcke.

THE COURT: So, he said, well, I looked in at AXA,

from, you know, the moon, so it's this real huge shot, and he

was just looking down, and he kind of funneled in with his

laser beam as to these costs. And he said that the

profitability of FMG was enormous, but he didn't know anything

about fallout benefits; and he didn't say that the allocations

were wrong, he just said it was enormous, and from an economic

standpoint you wouldn't have costs that high. That was his

viewpoint.

And I mean he was someone that was on the Federal

Reserve; they look at banks, they look at insurance companies

all the time, so you would think he would have some knowledge

as what might go on in the industry, at least from that very

high perspective. What do you think about that?

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3675

THE WITNESS: Well, I've read tried as hard as I

could to read all of the expert reports, and there are lots of

viewpoints expressed. And I think that reflects the fact that

in many of these areas -- sorry; I don't mean to trivialize

it, but in many of these areas it is more art than science.

There are lots of options and approaches.

And I don't know what to do with that other than

what we do, which is we try to take into account all of this

information. We try to -- each of us tries I think to weigh

everything and decide what's more important and what's less.

You know, it's why as I said earlier I think there's certain

markers that for me are very helpful. You know, we talked

about the fact, what does the investor pay; the investor pays

the total expense ratio.

And so going back to the discussion I had earlier in

the day, you know, we can look at all of this comparative fee

information, but you can also have experts who may have

already testified about how the comparative fee information,

no matter how good Lipper is, has real limitations in it.

Well, there's one think that doesn't have -- doesn't have the

kind of limitations we're discussing, and that is, what's the

total expense ratio look like. What's the bottom line number

of, you know, basis points or dollars out of $100 that an

investor is paying. So, you know, there are certain things

that I think you can't help to weigh more heavily than others.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3676

THE COURT: So what I was thinking or what's been on

my mind is that Dr. Kopcke, he had a big picture of this, and

I was wondering if the Board, because it's enmeshed in all of

these reports that you get each month, are just looking at it

from a very small insulated position. And so I was wondering

whether the Board had, or somebody was looking at it from that

big picture perspective.

THE WITNESS: I like to think we are. I mean

everybody, you know, has their own perspective I guess in the

end. I think there's a reason why we get not just fund by

fund, but we make sure we do get all the aggregate information

that allows us to kind of step back and try to look at the

bigger picture. Yes, we have to do a fund-by-fund analysis,

but as you've seen everything we get we also see it in the

aggregate, which allows us to step back.

And, you know, I think -- I think the critical

component here is -- is, you know, examining the actual

services that are provided; you know, and this is not a matter

of us just looking at a chart and saying oh, that must be what

they do. I think it's important at each Board meeting we are

working with the people who actually are doing the service.

Yes, sometimes they present about what they do, but more often

they are presenting what they do.

And so, you know, in terms of being able to form a

judgment about -- and I said I think this is a very high

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3677

quality operation -- and I'll acknowledge a high quality

operation, you know, in my mind it might be appropriate to

have a somewhat higher fee; I mean that's going to be part of

the analysis that's going to enter into my mind. But how do I

decide it's a high quality operation. Well, we see these

people at every meeting, and we see what they do and we see

the product of what they do. I think those are the critical

components.

But you're right, I think it's always important to

step back. I think we do that. I think it's part of the role

of a director or trustee to keep that perspective. You know,

getting lost in the weeds -- I think one of my problems

with -- with some of the suggestions in the expert reports was

a suggestion that the Board should be in the weeds, that

somehow, you know, you can eliminate FMG and the Board can do

everything; well, that's --

THE COURT: I didn't hear that one.

THE WITNESS: Well, it's in there, and that bears no

relationship to the reality. The Board -- you know, the Board

should not be involved in day-to-day, it should be in a

position to do what you just said, which is to be at a high

level, looking at -- examining all of this and being able to

exercise a reasonable judgment. And making sure that there's

a process in place that ensures that we don't get caught at

the level you just described.

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Schpero - Direct - Benedict

United States District Court

Trenton, New Jersey

3678

THE COURT: Okay, thank you.

THE WITNESS: Thank you.

THE COURT: All right.

MR. BENEDICT: Thank you, your Honor.

THE COURT: We'll reconvene on Monday, 10:30. See

you then.

(Counsel say thank you.)

(Proceedings concluded for the day.)

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 165 of 194 PageID: 19027
$

$100 [1] - 3675:23

$148 [1] - 3654:23

$15 [1] - 3622:23

$150 [1] - 3650:12

$500 [1] - 3631:10

'

'12 [1] - 3562:6

/

/S [1] - 3514:24

0

08608 [1] - 3514:15

1

1 [3] - 3520:19,

3558:3, 3610:14

10 [3] - 3568:14,

3668:5, 3668:10

10:30 [1] - 3678:5

11-4194 [1] - 3514:5

110 [1] - 3631:11

12 [17] - 3524:24,

3526:2, 3526:3,

3553:11, 3560:14,

3561:10, 3561:11,

3595:23, 3596:4,

3603:20, 3603:21,

3616:9, 3630:3,

3630:10, 3649:2,

3649:4, 3657:8

12(b)(1 [4] - 3607:2,

3607:5, 3608:8,

3637:8

1290 [2] - 3591:13,

3591:25

13 [2] - 3527:21,

3619:4

13-312 [1] - 3514:10

1363 [2] - 3643:19,

3643:23

1364 [1] - 3644:14

1365 [1] - 3644:19

1377 [1] - 3645:8

138.10 [5] - 3516:12,

3555:10, 3557:1,

3559:17, 3559:21

138.3 [5] - 3516:8,

3525:1, 3525:25,

3527:5, 3527:11

138.9 [5] - 3516:12,

3552:22, 3553:1,

3559:16, 3559:21

1382 [2] - 3645:13,

3645:14

1383 [1] - 3645:20

1384 [1] - 3645:21

14 [4] - 3622:22,

3623:4, 3623:5,

3623:16

142.10 [3] - 3536:13,

3540:11, 3541:10

142.11 [6] - 3516:14,

3582:14, 3586:13,

3625:8, 3625:11,

3625:14

142.2 [6] - 3516:9,

3530:23, 3533:2,

3533:20, 3533:21,

3538:20

142.7 [5] - 3516:16,

3603:4, 3625:10,

3625:24, 3626:3

143.7 [5] - 3516:11,

3532:23, 3534:23,

3536:5, 3536:9

144.15 [4] - 3516:13,

3568:7, 3568:24,

3571:12

144.16 [5] - 3516:17,

3627:24, 3629:11,

3629:15, 3648:4

144.18 [5] - 3516:10,

3527:22, 3533:23,

3534:1, 3534:5

144.19 [6] - 3516:15,

3598:25, 3599:2,

3625:8, 3625:16,

3625:21

148 [1] - 3654:24

15 [6] - 3530:5,

3532:22, 3534:24,

3610:16, 3610:20,

3617:3

15(c [17] - 3531:9,

3532:13, 3567:9,

3567:21, 3569:9,

3569:14, 3578:12,

3578:16, 3603:13,

3606:16, 3606:18,

3606:24, 3607:16,

3611:15, 3640:3,

3654:9

153 [3] - 3549:13,

3549:17, 3610:15

16 [1] - 3536:12

1663 [1] - 3644:5

17 [1] - 3650:10

18 [8] - 3517:19,

3549:12, 3549:16,

3549:17, 3570:24,

3571:1, 3610:14,

3610:20

1811 [2] - 3517:6,

3517:20

1812 [3] - 3517:6,

3517:19, 3517:20

184 [3] - 3648:6,

3648:13, 3649:17

185 [3] - 3648:7,

3648:13, 3650:12

19 [5] - 3514:13,

3521:15, 3552:21,

3552:23, 3552:24

1:00 [1] - 3568:14

2

2 [2] - 3520:25,

3567:23

20 [8] - 3516:7,

3521:15, 3524:4,

3536:21, 3544:20,

3555:9, 3651:7,

3653:8

2000 [6] - 3534:11,

3605:24, 3611:20,

3616:8, 3618:12

2002 [1] - 3523:19

2007 [1] - 3648:25

2008 [4] - 3544:1,

3544:12, 3561:19,

3650:19

2008/2009 [2] -

3543:19, 3543:23

2009 [3] - 3544:12,

3561:17, 3561:19

2010 [7] - 3544:5,

3545:6, 3545:18,

3547:5, 3558:23,

3667:23, 3668:13

2011 [6] - 3537:22,

3538:1, 3558:25,

3622:1, 3655:4,

3668:5

2012 [5] - 3523:19,

3558:25, 3622:1,

3648:25, 3654:21

2013 [9] - 3520:10,

3526:6, 3536:21,

3547:5, 3549:23,

3558:15, 3586:19,

3603:12, 3667:21

2014 [7] - 3520:17,

3521:10, 3591:12,

3591:22, 3591:23,

3643:13, 3667:21

2015 [3] - 3591:11,

3613:3, 3614:22

2016 [1] - 3514:13

21 [1] - 3514:20

22 [6] - 3530:6,

3568:3, 3568:7,

3568:23, 3569:1,

3658:5

24 [3] - 3582:13,

3586:12, 3655:6

26 [1] - 3533:13

27 [3] - 3598:23,

3599:1, 3599:2

28 [2] - 3514:23,

3603:3

29 [2] - 3627:24,

3648:1

3

30 [4] - 3521:10,

3551:19, 3643:6,

3653:24

30(b)(6 [2] - 3518:6,

3519:13

3524 [3] - 3516:2,

3516:2, 3516:6

3527 [1] - 3516:8

3533 [1] - 3516:9

3534 [1] - 3516:10

3536 [1] - 3516:11

3559 [1] - 3516:12

3571 [1] - 3516:13

36(b [1] - 3526:12

3625 [2] - 3516:14,

3516:15

3626 [1] - 3516:16

3629 [1] - 3516:17

3647 [1] - 3516:18

373 [3] - 3546:19,

3560:17, 3561:8

389.2 [5] - 3516:6,

3523:17, 3523:20,

3523:23, 3524:3

398.2 [2] - 3516:7,

3524:4

3:00 [1] - 3625:1

4

4 [3] - 3538:19,

3549:14, 3549:18

40 [1] - 3632:6

402 [1] - 3514:14

409 [1] - 3532:9

430 [1] - 3599:3

431 [1] - 3600:16

44 [1] - 3654:18

444 [1] - 3599:3

United States District Court

Trenton, New Jersey

3679

45 [2] - 3632:4,

3654:22

457.1 [4] - 3516:18,

3643:7, 3647:3,

3647:8

4808 [1] - 3549:15

5

5 [1] - 3554:1

50 [3] - 3596:15,

3632:1, 3653:7

5th [1] - 3520:17

6

60 [3] - 3544:19,

3651:7, 3672:10

62 [3] - 3649:25,

3654:17, 3654:21

7

7 [2] - 3557:4, 3557:6

70 [6] - 3544:19,

3651:7, 3652:24,

3653:5, 3653:6,

3672:10

727 [1] - 3648:13

728 [1] - 3648:14

75 [1] - 3562:6

753 [1] - 3514:23

7862 [2] - 3643:20,

3644:6

8

80 [5] - 3540:4,

3562:6, 3596:16,

3631:13, 3645:5

83 [1] - 3645:21

856 [1] - 3514:25

889-4761 [1] - 3514:25

9

90 [2] - 3596:16,

3631:13

A

Abbett [3] - 3557:3,

3558:9, 3559:9

ABC [1] - 3610:21

ability [2] - 3579:19,

3672:11

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 166 of 194 PageID: 19028
able [21] - 3517:23,

3537:20, 3558:12,

3562:3, 3562:9,

3575:25, 3577:4,

3584:21, 3592:18,

3595:15, 3595:18,

3604:17, 3604:22,

3615:2, 3636:3,

3646:12, 3656:13,

3659:8, 3676:24,

3677:22

absence [1] - 3667:2

Absolutely [2] -

3620:2, 3669:11

absolutely [2] -

3554:17, 3619:11

academic [2] -

3669:17, 3673:11

academics [1] -

3670:22

accept [1] - 3584:23

access [2] - 3602:17,

3605:7

accordance [1] -

3608:6

account [20] - 3549:5,

3562:20, 3583:13,

3600:8, 3606:15,

3607:8, 3627:1,

3627:10, 3627:16,

3633:8, 3638:25,

3639:7, 3639:10,

3640:1, 3640:6,

3649:19, 3649:22,

3649:23, 3656:24,

3675:8

accountant [1] -

3671:5

accountants [5] -

3612:13, 3614:8,

3617:1, 3617:11,

3659:15

accounting [11] -

3581:23, 3596:18,

3598:14, 3598:15,

3605:23, 3612:12,

3614:1, 3615:11,

3615:17, 3618:8,

3620:15

accuracy [1] - 3646:6

accurately [6] -

3543:9, 3587:7,

3591:1, 3591:6,

3641:23, 3646:16

achieve [1] - 3577:3

achieved [6] - 3584:1,

3626:14, 3626:15,

3648:24, 3649:5

acknowledge [2] -

3593:2, 3677:1

Act [1] - 3563:2

acting [1] - 3656:13

action [2] - 3554:3,

3590:8

actions [7] - 3559:24,

3560:2, 3560:15,

3561:13, 3641:23,

3654:16, 3654:18

active [11] - 3543:25,

3544:11, 3544:16,

3544:21, 3561:20,

3565:7, 3585:9,

3585:11, 3651:5,

3651:7, 3652:22

activist [3] - 3661:11,

3668:25

actual [16] - 3535:4,

3535:7, 3542:13,

3553:10, 3566:23,

3570:23, 3573:1,

3602:24, 3627:9,

3627:11, 3631:10,

3643:22, 3649:15,

3650:6, 3651:23,

3676:17

added [5] - 3545:23,

3556:1, 3627:20,

3630:25, 3635:15

addition [7] - 3524:18,

3539:13, 3539:20,

3542:1, 3553:9,

3558:3, 3561:23

additional [14] -

3527:15, 3529:2,

3541:11, 3545:23,

3598:13, 3601:13,

3601:14, 3601:17,

3619:21, 3619:23,

3629:6, 3632:5,

3652:4, 3659:9

additions [2] - 3558:1,

3634:25

address [3] - 3559:24,

3560:15, 3664:12

addressed [2] -

3617:4, 3664:11

addresses [1] -

3558:7

addressing [1] -

3617:19

adequately [1] -

3659:17

administration [12] -

3587:2, 3587:16,

3588:3, 3589:10,

3589:23, 3589:24,

3590:4, 3590:9,

3590:23, 3591:25,

3605:13, 3637:2

Administration [6] -

3589:25, 3590:25,

3592:3, 3593:19,

3646:19, 3647:12

administrative [37] -

3545:24, 3563:3,

3581:13, 3581:15,

3581:19, 3582:11,

3587:6, 3588:11,

3589:7, 3593:16,

3594:4, 3594:17,

3595:1, 3596:18,

3597:12, 3597:14,

3597:15, 3597:23,

3598:1, 3598:4,

3598:7, 3598:9,

3598:11, 3598:16,

3599:9, 3599:14,

3599:16, 3600:11,

3601:1, 3606:9,

3621:11, 3622:6,

3626:22, 3631:2,

3631:8, 3635:17,

3637:7

Administrative [1] -

3593:13

administrator [21] -

3531:20, 3586:20,

3586:22, 3587:8,

3587:9, 3588:19,

3588:20, 3589:10,

3591:20, 3591:21,

3592:2, 3592:23,

3593:4, 3593:6,

3594:5, 3594:7,

3594:9, 3594:11,

3600:21, 3602:23,

3656:22

administrators [1] -

3656:23

admissible [1] -

3541:1

admission [1] -

3518:1

admit [2] - 3519:11,

3541:14

Admitted [2] - 3534:4,

3625:13

admitted [12] -

3517:22, 3522:18,

3523:18, 3527:10,

3533:20, 3536:8,

3559:20, 3571:11,

3625:20, 3626:2,

3629:14, 3647:7

admitting [2] -

3517:19, 3533:6

ADV [2] - 3531:25,

3569:16

advance [5] - 3526:7,

3553:12, 3554:25,

3555:17, 3555:18

adversarial [2] -

3663:3, 3663:5

advice [2] - 3520:22,

3639:15

advisor[38] - 3528:4,

3528:21, 3536:24,

3537:11, 3546:12,

3546:13, 3554:2,

3559:8, 3560:5,

3563:17, 3567:12,

3567:13, 3570:13,

3572:11, 3573:3,

3573:4, 3573:18,

3578:25, 3579:8,

3579:10, 3579:18,

3582:20, 3585:15,

3594:5, 3602:23,

3608:25, 3609:2,

3609:8, 3609:12,

3633:23, 3633:24,

3637:10, 3647:1,

3651:24, 3653:16,

3653:21, 3654:1,

3656:23

advisors [59] -

3535:17, 3535:18,

3538:14, 3539:3,

3539:4, 3539:5,

3539:7, 3539:11,

3539:14, 3539:15,

3539:16, 3539:18,

3542:2, 3542:9,

3542:14, 3543:10,

3546:15, 3552:7,

3552:13, 3563:16,

3563:23, 3564:5,

3565:6, 3566:9,

3566:11, 3566:17,

3567:3, 3567:7,

3567:17, 3569:14,

3570:10, 3570:23,

3571:3, 3571:6,

3571:16, 3571:25,

3572:21, 3572:23,

3572:25, 3573:15,

3573:21, 3575:4,

3575:10, 3578:6,

3578:8, 3578:22,

3579:12, 3582:10,

3584:22, 3587:15,

3597:3, 3608:23,

3609:3, 3609:18,

3644:18, 3650:24,

3651:17, 3651:19,

3666:21

advisors' [1] - 3579:4

advisory [23] - 3532:2,

3544:17, 3563:3,

3564:7, 3564:8,

United States District Court

Trenton, New Jersey

3680

3564:16, 3564:18,

3564:22, 3567:2,

3569:10, 3570:2,

3570:7, 3572:17,

3584:15, 3587:25,

3588:7, 3605:13,

3606:3, 3633:14,

3633:21, 3646:23,

3646:24, 3652:24

advocacy [1] -

3661:14

affecting [1] - 3566:13

affiliate [1] - 3590:5

affiliated [4] -

3602:23, 3608:25,

3609:3, 3637:11

affiliates [3] -

3570:21, 3636:18,

3637:12

afternoon [2] -

3532:8, 3625:3

afterwards [1] -

3590:19

agency [1] - 3673:10

agent [1] - 3549:3

aggregate [14] -

3528:2, 3529:10,

3551:6, 3551:8,

3584:6, 3599:16,

3603:17, 3648:25,

3649:5, 3649:15,

3650:8, 3670:15,

3676:11, 3676:15

aggregating [1] -

3652:8

aggressive [1] -

3620:4

ago [8] - 3521:9,

3522:2, 3528:13,

3537:6, 3557:10,

3599:13, 3662:24,

3668:10

agree [12] - 3520:19,

3521:1, 3554:20,

3559:4, 3571:17,

3572:11, 3575:19,

3589:11, 3624:9,

3635:23, 3655:15,

3660:21

agreed [5] - 3520:18,

3521:18, 3521:23,

3532:4, 3580:25

Agreement [14] -

3563:17, 3573:14,

3573:16, 3575:5,

3589:25, 3590:25,

3592:3, 3593:13,

3593:19, 3621:21,

3623:7, 3623:22,

3646:20, 3647:12

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 167 of 194 PageID: 19029
agreement [11] -

3517:16, 3563:22,

3590:12, 3602:3,

3621:23, 3621:24,

3622:25, 3623:17,

3640:9, 3640:12,

3642:2

agreements [5] -

3544:17, 3572:18,

3629:21, 3646:23,

3646:24

ahead [3] - 3551:14,

3558:23, 3615:23

aid [1] - 3627:6

al [3] - 3514:3, 3514:6,

3514:8

albeit [1] - 3580:5

alert [1] - 3554:11

alerted [1] - 3590:21

alerting [1] - 3540:19

all-year [1] - 3657:5

allegations [9] -

3537:18, 3538:6,

3538:8, 3587:24,

3588:2, 3655:12,

3655:15, 3655:18,

3656:20

Alliance [3] - 3609:1,

3637:10, 3637:12

allocated [10] -

3610:1, 3611:3,

3616:16, 3617:22,

3617:23, 3620:9,

3620:12, 3620:21,

3621:6, 3621:11

allocation [7] -

3550:13, 3611:17,

3612:25, 3615:2,

3616:11, 3621:17,

3621:19

allocations [1] -

3674:17

allow [3] - 3563:18,

3620:18, 3629:20

allowed [3] - 3608:10,

3656:9, 3656:12

allowing [3] - 3602:12,

3602:19, 3671:2

allows [4] - 3536:3,

3556:19, 3676:12,

3676:15

almost [5] - 3530:6,

3641:7, 3642:16,

3650:12, 3673:21

ALSO [1] - 3515:16

alternative [4] -

3575:9, 3575:18,

3575:23, 3639:4

alternatives [1] -

3576:15

ambiguity [1] -

3589:14

ambiguous [1] -

3572:7

amended [2] - 3592:1,

3592:4

amendment [2] -

3587:16, 3590:18

amount [15] - 3528:11,

3529:15, 3573:19,

3573:22, 3574:1,

3574:10, 3575:3,

3580:23, 3593:15,

3623:15, 3632:5,

3636:2, 3639:25,

3652:3

amounts [2] -

3542:12, 3656:11

analyses [1] - 3551:25

analysis [24] -

3551:22, 3551:24,

3565:5, 3574:18,

3580:12, 3582:7,

3582:10, 3584:14,

3586:2, 3597:22,

3599:16, 3599:23,

3604:20, 3606:16,

3610:11, 3644:15,

3645:15, 3645:18,

3645:22, 3647:15,

3670:2, 3672:5,

3676:13, 3677:4

analytics [1] - 3539:7

analyze [2] - 3574:8,

3661:4

analyzed [1] - 3580:15

analyzing [4] -

3526:17, 3535:24,

3606:15

ANN [1] - 3514:3

annexed [1] - 3538:19

announcement [1] -

3556:9

annoying [1] -

3534:18

annual [6] - 3569:14,

3606:25, 3635:11,

3643:1, 3643:12,

3646:7

annually [1] - 3603:12

annuities [1] -

3637:24

annuity [3] - 3638:3,

3639:25, 3666:23

answer[13] - 3541:13,

3550:4, 3560:8,

3575:14, 3595:23,

3597:17, 3603:15,

3604:12, 3614:15,

3616:19, 3630:16,

3639:19, 3639:20

answer's [1] - 3587:12

answered [2] -

3575:7, 3662:18

answering [1] -

3584:17

answers [1] - 3615:8

anyway [2] - 3533:6,

3659:11

apart [2] - 3528:20,

3639:7

appeared [1] - 3518:6

appendices [1] -

3526:16

apples [4] - 3583:22,

3598:20, 3598:21

apples-to-apples [1] -

3583:22

applicable [1] -

3545:22

applications [2] -

3517:1, 3523:7

applied [1] - 3656:5

applies [1] - 3673:9

apply [2] - 3646:3,

3654:3

appreciate [1] -

3553:8

approach [1] - 3604:5

approaches [6] -

3588:16, 3616:25,

3617:13, 3629:2,

3664:15, 3675:6

appropriate [24] -

3522:5, 3530:3,

3530:7, 3530:14,

3538:5, 3538:8,

3541:23, 3542:7,

3566:9, 3566:12,

3567:15, 3570:19,

3574:7, 3574:21,

3587:22, 3613:12,

3621:5, 3632:8,

3633:13, 3635:23,

3640:25, 3647:18,

3664:15, 3677:2

appropriately [3] -

3591:20, 3592:1,

3621:6

approval [3] - 3590:7,

3618:19, 3622:5

approvals [2] -

3641:5, 3654:7

approve [21] -

3529:19, 3572:17,

3572:20, 3575:4,

3589:24, 3589:25,

3592:24, 3593:19,

3593:23, 3594:12,

3594:14, 3608:7,

3629:21, 3631:6,

3634:1, 3640:9,

3640:12, 3646:5,

3646:19, 3647:11

approved [4] -

3543:20, 3547:18,

3640:14, 3649:21

approves [2] -

3593:12, 3606:25

approving [4] -

3626:21, 3635:10,

3642:1, 3643:2

arbitrary [1] - 3668:24

area [4] - 3530:6,

3605:6, 3613:24,

3656:3

areas [11] - 3530:10,

3530:11, 3554:11,

3566:23, 3617:7,

3618:23, 3629:5,

3661:22, 3673:17,

3675:4, 3675:5

arena [2] - 3526:12,

3581:23

argue [4] - 3579:21,

3584:25, 3585:11,

3641:6

argument [1] -

3580:24

arise [2] - 3540:4,

3670:10

arithmetic [1] -

3624:15

arm's [5] - 3580:6,

3609:7, 3661:25,

3663:1, 3664:6

arm's-length [3] -

3609:7, 3661:25,

3663:1

ARNOLD [1] - 3515:4

Arpert [1] - 3520:17

arrangement [4] -

3622:12, 3622:20,

3622:21, 3633:21

arrangements [13] -

3532:3, 3542:9,

3545:19, 3562:8,

3562:11, 3587:17,

3587:25, 3591:19,

3595:13, 3607:1,

3637:9, 3641:2

art [3] - 3613:24,

3617:13, 3675:5

aside [3] - 3547:23,

3616:1, 3655:3

aspect [1] - 3565:3

aspects [4] - 3583:9,

3583:13, 3589:22,

3628:7

asserted [6] -

United States District Court

Trenton, New Jersey

3681

3571:15, 3572:8,

3575:8, 3575:17,

3589:9, 3624:7

assess [1] - 3635:21

assessing [1] -

3594:25

assessment [1] -

3657:2

asset [13] - 3529:15,

3577:3, 3588:21,

3588:22, 3627:11,

3631:9, 3631:16,

3631:21, 3631:23,

3632:14, 3632:23,

3633:6, 3634:8

assets [12] - 3549:4,

3576:6, 3578:10,

3579:14, 3579:17,

3626:11, 3626:12,

3628:19, 3632:1,

3632:3, 3632:10,

3633:1

ASSOCIATE [1] -

3515:16

associated [2] -

3540:8, 3607:5

assume [3] - 3631:7,

3643:25, 3652:23

assumed [1] - 3576:16

assumes [1] - 3576:20

assumption [3] -

3580:9, 3580:17,

3626:12

at-issue [14] -

3543:22, 3545:22,

3547:6, 3560:14,

3560:17, 3561:10,

3561:11, 3561:14,

3565:8, 3600:10,

3630:10, 3630:15,

3630:16, 3631:24

attach [2] - 3569:15

attaches [2] - 3525:16,

3567:14

attempting [1] -

3666:20

attend [1] - 3619:16

attended [1] - 3670:20

attention [11] -

3549:12, 3552:21,

3559:12, 3568:2,

3596:4, 3627:23,

3643:6, 3645:8,

3648:1, 3648:6,

3666:12

attentive [1] - 3537:16

attorney [1] - 3573:7

attorney/client [1] -

3520:10

attractive [3] - 3565:2,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 168 of 194 PageID: 19030
3566:6, 3672:12

audit [2] - 3617:11,

3618:25

audited [1] - 3618:6

auditors [1] - 3617:8

audits [2] - 3617:9,

3658:12

available [11] -

3528:6, 3553:19,

3578:10, 3601:20,

3605:5, 3605:10,

3613:25, 3637:23,

3638:17, 3639:7,

3673:21

aware [18] - 3538:17,

3563:8, 3574:9,

3590:9, 3607:14,

3620:8, 3624:16,

3624:22, 3638:25,

3640:4, 3655:2,

3655:3, 3656:19,

3656:20, 3656:22,

3656:23, 3662:25,

3670:24

AXA [56] - 3514:6,

3514:10, 3515:17,

3547:21, 3548:1,

3548:6, 3548:22,

3548:24, 3549:2,

3549:9, 3549:11,

3549:24, 3550:11,

3550:13, 3576:7,

3576:9, 3577:4,

3578:9, 3579:20,

3581:6, 3610:2,

3611:3, 3616:16,

3617:8, 3617:24,

3618:1, 3618:16,

3620:9, 3621:1,

3622:3, 3622:12,

3622:24, 3623:1,

3623:7, 3623:18,

3623:21, 3624:14,

3624:19, 3637:14,

3637:20, 3637:22,

3638:17, 3638:22,

3639:7, 3639:24,

3639:25, 3640:5,

3653:11, 3662:1,

3663:22, 3666:19,

3666:22, 3666:23,

3674:12

AXA's [5] - 3564:1,

3576:9, 3618:15,

3640:2, 3671:8

B

background [3] -

3658:24, 3660:14,

3660:24

backgrounds [2] -

3530:10, 3615:18

backwards [2] -

3648:2, 3648:3

bad [3] - 3558:25,

3662:6, 3668:2

bankers [3] - 3659:13,

3659:14, 3659:15

banks [1] - 3674:22

bar[1] - 3607:23

Barbash [2] - 3658:16,

3658:17

Barry [2] - 3658:16

based [9] - 3553:14,

3574:17, 3605:4,

3636:7, 3638:7,

3638:9, 3640:17,

3647:19, 3666:7

basic [1] - 3532:5

basics [1] - 3668:1

basis [36] - 3518:15,

3518:25, 3540:3,

3549:5, 3562:6,

3572:2, 3572:4,

3582:2, 3596:14,

3596:15, 3596:16,

3603:19, 3608:4,

3609:8, 3631:11,

3631:13, 3632:1,

3632:4, 3632:6,

3645:5, 3649:25,

3650:11, 3652:24,

3653:7, 3653:8,

3653:24, 3654:17,

3654:19, 3654:21,

3654:22, 3665:7,

3667:7, 3672:10,

3675:23

bat [1] - 3642:22

Bate [1] - 3549:15

Bates [6] - 3643:19,

3643:20, 3644:5,

3648:11, 3648:13

bathroom [1] - 3568:8

batting [1] - 3642:20

beam [1] - 3674:15

Bear [1] - 3564:21

bear [4] - 3580:20,

3580:23, 3608:12,

3608:13

bearing [6] - 3585:20,

3586:4, 3596:20,

3597:1, 3598:21,

3608:3

bears [2] - 3596:17,

3677:18

beaten [1] - 3558:22

became [7] - 3622:24,

3655:3, 3658:19,

3664:2, 3668:4,

3668:11, 3668:24

become [2] - 3538:1,

3655:2

bed [1] - 3662:10

began [1] - 3544:1

begin [4] - 3521:22,

3525:3, 3643:19,

3666:14

beginning [2] -

3531:19, 3533:7

begins [3] - 3643:22,

3644:20, 3645:14

behalf [12] - 3518:6,

3534:12, 3566:3,

3567:4, 3574:5,

3576:8, 3589:7,

3623:8, 3626:14,

3626:15, 3649:5

behind [1] - 3568:6

below [1] - 3607:17

benchmark [1] -

3558:22

benchmarks [3] -

3551:16, 3644:23

BENEDICT [101] -

3515:13, 3516:3,

3518:5, 3519:6,

3519:21, 3520:5,

3520:8, 3522:8,

3522:11, 3522:13,

3523:3, 3523:13,

3524:6, 3524:12,

3524:15, 3524:25,

3525:7, 3525:14,

3525:24, 3527:4,

3527:13, 3530:22,

3533:1, 3533:8,

3533:11, 3533:25,

3534:8, 3534:21,

3536:5, 3536:11,

3538:18, 3541:9,

3544:8, 3545:8,

3546:23, 3547:11,

3555:6, 3555:8,

3559:14, 3559:16,

3559:23, 3560:12,

3560:13, 3561:7,

3561:9, 3568:6,

3568:13, 3568:21,

3568:22, 3571:8,

3571:14, 3573:11,

3573:13, 3575:16,

3581:9, 3581:11,

3586:9, 3586:11,

3592:9, 3592:10,

3594:2, 3594:20,

3594:22, 3595:25,

3596:3, 3601:23,

3601:25, 3604:16,

3608:15, 3608:17,

3612:9, 3614:25,

3617:21, 3619:2,

3620:20, 3625:6,

3625:10, 3625:17,

3625:24, 3626:5,

3629:11, 3629:17,

3630:8, 3630:9,

3639:23, 3642:16,

3642:20, 3642:23,

3642:24, 3647:3,

3647:10, 3648:10,

3648:13, 3648:17,

3649:3, 3649:8,

3649:11, 3654:12,

3654:14, 3657:10,

3678:4

Benedict [12] -

3517:6, 3517:8,

3518:3, 3519:5,

3520:1, 3523:11,

3523:17, 3524:5,

3560:11, 3568:20,

3625:5, 3648:12

Benedict's [1] -

3545:14

beneficial [2] -

3546:5, 3566:14

benefit [12] - 3530:2,

3548:15, 3548:17,

3548:18, 3564:4,

3572:16, 3588:16,

3595:17, 3598:19,

3650:12, 3673:7,

3673:8

benefited [1] - 3653:9

benefits [20] -

3564:20, 3564:23,

3635:22, 3636:10,

3636:11, 3636:15,

3636:17, 3636:21,

3636:24, 3637:1,

3637:9, 3637:10,

3637:13, 3637:15,

3638:3, 3639:10,

3645:22, 3673:1,

3673:18, 3674:17

BENJAMIN [1] -

3515:14

Bernstein [1] -

3637:10

best [17] - 3543:8,

3583:22, 3587:7,

3600:6, 3604:5,

3618:22, 3640:16,

3641:2, 3655:25,

3656:3, 3656:7,

3656:15, 3664:15,

3665:13, 3666:20,

3668:22, 3670:24

United States District Court

Trenton, New Jersey

3682

better [3] - 3528:6,

3603:6, 3669:1

between [17] - 3520:9,

3520:13, 3521:2,

3563:17, 3564:12,

3575:2, 3580:4,

3580:10, 3590:1,

3590:25, 3622:12,

3633:24, 3640:9,

3646:20, 3647:12,

3654:21, 3664:5

beyond [2] - 3545:10,

3608:9

bid [4] - 3665:19,

3666:15, 3667:1,

3667:8

big [6] - 3542:6,

3586:2, 3653:2,

3666:5, 3676:2,

3676:7

bigger[3] - 3617:18,

3651:2, 3676:13

billion [5] - 3632:2,

3632:3, 3632:6

binder[11] - 3518:11,

3549:12, 3552:21,

3555:9, 3568:24,

3569:1, 3582:14,

3598:24, 3603:4,

3627:24, 3643:6

Bingham [2] -

3519:24, 3520:2

bit [3] - 3519:25,

3543:12, 3649:10

black [3] - 3649:18,

3649:25, 3650:6

BLADER [1] - 3515:3

blame [1] - 3663:6

BLANK [1] - 3515:9

bless [1] - 3665:3

blessed [1] - 3618:8

blown [1] - 3603:6

blue [3] - 3649:24,

3652:20, 3653:12

BLUMSTEIN [1] -

3515:3

blurred [1] - 3517:11

board [13] - 3539:9,

3540:19, 3565:18,

3565:22, 3608:19,

3631:5, 3631:6,

3659:2, 3667:11,

3668:2, 3669:2,

3674:4, 3674:5

Board [246] - 3517:23,

3517:25, 3518:10,

3518:16, 3518:21,

3519:4, 3519:9,

3519:10, 3519:16,

3519:25, 3521:14,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 169 of 194 PageID: 19031
3521:20, 3526:7,

3526:15, 3526:24,

3526:25, 3527:6,

3527:14, 3528:9,

3529:4, 3529:11,

3529:14, 3530:5,

3532:4, 3533:3,

3534:11, 3534:12,

3536:20, 3536:21,

3537:7, 3537:15,

3538:2, 3539:5,

3539:9, 3539:13,

3539:19, 3539:22,

3539:25, 3540:17,

3540:19, 3540:20,

3541:17, 3541:19,

3541:20, 3542:3,

3542:12, 3543:20,

3546:3, 3546:9,

3546:14, 3547:18,

3549:23, 3550:2,

3550:9, 3550:16,

3550:20, 3550:25,

3551:3, 3551:4,

3551:14, 3552:9,

3553:12, 3553:14,

3555:1, 3555:17,

3555:18, 3555:24,

3556:2, 3556:4,

3556:23, 3559:24,

3561:13, 3562:14,

3562:22, 3564:9,

3565:25, 3567:2,

3567:3, 3567:8,

3567:20, 3569:9,

3570:10, 3570:14,

3570:15, 3570:18,

3571:9, 3572:8,

3572:17, 3574:20,

3574:23, 3575:8,

3575:17, 3576:13,

3579:19, 3580:1,

3580:4, 3580:15,

3582:4, 3582:9,

3586:18, 3586:19,

3587:19, 3588:13,

3589:24, 3589:25,

3590:6, 3590:9,

3590:24, 3591:17,

3592:11, 3592:12,

3592:15, 3592:21,

3593:5, 3593:8,

3593:11, 3594:12,

3595:15, 3599:8,

3603:13, 3605:15,

3605:21, 3606:3,

3606:13, 3606:17,

3607:12, 3608:7,

3608:22, 3609:2,

3610:2, 3611:2,

3611:14, 3611:19,

3611:21, 3611:23,

3612:16, 3612:24,

3613:15, 3613:16,

3613:18, 3614:7,

3615:1, 3615:11,

3615:14, 3615:19,

3616:7, 3617:1,

3617:3, 3618:19,

3619:4, 3619:15,

3619:16, 3620:1,

3620:6, 3621:10,

3622:17, 3623:24,

3624:1, 3624:4,

3624:7, 3627:2,

3628:4, 3628:6,

3629:2, 3630:21,

3631:12, 3631:15,

3632:17, 3633:10,

3635:6, 3635:10,

3635:20, 3635:24,

3636:23, 3637:4,

3639:24, 3641:9,

3641:11, 3641:24,

3642:1, 3643:2,

3643:17, 3644:8,

3644:15, 3644:21,

3645:5, 3645:15,

3646:5, 3648:21,

3649:5, 3649:21,

3650:22, 3654:8,

3654:10, 3654:16,

3655:4, 3655:20,

3655:22, 3656:8,

3656:16, 3656:19,

3657:7, 3657:19,

3657:20, 3658:4,

3659:20, 3659:21,

3659:22, 3660:11,

3660:20, 3661:15,

3661:17, 3662:3,

3662:7, 3662:13,

3662:19, 3663:6,

3663:11, 3663:23,

3664:4, 3664:6,

3664:7, 3664:19,

3665:2, 3665:3,

3666:5, 3666:24,

3668:13, 3668:17,

3668:24, 3669:17,

3673:23, 3676:3,

3676:6, 3676:20,

3677:14, 3677:15,

3677:19

Board's [15] -

3517:22, 3550:17,

3552:2, 3553:23,

3562:25, 3563:6,

3583:8, 3591:18,

3598:16, 3599:17,

3634:6, 3644:13,

3645:18, 3646:15,

3646:16

boards [2] - 3661:13,

3667:8

Boch [2] - 3521:17,

3521:21

Book [1] - 3567:23

book [7] - 3531:7,

3532:24, 3550:21,

3567:25, 3568:3,

3610:13, 3636:12

booklet [6] - 3524:24,

3527:21, 3532:21,

3532:22, 3535:15,

3536:13

books [3] - 3525:4,

3588:25, 3646:3

borne [7] - 3579:5,

3580:17, 3580:18,

3618:3, 3622:23,

3623:16, 3623:21

bottom [5] - 3558:4,

3593:6, 3607:7,

3650:6, 3675:22

brand [1] - 3591:15

breadth [1] - 3564:3

break [11] - 3552:5,

3552:6, 3568:8,

3568:10, 3568:11,

3599:15, 3601:2,

3624:24, 3624:25

breakpoint [5] -

3631:1, 3631:19,

3631:22, 3632:2,

3633:13

breakpoints [24] -

3545:23, 3546:1,

3584:2, 3627:8,

3627:10, 3627:13,

3628:17, 3628:20,

3630:14, 3630:17,

3630:25, 3631:19,

3632:16, 3632:18,

3632:22, 3633:4,

3633:14, 3633:16,

3634:3, 3635:18,

3635:23, 3649:22,

3650:9

breaks [1] - 3529:9

briefly [3] - 3540:14,

3543:18, 3567:1

bring [8] - 3530:10,

3613:16, 3617:10,

3658:14, 3658:24,

3659:8, 3661:21,

3666:20

bringing [1] - 3616:25

brings [1] - 3656:17

broadly [1] - 3561:12

broken [4] - 3540:5,

3598:4, 3598:8,

3644:24

brokerage [2] -

3542:10, 3637:11

brokers [1] - 3637:12

brought [7] - 3519:13,

3537:24, 3580:8,

3580:15, 3618:12,

3661:9, 3668:14

budgetary [1] -

3581:23

built [1] - 3651:24

business [11] -

3574:19, 3574:25,

3584:18, 3602:11,

3613:22, 3629:20,

3636:4, 3640:18,

3656:9, 3657:1,

3674:6

but-for [6] - 3636:20,

3638:8, 3638:12,

3638:20, 3639:14,

3673:1

buy [1] - 3638:20

buyer[1] - 3661:6

buying [2] - 3666:22,

3666:23

BY [42] - 3515:4,

3515:9, 3515:12,

3516:2, 3524:14,

3525:24, 3527:13,

3534:8, 3534:21,

3536:11, 3541:9,

3544:8, 3555:8,

3559:23, 3560:13,

3561:9, 3568:22,

3571:14, 3573:13,

3575:16, 3581:11,

3586:11, 3592:10,

3594:22, 3596:3,

3601:25, 3604:16,

3608:17, 3612:9,

3614:25, 3617:21,

3619:2, 3620:20,

3626:5, 3629:17,

3630:9, 3639:23,

3642:24, 3647:10,

3648:17, 3649:11,

3654:14

C

C.S.R [1] - 3514:24

calculating [1] -

3588:22

calculation [2] -

3562:21, 3623:23

calendar [2] -

3570:18, 3665:6

California [1] -

3619:18

United States District Court

Trenton, New Jersey

3683

candy [1] - 3642:12

cannot [1] - 3607:17

cap [15] - 3562:1,

3562:7, 3627:14,

3628:15, 3630:18,

3631:3, 3631:4,

3631:12, 3631:18,

3652:15, 3652:18,

3652:19, 3653:11,

3653:25

Cap [2] - 3557:4,

3558:2

capability [1] - 3659:9

caps [7] - 3546:3,

3546:4, 3577:5,

3579:3, 3630:20,

3631:6, 3654:10

card [2] - 3553:6,

3553:13

care [2] - 3523:7,

3523:11

career[1] - 3658:18

careful [6] - 3541:14,

3584:10, 3604:18,

3624:7, 3640:17,

3663:19

carefully [4] -

3566:10, 3583:11,

3583:25, 3647:22

carrying [1] - 3554:8

case [22] - 3536:21,

3557:24, 3558:19,

3559:9, 3562:7,

3565:25, 3569:9,

3579:9, 3584:24,

3598:6, 3598:15,

3603:12, 3609:21,

3623:9, 3630:13,

3633:24, 3657:2,

3659:6, 3664:3,

3666:10, 3667:14,

3667:23

cases [11] - 3544:14,

3556:1, 3560:4,

3577:23, 3578:3,

3578:5, 3578:7,

3579:7, 3585:1,

3604:19, 3673:20

cash [5] - 3529:15,

3529:16, 3553:18,

3573:2, 3623:2

catastrophic [1] -

3542:25

categories [4] -

3542:24, 3547:8,

3553:15, 3553:24

categorize [3] -

3576:23, 3634:21,

3663:25

caught [1] - 3677:24

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 170 of 194 PageID: 19032
caveat [1] - 3630:7

center [2] - 3549:6,

3549:9

cents [1] - 3650:11

certain [13] - 3531:15,

3532:10, 3536:1,

3557:20, 3562:1,

3591:10, 3600:25,

3653:11, 3665:4,

3668:9, 3675:11,

3675:24

certainly [86] -

3517:19, 3528:21,

3530:6, 3530:11,

3532:18, 3534:11,

3537:9, 3537:16,

3538:3, 3538:16,

3539:6, 3544:14,

3546:7, 3546:11,

3551:14, 3553:23,

3555:25, 3556:1,

3558:20, 3561:20,

3563:8, 3566:13,

3576:14, 3578:17,

3579:7, 3579:8,

3580:21, 3581:2,

3581:4, 3583:25,

3584:3, 3587:4,

3587:20, 3588:14,

3588:24, 3591:17,

3592:5, 3592:22,

3592:24, 3595:12,

3595:18, 3598:17,

3598:20, 3600:8,

3602:7, 3603:2,

3604:5, 3607:6,

3607:14, 3609:4,

3611:9, 3611:25,

3614:20, 3615:16,

3616:2, 3621:8,

3621:13, 3621:14,

3621:15, 3622:18,

3623:12, 3626:19,

3626:25, 3629:6,

3630:22, 3632:20,

3633:10, 3633:25,

3634:9, 3635:6,

3640:4, 3641:1,

3643:5, 3644:2,

3646:9, 3646:13,

3655:16, 3655:22,

3660:21, 3661:17,

3664:23, 3666:7,

3668:11, 3670:15,

3672:8, 3673:21

Certainly [8] -

3536:16, 3548:1,

3554:19, 3591:5,

3596:23, 3640:23,

3648:10, 3668:1

Certified [1] - 3514:23

cetera [2] - 3553:12,

3645:1

chair [2] - 3552:10,

3664:13

chairman [4] - 3664:4,

3664:6, 3664:22,

3665:15

challenged [1] -

3587:17

chance [1] - 3546:24

chances [1] - 3615:21

change [11] - 3544:18,

3544:22, 3544:23,

3558:6, 3559:7,

3566:13, 3602:14,

3652:9, 3665:4,

3667:22, 3668:3

changed [6] -

3546:15, 3562:11,

3591:19, 3652:9,

3668:1, 3668:25

changes [28] -

3539:14, 3539:15,

3541:23, 3543:13,

3543:16, 3543:21,

3544:1, 3544:25,

3545:17, 3545:18,

3546:7, 3546:9,

3546:12, 3546:17,

3547:8, 3547:16,

3561:17, 3561:24,

3562:8, 3565:8,

3566:4, 3630:24,

3647:18, 3650:5,

3650:20, 3650:25,

3651:1, 3668:20

changing [1] - 3665:6

characterized [1] -

3577:19

charged [1] - 3574:16

charges [1] - 3600:3

charging [1] - 3633:6

chart [36] - 3529:8,

3529:9, 3529:13,

3529:14, 3534:19,

3536:20, 3537:10,

3538:11, 3538:13,

3538:19, 3540:12,

3540:23, 3541:1,

3541:2, 3541:5,

3541:6, 3543:9,

3560:17, 3561:25,

3562:3, 3573:23,

3586:18, 3587:7,

3587:11, 3587:14,

3588:6, 3588:10,

3600:15, 3610:21,

3612:6, 3616:11,

3616:16, 3649:3,

3649:17, 3668:10,

3676:19

charts [10] - 3528:7,

3528:12, 3528:14,

3529:6, 3534:2,

3534:7, 3534:9,

3621:14, 3649:12,

3654:15

Chase [4] - 3587:9,

3590:1, 3590:10,

3592:14

chase [1] - 3525:19

Chicago [1] - 3670:20

chief [4] - 3540:1,

3635:4, 3635:9,

3635:10

choices [1] - 3672:21

Chris [1] - 3660:17

CHRISTOPHER [2] -

3515:6, 3515:6

circulated [1] -

3641:11

circumstances [3] -

3571:4, 3581:7,

3583:1

cite [1] - 3560:25

CIVIL [2] - 3514:5,

3514:9

clarification [1] -

3617:22

clarify [1] - 3570:15

CLARKSON [1] -

3514:14

clear [4] - 3554:17,

3606:13, 3663:16,

3665:1

clearly [11] - 3556:20,

3574:9, 3587:2,

3595:14, 3605:6,

3609:14, 3612:21,

3623:19, 3632:14,

3664:14, 3667:6

clerical [1] - 3582:1

clients [1] - 3564:1

close [1] - 3636:12

closely [4] - 3530:1,

3559:8, 3589:2,

3603:2

CO [2] - 3514:6,

3515:17

code [1] - 3539:22

colleague [1] -

3533:25

collecting [1] -

3598:13

collection [4] -

3518:12, 3518:16,

3519:7, 3533:3

collective [1] - 3519:9

collectively [1] -

3518:10

college [1] - 3669:6

color [1] - 3553:20

combination [1] -

3632:12

combines [1] -

3597:22

comfortable [12] -

3530:13, 3580:21,

3581:5, 3609:6,

3609:24, 3616:23,

3617:16, 3621:8,

3623:13, 3632:23,

3641:1, 3655:21

coming [5] - 3539:17,

3549:11, 3573:18,

3583:21, 3612:15

commencement [1] -

3614:2

comment [2] -

3646:10, 3646:14

comments [1] -

3641:21

committee [7] -

3540:6, 3552:6,

3552:11, 3570:10,

3592:12, 3592:15,

3660:12

committees [1] -

3552:6

communicate [1] -

3566:24

communications [3] -

3520:20, 3521:4,

3543:3

companies [1] -

3674:22

company [1] - 3581:4

Company [3] - 3563:2,

3669:13, 3670:12

comparable [2] -

3583:24, 3600:7

comparative [19] -

3551:16, 3583:17,

3593:22, 3594:23,

3594:24, 3595:2,

3595:4, 3595:6,

3597:12, 3599:22,

3627:12, 3628:18,

3633:5, 3635:15,

3645:11, 3647:21,

3667:4, 3675:16,

3675:18

Comparative [1] -

3597:14

compare [12] - 3565:9,

3583:23, 3585:18,

3586:5, 3595:18,

3595:21, 3596:6,

3597:9, 3600:11,

United States District Court

Trenton, New Jersey

3684

3604:7, 3604:22,

3649:16

compared [1] -

3582:21

compares [3] -

3551:15, 3586:19,

3597:5

comparing [4] -

3585:14, 3587:14,

3597:15, 3597:19

comparison [5] -

3583:22, 3585:10,

3585:13, 3632:7,

3644:22

comparisons [4] -

3528:5, 3585:21,

3598:11, 3598:20

compensation [2] -

3635:10, 3637:8

competence [1] -

3619:9

competitive [1] -

3631:14

competitor[1] -

3658:15

complaint [11] -

3537:15, 3537:18,

3537:20, 3537:21,

3537:22, 3537:24,

3538:7, 3587:16,

3590:8, 3590:18,

3656:20

complaints [2] -

3655:7, 3655:13

complex [9] -

3563:25, 3564:1,

3576:5, 3579:11,

3599:17, 3638:1,

3666:13, 3666:17,

3666:18

complexes [6] -

3565:9, 3565:12,

3599:10, 3600:11,

3670:8, 3671:1

Compliance [1] -

3542:17

compliance [21] -

3540:2, 3540:4,

3542:14, 3543:1,

3569:17, 3577:12,

3577:25, 3579:8,

3581:25, 3582:1,

3589:4, 3635:4,

3635:5, 3635:8,

3635:9, 3635:11,

3635:12, 3658:11,

3658:12, 3666:11,

3668:18

complicated [3] -

3611:11, 3615:9

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 171 of 194 PageID: 19033
component [2] -

3532:17, 3676:17

components [2] -

3651:2, 3677:8

concept [2] - 3626:11,

3631:20

conceptual [2] -

3583:15, 3583:16

conceptually [1] -

3579:17

concern [3] - 3546:16,

3607:25, 3608:9

concerned [2] -

3574:22, 3586:3

concerning [16] -

3518:12, 3524:19,

3537:10, 3567:2,

3567:4, 3567:8,

3578:12, 3578:15,

3593:23, 3619:9,

3624:1, 3624:4,

3627:8, 3629:19,

3639:24, 3643:17

concerns [3] - 3543:1,

3552:3, 3650:23

concessions [1] -

3620:3

concluded [2] -

3640:14, 3678:8

conclusions [2] -

3525:9, 3612:18

conducts [1] -

3551:25

conduit [1] - 3529:6

confer [1] - 3520:11

conference [1] -

3670:20

confidential [1] -

3605:7

confine [3] - 3595:23,

3630:3, 3649:2

confined [1] - 3560:8

conflict [2] - 3565:23,

3609:9

connected [2] -

3529:1, 3532:1

connection [26] -

3518:8, 3536:21,

3537:8, 3537:21,

3537:23, 3537:25,

3538:5, 3538:8,

3538:11, 3542:13,

3547:22, 3548:2,

3548:17, 3550:16,

3577:7, 3578:12,

3590:17, 3591:14,

3593:23, 3602:2,

3611:15, 3622:5,

3626:21, 3636:18,

3648:23

conscientious [6] -

3574:18, 3575:9,

3575:18, 3619:14,

3619:15, 3674:4

consider [17] - 3575:2,

3575:9, 3575:18,

3575:23, 3576:16,

3593:11, 3593:18,

3593:22, 3594:24,

3596:21, 3597:5,

3597:12, 3602:2,

3606:8, 3608:22,

3626:20, 3664:14

consideration [11] -

3517:22, 3595:7,

3600:8, 3602:5,

3626:24, 3627:3,

3627:6, 3628:23,

3633:7, 3634:9,

3636:24

considerations [7] -

3526:16, 3527:2,

3528:17, 3632:18,

3633:4, 3633:5,

3634:10

considered [13] -

3521:14, 3556:7,

3612:24, 3638:2,

3639:9, 3641:4,

3641:7, 3642:1,

3643:2, 3645:4,

3651:20, 3661:10,

3665:12

considering [2] -

3597:6, 3629:21

consistent [10] -

3563:24, 3606:1,

3610:5, 3612:23,

3614:10, 3618:22,

3636:8, 3638:9,

3656:6, 3665:12

consistently [4] -

3605:24, 3614:2,

3656:4, 3656:12

constant [2] -

3670:19, 3670:23

constantly [1] -

3607:15

constitute [1] - 3638:3

consultant [5] -

3612:24, 3613:17,

3635:21, 3635:24,

3670:11

consultants [1] -

3669:22

consulting [2] -

3660:25, 3661:3

consumer [1] -

3661:14

contended [1] -

3623:6

contents [1] - 3523:18

context [3] - 3578:1,

3613:14, 3637:21

continually [1] -

3541:22

continuations [1] -

3558:1

continue [4] -

3568:20, 3577:4,

3588:14, 3650:3

continued [2] -

3587:19, 3614:9

CONTINUED [2] -

3516:2, 3524:14

continuing [2] -

3593:7, 3650:19

contract [28] -

3527:16, 3529:19,

3537:23, 3537:24,

3537:25, 3538:9,

3555:3, 3564:12,

3572:4, 3577:16,

3578:7, 3579:23,

3590:5, 3590:10,

3590:23, 3591:5,

3592:1, 3592:24,

3594:9, 3594:11,

3598:9, 3598:16,

3600:2, 3631:2,

3637:7, 3640:15

contractor[1] -

3589:8

contracts [11] -

3563:3, 3591:16,

3591:24, 3597:3,

3597:23, 3598:5,

3608:24, 3622:6,

3626:22, 3655:25

contractual [4] -

3528:18, 3536:24,

3542:9, 3591:19

contractually [3] -

3564:12, 3564:17,

3654:4

contrast [1] - 3656:19

contribute [2] -

3602:12, 3620:5

contributor [1] -

3561:21

controversy [1] -

3520:8

convenient [1] -

3525:18

conversation [1] -

3517:7

converted [1] -

3561:19

convince [1] - 3670:4

coordinate [2] -

3542:19, 3542:20

Copenhefer[1] -

3668:13

copies [4] - 3517:11,

3521:23, 3533:14,

3613:11

copy [1] - 3523:3

Core [1] - 3557:4

corner [1] - 3554:14

corporate [3] -

3540:19, 3548:14,

3548:21

corporation [1] -

3621:3

correct [33] - 3514:23,

3522:8, 3523:21,

3524:1, 3530:19,

3548:10, 3548:11,

3557:16, 3559:11,

3562:13, 3567:13,

3570:5, 3570:8,

3572:24, 3581:16,

3593:20, 3594:18,

3595:1, 3597:7,

3602:3, 3602:4,

3617:25, 3625:17,

3638:24, 3645:7,

3645:21, 3646:1,

3646:4, 3650:2,

3650:15, 3654:20,

3654:25, 3657:22

Correct [5] - 3533:8,

3557:12, 3567:22,

3634:15, 3651:18

corrected [1] - 3529:1

cost [5] - 3550:12,

3612:25, 3615:2,

3624:17, 3645:15

costs [18] - 3550:13,

3563:5, 3563:9,

3563:13, 3577:1,

3580:22, 3607:5,

3607:15, 3610:8,

3610:11, 3621:4,

3623:20, 3624:13,

3624:18, 3626:13,

3652:4, 3674:15,

3674:19

Council [1] - 3670:16

counsel [46] -

3518:11, 3520:9,

3520:12, 3520:13,

3520:23, 3521:3,

3521:5, 3521:6,

3521:7, 3521:12,

3527:15, 3530:1,

3532:10, 3537:17,

3538:2, 3538:3,

3542:18, 3570:3,

3570:6, 3574:20,

United States District Court

Trenton, New Jersey

3685

3580:16, 3590:24,

3606:1, 3606:13,

3609:5, 3613:8,

3613:12, 3613:15,

3622:18, 3622:19,

3636:8, 3636:20,

3638:4, 3638:7,

3638:9, 3639:16,

3641:20, 3646:9,

3656:2, 3656:6,

3659:4, 3668:12,

3673:12

Counsel [1] - 3678:7

COUNSEL [1] -

3515:16

counsel's [1] -

3518:20

country [2] - 3565:12,

3659:18

couple [7] - 3571:4,

3578:23, 3596:10,

3637:5, 3660:9,

3667:25, 3671:15

course [7] - 3521:8,

3548:13, 3552:1,

3597:25, 3631:18,

3659:3, 3665:25

COURT [192] - 3514:1,

3514:17, 3517:1,

3518:3, 3518:18,

3518:23, 3519:5,

3519:11, 3520:4,

3520:7, 3522:6,

3522:10, 3522:12,

3522:21, 3522:24,

3523:5, 3523:11,

3523:22, 3523:24,

3524:1, 3524:5,

3524:10, 3524:13,

3525:2, 3525:8,

3525:23, 3527:8,

3527:10, 3533:5,

3533:9, 3533:15,

3533:20, 3534:4,

3534:7, 3534:15,

3534:17, 3534:20,

3536:6, 3536:8,

3538:22, 3541:3,

3541:5, 3544:7,

3545:5, 3545:11,

3545:16, 3546:22,

3546:25, 3547:15,

3554:13, 3554:18,

3554:23, 3555:5,

3555:7, 3557:1,

3557:3, 3557:6,

3557:10, 3557:13,

3557:17, 3557:22,

3558:8, 3558:13,

3559:13, 3559:15,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 172 of 194 PageID: 19034
3559:18, 3559:20,

3560:10, 3560:21,

3561:1, 3561:5,

3561:8, 3568:10,

3568:14, 3568:18,

3568:20, 3569:2,

3570:17, 3571:11,

3573:8, 3573:10,

3573:12, 3575:11,

3575:13, 3578:19,

3579:1, 3579:25,

3581:8, 3581:10,

3582:15, 3582:18,

3586:8, 3586:10,

3592:8, 3594:1,

3594:3, 3594:8,

3594:15, 3594:19,

3594:21, 3596:1,

3600:15, 3600:18,

3600:20, 3601:5,

3601:22, 3601:24,

3604:10, 3604:12,

3607:18, 3607:20,

3608:1, 3608:14,

3608:16, 3612:5,

3614:15, 3616:10,

3616:13, 3616:15,

3617:20, 3618:10,

3618:14, 3619:1,

3620:17, 3624:25,

3625:3, 3625:9,

3625:11, 3625:13,

3625:16, 3625:18,

3625:20, 3625:23,

3625:25, 3626:2,

3629:12, 3629:14,

3630:6, 3639:19,

3639:22, 3642:14,

3642:18, 3646:21,

3647:2, 3647:5,

3647:7, 3648:11,

3648:15, 3649:9,

3650:16, 3651:13,

3651:16, 3651:19,

3652:4, 3652:12,

3652:15, 3653:5,

3653:13, 3653:19,

3654:5, 3654:13,

3657:12, 3657:16,

3657:19, 3658:2,

3659:10, 3659:21,

3660:3, 3660:8,

3661:9, 3662:17,

3664:2, 3664:21,

3665:9, 3665:16,

3665:18, 3666:3,

3667:15, 3667:20,

3669:3, 3669:12,

3669:15, 3671:3,

3671:11, 3672:25,

3674:8, 3674:12,

3676:1, 3677:17,

3678:1, 3678:3,

3678:5

Court [17] - 3523:4,

3525:18, 3526:10,

3530:23, 3531:17,

3540:14, 3548:5,

3561:14, 3569:11,

3581:18, 3599:12,

3628:10, 3638:11,

3643:24, 3649:13,

3655:17, 3657:5

court [3] - 3517:24,

3520:17, 3522:18

COURTHOUSE [1] -

3514:14

courtroom [1] -

3617:19

courts [4] - 3595:11,

3602:18, 3673:22,

3674:3

cover[2] - 3531:22,

3643:15

covered [2] - 3542:17,

3580:11

covers [1] - 3628:7

cozy [3] - 3662:22,

3662:23, 3663:25

create [1] - 3543:24

created [1] - 3552:2

credits [1] - 3637:14

crisis [1] - 3543:19

critical [15] - 3528:24,

3530:8, 3532:17,

3548:24, 3548:25,

3550:11, 3554:7,

3578:9, 3586:1,

3586:6, 3618:4,

3663:13, 3671:1,

3676:16, 3677:7

criticism [4] - 3615:3,

3615:5, 3615:25,

3616:5

criticized [2] - 3615:1,

3635:20

cross [3] - 3517:23,

3657:12, 3659:23

cross-examine [1] -

3517:23

cry [1] - 3664:1

current [4] - 3609:5,

3631:9, 3632:14,

3632:25

custom [1] - 3608:18

cut [1] - 3610:11

cutoff [1] - 3668:24

D

daily [4] - 3540:7,

3549:5, 3572:4,

3572:6

DANIEL [1] - 3515:4

dashboard [2] -

3551:8, 3553:9

data [30] - 3528:1,

3528:5, 3532:21,

3547:7, 3551:15,

3554:11, 3562:15,

3570:4, 3574:20,

3584:19, 3601:21,

3602:20, 3602:22,

3602:24, 3603:1,

3604:25, 3608:19,

3627:8, 3627:12,

3628:18, 3633:5,

3636:3, 3641:8,

3645:10, 3645:11,

3647:21, 3656:25,

3657:4, 3667:4

date [2] - 3555:16,

3648:22

dates [3] - 3587:18,

3591:10, 3591:22

DAY [1] - 3514:20

day-to-day [16] -

3535:4, 3540:3,

3542:4, 3571:16,

3571:22, 3571:23,

3571:25, 3572:2,

3581:25, 3582:2,

3585:3, 3589:10,

3589:18, 3589:20,

3589:23, 3677:20

days [4] - 3640:21,

3655:21, 3657:7,

3664:18

deal [7] - 3542:22,

3611:13, 3659:13,

3659:14, 3659:15,

3659:17, 3671:8

dealing [6] - 3539:21,

3540:3, 3589:14,

3611:4, 3623:14,

3666:6

dealt [1] - 3663:7

debates [1] - 3554:21

December [1] - 3547:5

decent [2] - 3662:20,

3662:21

decide [6] - 3602:13,

3616:23, 3665:7,

3673:8, 3675:10,

3677:5

decided [1] - 3672:22

deciding [2] -

3613:16, 3633:12

decision [4] - 3535:8,

3549:7, 3566:22,

3593:23

decisions [2] -

3538:3, 3566:20

declines [1] - 3632:10

decreased [1] -

3562:5

deductible [2] -

3580:8, 3580:17

deemed [2] - 3517:20,

3637:15

defeating [1] - 3663:4

DEFENDANT [1] -

3514:11

Defendant's [55] -

3516:6, 3516:8,

3516:9, 3516:10,

3516:11, 3516:12,

3516:13, 3516:14,

3516:15, 3516:16,

3516:17, 3516:18,

3523:17, 3523:23,

3524:3, 3524:25,

3525:25, 3527:4,

3527:11, 3527:22,

3530:23, 3532:9,

3532:23, 3533:21,

3534:5, 3534:22,

3536:9, 3536:13,

3538:20, 3540:11,

3541:10, 3549:13,

3549:17, 3552:22,

3553:1, 3555:10,

3559:21, 3568:7,

3568:24, 3571:12,

3582:14, 3586:12,

3598:24, 3599:2,

3603:4, 3610:15,

3625:8, 3625:14,

3625:21, 3626:3,

3627:24, 3629:15,

3643:7, 3647:8,

3648:4

defendant's [3] -

3523:22, 3613:13,

3614:5

defendants [8] -

3521:5, 3521:6,

3523:15, 3533:2,

3536:5, 3613:10,

3629:11, 3647:3

Defendants [4] -

3524:6, 3527:4,

3559:16, 3571:8

DEFENDANTS [3] -

3514:7, 3515:10,

3515:14

definition [3] -

United States District Court

Trenton, New Jersey

3686

3571:21, 3572:7,

3637:6

definitive [1] - 3600:6

delegates [2] -

3571:15, 3589:9

deletions [2] -

3557:24, 3558:5

deliberately [1] -

3537:17

deliberation [1] -

3517:23

deliberations [1] -

3646:17

deliver[4] - 3535:14,

3542:11, 3543:4,

3609:18

delivered [6] - 3526:6,

3594:13, 3603:12,

3613:10, 3617:6

delivering [1] - 3543:6

delivers [1] - 3535:4

demanding [3] -

3662:3, 3662:5

demean [1] - 3664:16

demonstrative [2] -

3525:15, 3525:16

Denied [2] - 3544:7,

3575:13

department [1] -

3548:23

dependent [1] -

3616:21

deposition [10] -

3518:6, 3519:14,

3519:20, 3520:16,

3520:22, 3521:9,

3590:20, 3591:5,

3591:6

depositions [1] -

3590:20

depth [1] - 3645:3

describe [17] - 3526:9,

3531:16, 3543:9,

3548:5, 3553:7,

3569:11, 3581:18,

3587:8, 3591:1,

3591:6, 3599:11,

3613:5, 3628:9,

3641:23, 3642:11,

3643:1, 3643:24

described [8] -

3526:22, 3535:20,

3539:23, 3642:2,

3658:19, 3661:8,

3677:25

describes [1] -

3646:16

describing [3] -

3519:24, 3524:17,

3658:15

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 173 of 194 PageID: 19035
description [2] -

3518:21, 3645:3

descriptions [1] -

3646:15

deserved [1] -

3666:13

despite [1] - 3558:20

detailed [2] - 3551:23,

3611:1

details [1] - 3615:2

determination [3] -

3539:25, 3602:19,

3644:13

determinations [2] -

3536:3, 3645:4

determine [1] -

3616:18

determined [1] -

3558:5

determines [1] -

3632:16

determining [4] -

3566:19, 3593:18,

3632:21, 3636:4

developed [7] -

3537:11, 3611:18,

3611:19, 3611:24,

3612:10, 3635:15,

3664:1

developing [3] -

3633:9, 3663:22,

3663:24

development [1] -

3587:21

developments [6] -

3540:20, 3553:18,

3629:5, 3635:7,

3668:22

develops [1] - 3580:4

devoted [2] - 3551:4,

3555:3

devoting [1] - 3554:12

differ [1] - 3633:19

difference [3] -

3519:17, 3575:2,

3669:19

differences [1] -

3593:11

different [48] - 3518:9,

3522:18, 3542:24,

3543:23, 3544:13,

3547:8, 3551:12,

3556:13, 3564:3,

3564:5, 3565:5,

3571:22, 3576:2,

3584:11, 3584:12,

3585:1, 3585:6,

3585:9, 3585:16,

3589:18, 3597:2,

3597:10, 3606:25,

3609:13, 3614:3,

3621:7, 3623:19,

3627:11, 3628:7,

3628:13, 3628:14,

3628:19, 3629:3,

3631:21, 3631:23,

3634:12, 3634:14,

3635:5, 3640:19,

3659:24, 3660:19,

3660:21, 3661:8,

3661:22, 3663:24,

3673:5

Different [1] - 3634:14

differential [2] -

3650:7, 3654:21

differently [4] -

3522:17, 3598:1,

3668:12, 3670:5

difficult [8] - 3562:12,

3565:24, 3583:21,

3585:21, 3599:14,

3609:21, 3626:18,

3662:4

difficulty [2] -

3597:19, 3609:17

diligence [4] - 3539:4,

3539:10, 3539:17,

3581:1

diligent [1] - 3615:15

Diligent [1] - 3568:1

diligently [1] - 3656:1

direct [5] - 3579:23,

3583:14, 3589:8,

3622:22, 3623:16

DIRECT [2] - 3516:2,

3524:14

directed [2] - 3639:6,

3649:4

direction [2] - 3556:1,

3599:18

directly [4] - 3548:18,

3549:25, 3610:9,

3666:22

DIRECTOR [1] -

3515:16

director [4] - 3519:19,

3524:20, 3677:11

directors [3] - 3670:8,

3670:19, 3674:1

Directors [1] -

3670:16

disagree [3] -

3572:12, 3655:18,

3673:4

disagreement [1] -

3523:16

discern [1] - 3600:5

disclosed [5] -

3576:11, 3608:4,

3608:13, 3671:7,

3672:23

disclosure [6] -

3532:1, 3643:17,

3671:21, 3671:23,

3672:15

disclosures [1] -

3645:24

discomfort [1] -

3667:2

discovery [3] -

3522:2, 3533:17,

3590:18

discrete [1] - 3614:8

discretion [1] - 3673:2

discuss [3] - 3614:6,

3621:1, 3637:4

discussed [14] -

3532:8, 3572:1,

3590:24, 3600:1,

3609:4, 3610:7,

3621:7, 3637:20,

3638:4, 3639:11,

3642:5, 3642:9,

3645:9

discusses [1] -

3645:18

discussing [5] -

3605:25, 3623:20,

3640:20, 3647:21,

3675:21

discussion [10] -

3613:2, 3613:4,

3627:21, 3631:5,

3632:7, 3638:5,

3644:20, 3645:14,

3655:23, 3675:15

discussions [17] -

3551:5, 3551:21,

3556:4, 3578:17,

3587:20, 3613:14,

3613:15, 3620:5,

3622:18, 3627:18,

3631:12, 3638:7,

3638:9, 3641:23,

3646:6, 3663:21,

3666:13

disinclination [1] -

3566:3

displeasure [1] -

3546:8

dispute [1] - 3518:2

disservice [1] -

3615:12

distinction [1] -

3669:21

distribution [11] -

3596:18, 3606:8,

3606:14, 3606:17,

3606:18, 3607:2,

3607:5, 3607:15,

3608:10, 3608:20,

3637:8

distributor [2] -

3531:21, 3543:7

DISTRICT [4] - 3514:1,

3514:1, 3514:17,

3514:18

diversified [3] -

3615:11, 3656:17,

3660:10

division [6] - 3548:13,

3622:2, 3622:24,

3623:17, 3658:8,

3658:20

division's [1] - 3623:3

document [61] -

3520:18, 3521:24,

3522:16, 3525:3,

3525:10, 3525:15,

3526:1, 3526:9,

3526:19, 3527:5,

3527:23, 3531:3,

3531:6, 3531:8,

3531:10, 3531:11,

3531:16, 3532:14,

3533:12, 3533:13,

3534:23, 3535:21,

3536:14, 3537:1,

3546:24, 3547:2,

3547:11, 3549:20,

3550:5, 3553:3,

3553:21, 3554:4,

3554:13, 3555:11,

3555:20, 3556:15,

3560:22, 3561:2,

3561:5, 3569:4,

3569:11, 3569:20,

3586:15, 3586:23,

3599:3, 3599:5,

3599:11, 3599:23,

3603:8, 3610:23,

3621:20, 3622:4,

3622:13, 3623:14,

3628:1, 3628:9,

3628:22, 3643:9,

3643:24, 3648:18,

3672:24

documentation [10] -

3530:3, 3530:7,

3530:14, 3531:24,

3535:14, 3567:15,

3569:13, 3569:19,

3599:19, 3601:1

documents [25] -

3517:13, 3518:11,

3518:13, 3518:14,

3519:7, 3519:12,

3519:18, 3521:11,

3521:13, 3521:19,

3521:20, 3521:22,

United States District Court

Trenton, New Jersey

3687

3521:23, 3522:4,

3522:6, 3525:17,

3526:25, 3532:7,

3569:16, 3569:17,

3601:5, 3662:20,

3667:16, 3671:24

dollars [7] - 3578:4,

3580:9, 3632:2,

3632:3, 3632:4,

3650:11, 3675:23

done [16] - 3530:12,

3535:13, 3547:24,

3550:12, 3582:11,

3591:25, 3596:13,

3605:24, 3628:5,

3630:1, 3640:17,

3662:16, 3663:7,

3673:12, 3673:13,

3673:14

down [10] - 3525:19,

3554:1, 3557:13,

3558:4, 3568:15,

3589:15, 3589:17,

3611:3, 3673:24,

3674:14

Dr[2] - 3674:10,

3676:2

draft [4] - 3641:11,

3641:21, 3646:8,

3646:9

driven [1] - 3623:14

dry [1] - 3642:13

due [4] - 3522:14,

3539:17, 3653:24,

3666:16

during [8] - 3521:8,

3522:2, 3590:19,

3590:20, 3629:4,

3650:9, 3654:9,

3665:18

duties [3] - 3524:19,

3541:7, 3662:13

DX-144.15 [1] - 3571:8

E

e-mail [1] - 3521:1

early [6] - 3528:9,

3554:7, 3567:14,

3569:23, 3577:6,

3609:16

easily [2] - 3605:7,

3621:16

EAST [1] - 3514:14

eat [1] - 3580:23

economic [2] -

3551:8, 3674:18

economies [28] -

3526:18, 3584:1,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 174 of 194 PageID: 19036
3584:25, 3626:6,

3626:8, 3626:10,

3626:14, 3626:17,

3626:21, 3627:3,

3627:7, 3627:16,

3627:18, 3627:21,

3628:7, 3628:13,

3629:5, 3629:19,

3629:23, 3630:11,

3630:22, 3631:21,

3633:9, 3635:22,

3636:6, 3645:18,

3648:24, 3673:18

economist [1] -

3674:10

education [1] -

3539:22

Edwards [6] -

3529:14, 3615:25,

3616:6, 3616:7,

3619:3, 3660:23

effective [14] - 3546:2,

3554:9, 3554:10,

3627:9, 3627:11,

3627:13, 3628:19,

3632:9, 3632:12,

3632:13, 3632:22,

3634:7, 3649:15,

3650:7

effectively [2] -

3549:3, 3665:14

efficiencies [1] -

3664:24

efficient [1] - 3554:9

effort [11] - 3520:2,

3552:10, 3553:13,

3569:12, 3599:9,

3599:18, 3599:20,

3605:9, 3614:23,

3636:6, 3670:23

efforts [2] - 3526:24,

3604:5

eight [1] - 3661:18

either [10] - 3548:16,

3549:7, 3592:14,

3603:6, 3608:5,

3631:4, 3650:24,

3653:15, 3664:12,

3673:10

eliminate [2] - 3609:9,

3677:15

elsewhere [8] -

3600:7, 3610:8,

3621:4, 3623:21,

3624:14, 3624:19,

3672:14, 3672:21

embarrass [1] -

3663:14

emphasize [1] -

3657:3

employee [4] - 3624:2,

3624:5, 3624:8

employees [2] -

3565:22, 3624:17

enabled [1] - 3656:18

end [22] - 3529:23,

3530:11, 3580:25,

3585:19, 3587:2,

3604:19, 3609:24,

3615:19, 3617:16,

3621:17, 3633:25,

3634:5, 3640:14,

3642:16, 3645:14,

3653:15, 3653:17,

3665:7, 3665:8,

3673:23, 3674:3,

3676:10

ending [4] - 3632:25,

3643:12, 3643:19,

3648:14

ends [1] - 3549:15

enforcement [1] -

3540:21

engage [9] - 3536:4,

3539:6, 3539:10,

3539:17, 3539:20,

3553:17, 3556:4,

3566:18, 3566:20

engaged [5] -

3539:21, 3540:2,

3602:10, 3635:21,

3656:9

engages [1] - 3540:6

engaging [1] - 3656:3

enmeshed [1] -

3676:3

enormous [2] -

3674:16, 3674:18

ensure [4] - 3574:5,

3593:7, 3608:12,

3656:3

ensured [1] - 3546:14

ensures [1] - 3677:24

ensuring [2] - 3550:9,

3656:5

enter [1] - 3677:4

entered [7] - 3524:22,

3527:6, 3533:12,

3590:9, 3622:1,

3644:15, 3645:22

entering [1] - 3544:17

enterprise [5] -

3577:9, 3577:19,

3578:20, 3579:6,

3669:18

enters [1] - 3607:3

entire [5] - 3518:10,

3518:16, 3519:9,

3533:12, 3546:12

entity [5] - 3537:5,

3577:14, 3610:11,

3621:5, 3647:24

entrepreneurial [4] -

3576:24, 3578:20,

3578:24, 3669:18

EQ/Lord [2] - 3557:3,

3558:9

EQAT [12] - 3518:7,

3519:8, 3548:3,

3563:1, 3591:24,

3593:13, 3616:6,

3638:22, 3639:8,

3641:9, 3645:6,

3649:4

equal [1] - 3525:11

equally [1] - 3577:8

EQUITABLE [3] -

3514:6, 3514:10,

3515:17

Equitable [9] -

3547:21, 3548:1,

3548:6, 3549:25,

3610:2, 3616:16,

3617:24, 3617:25,

3618:2

Ernst [4] - 3612:14,

3612:18, 3618:11

erroneously [3] -

3516:7, 3523:20,

3524:4

ESQUIRE [12] -

3515:4, 3515:4,

3515:5, 3515:5,

3515:6, 3515:6,

3515:9, 3515:12,

3515:13, 3515:13,

3515:14, 3515:16

essential [3] - 3536:2,

3548:21, 3672:2

essentially [1] -

3622:20

et [5] - 3514:3, 3514:6,

3514:8, 3553:12,

3644:25

ETF [1] - 3535:10

ETFs [1] - 3542:5

ethics [1] - 3539:22

evaluation [2] -

3576:17, 3646:16

evening [1] - 3522:24

events [1] - 3565:13

everywhere [1] -

3579:21

evidence [45] -

3516:7, 3516:8,

3516:9, 3516:10,

3516:11, 3516:12,

3516:13, 3516:14,

3516:15, 3516:16,

3516:17, 3516:18,

3517:6, 3517:13,

3517:15, 3518:1,

3522:17, 3523:18,

3524:3, 3524:22,

3527:7, 3527:12,

3533:2, 3533:4,

3533:12, 3533:22,

3533:24, 3534:2,

3534:6, 3536:10,

3538:21, 3541:1,

3541:2, 3547:14,

3559:17, 3559:22,

3571:9, 3571:13,

3612:3, 3625:15,

3625:22, 3626:4,

3629:16, 3647:4,

3647:9

evolved [1] - 3528:12

exact [1] - 3525:15

Exactly [1] - 3666:3

exactly [4] - 3658:17,

3658:21, 3658:23,

3659:4

exam [1] - 3607:24

examination [1] -

3595:18

EXAMINATION [2] -

3516:2, 3524:14

examine [12] -

3517:23, 3528:22,

3528:24, 3528:25,

3537:9, 3565:25,

3583:8, 3583:11,

3584:9, 3607:12,

3634:10, 3661:4

examined [1] - 3644:4

examiners [1] -

3658:7

examining [10] -

3595:13, 3602:12,

3602:25, 3607:8,

3607:16, 3615:15,

3647:23, 3657:7,

3676:17, 3677:22

example [14] -

3565:16, 3569:25,

3570:25, 3572:4,

3580:7, 3596:14,

3598:14, 3629:1,

3629:9, 3652:21,

3658:16, 3667:11,

3668:4

examples [12] -

3529:2, 3540:9,

3543:15, 3560:25,

3577:24, 3582:12,

3587:4, 3627:5,

3634:19, 3635:2,

3637:5, 3637:16

exams [1] - 3542:20

United States District Court

Trenton, New Jersey

3688

exceeded [1] - 3559:1

exceeds [1] - 3553:25

Excellent [1] -

3619:13

exception [1] - 3555:1

excessive [1] -

3582:23

exchange [5] -

3520:21, 3535:10,

3538:24, 3581:19

excluded [1] -

3521:13

exclusive [1] -

3608:20

exclusively [1] -

3582:10

excuse [2] - 3517:19,

3589:24

Excuse [5] - 3533:23,

3540:22, 3612:2,

3630:2, 3648:8

execute [1] - 3637:13

execution [2] -

3542:10, 3566:23

executive [6] - 3537:4,

3553:19, 3554:10,

3587:1, 3588:17,

3663:19

exemptive [2] -

3542:23, 3542:25

exercise [12] -

3574:25, 3584:18,

3602:11, 3613:22,

3632:24, 3636:3,

3640:18, 3656:9,

3657:1, 3673:15,

3673:24, 3677:23

exercising [4] -

3570:18, 3574:18,

3600:9, 3674:5

Exhibit [58] - 3516:6,

3516:8, 3516:9,

3516:10, 3516:11,

3516:13, 3516:14,

3516:15, 3516:16,

3516:17, 3516:18,

3523:17, 3523:23,

3524:3, 3525:1,

3525:25, 3527:4,

3527:11, 3527:22,

3530:23, 3532:9,

3532:23, 3533:13,

3533:21, 3534:5,

3534:22, 3536:9,

3536:13, 3538:19,

3538:20, 3540:11,

3541:10, 3546:19,

3549:13, 3549:17,

3552:22, 3553:1,

3555:10, 3560:16,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 175 of 194 PageID: 19037
3561:8, 3568:7,

3568:24, 3571:12,

3582:14, 3586:13,

3598:24, 3599:2,

3603:4, 3610:15,

3625:14, 3625:21,

3626:3, 3627:24,

3629:15, 3643:7,

3647:8, 3648:4

exhibit [8] - 3523:22,

3533:2, 3549:14,

3610:16, 3648:3,

3648:7, 3648:9,

3657:20

exhibited [1] - 3572:8

Exhibits [4] - 3516:12,

3559:16, 3559:21,

3625:8

exhibits [5] - 3517:16,

3518:8, 3525:6,

3531:21, 3625:7

existed [1] - 3638:22

existence [1] -

3638:14

expands [1] - 3550:8

expect [2] - 3578:5,

3578:25

expectation [1] -

3576:7

expectations [1] -

3553:25

expected [1] - 3602:11

expense [47] - 3532:3,

3546:3, 3546:4,

3546:6, 3562:1,

3562:7, 3577:5,

3579:3, 3583:18,

3586:4, 3596:9,

3596:12, 3596:15,

3596:21, 3597:5,

3597:8, 3597:18,

3597:20, 3598:18,

3614:23, 3616:11,

3627:14, 3627:15,

3628:15, 3628:18,

3630:18, 3630:20,

3631:3, 3631:4,

3631:7, 3631:8,

3631:10, 3631:12,

3631:18, 3649:24,

3651:10, 3652:15,

3652:19, 3653:11,

3653:25, 3654:10,

3672:2, 3672:10,

3672:19, 3675:14,

3675:22

Expense [1] - 3652:18

expenses [34] -

3596:13, 3596:17,

3596:19, 3605:13,

3605:16, 3605:18,

3606:8, 3606:15,

3606:18, 3608:3,

3608:13, 3608:20,

3610:1, 3611:3,

3616:16, 3616:17,

3617:23, 3617:24,

3618:1, 3618:3,

3618:15, 3618:16,

3620:9, 3620:12,

3620:21, 3621:11,

3622:22, 3623:7,

3623:16, 3645:10,

3645:11, 3673:9

experience [8] -

3530:4, 3619:12,

3656:2, 3658:4,

3659:2, 3666:7,

3668:17, 3674:10

experienced [2] -

3530:2, 3636:8

expert [8] - 3564:4,

3565:3, 3573:7,

3613:9, 3614:4,

3620:15, 3675:2,

3677:13

expertise [7] -

3530:11, 3569:25,

3615:14, 3656:17,

3658:13, 3659:5,

3661:22

experts [7] - 3613:13,

3613:14, 3614:5,

3615:12, 3615:24,

3616:5, 3675:17

explain [9] - 3555:19,

3565:1, 3577:22,

3615:2, 3638:11,

3649:12, 3650:16,

3655:17, 3661:11

explained [2] -

3618:16, 3636:19

explaining [2] -

3535:18, 3612:6

explanation [4] -

3592:5, 3592:6,

3614:18, 3614:20

explicit [2] - 3520:25,

3602:6

expressed [1] -

3675:3

expressly [2] -

3520:18, 3521:8

extensive [6] -

3531:18, 3556:4,

3611:11, 3611:12,

3640:13, 3647:20

extensively [5] -

3542:2, 3555:24,

3571:7, 3609:4,

3609:5

extent [5] - 3560:14,

3583:20, 3617:5,

3635:21, 3644:16

extra [1] - 3533:14

extraordinarily [1] -

3670:3

extraordinary [1] -

3667:14

Extremely [1] -

3619:20

extremely [2] -

3552:19, 3574:23

F

faced [1] - 3667:12

facilities [1] - 3542:8

fact [22] - 3522:2,

3525:8, 3548:13,

3563:13, 3584:20,

3590:21, 3610:6,

3610:7, 3610:10,

3613:18, 3613:23,

3614:6, 3617:12,

3621:2, 3624:13,

3624:18, 3633:8,

3635:3, 3658:14,

3660:16, 3675:3,

3675:13

factor [18] - 3518:15,

3530:4, 3584:4,

3584:8, 3595:12,

3597:21, 3600:3,

3602:7, 3604:4,

3629:10, 3644:12,

3645:5, 3645:9

factor-by-factor [1] -

3645:5

factors [34] - 3518:15,

3525:5, 3526:13,

3527:3, 3532:20,

3574:22, 3576:2,

3583:3, 3584:19,

3595:11, 3602:12,

3607:11, 3613:23,

3621:7, 3626:25,

3630:23, 3632:20,

3633:11, 3640:19,

3640:20, 3641:4,

3641:7, 3642:1,

3642:5, 3642:9,

3643:2, 3644:4,

3644:8, 3645:4,

3646:6, 3646:16,

3647:20, 3660:6,

3672:5

fail [1] - 3667:5

failing [1] - 3576:13

failure [1] - 3542:24

failures [2] - 3666:2,

3666:11

fair[17] - 3574:7,

3574:11, 3574:25,

3576:1, 3584:20,

3602:13, 3603:1,

3615:3, 3615:5,

3632:21, 3636:5,

3640:15, 3641:2,

3647:19, 3655:24,

3659:17, 3664:9

fairly [3] - 3585:1,

3607:3, 3614:8

fairness [3] - 3594:25,

3595:7, 3606:9

faith [1] - 3602:20

fall [2] - 3520:10,

3670:21

fallout [17] - 3636:10,

3636:11, 3636:15,

3636:24, 3637:1,

3637:9, 3637:10,

3637:13, 3637:15,

3638:3, 3639:10,

3645:22, 3672:25,

3673:7, 3673:17,

3674:17

familiar [14] - 3530:7,

3565:10, 3577:24,

3581:3, 3588:14,

3590:12, 3590:13,

3596:9, 3621:20,

3626:7, 3636:11,

3637:17, 3655:12,

3669:4

far [3] - 3574:22,

3660:23, 3664:1

fashion [2] - 3580:1,

3644:9

feature [1] - 3635:14

FEBRUARY [1] -

3514:13

February [1] - 3520:17

Federal [2] - 3674:9,

3674:21

Fee [1] - 3523:5

fee [104] - 3528:3,

3528:11, 3528:18,

3528:19, 3528:22,

3528:24, 3538:25,

3545:18, 3546:2,

3547:7, 3562:2,

3562:5, 3562:8,

3573:3, 3573:18,

3573:20, 3574:8,

3574:9, 3574:10,

3574:24, 3575:3,

3575:6, 3575:25,

3581:19, 3583:6,

3584:14, 3584:15,

United States District Court

Trenton, New Jersey

3689

3584:17, 3584:23,

3585:12, 3593:16,

3593:22, 3594:25,

3595:3, 3595:6,

3597:6, 3597:12,

3597:14, 3597:18,

3597:24, 3598:11,

3598:14, 3599:16,

3599:21, 3599:22,

3600:21, 3600:22,

3602:13, 3602:14,

3602:25, 3608:5,

3608:10, 3609:11,

3609:13, 3627:9,

3628:19, 3629:21,

3630:24, 3630:25,

3631:8, 3631:9,

3631:16, 3631:23,

3631:25, 3632:1,

3632:4, 3632:9,

3632:12, 3632:13,

3632:21, 3632:22,

3632:25, 3633:17,

3633:21, 3634:7,

3634:14, 3635:17,

3642:2, 3643:3,

3649:15, 3649:18,

3650:7, 3651:11,

3651:19, 3651:23,

3651:25, 3652:3,

3652:10, 3652:23,

3652:24, 3653:4,

3653:6, 3653:7,

3653:22, 3653:23,

3654:17, 3667:4,

3670:2, 3672:7,

3675:16, 3675:18,

3677:3

fees [81] - 3532:1,

3532:2, 3537:7,

3545:24, 3545:25,

3552:15, 3552:17,

3552:18, 3562:15,

3562:16, 3562:19,

3562:21, 3572:20,

3574:7, 3575:4,

3580:21, 3580:22,

3583:23, 3584:3,

3585:3, 3585:9,

3593:24, 3594:4,

3594:23, 3595:1,

3595:4, 3595:7,

3595:13, 3595:20,

3596:6, 3596:15,

3597:15, 3597:19,

3598:2, 3598:4,

3598:7, 3598:13,

3599:9, 3599:14,

3600:7, 3600:11,

3601:1, 3604:14,

3605:13, 3605:18,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 176 of 194 PageID: 19038
3606:3, 3606:10,

3623:19, 3627:11,

3627:13, 3628:23,

3631:9, 3632:8,

3633:11, 3633:14,

3633:23, 3634:1,

3635:17, 3636:5,

3637:17, 3637:20,

3637:22, 3638:3,

3638:8, 3638:12,

3638:15, 3638:23,

3640:1, 3640:4,

3640:15, 3640:24,

3641:1, 3641:5,

3647:17, 3649:23,

3655:24

Fees [1] - 3572:23

fellow [2] - 3662:20,

3662:21

felt [5] - 3556:2,

3576:13, 3598:17,

3613:8

few [11] - 3534:11,

3537:6, 3539:2,

3579:10, 3605:20,

3606:22, 3615:8,

3637:15, 3655:8,

3657:16, 3672:1

Fidelity [4] - 3565:17,

3667:8, 3667:9,

3667:11

fiduciary [3] -

3524:19, 3586:3,

3662:13

figure [4] - 3652:5,

3660:4, 3661:4,

3673:11

filed [6] - 3537:15,

3590:8, 3601:6,

3601:17, 3655:5,

3655:8

filing [1] - 3646:7

filings [3] - 3599:20,

3601:3, 3601:20

fill [1] - 3569:15

fills [1] - 3567:14

finalized [2] - 3641:12,

3641:23

finally [1] - 3641:22

financial [12] - 3532:4,

3543:19, 3569:17,

3578:8, 3579:14,

3581:23, 3581:24,

3589:3, 3615:18,

3618:6, 3640:3,

3660:15

findings [5] - 3525:8,

3615:23, 3655:22,

3656:14, 3656:18

Fine [1] - 3562:13

fine [2] - 3519:3,

3666:25

finishing [1] - 3522:3

fire [1] - 3671:8

firm [3] - 3614:23,

3660:14, 3660:25

firms [10] - 3542:19,

3572:11, 3605:23,

3612:12, 3612:15,

3614:1, 3618:9,

3659:7, 3661:3

First [3] - 3615:8,

3642:22, 3660:10

first [24] - 3517:10,

3540:17, 3552:8,

3558:8, 3560:4,

3560:11, 3561:15,

3576:12, 3579:9,

3579:10, 3594:4,

3594:8, 3603:16,

3609:24, 3611:23,

3630:13, 3632:20,

3633:24, 3644:7,

3649:17, 3664:2,

3672:1, 3672:24

FISHER [2] - 3514:14,

3515:5

fit [1] - 3553:18

five [10] - 3545:16,

3551:24, 3552:7,

3553:11, 3624:23,

3630:24, 3667:24,

3670:17, 3673:4

five-year [1] - 3667:24

fixed [3] - 3558:6,

3639:6, 3640:6

flip [1] - 3531:22

flipping [2] - 3542:6,

3628:12

flow [4] - 3529:15,

3553:18, 3573:2,

3623:2

flowing [1] - 3529:16

flows [1] - 3670:19

FMG [201] - 3524:19,

3524:23, 3526:7,

3528:3, 3528:11,

3528:18, 3528:24,

3529:17, 3530:18,

3531:7, 3531:8,

3531:11, 3531:13,

3531:24, 3532:7,

3532:10, 3535:3,

3535:18, 3536:20,

3536:22, 3538:5,

3538:11, 3538:14,

3538:20, 3538:24,

3540:15, 3541:12,

3542:1, 3542:22,

3543:10, 3543:20,

3544:13, 3546:8,

3547:21, 3548:2,

3548:6, 3548:9,

3548:13, 3548:16,

3548:21, 3548:24,

3549:25, 3550:14,

3551:5, 3551:22,

3551:25, 3552:11,

3553:13, 3554:1,

3554:21, 3555:23,

3559:4, 3563:17,

3563:18, 3563:22,

3564:16, 3564:17,

3565:4, 3566:13,

3566:25, 3567:1,

3567:11, 3569:8,

3569:12, 3569:17,

3570:3, 3570:21,

3571:15, 3572:1,

3572:15, 3573:2,

3573:17, 3573:20,

3574:1, 3574:8,

3574:11, 3575:3,

3575:5, 3575:6,

3575:10, 3575:19,

3576:3, 3576:13,

3576:16, 3576:20,

3577:4, 3577:9,

3577:14, 3577:18,

3578:9, 3578:11,

3578:22, 3579:5,

3579:11, 3579:19,

3579:22, 3579:25,

3580:5, 3580:11,

3580:18, 3581:3,

3581:6, 3581:15,

3581:19, 3582:7,

3582:21, 3583:7,

3583:12, 3584:18,

3584:21, 3585:7,

3585:16, 3585:17,

3586:20, 3587:8,

3588:11, 3589:2,

3589:8, 3589:9,

3589:17, 3590:1,

3590:9, 3590:25,

3591:13, 3591:18,

3593:12, 3593:16,

3593:19, 3599:17,

3600:20, 3600:23,

3601:2, 3601:18,

3603:18, 3605:12,

3605:18, 3606:3,

3607:6, 3609:13,

3610:1, 3610:10,

3611:1, 3611:13,

3612:1, 3612:12,

3612:15, 3616:18,

3617:9, 3617:24,

3618:2, 3619:22,

3620:9, 3621:1,

3621:2, 3621:10,

3622:2, 3622:12,

3622:19, 3622:23,

3623:1, 3623:7,

3624:2, 3624:5,

3624:17, 3627:2,

3627:20, 3628:8,

3629:23, 3630:11,

3631:12, 3633:24,

3634:16, 3635:18,

3636:23, 3637:1,

3638:15, 3638:17,

3638:20, 3640:9,

3646:20, 3647:12,

3649:16, 3650:10,

3650:21, 3652:4,

3654:3, 3656:21,

3656:22, 3662:1,

3662:4, 3662:19,

3664:5, 3664:18,

3664:24, 3667:1,

3674:16, 3677:15

FMG's [26] - 3531:19,

3532:18, 3535:25,

3547:20, 3548:1,

3553:22, 3553:23,

3554:17, 3572:9,

3572:10, 3576:17,

3579:20, 3585:22,

3593:12, 3595:7,

3595:20, 3596:5,

3598:15, 3602:2,

3604:7, 3604:23,

3606:9, 3608:24,

3609:11, 3623:23,

3672:7

focal [1] - 3543:6

focus [5] - 3554:12,

3561:14, 3629:5,

3656:12, 3661:2

focused [2] - 3556:23,

3574:23

Focusing [1] -

3630:10

focusing [1] - 3644:22

folks [2] - 3659:12,

3671:12

follow [2] - 3603:20,

3671:6

following [3] - 3517:8,

3517:18, 3645:17

FOR [3] - 3515:7,

3515:10, 3515:14

forcible [1] - 3533:19

forever[1] - 3667:18

forget [3] - 3533:1,

3621:12, 3674:8

forgot [1] - 3534:1

form [4] - 3526:13,

3535:15, 3590:22,

United States District Court

Trenton, New Jersey

3690

3676:24

Form [1] - 3531:25

formal [1] - 3526:25

format [2] - 3537:5,

3537:9

forward [1] - 3544:5

foundation [1] -

3604:9

four[4] - 3552:7,

3557:14, 3566:18,

3630:23

Fox [1] - 3668:12

Francis [1] - 3514:24

FRANCIS [1] -

3514:24

Frank [4] - 3524:1,

3541:3, 3573:8,

3604:10

frankly [1] - 3662:8

fraud [2] - 3617:17,

3617:18

frequently [2] -

3560:5, 3570:13

friend [1] - 3658:16

front [18] - 3524:24,

3525:21, 3527:21,

3532:23, 3536:13,

3540:12, 3549:13,

3552:22, 3555:10,

3568:24, 3569:1,

3598:24, 3603:4,

3608:5, 3630:19,

3654:15, 3663:17,

3667:16

fronts [1] - 3667:5

full [2] - 3583:18,

3592:15

fully [5] - 3583:8,

3608:4, 3608:13,

3670:24, 3672:23

function [2] - 3543:3,

3594:17

functions [2] -

3563:18, 3564:7

fund [147] - 3526:17,

3528:1, 3529:16,

3535:6, 3535:8,

3542:4, 3544:11,

3544:14, 3544:19,

3544:20, 3544:22,

3548:15, 3548:18,

3548:25, 3551:1,

3551:11, 3551:15,

3551:23, 3551:25,

3552:14, 3553:10,

3553:16, 3555:22,

3556:20, 3557:8,

3559:3, 3559:25,

3560:15, 3561:24,

3562:2, 3562:14,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 177 of 194 PageID: 19039
3562:21, 3564:1,

3564:2, 3564:3,

3564:12, 3564:18,

3564:20, 3564:23,

3565:9, 3565:11,

3571:23, 3576:25,

3577:6, 3577:13,

3577:16, 3577:17,

3579:17, 3580:11,

3580:14, 3580:18,

3581:6, 3581:16,

3582:5, 3583:18,

3584:5, 3584:6,

3584:7, 3584:8,

3585:2, 3585:3,

3585:8, 3585:9,

3586:5, 3588:25,

3589:8, 3589:23,

3596:20, 3597:10,

3597:21, 3597:25,

3598:6, 3598:7,

3598:12, 3600:11,

3601:12, 3601:16,

3603:19, 3604:6,

3604:18, 3604:20,

3607:2, 3608:4,

3608:18, 3608:19,

3609:16, 3609:20,

3612:13, 3618:4,

3626:11, 3626:17,

3627:9, 3628:14,

3628:17, 3629:24,

3630:11, 3631:10,

3631:14, 3631:18,

3633:1, 3634:21,

3636:16, 3636:18,

3636:22, 3638:1,

3640:21, 3641:10,

3643:2, 3644:25,

3645:12, 3646:3,

3646:20, 3647:12,

3649:3, 3651:12,

3651:13, 3652:5,

3652:8, 3652:20,

3652:22, 3652:25,

3653:1, 3653:15,

3653:16, 3653:19,

3653:20, 3657:2,

3659:1, 3669:4,

3669:9, 3672:12,

3672:18, 3672:19,

3676:10, 3676:11,

3676:13

Fund [1] - 3562:16

fund's [2] - 3597:5,

3643:12

fund-by-fund [3] -

3603:19, 3604:20,

3676:13

fundamental [1] -

3572:9

funding [1] - 3637:25

FUNDS [1] - 3514:10

Funds [7] - 3548:3,

3563:1, 3591:13,

3591:24, 3591:25,

3638:22, 3639:8

funds [145] - 3529:16,

3530:19, 3535:6,

3535:8, 3535:10,

3536:1, 3536:2,

3542:5, 3542:23,

3543:4, 3543:13,

3543:16, 3543:21,

3543:22, 3543:24,

3545:1, 3545:9,

3545:10, 3545:22,

3546:4, 3547:6,

3547:17, 3547:22,

3549:3, 3549:5,

3549:6, 3549:25,

3551:11, 3551:12,

3552:3, 3552:4,

3556:1, 3556:2,

3556:3, 3556:6,

3556:13, 3556:21,

3556:24, 3560:9,

3560:14, 3560:17,

3561:4, 3561:10,

3561:11, 3561:14,

3561:16, 3561:19,

3561:20, 3563:4,

3563:5, 3563:12,

3564:2, 3564:15,

3565:3, 3565:7,

3565:8, 3565:14,

3565:17, 3565:18,

3565:19, 3566:8,

3566:17, 3571:17,

3576:18, 3576:21,

3576:25, 3577:2,

3577:5, 3577:25,

3578:2, 3578:4,

3583:24, 3586:5,

3588:19, 3589:3,

3589:11, 3589:20,

3591:2, 3591:14,

3591:16, 3595:21,

3595:23, 3596:4,

3596:6, 3596:17,

3597:9, 3598:1,

3598:3, 3601:12,

3603:21, 3611:4,

3616:18, 3623:8,

3627:14, 3628:19,

3628:21, 3630:3,

3630:10, 3630:14,

3630:15, 3630:16,

3630:17, 3631:24,

3632:16, 3635:14,

3635:16, 3635:18,

3637:2, 3638:15,

3638:16, 3638:17,

3638:20, 3639:4,

3640:10, 3642:11,

3642:25, 3643:22,

3644:24, 3644:25,

3645:6, 3649:2,

3649:4, 3650:21,

3650:24, 3651:2,

3651:4, 3651:5,

3651:8, 3652:8,

3661:4, 3666:23,

3667:9, 3667:10,

3667:11, 3670:7,

3672:9

funds' [3] - 3552:15,

3572:20, 3600:10

funneled [1] - 3674:14

furnish [1] - 3622:4

G

Gabelli [2] - 3585:9,

3585:14

GABLE [1] - 3514:24

Gable [1] - 3514:24

gamut [1] - 3647:21

Gartenberg [16] -

3518:14, 3525:5,

3526:12, 3527:3,

3574:21, 3595:11,

3602:6, 3602:9,

3607:11, 3641:4,

3641:7, 3642:5,

3644:3, 3660:6,

3672:4, 3673:19

Gary [6] - 3528:7,

3534:2, 3534:7,

3534:9, 3573:23,

3668:10

GARY [4] - 3516:2,

3516:2, 3524:8,

3524:14

Gates [2] - 3524:19,

3524:22

gather [1] - 3599:18

gears [11] - 3530:15,

3543:12, 3547:20,

3578:18, 3581:12,

3594:23, 3600:14,

3610:1, 3621:20,

3640:8, 3655:1

general [12] - 3533:18,

3544:24, 3545:21,

3565:20, 3570:23,

3638:25, 3639:9,

3640:1, 3640:6,

3643:25, 3644:1

GENERAL [1] -

3515:16

generally [20] -

3526:9, 3562:14,

3562:21, 3572:4,

3578:24, 3595:20,

3596:5, 3597:8,

3599:11, 3600:10,

3620:8, 3628:9,

3628:20, 3633:1,

3642:2, 3642:8,

3643:24, 3644:10,

3646:11, 3669:5

Generally [3] -

3538:23, 3566:16,

3588:18

generated [1] -

3528:13

generation [1] -

3537:13

genesis [1] - 3587:11

gist [1] - 3542:17

given [4] - 3521:6,

3592:5, 3622:19,

3651:11

GLENN [1] - 3514:8

global [1] - 3581:4

goal [3] - 3559:2,

3566:9, 3574:24

Goldstein [7] -

3572:8, 3575:8,

3575:17, 3615:1,

3661:16, 3665:9,

3665:16

governance [3] -

3539:21, 3540:19,

3660:12

government [2] -

3657:24, 3658:2

governmental [1] -

3673:10

great [3] - 3523:6,

3642:10, 3662:13

gross [1] - 3562:19

grounds [1] - 3649:7

GROUP [1] - 3514:11

group [1] - 3558:23

groups [6] - 3543:7,

3551:17, 3595:21,

3596:7, 3597:9,

3644:23

grow [2] - 3632:3,

3632:10

grows [1] - 3579:17

Growth [2] - 3558:2,

3562:5

guarantee [1] - 3577:1

guess [29] - 3531:7,

3539:1, 3541:25,

3546:17, 3548:20,

3550:3, 3560:25,

3562:2, 3564:13,

3564:14, 3573:1,

United States District Court

Trenton, New Jersey

3691

3576:22, 3577:9,

3577:24, 3578:23,

3590:17, 3590:19,

3603:14, 3604:3,

3605:20, 3613:5,

3615:17, 3618:20,

3622:1, 3659:25,

3660:1, 3660:9,

3668:13, 3676:9

guidance [6] - 3636:7,

3673:14, 3673:19,

3673:20, 3673:21,

3674:1

H

HADLEY [1] - 3515:12

half [4] - 3535:15,

3580:9, 3650:11,

3665:6

hand [5] - 3523:3,

3530:22, 3546:19,

3553:20, 3554:14

handled [1] - 3542:22

Hang [1] - 3610:17

happily [1] - 3523:16

hard [6] - 3546:14,

3585:24, 3600:5,

3656:1, 3674:6,

3675:1

harsh [2] - 3615:24,

3616:5

Harvey [1] - 3529:8

hat [1] - 3607:22

hate [1] - 3610:13

head [3] - 3658:20,

3660:12, 3660:13

headed [1] - 3658:7

headings [1] -

3540:15

hear [2] - 3639:20,

3677:17

heard [4] - 3518:4,

3520:5, 3573:10,

3642:19

hearing [2] - 3614:17,

3614:20

hearsay [4] - 3518:21,

3592:7, 3612:4,

3639:18

heavily [2] - 3572:2,

3675:25

heavy [1] - 3551:2

held [1] - 3607:24

help [2] - 3659:19,

3675:25

helpful [33] - 3526:19,

3528:14, 3528:23,

3532:14, 3535:21,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 178 of 194 PageID: 19040
3537:1, 3541:17,

3550:5, 3554:4,

3556:15, 3556:18,

3558:14, 3558:18,

3560:10, 3561:3,

3569:20, 3569:24,

3570:3, 3586:23,

3586:24, 3587:5,

3588:17, 3595:6,

3595:15, 3599:23,

3602:19, 3602:25,

3603:25, 3611:6,

3628:22, 3660:18,

3669:23, 3675:12

helping [2] - 3550:11,

3661:3

helps [4] - 3537:9,

3554:10, 3554:11,

3609:9

hesitant [1] - 3566:11

hesitation [1] - 3665:3

hide [1] - 3579:4

high [8] - 3576:3,

3666:6, 3674:19,

3674:25, 3676:25,

3677:1, 3677:5,

3677:21

higher[4] - 3580:13,

3585:12, 3604:19,

3677:3

highest [4] - 3557:17,

3656:10, 3658:22,

3665:25

highly [1] - 3565:4

himself [1] - 3661:10

hired [2] - 3635:24,

3670:7

hiring [1] - 3612:24

hold [2] - 3575:11,

3605:10

Honor [77] - 3517:3,

3518:2, 3518:5,

3519:21, 3519:22,

3520:6, 3522:5,

3522:11, 3522:14,

3522:19, 3523:1,

3523:10, 3523:14,

3523:25, 3524:6,

3524:12, 3524:25,

3525:7, 3525:13,

3525:15, 3527:9,

3533:1, 3533:16,

3533:23, 3534:3,

3536:5, 3536:7,

3538:19, 3540:22,

3544:4, 3546:24,

3547:11, 3555:1,

3555:6, 3559:14,

3559:19, 3560:7,

3568:8, 3568:13,

3568:21, 3570:25,

3575:12, 3579:7,

3581:9, 3586:9,

3592:7, 3594:2,

3594:20, 3595:22,

3600:24, 3601:23,

3608:15, 3612:2,

3614:12, 3617:2,

3618:5, 3620:14,

3620:19, 3621:7,

3624:23, 3625:6,

3625:12, 3625:17,

3625:19, 3626:1,

3629:11, 3629:13,

3639:18, 3642:12,

3642:21, 3647:3,

3647:6, 3649:1,

3654:12, 3657:15,

3671:10, 3678:4

Honor's [1] - 3533:17

HONORABLE [1] -

3514:17

hook [1] - 3579:18

hope [1] - 3523:1

HORA [3] - 3515:13,

3523:14, 3523:23

Hora [1] - 3523:14

hours [1] - 3655:6

housekeeping [1] -

3523:15

huge [1] - 3674:13

human [1] - 3548:23

hundreds [1] - 3578:3

hybrid [4] - 3543:24,

3544:18, 3651:6,

3653:1

I

idea [1] - 3556:13

ideas [1] - 3668:14

identification [1] -

3547:14

identified [8] -

3522:10, 3522:12,

3523:20, 3570:2,

3577:14, 3615:16,

3637:4, 3673:15

identifies [1] - 3552:3

identify [2] - 3556:6,

3569:19

ignoring [2] - 3624:13,

3624:18

immediate [1] -

3559:7

immediately [2] -

3546:17, 3617:6

impact [7] - 3623:22,

3650:8, 3650:9,

3650:17, 3651:20,

3651:25

impacts [1] - 3627:21

imperative [2] -

3537:6, 3670:10

implemented [1] -

3613:1

implications [1] -

3522:18

important [41] -

3517:14, 3517:20,

3518:14, 3528:10,

3528:22, 3532:20,

3539:3, 3540:3,

3542:11, 3552:14,

3552:17, 3574:1,

3574:2, 3580:6,

3584:4, 3585:17,

3595:19, 3596:22,

3597:20, 3598:18,

3600:3, 3602:5,

3602:8, 3611:9,

3613:7, 3613:8,

3626:24, 3632:15,

3641:19, 3650:21,

3657:4, 3660:22,

3663:21, 3664:17,

3668:8, 3669:21,

3671:20, 3672:3,

3675:10, 3676:20,

3677:9

important.. [1] -

3566:15

importantly [5] -

3577:8, 3583:16,

3585:19, 3598:2,

3646:9

imposed [3] - 3635:8,

3671:21, 3673:21

imposes [1] - 3631:6

improvements [3] -

3634:16, 3634:20,

3634:25

in-depth [1] - 3645:3

inception [1] -

3558:22

include [7] - 3608:10,

3610:1, 3635:18,

3637:6, 3637:7,

3637:9, 3637:11

included [3] - 3527:6,

3562:21, 3598:19

includes [2] - 3528:1,

3607:15

including [10] -

3535:14, 3543:22,

3547:7, 3565:7,

3576:2, 3583:13,

3616:25, 3631:8,

3644:11, 3652:24

inclusive [1] - 3608:19

income [5] - 3602:24,

3639:3, 3639:7,

3640:7

inconsistent [2] -

3563:14, 3563:15

increase [3] - 3626:11,

3626:12, 3626:13

increased [1] - 3633:9

incremental [1] -

3632:5

incurred [2] - 3610:8,

3624:14

incurring [1] - 3546:6

incurs [1] - 3623:8

independence [1] -

3539:25

independent [61] -

3518:7, 3518:13,

3519:7, 3519:19,

3520:9, 3520:13,

3520:20, 3520:23,

3520:24, 3521:2,

3521:4, 3527:15,

3530:1, 3530:9,

3530:13, 3532:10,

3534:13, 3538:4,

3552:12, 3554:8,

3554:20, 3566:12,

3570:6, 3570:14,

3570:16, 3574:16,

3577:15, 3590:21,

3605:23, 3606:1,

3612:12, 3612:13,

3612:14, 3614:1,

3614:7, 3618:8,

3618:12, 3618:25,

3622:5, 3632:24,

3633:25, 3639:16,

3641:14, 3641:17,

3641:20, 3646:8,

3654:7, 3659:4,

3662:14, 3662:15,

3664:12, 3664:13,

3665:1, 3665:14,

3670:3, 3670:8,

3670:11, 3670:18,

3670:24, 3670:25,

3674:5

Independent [1] -

3670:16

index [13] - 3525:17,

3543:25, 3544:20,

3551:11, 3559:1,

3585:2, 3585:3,

3585:8, 3585:12,

3585:15, 3651:8,

3653:2

indexes [1] - 3635:15

indicate [2] - 3553:21,

United States District Court

Trenton, New Jersey

3692

3614:17

indicated [6] -

3517:11, 3520:1,

3526:8, 3604:3,

3649:14, 3665:18

indicating [1] -

3671:24

indicating) [1] -

3569:2

indirectly [4] -

3548:19, 3549:25,

3608:11, 3608:12

individual [2] -

3527:14, 3534:14

industries [1] - 3669:5

industry [41] - 3528:5,

3563:15, 3580:12,

3585:18, 3595:16,

3597:3, 3597:16,

3600:7, 3600:12,

3604:8, 3604:24,

3606:1, 3608:18,

3610:5, 3614:11,

3617:10, 3618:23,

3626:17, 3627:17,

3627:18, 3628:16,

3636:9, 3636:16,

3638:10, 3657:24,

3658:9, 3661:12,

3661:13, 3662:12,

3664:10, 3666:8,

3667:8, 3668:6,

3668:21, 3669:5,

3669:7, 3669:9,

3670:22, 3674:24

information [95] -

3518:12, 3519:13,

3526:14, 3527:15,

3528:8, 3528:10,

3529:3, 3529:18,

3529:21, 3530:17,

3532:11, 3535:3,

3536:3, 3542:3,

3542:12, 3543:4,

3543:6, 3547:7,

3566:2, 3566:24,

3567:1, 3567:3,

3567:8, 3567:20,

3567:23, 3569:17,

3569:24, 3570:7,

3573:19, 3578:11,

3578:15, 3581:14,

3581:25, 3582:9,

3583:17, 3588:17,

3593:15, 3593:18,

3593:22, 3594:25,

3595:6, 3595:17,

3596:21, 3597:13,

3599:18, 3599:21,

3599:22, 3601:13,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 179 of 194 PageID: 19041
3601:15, 3601:17,

3605:5, 3605:7,

3606:17, 3608:23,

3609:3, 3609:14,

3609:17, 3609:19,

3617:11, 3618:6,

3621:9, 3624:1,

3624:4, 3627:2,

3627:6, 3627:9,

3627:13, 3627:14,

3627:19, 3628:17,

3629:3, 3629:4,

3629:7, 3629:9,

3629:18, 3636:23,

3639:24, 3644:10,

3644:11, 3644:14,

3645:16, 3656:11,

3657:4, 3657:9,

3664:25, 3670:2,

3670:14, 3670:15,

3670:19, 3672:2,

3675:9, 3675:17,

3675:18, 3676:11

informing [1] -

3540:20

infrequently [1] -

3653:17

inherent [4] - 3565:23,

3598:10, 3602:21,

3609:9

inherently [2] -

3616:21, 3633:8

initial [2] - 3580:9,

3580:16

initiatives [2] -

3541:21, 3543:5

INS [1] - 3514:6

Insight [1] - 3605:1

insofar[2] - 3517:21,

3517:24

Insofar[1] - 3518:22

Institute [2] - 3669:13,

3670:12

insulated [1] - 3676:5

INSURANCE [1] -

3515:17

insurance [13] -

3562:20, 3563:5,

3563:10, 3581:4,

3621:25, 3622:25,

3637:22, 3637:24,

3638:19, 3639:4,

3666:23, 3674:22

integrity [1] - 3661:23

intended [2] - 3610:7,

3622:20

interest [10] - 3530:11,

3609:11, 3640:16,

3641:2, 3655:25,

3656:14, 3656:15,

3661:12, 3661:23,

3662:11

interested [2] -

3661:24, 3672:6

interesting [4] -

3585:10, 3660:1,

3660:16, 3661:21

internal [2] - 3617:8,

3622:12

interrupt [3] -

3540:23, 3560:8,

3649:1

intimately [1] -

3655:19

introduce [1] -

3525:21

invest [5] - 3564:3,

3566:19, 3601:16,

3639:4, 3672:8

investing [4] - 3549:6,

3638:19, 3666:21,

3666:22

investment [62] -

3531:20, 3535:7,

3535:8, 3536:22,

3540:2, 3541:24,

3546:8, 3546:10,

3548:17, 3549:7,

3551:21, 3552:5,

3552:6, 3552:10,

3553:17, 3553:18,

3556:8, 3563:17,

3564:13, 3565:18,

3565:21, 3566:4,

3566:7, 3566:20,

3566:21, 3566:22,

3571:16, 3571:23,

3572:3, 3575:10,

3575:19, 3575:23,

3576:21, 3585:3,

3597:2, 3604:8,

3604:23, 3605:4,

3605:11, 3628:14,

3631:4, 3632:1,

3639:3, 3644:21,

3647:1, 3651:11,

3653:3, 3653:6,

3653:13, 3653:14,

3656:21, 3658:8,

3658:11, 3658:12,

3658:20, 3659:13,

3659:14, 3659:15,

3661:5, 3670:4

Investment [3] -

3563:2, 3669:13,

3670:12

investments [2] -

3639:6, 3640:7

investor[30] - 3546:2,

3546:5, 3546:6,

3549:7, 3552:19,

3566:6, 3575:1,

3585:20, 3586:4,

3596:19, 3597:1,

3601:16, 3608:3,

3643:17, 3648:25,

3650:13, 3653:8,

3660:4, 3671:7,

3671:19, 3671:22,

3672:3, 3672:6,

3672:8, 3672:17,

3672:22, 3672:24,

3675:13, 3675:24

investor's [2] -

3651:25, 3652:2

investors [26] -

3564:2, 3564:20,

3566:14, 3572:16,

3574:5, 3576:8,

3576:11, 3580:20,

3580:23, 3586:3,

3598:21, 3601:15,

3601:20, 3615:12,

3626:16, 3629:24,

3630:12, 3635:22,

3639:5, 3641:3,

3654:23, 3659:17,

3661:24, 3666:19,

3666:20, 3671:16

invite [1] - 3663:20

involve [1] - 3546:10

involved [17] - 3538:4,

3565:4, 3571:25,

3572:2, 3577:1,

3583:15, 3585:7,

3587:2, 3589:1,

3589:2, 3609:9,

3612:1, 3617:7,

3651:4, 3655:19,

3664:2, 3677:20

involvement [1] -

3649:21

involving [1] - 3589:4

isolation [1] - 3584:16

issue [38] - 3517:18,

3519:22, 3520:5,

3521:8, 3523:15,

3534:12, 3537:16,

3543:22, 3544:4,

3545:9, 3545:10,

3545:22, 3546:16,

3547:6, 3558:7,

3560:11, 3560:14,

3560:17, 3560:21,

3561:10, 3561:11,

3561:14, 3565:8,

3590:22, 3595:23,

3596:5, 3597:9,

3600:10, 3603:21,

3611:4, 3623:20,

3630:10, 3630:15,

3630:16, 3631:24,

3639:16, 3655:24,

3659:10

issues [27] - 3517:4,

3517:8, 3522:1,

3538:10, 3539:22,

3540:4, 3540:8,

3542:18, 3543:2,

3551:8, 3553:17,

3556:7, 3556:11,

3556:14, 3556:22,

3556:24, 3559:2,

3562:10, 3569:19,

3570:2, 3593:6,

3617:18, 3619:25,

3663:16, 3668:17,

3668:18, 3673:22

item [1] - 3542:14

items [6] - 3540:18,

3542:7, 3632:19,

3637:3, 3652:16,

3673:5

itself [3] - 3544:22,

3621:16, 3640:15

J

JAMES [1] - 3515:13

January [2] - 3521:10,

3611:20

JERSEY [3] - 3514:1,

3514:15, 3514:18

Jettie [5] - 3529:13,

3615:25, 3616:6,

3616:7, 3619:3

Jim [1] - 3533:23

job [1] - 3671:2

jobs [1] - 3661:3

Joenk [7] - 3662:21,

3663:11, 3664:4,

3664:16, 3664:20,

3664:22, 3665:5

joined [6] - 3534:10,

3611:19, 3611:21,

3622:18, 3635:6,

3668:13

joining [2] - 3528:9,

3534:11

joint [1] - 3523:3

JONATHAN [1] -

3515:9

JP [17] - 3586:21,

3587:9, 3588:12,

3588:18, 3589:10,

3590:1, 3590:10,

3591:1, 3592:11,

3592:14, 3592:17,

3592:20, 3593:8,

United States District Court

Trenton, New Jersey

3693

3593:12, 3594:5,

3594:16

JUDGE [1] - 3514:17

Judge [1] - 3520:17

judges [1] - 3673:4

judgment [29] -

3529:24, 3570:19,

3574:19, 3575:1,

3584:18, 3586:7,

3600:9, 3602:12,

3613:19, 3613:22,

3614:22, 3617:16,

3618:22, 3620:18,

3629:20, 3632:24,

3636:4, 3640:18,

3641:8, 3656:10,

3657:1, 3669:22,

3673:14, 3673:15,

3673:24, 3674:6,

3676:25, 3677:23

judgments [1] -

3640:24

judicial [1] - 3526:16

July [27] - 3526:15,

3530:12, 3536:21,

3537:21, 3537:22,

3537:24, 3538:5,

3538:9, 3541:16,

3549:23, 3555:2,

3555:4, 3574:16,

3586:19, 3587:23,

3588:1, 3603:12,

3615:19, 3628:6,

3642:3, 3642:8,

3643:17, 3648:23,

3655:4, 3657:6,

3657:9

June [7] - 3526:7,

3526:15, 3538:9,

3551:19, 3555:2,

3657:9

justify [3] - 3583:4,

3672:13, 3672:14

K

K&L [2] - 3524:19,

3524:22

keep [9] - 3533:9,

3537:20, 3545:16,

3588:24, 3606:23,

3622:21, 3653:11,

3669:6, 3677:11

keeping [2] - 3541:20,

3634:13

keeps [1] - 3575:5

key [15] - 3526:14,

3526:25, 3528:17,

3547:6, 3551:21,

3569:16, 3569:18,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 180 of 194 PageID: 19042
3587:5, 3606:25,

3634:9, 3634:12,

3644:10, 3657:9,

3671:19

kind [30] - 3529:10,

3534:18, 3535:16,

3537:4, 3542:6,

3547:6, 3559:12,

3565:6, 3569:23,

3582:8, 3607:12,

3617:11, 3618:25,

3627:12, 3629:9,

3644:9, 3659:5,

3659:16, 3661:7,

3661:12, 3662:18,

3663:24, 3668:18,

3669:7, 3669:18,

3670:15, 3671:5,

3674:14, 3675:21,

3676:12

kinds [6] - 3548:20,

3564:3, 3617:6,

3647:20, 3670:9,

3673:22

knowledge [5] -

3543:8, 3587:7,

3619:6, 3673:25,

3674:23

known [2] - 3594:6,

3594:10

Komisarjevsky [1] -

3660:11

Kopcke [2] - 3674:11,

3676:2

Kopne [1] - 3674:10

KORN [1] - 3515:9

KWELTY [1] - 3515:6

L

Lakind [10] - 3518:19,

3521:10, 3521:12,

3521:20, 3521:25,

3522:7, 3525:12,

3545:5, 3625:11,

3625:18

LAKIND [47] - 3515:3,

3515:4, 3515:5,

3517:3, 3518:20,

3519:1, 3519:22,

3522:14, 3522:23,

3523:1, 3523:9,

3523:25, 3525:13,

3527:9, 3533:16,

3533:23, 3534:3,

3536:7, 3540:22,

3544:4, 3545:9,

3559:19, 3560:7,

3560:19, 3571:10,

3573:6, 3575:12,

3592:7, 3595:22,

3604:9, 3612:2,

3614:12, 3620:14,

3620:19, 3625:12,

3625:19, 3626:1,

3629:13, 3630:2,

3639:18, 3647:6,

3648:8, 3648:16,

3649:1, 3649:7,

3657:14, 3671:10

language [1] -

3589:15

lapses [1] - 3667:12

large [8] - 3517:7,

3548:14, 3583:3,

3584:24, 3621:3,

3649:4, 3659:6,

3660:13

Large [2] - 3557:3,

3558:2

largely [1] - 3567:23

larger [1] - 3632:10

laser [1] - 3674:15

last [17] - 3541:17,

3553:11, 3591:23,

3593:21, 3616:9,

3625:23, 3630:23,

3635:7, 3640:21,

3648:3, 3655:1,

3655:8, 3662:17,

3662:25, 3664:18,

3665:10, 3667:17

lastly [1] - 3657:3

law [2] - 3525:9,

3542:19

laws [1] - 3543:1

lawsuit [8] - 3580:20,

3655:2, 3655:3,

3655:5, 3655:8,

3669:1, 3671:15

lawyer[1] - 3607:22

lawyers [1] - 3659:14

lead [13] - 3519:18,

3526:23, 3526:24,

3529:5, 3534:13,

3538:1, 3581:5,

3656:5, 3664:12,

3665:14, 3668:4,

3668:5, 3668:11

leaders [1] - 3670:22

leading [1] - 3575:12

leafs [1] - 3517:7

learn [1] - 3622:19

Learned [1] - 3612:5

learned [8] - 3552:12,

3594:5, 3594:8,

3612:4, 3622:13,

3622:17, 3655:6

learning [1] - 3662:12

least [18] - 3526:13,

3526:23, 3527:2,

3528:22, 3539:11,

3554:1, 3570:24,

3588:24, 3605:10,

3609:15, 3609:16,

3627:17, 3637:16,

3639:5, 3661:2,

3667:1, 3670:17,

3674:24

leaves [1] - 3517:18

leaving [1] - 3556:11

left [4] - 3517:4,

3524:16, 3544:21,

3553:4

leg [1] - 3655:1

Legal [1] - 3542:17

legal [8] - 3542:18,

3548:23, 3570:1,

3573:4, 3573:5,

3577:11, 3596:18

legend [1] - 3553:20

legible [1] - 3517:11

length [6] - 3580:6,

3609:7, 3642:10,

3661:25, 3663:1,

3664:6

less [8] - 3546:2,

3554:12, 3609:20,

3649:25, 3652:11,

3654:3, 3654:18,

3675:10

level [29] - 3546:9,

3548:22, 3549:11,

3551:6, 3563:10,

3563:11, 3564:15,

3564:16, 3577:3,

3582:11, 3598:21,

3598:22, 3611:3,

3626:13, 3631:9,

3631:16, 3632:14,

3632:23, 3633:13,

3634:2, 3634:3,

3634:8, 3637:22,

3637:25, 3667:2,

3677:22, 3677:25

levels [10] - 3546:1,

3627:10, 3628:19,

3631:1, 3631:21,

3631:23, 3633:1,

3633:7, 3653:11,

3658:23

leverage [1] - 3609:20

Lewis [4] - 3520:13,

3524:18, 3659:6,

3668:14

LIFE [2] - 3514:6,

3515:17

likely [1] - 3633:9

limit [1] - 3601:10

limitation [2] - 3532:3,

3631:6

limitations [6] -

3585:24, 3598:10,

3602:21, 3627:15,

3675:19, 3675:21

limited [3] - 3550:23,

3579:15, 3585:1

line [7] - 3568:1,

3607:17, 3649:18,

3649:25, 3650:6,

3675:22

Lipper[19] - 3551:17,

3566:1, 3595:21,

3596:6, 3597:22,

3599:14, 3600:18,

3600:19, 3600:23,

3601:2, 3605:1,

3644:11, 3645:10,

3645:11, 3669:16,

3669:25, 3670:4,

3675:19

list [19] - 3539:1,

3539:17, 3552:2,

3555:15, 3555:17,

3555:20, 3555:22,

3555:23, 3556:5,

3557:9, 3559:3,

3566:18, 3571:1,

3581:21, 3589:17,

3589:18, 3644:7,

3644:10

listed [3] - 3525:5,

3557:8, 3601:6

lists [5] - 3570:1,

3586:20, 3586:21,

3628:12, 3643:21

litigation [7] -

3526:11, 3540:21,

3541:20, 3587:15,

3587:20, 3603:22,

3613:7

live [1] - 3659:18

lived [1] - 3661:19

living [1] - 3661:20

LLP [2] - 3515:9,

3515:12

load [1] - 3608:5

log [1] - 3521:3

long-held [1] -

3607:24

look [78] - 3522:24,

3525:12, 3530:8,

3543:22, 3544:12,

3546:18, 3546:24,

3551:6, 3557:1,

3557:25, 3560:22,

3562:3, 3562:17,

3562:18, 3563:4,

3563:11, 3564:9,

3564:17, 3575:5,

United States District Court

Trenton, New Jersey

3694

3577:17, 3578:5,

3579:9, 3579:22,

3582:19, 3583:4,

3583:5, 3583:6,

3583:10, 3583:16,

3583:17, 3583:19,

3583:23, 3583:24,

3583:25, 3584:1,

3584:3, 3584:6,

3584:7, 3584:9,

3584:15, 3585:2,

3585:21, 3586:2,

3586:6, 3597:21,

3598:18, 3600:3,

3600:16, 3600:18,

3600:20, 3602:7,

3603:2, 3603:16,

3603:20, 3604:4,

3605:3, 3607:17,

3613:17, 3624:16,

3632:11, 3633:11,

3643:16, 3649:18,

3650:12, 3660:11,

3660:19, 3667:4,

3669:21, 3673:10,

3674:22, 3675:16,

3675:22, 3676:12

looked [11] - 3577:10,

3614:1, 3624:16,

3644:8, 3645:16,

3651:21, 3657:19,

3667:17, 3671:4,

3671:24, 3674:12

looking [33] - 3525:19,

3551:8, 3559:8,

3576:14, 3579:11,

3579:19, 3582:25,

3583:21, 3585:24,

3597:24, 3598:10,

3599:22, 3600:21,

3602:20, 3602:22,

3632:15, 3633:1,

3633:6, 3648:11,

3649:17, 3657:9,

3659:20, 3659:21,

3661:5, 3661:23,

3664:3, 3666:5,

3666:8, 3674:14,

3676:4, 3676:6,

3676:19, 3677:22

looks [6] - 3526:11,

3557:19, 3559:1,

3569:2, 3582:19,

3659:12

loose [1] - 3517:7

Lord [1] - 3559:9

lost [2] - 3633:2,

3677:12

LOUIE [1] - 3515:16

Louie [2] - 3525:22,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 181 of 194 PageID: 19043
3641:10

low [2] - 3585:4,

3609:11

lower [3] - 3546:1,

3546:5, 3554:13

lowered [2] - 3562:1,

3562:2

lowest [1] - 3557:18

lunch [1] - 3568:11

Luncheon [1] -

3568:17

M

magnitude [3] -

3620:8, 3620:12,

3620:21

mail [1] - 3521:1

main [2] - 3531:10,

3606:23

maintained [1] -

3589:1

major [13] - 3548:22,

3556:10, 3556:11,

3561:20, 3565:12,

3566:4, 3577:25,

3578:10, 3581:4,

3614:1, 3618:8,

3666:11, 3670:14

manage [3] - 3535:9,

3542:19, 3667:10

managed [5] -

3543:25, 3544:19,

3547:16, 3651:7

Management [5] -

3563:16, 3573:14,

3573:16, 3575:5,

3605:2

MANAGEMENT [1] -

3514:11

management [67] -

3527:16, 3530:16,

3530:18, 3538:24,

3545:24, 3545:25,

3547:22, 3548:3,

3563:2, 3563:18,

3564:4, 3571:16,

3571:23, 3572:3,

3573:20, 3575:3,

3585:3, 3587:23,

3587:24, 3587:25,

3588:7, 3589:20,

3593:24, 3594:25,

3595:20, 3596:5,

3596:15, 3596:18,

3597:6, 3597:18,

3597:22, 3598:2,

3598:3, 3598:7,

3598:9, 3598:11,

3600:2, 3602:3,

3606:9, 3608:9,

3608:24, 3615:21,

3620:3, 3621:10,

3622:4, 3622:6,

3626:21, 3631:1,

3631:8, 3633:17,

3637:2, 3638:15,

3640:9, 3642:2,

3643:3, 3651:11,

3651:23, 3651:24,

3652:3, 3652:10,

3652:23, 3652:24,

3653:4, 3653:6,

3658:8, 3658:20

management/

advisory [1] -

3654:17

manager [48] -

3531:20, 3535:5,

3536:1, 3536:23,

3537:10, 3540:2,

3544:16, 3546:10,

3548:18, 3556:9,

3564:13, 3564:19,

3564:23, 3565:3,

3566:7, 3573:17,

3576:21, 3577:9,

3578:6, 3585:11,

3585:12, 3585:15,

3587:14, 3598:6,

3604:6, 3605:8,

3608:12, 3609:7,

3616:22, 3616:24,

3628:14, 3631:4,

3632:1, 3634:2,

3634:3, 3634:5,

3634:7, 3636:17,

3644:17, 3647:1,

3651:5, 3651:7,

3651:8, 3652:22,

3656:21, 3665:19,

3672:13

manager's [4] -

3554:14, 3573:18,

3618:25, 3636:21

managers [16] -

3564:19, 3564:23,

3575:19, 3575:23,

3599:20, 3601:4,

3604:8, 3604:23,

3605:4, 3605:11,

3658:9, 3658:12,

3658:13, 3661:5,

3662:10, 3670:4

manages [2] -

3529:17, 3542:4

MANAGING [1] -

3515:16

managing [3] -

3570:22, 3585:2,

3636:18

mandated [1] -

3671:23

mandates [1] -

3657:25

manual [2] - 3523:19,

3673:6

margin [1] - 3604:7

mark [3] - 3530:21,

3547:13, 3637:23

MARK [1] - 3515:5

marked [25] - 3516:6,

3516:8, 3516:9,

3516:10, 3516:11,

3516:12, 3516:13,

3516:14, 3516:15,

3516:16, 3516:17,

3516:18, 3523:17,

3524:3, 3527:11,

3533:21, 3534:5,

3536:9, 3559:21,

3571:12, 3625:14,

3625:21, 3626:3,

3629:15, 3647:8

markers [1] - 3675:12

market [4] - 3578:1,

3578:2, 3631:14,

3650:25

marketed [2] - 3564:1,

3576:9

marketing [1] -

3637:23

MARY [1] - 3514:3

match [1] - 3544:20

material [5] - 3519:25,

3539:9, 3540:19,

3615:9, 3618:21

materials [15] -

3525:20, 3526:8,

3527:6, 3529:3,

3532:6, 3533:3,

3551:9, 3569:9,

3571:9, 3582:5,

3616:20, 3619:21,

3619:24, 3647:17

matter [10] - 3557:22,

3561:1, 3566:4,

3580:2, 3581:1,

3657:6, 3660:1,

3663:5, 3675:19,

3676:18

matters [7] - 3520:11,

3530:2, 3540:21,

3541:21, 3543:5,

3570:1, 3657:8

McCLOY [1] - 3515:12

mean [43] - 3541:14,

3544:2, 3544:9,

3559:6, 3560:7,

3560:25, 3561:12,

3562:7, 3564:11,

3577:12, 3577:23,

3597:17, 3597:19,

3601:7, 3605:6,

3613:5, 3618:14,

3626:10, 3629:1,

3630:13, 3630:15,

3634:20, 3643:21,

3646:12, 3646:22,

3654:6, 3658:6,

3658:10, 3658:15,

3659:25, 3662:3,

3664:16, 3664:18,

3669:20, 3669:24,

3671:4, 3671:21,

3673:1, 3673:19,

3674:21, 3675:4,

3676:8, 3677:3

meaning [2] -

3546:11, 3572:7

means [4] - 3553:7,

3554:15, 3559:7,

3559:8

measure [1] - 3626:18

mechanism [1] -

3556:23

meet [9] - 3520:11,

3552:7, 3593:5,

3614:5, 3638:8,

3638:12, 3639:14,

3663:12, 3668:19

meeting [35] - 3526:7,

3526:8, 3529:11,

3529:14, 3536:21,

3541:16, 3541:17,

3551:3, 3551:4,

3551:14, 3551:18,

3553:13, 3555:1,

3555:2, 3555:17,

3555:18, 3556:4,

3560:5, 3569:10,

3586:19, 3587:23,

3588:1, 3606:24,

3606:25, 3615:19,

3619:17, 3628:6,

3643:18, 3648:22,

3655:4, 3664:23,

3676:20, 3677:6

meetings [22] -

3526:15, 3539:10,

3550:16, 3552:9,

3565:22, 3570:11,

3571:6, 3592:12,

3592:15, 3593:9,

3613:14, 3617:8,

3619:16, 3619:19,

3628:7, 3641:9,

3642:3, 3642:6,

3642:8, 3642:9,

3657:9

United States District Court

Trenton, New Jersey

3695

member[1] - 3668:16

members [6] -

3518:21, 3527:14,

3529:4, 3615:1,

3657:20, 3663:15

memo [5] - 3524:22,

3526:6, 3531:7,

3531:14, 3538:20

memoranda [1] -

3524:23

memorandum [6] -

3524:17, 3524:18,

3531:18, 3532:8,

3532:9, 3570:6

memorandums [1] -

3638:6

memorize [1] - 3587:4

memos [2] - 3519:24,

3520:1

men [1] - 3661:18

mention [8] - 3541:7,

3541:13, 3541:21,

3541:24, 3541:25,

3542:15, 3543:4

mentioned [24] -

3541:19, 3544:9,

3545:3, 3547:17,

3550:15, 3564:19,

3567:13, 3570:5,

3570:9, 3591:8,

3593:21, 3594:24,

3595:10, 3596:10,

3602:1, 3628:12,

3628:15, 3631:3,

3631:19, 3632:19,

3645:24, 3650:18,

3651:3, 3663:10

mentioning [1] -

3668:18

mentions [1] -

3628:12

met [3] - 3518:9,

3519:9, 3613:13

methodologies [3] -

3612:22, 3613:25,

3614:11

methodology [19] -

3605:22, 3611:10,

3611:12, 3611:17,

3611:23, 3611:24,

3612:10, 3612:16,

3612:21, 3612:22,

3612:25, 3614:9,

3615:3, 3615:20,

3615:22, 3618:7,

3618:13, 3618:14,

3667:23

might [24] - 3517:3,

3533:9, 3541:5,

3541:23, 3544:12,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 182 of 194 PageID: 19044
3544:13, 3544:21,

3546:1, 3551:18,

3556:24, 3558:12,

3562:11, 3608:1,

3624:16, 3629:8,

3631:13, 3631:23,

3632:5, 3651:16,

3657:21, 3659:11,

3671:15, 3674:24,

3677:2

MILBANK [1] -

3515:12

million [10] - 3580:9,

3622:23, 3623:4,

3623:5, 3623:16,

3631:10, 3650:12,

3654:23, 3654:25

millions [2] - 3578:3

mind [20] - 3525:14,

3540:9, 3546:17,

3548:12, 3548:20,

3558:11, 3571:22,

3581:22, 3582:22,

3583:4, 3588:21,

3597:17, 3606:23,

3630:23, 3634:13,

3642:12, 3664:17,

3676:2, 3677:2,

3677:4

mine [1] - 3658:16

minimal [1] - 3579:14

minimizes [1] -

3578:22

minimum [1] -

3544:16

minor [1] - 3523:15

minute [7] - 3536:15,

3599:13, 3616:1,

3624:23, 3645:2,

3648:8, 3662:24

minutes [14] - 3537:6,

3582:6, 3611:22,

3612:1, 3612:3,

3612:20, 3641:9,

3641:11, 3641:18,

3641:20, 3641:21,

3641:22, 3642:2,

3642:7

mirror [1] - 3591:24

mirrors [1] - 3535:16

misleading [1] -

3624:20

missed [1] - 3619:17

misunderstanding [1]

- 3572:9

mix [2] - 3559:2,

3560:3

moment [5] - 3530:25,

3545:21, 3547:23,

3558:15, 3636:12

Monday [2] - 3657:13,

3678:5

money [2] - 3578:2,

3653:19

money's [1] - 3579:24

monitor[6] - 3537:18,

3539:5, 3542:11,

3543:1, 3556:14,

3566:10

monitoring [8] -

3539:25, 3541:22,

3542:10, 3550:17,

3550:20, 3551:1,

3587:19, 3613:7

month [2] - 3554:24,

3676:4

monthly [1] - 3539:11

months [7] - 3541:16,

3542:21, 3553:11,

3570:24, 3571:1,

3616:9, 3657:8

moon [1] - 3674:13

Morgan [22] - 3520:13,

3524:18, 3557:13,

3586:21, 3587:9,

3588:12, 3588:18,

3589:10, 3590:1,

3590:10, 3591:1,

3591:2, 3592:11,

3592:14, 3592:17,

3592:20, 3593:9,

3593:12, 3594:5,

3594:16, 3659:6,

3668:14

morning [6] - 3517:1,

3517:8, 3520:16,

3523:8, 3533:14,

3567:1

most [9] - 3518:14,

3551:18, 3566:7,

3580:18, 3588:24,

3589:19, 3620:4,

3632:14, 3669:5

mouth [1] - 3642:13

move [7] - 3534:1,

3547:13, 3549:8,

3562:13, 3565:20,

3647:3

moved [4] - 3517:6,

3546:1, 3622:2,

3651:1

movement [1] -

3565:7

moving [2] - 3549:4,

3651:4

MURPHY [3] -

3515:12, 3642:22,

3674:11

Murphy [1] - 3533:25

must [1] - 3676:19

mutual [7] - 3608:18,

3626:17, 3636:16,

3638:1, 3669:4,

3669:9, 3672:9

MYLES [1] - 3515:6

N

name [4] - 3565:14,

3579:20, 3621:12,

3674:9

named [3] - 3529:13,

3534:15, 3534:16

names [1] - 3529:8

narrow [1] - 3641:7

nature [15] - 3530:16,

3530:17, 3532:19,

3563:24, 3579:11,

3581:12, 3581:14,

3583:10, 3584:10,

3618:19, 3644:16,

3647:23, 3651:11,

3652:17, 3658:6

near [1] - 3558:4

necessarily [6] -

3546:9, 3553:23,

3556:8, 3559:6,

3585:5, 3601:11

necessary [2] -

3538:13, 3588:10

need [19] - 3522:24,

3529:22, 3560:22,

3561:1, 3578:10,

3607:4, 3607:16,

3609:14, 3613:5,

3615:13, 3616:13,

3616:23, 3620:17,

3642:17, 3661:20,

3662:8, 3667:13,

3669:23, 3673:15

needs [4] - 3519:23,

3540:23, 3615:13,

3664:24

negotiate [4] - 3542:8,

3584:21, 3609:11,

3663:9

negotiated [8] -

3520:13, 3546:3,

3584:2, 3630:22,

3630:23, 3633:23,

3634:4, 3650:10

negotiating [2] -

3609:8, 3636:5

negotiation [2] -

3632:7, 3655:23

negotiations [7] -

3545:19, 3602:14,

3633:20, 3640:23,

3647:18, 3654:8,

3663:21

net [8] - 3520:11,

3562:14, 3562:16,

3563:13, 3588:21,

3588:22, 3632:9,

3654:22

never[4] - 3594:13,

3619:17, 3658:2

New [1] - 3661:1

NEW [3] - 3514:1,

3514:15, 3514:18

new [9] - 3544:17,

3568:3, 3569:1,

3579:12, 3588:16,

3591:15, 3591:16,

3594:1, 3629:4

news [1] - 3556:10

next [11] - 3520:3,

3537:23, 3537:25,

3538:5, 3558:3,

3587:23, 3587:25,

3632:6, 3644:9,

3645:9, 3665:6

Next [1] - 3557:3

nice [2] - 3537:4,

3666:14

night [1] - 3665:5

NO [2] - 3514:5,

3514:9

nobody [2] - 3619:15,

3671:25

non [4] - 3590:5,

3609:3, 3638:17

non-affiliate [1] -

3590:5

non-affiliated [1] -

3609:3

non-AXA [1] - 3638:17

non-FMG [1] -

3638:17

none [7] - 3579:3,

3618:3, 3653:25,

3661:19, 3661:25,

3665:25, 3666:1

None [1] - 3666:24

normal [1] - 3671:12

note [9] - 3527:5,

3533:2, 3533:11,

3538:18, 3563:11,

3585:19, 3605:22,

3614:19, 3641:19

noted [1] - 3542:3

nothing [1] - 3665:2

Notwithstanding [1] -

3518:20

number[40] -

3529:25, 3532:20,

3543:22, 3544:14,

3546:3, 3546:7,

3554:1, 3557:7,

United States District Court

Trenton, New Jersey

3696

3558:3, 3561:15,

3561:19, 3561:24,

3562:8, 3562:10,

3575:24, 3576:22,

3582:21, 3592:16,

3593:3, 3604:25,

3609:17, 3610:14,

3612:7, 3613:23,

3621:18, 3630:17,

3630:19, 3630:24,

3631:11, 3631:25,

3637:3, 3643:20,

3652:6, 3652:8,

3653:4, 3659:7,

3661:3, 3670:3,

3675:22

Number [1] - 3605:20

numbers [6] -

3554:15, 3554:20,

3554:21, 3621:16,

3624:8, 3632:13

O

oath [3] - 3524:11,

3568:18, 3625:4

object [6] - 3517:14,

3517:25, 3519:5,

3533:15, 3545:10,

3649:7

Objection [3] -

3573:6, 3604:9,

3639:18

objection [20] -

3517:13, 3517:19,

3519:1, 3527:9,

3533:6, 3533:18,

3534:3, 3559:19,

3571:10, 3575:11,

3595:22, 3612:2,

3614:12, 3620:14,

3625:18, 3625:25,

3626:1, 3630:2,

3647:5, 3647:6

objections [5] -

3523:24, 3536:6,

3559:18, 3625:11,

3629:12

obligation [6] -

3573:4, 3583:8,

3584:6, 3660:7,

3667:6

obligations [1] -

3671:21

obliged [1] - 3654:4

obvious [1] - 3666:12

Obviously [3] -

3558:14, 3589:20,

3613:22

obviously [18] -

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 183 of 194 PageID: 19045
3528:25, 3529:11,

3531:22, 3538:7,

3539:9, 3551:5,

3565:25, 3584:7,

3587:18, 3600:25,

3609:12, 3613:11,

3640:13, 3655:19,

3657:8, 3660:2,

3669:23, 3671:4

occasions [2] -

3518:9, 3593:3

occur [1] - 3646:11

occurred [5] -

3543:18, 3545:20,

3547:8, 3649:20,

3650:5

occurring [1] - 3572:5

occurs [1] - 3673:3

October [1] - 3538:1

odd [2] - 3664:4,

3669:3

OF [4] - 3514:1,

3514:18, 3516:2,

3524:14

offer[8] - 3518:12,

3527:4, 3533:2,

3536:5, 3559:16,

3571:8, 3625:7,

3629:11

offered [1] - 3671:14

officer [6] - 3540:2,

3565:21, 3635:4,

3635:9, 3635:11,

3671:11

officers [1] - 3582:5

offices [1] - 3542:8

OFFICIAL [1] -

3514:25

often [27] - 3528:6,

3539:12, 3539:13,

3554:21, 3565:20,

3569:15, 3571:2,

3579:15, 3584:21,

3592:17, 3619:23,

3629:3, 3631:22,

3633:15, 3640:23,

3650:22, 3650:23,

3651:3, 3651:7,

3651:10, 3653:2,

3653:3, 3653:16,

3654:8, 3659:7,

3668:19, 3676:22

Often [1] - 3629:6

old [2] - 3568:4,

3568:5

once [11] - 3522:17,

3559:3, 3570:21,

3587:18, 3592:19,

3622:13, 3622:17,

3622:24, 3641:22

One [3] - 3517:5,

3607:1, 3625:9

one [65] - 3523:15,

3525:2, 3525:4,

3526:23, 3526:24,

3528:17, 3529:25,

3530:25, 3532:7,

3533:19, 3535:24,

3536:15, 3537:9,

3542:15, 3544:22,

3553:4, 3553:24,

3555:15, 3558:9,

3564:21, 3567:6,

3568:4, 3568:5,

3575:24, 3584:8,

3584:10, 3589:15,

3590:20, 3591:17,

3592:22, 3595:10,

3598:6, 3603:1,

3603:2, 3605:20,

3612:22, 3614:10,

3618:24, 3620:4,

3625:23, 3626:25,

3628:4, 3628:6,

3629:6, 3630:22,

3634:9, 3642:9,

3648:23, 3652:16,

3652:19, 3653:22,

3654:9, 3660:18,

3661:10, 3662:11,

3663:10, 3665:5,

3668:16, 3669:15,

3673:3, 3674:4,

3675:20, 3677:12,

3677:17

one's [1] - 3618:16

ones [3] - 3522:7,

3553:4, 3560:11

ongoing [1] - 3582:1

open [2] - 3517:4

operation [3] - 3677:1,

3677:2, 3677:5

operational [1] -

3577:12

Operations [1] -

3542:7

operations [1] -

3556:10

opinion [3] - 3614:13,

3619:9, 3620:15

opinions [2] -

3554:15, 3554:17

opportunities [1] -

3614:8

opportunity [13] -

3564:2, 3571:5,

3585:23, 3591:15,

3591:23, 3593:8,

3614:5, 3620:25,

3641:14, 3646:5,

3646:10, 3646:14,

3662:14

opposed [4] - 3548:6,

3578:6, 3587:9,

3669:17

opted [1] - 3658:18

option [2] - 3639:5,

3639:6

options [2] - 3616:24,

3675:6

order[5] - 3601:20,

3615:22, 3631:14,

3635:15

ordered [1] - 3520:16

organization [3] -

3556:11, 3610:9,

3669:14

organizational [1] -

3553:17

organizations [1] -

3584:24

original [3] - 3623:4,

3623:5, 3633:3

originally [3] - 3541:8,

3561:12, 3623:3

otherwise [3] -

3591:19, 3623:21,

3654:10

ought [2] - 3554:11,

3559:7

outset [1] - 3519:2

outside [12] - 3542:19,

3563:6, 3566:1,

3598:8, 3605:9,

3613:17, 3616:25,

3617:11, 3618:23,

3656:11, 3667:4,

3669:21

overlay [1] - 3635:13

overruled [1] - 3612:5

Overruled [2] -

3604:12, 3649:9

overseen [1] -

3657:24

oversight [1] -

3542:13

overview [3] -

3541:25, 3551:9,

3565:5

own [16] - 3530:4,

3530:10, 3582:7,

3584:23, 3584:24,

3584:25, 3620:18,

3626:10, 3631:5,

3650:24, 3653:17,

3653:23, 3654:2,

3666:7, 3668:6,

3676:9

owned [1] - 3581:3

P

pactive [4] - 3543:24,

3551:11, 3561:20,

3653:1

page [18] - 3549:14,

3549:18, 3558:4,

3599:3, 3600:16,

3603:16, 3607:7,

3610:16, 3610:20,

3643:19, 3644:5,

3645:8, 3645:14,

3648:11, 3649:17,

3650:12, 3654:24

pages [9] - 3521:15,

3551:24, 3557:25,

3599:2, 3603:14,

3603:20, 3648:6,

3672:1, 3672:24

paid [15] - 3532:3,

3537:8, 3572:20,

3572:23, 3575:4,

3580:14, 3585:7,

3585:17, 3585:25,

3617:24, 3618:1,

3635:17, 3653:19,

3653:20, 3653:21

panels [1] - 3670:21

paragraph [5] -

3520:19, 3520:25,

3558:12, 3644:7,

3644:9

paragraphs [1] -

3644:9

parcel [1] - 3632:21

parent [2] - 3547:20,

3548:1

parentheses [1] -

3557:4

part [54] - 3517:12,

3526:22, 3528:4,

3531:8, 3533:3,

3538:11, 3539:24,

3540:1, 3549:10,

3551:2, 3551:4,

3551:13, 3552:8,

3567:9, 3567:20,

3569:8, 3569:14,

3571:9, 3576:1,

3576:16, 3578:16,

3581:1, 3586:1,

3586:6, 3588:4,

3588:24, 3588:25,

3589:19, 3598:2,

3598:5, 3598:15,

3601:17, 3603:11,

3603:13, 3605:22,

3605:24, 3606:18,

3609:15, 3610:12,

United States District Court

Trenton, New Jersey

3697

3611:1, 3613:6,

3624:19, 3632:21,

3634:12, 3640:3,

3651:20, 3653:2,

3658:10, 3661:3,

3671:1, 3672:7,

3673:16, 3677:3,

3677:10

particular [44] -

3528:2, 3537:19,

3546:13, 3546:15,

3547:11, 3550:13,

3552:3, 3555:16,

3556:6, 3556:20,

3556:24, 3556:25,

3558:21, 3560:9,

3569:25, 3583:6,

3584:23, 3584:24,

3588:21, 3590:6,

3595:16, 3596:4,

3597:21, 3599:15,

3603:13, 3605:8,

3611:14, 3615:17,

3629:5, 3629:10,

3630:3, 3631:9,

3631:16, 3632:25,

3634:8, 3637:25,

3638:1, 3644:22,

3645:10, 3647:24,

3649:3, 3670:15,

3672:12

particularly [12] -

3556:19, 3585:20,

3588:1, 3598:4,

3599:2, 3615:24,

3616:5, 3637:12,

3651:1, 3663:12,

3668:15, 3673:17

parties [5] - 3523:16,

3544:17, 3587:6,

3605:9, 3646:14

partner [2] - 3658:17,

3668:19

parts [1] - 3589:2

party [7] - 3577:10,

3577:13, 3577:17,

3578:4, 3578:9,

3579:22, 3584:22

passed [4] - 3578:21,

3623:1, 3635:22,

3668:12

passive [2] - 3544:19,

3644:25

passives [1] - 3651:2

past [3] - 3551:7,

3670:20

PATRICIA [1] -

3515:16

pay [6] - 3573:4,

3579:19, 3616:18,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 184 of 194 PageID: 19046
3654:1, 3675:13

paying [5] - 3653:16,

3672:7, 3672:9,

3672:10, 3675:24

Paying [1] - 3596:4

payment [5] - 3528:3,

3573:2, 3573:3,

3573:20

payments [1] -

3573:17

pays [4] - 3572:25,

3573:14, 3575:6,

3675:13

PC [1] - 3515:3

peer [6] - 3551:17,

3558:23, 3595:21,

3596:6, 3597:9,

3644:23

peers [6] - 3559:1,

3583:20, 3585:24,

3595:16, 3597:6,

3633:6

pension [1] - 3661:4

people [12] - 3615:16,

3658:22, 3658:23,

3659:23, 3661:24,

3661:25, 3665:4,

3671:5, 3671:9,

3673:4, 3676:21,

3677:6

People [1] - 3666:21

per[4] - 3624:2,

3624:5, 3624:8

percent [4] - 3544:19,

3544:20, 3651:7,

3651:8

percentage [4] -

3580:13, 3596:14

perceptions [1] -

3627:19

perfect [1] - 3666:1

perfectly [2] -

3607:13, 3664:15

perform [1] - 3538:24

performance [44] -

3529:9, 3531:23,

3539:6, 3539:7,

3546:15, 3550:17,

3551:1, 3551:15,

3551:25, 3552:4,

3552:15, 3552:17,

3552:18, 3553:10,

3556:8, 3556:12,

3558:21, 3559:25,

3560:15, 3561:12,

3561:16, 3561:21,

3562:10, 3562:14,

3562:16, 3562:18,

3562:21, 3563:4,

3563:11, 3563:12,

3565:25, 3566:5,

3566:9, 3566:10,

3582:8, 3582:10,

3584:7, 3595:3,

3619:6, 3635:16,

3637:21, 3644:21,

3650:25, 3672:19

Performance [1] -

3562:15

performed [5] -

3538:14, 3572:10,

3588:11, 3591:1,

3593:12

performing [5] -

3553:16, 3564:6,

3564:8, 3567:4,

3589:6

performs [1] - 3581:19

perhaps [5] - 3539:12,

3544:15, 3544:20,

3631:10, 3651:6

period [14] - 3522:3,

3546:11, 3547:9,

3551:19, 3648:25,

3649:14, 3650:6,

3650:7, 3650:9,

3650:10, 3650:14,

3653:10, 3655:20,

3667:24

periodically [5] -

3558:4, 3605:3,

3614:6, 3614:9,

3663:20

periods [1] - 3551:17

permit [1] - 3563:22

permitted [1] -

3520:21

person [8] - 3657:21,

3657:22, 3657:23,

3657:25, 3658:7,

3660:13, 3660:24,

3661:7

personal [2] - 3530:4,

3619:6

personally [2] -

3584:13, 3621:8

personnel [12] -

3546:8, 3551:21,

3552:11, 3553:17,

3556:11, 3565:4,

3565:19, 3566:4,

3601:19, 3621:1,

3623:2, 3666:10

perspective [20] -

3523:9, 3554:22,

3598:16, 3618:5,

3634:6, 3634:13,

3652:1, 3652:2,

3659:16, 3660:1,

3660:17, 3660:19,

3660:21, 3661:6,

3661:14, 3662:6,

3674:25, 3676:7,

3676:9, 3677:11

PETER [1] - 3514:17

PGS [2] - 3514:5,

3514:10

phenomenal [1] -

3669:14

picture [8] - 3542:6,

3586:2, 3607:14,

3666:5, 3676:2,

3676:7, 3676:13

PIMCO [2] - 3667:9,

3667:10

place [25] - 3543:21,

3544:12, 3546:3,

3549:6, 3549:9,

3563:5, 3577:6,

3591:16, 3622:21,

3623:3, 3623:15,

3630:17, 3630:20,

3631:13, 3635:6,

3635:12, 3635:13,

3649:22, 3654:11,

3662:25, 3668:8,

3669:8, 3672:16,

3673:10, 3677:24

places [1] - 3601:11

Plaintiff's [4] -

3533:13, 3546:19,

3560:16, 3561:8

plaintiffs [11] - 3520:9,

3520:14, 3520:18,

3520:19, 3571:15,

3582:23, 3589:9,

3613:10, 3623:6,

3635:20, 3674:8

Plaintiffs [4] - 3521:1,

3615:24, 3616:4,

3624:7

PLAINTIFFS [3] -

3514:4, 3514:8,

3515:7

plaintiffs' [1] - 3523:9

plan [6] - 3607:2,

3607:5, 3608:8,

3608:13, 3637:9

play [1] - 3576:10

plays [3] - 3661:7,

3664:17, 3665:14

plus [1] - 3645:5

PLUS [1] - 3558:2

pocket [2] - 3653:17,

3654:2

point [35] - 3525:2,

3533:19, 3543:6,

3545:15, 3550:8,

3554:11, 3556:19,

3556:21, 3561:15,

3568:9, 3571:20,

3576:12, 3585:23,

3596:14, 3597:19,

3602:24, 3603:1,

3607:10, 3609:24,

3613:9, 3614:24,

3617:22, 3626:12,

3630:13, 3634:11,

3637:16, 3649:20,

3658:18, 3659:3,

3662:24, 3665:10,

3666:9, 3666:25,

3668:24, 3671:19

pointed [1] - 3674:3

pointing [2] - 3558:20,

3663:6

points [27] - 3562:6,

3584:20, 3596:15,

3596:16, 3605:20,

3631:11, 3631:13,

3632:1, 3632:4,

3632:6, 3650:1,

3650:11, 3652:25,

3653:7, 3653:8,

3653:24, 3654:18,

3654:19, 3654:22,

3660:10, 3663:4,

3668:1, 3672:10,

3675:23

police [1] - 3671:11

policy [5] - 3580:8,

3580:11, 3608:1,

3608:2, 3608:11

portfolio [15] - 3535:5,

3535:25, 3544:21,

3551:10, 3558:22,

3562:17, 3564:4,

3564:15, 3566:21,

3570:23, 3572:1,

3583:6, 3588:23,

3605:8, 3644:22

portfolios [12] -

3529:11, 3535:11,

3540:4, 3540:5,

3541:22, 3541:23,

3542:4, 3543:25,

3550:18, 3643:22,

3644:25

portion [4] - 3528:3,

3528:22, 3573:2,

3573:3

portions [2] - 3536:2,

3589:4

position [4] - 3607:19,

3607:24, 3676:5,

3677:21

possible [4] -

3539:18, 3595:24,

3609:14, 3670:21

potential [3] -

United States District Court

Trenton, New Jersey

3698

3626:20, 3629:23,

3630:11

potentially [2] -

3554:2, 3566:14

practical [1] - 3580:2

practice [21] -

3533:10, 3563:15,

3580:12, 3590:6,

3606:2, 3607:3,

3608:18, 3610:6,

3617:10, 3618:24,

3636:9, 3656:4,

3656:7, 3658:6,

3658:11, 3658:21,

3658:23, 3664:15,

3665:13, 3667:7,

3667:22

Practice [1] - 3605:2

practiced [1] - 3530:5

practices [4] -

3612:23, 3618:22,

3668:22, 3670:25

practitioners [1] -

3659:7

pre [2] - 3602:24,

3604:7

pre-tax [2] - 3602:24,

3604:7

precise [2] - 3521:11,

3525:16

precisely [1] - 3626:18

precludes [1] -

3666:24

prefer[1] - 3568:13

premiere [1] - 3670:1

premium [2] -

3580:10, 3580:14

preparation [6] -

3518:8, 3519:14,

3582:2, 3582:4,

3582:6, 3582:7

prepared [7] -

3525:15, 3532:7,

3538:11, 3569:8,

3601:3, 3619:19,

3646:2

prepares [2] -

3555:23, 3641:9

preparing [1] - 3589:2

present [6] - 3570:13,

3592:11, 3605:18,

3622:11, 3670:5,

3676:22

PRESENT [1] -

3515:16

presentation [11] -

3531:19, 3549:24,

3550:1, 3599:8,

3603:17, 3603:25,

3605:12, 3611:1,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 185 of 194 PageID: 19047
3611:6, 3611:14,

3648:21

presentations [10] -

3542:13, 3551:5,

3551:23, 3570:10,

3592:14, 3592:20,

3611:11, 3611:12,

3611:21, 3628:4

presented [18] -

3528:1, 3550:2,

3551:9, 3551:20,

3557:21, 3562:14,

3562:16, 3562:22,

3563:10, 3586:18,

3590:6, 3592:17,

3605:21, 3611:23,

3614:2, 3620:1,

3623:24, 3628:8

presenting [3] -

3588:16, 3604:5,

3676:23

press [1] - 3620:3

presumably [1] -

3600:4

pretty [12] - 3552:8,

3587:12, 3587:13,

3591:10, 3600:25,

3621:16, 3624:15,

3643:25, 3658:25,

3660:10, 3673:2

previewing [1] -

3526:8

previously [4] -

3524:8, 3530:16,

3570:9, 3581:13

Price [6] - 3561:23,

3562:5, 3565:14,

3565:15, 3565:17,

3667:9

Pricewaterhouse [2] -

3612:13, 3618:10

Pricewaterhouse's [1]

- 3614:18

pride [1] - 3670:6

primarily [1] - 3624:12

primary [1] - 3607:9

privilege [2] -

3520:10, 3521:3

privileged [2] -

3520:20, 3521:22

pro [1] - 3520:24

problem [8] - 3531:1,

3545:11, 3564:14,

3577:13, 3577:16,

3579:8, 3579:16,

3581:5

problematic [4] -

3556:7, 3556:21,

3561:22, 3571:3

problems [10] -

3559:11, 3577:11,

3577:12, 3578:1,

3593:7, 3597:15,

3677:12

procedures [1] -

3607:1

proceed [13] -

3522:20, 3524:12,

3546:22, 3555:6,

3559:14, 3581:9,

3586:9, 3594:20,

3601:23, 3608:15,

3625:5, 3654:12,

3654:13

Proceedings [1] -

3678:8

proceedings [1] -

3532:13

process [43] -

3526:22, 3526:25,

3530:12, 3531:9,

3539:4, 3539:17,

3539:21, 3541:24,

3552:6, 3553:22,

3567:9, 3567:21,

3569:14, 3572:1,

3578:12, 3578:16,

3581:2, 3601:21,

3602:10, 3602:16,

3603:13, 3606:19,

3611:2, 3611:10,

3611:11, 3611:15,

3612:1, 3613:7,

3613:9, 3618:19,

3640:3, 3640:13,

3640:25, 3654:9,

3655:20, 3656:8,

3657:5, 3670:1,

3673:16, 3673:25,

3674:4, 3677:24

processes [1] -

3553:16

processing [2] -

3549:1, 3549:2

product [8] - 3562:20,

3563:10, 3637:17,

3638:3, 3638:12,

3638:23, 3640:1,

3677:7

production [2] -

3520:10, 3521:1

products [7] - 3563:5,

3564:4, 3637:24,

3638:19, 3639:5,

3666:22, 3666:24

profess [1] - 3629:7

professional [3] -

3614:13, 3662:2,

3663:1

professionals [1] -

3674:2

profit [3] - 3604:7,

3624:1, 3624:5

profitability [48] -

3526:17, 3531:23,

3550:12, 3550:14,

3584:4, 3584:5,

3602:2, 3602:20,

3602:22, 3603:11,

3603:18, 3603:21,

3604:3, 3604:5,

3604:23, 3605:4,

3605:8, 3605:12,

3605:14, 3605:16,

3606:16, 3606:18,

3607:4, 3607:9,

3607:16, 3608:19,

3608:23, 3609:2,

3609:10, 3609:19,

3610:2, 3610:12,

3618:3, 3618:25,

3620:10, 3621:11,

3621:15, 3621:16,

3623:23, 3623:24,

3624:8, 3624:20,

3633:12, 3645:15,

3647:22, 3671:3,

3672:4, 3674:16

program [3] - 3542:14,

3589:5, 3669:6

programs [3] -

3539:22, 3658:11,

3658:12

promise [1] - 3642:20

promised [1] -

3642:18

pronouncements [1] -

3606:14

proof [1] - 3559:5

properly [1] - 3663:7

proposal [3] -

3527:17, 3529:22,

3597:6

proposed [2] -

3529:19, 3544:13

prospectus [3] -

3563:12, 3601:14,

3601:15

prospectuses [1] -

3672:1

protected [1] -

3521:19

protecting [1] -

3660:4

provide [33] - 3521:5,

3521:13, 3531:25,

3535:17, 3535:18,

3537:5, 3540:1,

3540:6, 3542:7,

3542:18, 3547:21,

3548:1, 3561:5,

3564:19, 3564:23,

3566:17, 3567:3,

3567:7, 3567:16,

3576:10, 3588:18,

3601:12, 3608:19,

3627:2, 3627:20,

3634:25, 3635:1,

3635:4, 3636:23,

3658:22, 3662:19,

3664:25

provided [33] -

3526:14, 3527:1,

3533:17, 3536:20,

3536:22, 3536:23,

3541:15, 3543:10,

3549:23, 3549:24,

3550:10, 3567:20,

3572:3, 3572:15,

3576:3, 3578:11,

3578:15, 3586:19,

3587:6, 3587:8,

3588:6, 3589:17,

3592:2, 3593:4,

3597:2, 3610:10,

3611:14, 3621:2,

3627:6, 3629:19,

3656:21, 3672:20,

3676:18

provider [3] - 3666:7,

3670:1, 3670:14

providers [6] - 3566:1,

3574:6, 3584:12,

3588:15, 3618:23,

3656:12

provides [18] -

3528:20, 3528:21,

3530:18, 3535:19,

3536:2, 3540:15,

3541:12, 3548:6,

3567:2, 3570:6,

3574:11, 3581:15,

3583:12, 3589:18,

3589:22, 3650:22,

3656:22, 3670:11

providing [13] -

3542:2, 3553:15,

3572:2, 3574:6,

3583:20, 3584:12,

3584:25, 3592:23,

3593:1, 3594:16,

3633:23, 3634:5,

3647:25

proving [2] - 3528:17,

3528:18

provision [1] - 3582:5

proxy [1] - 3582:4

prudent [1] - 3657:15

public [7] - 3599:19,

3599:20, 3601:3,

United States District Court

Trenton, New Jersey

3699

3601:8, 3601:19,

3660:14

Public [1] - 3601:5

publicly [3] - 3605:4,

3605:11, 3646:6

pull [1] - 3616:12

purchased [1] -

3638:18

purchases [1] -

3549:8

purpose [4] - 3556:5,

3645:17, 3663:19,

3672:15

purposely [1] -

3663:14

purposes [4] -

3519:19, 3605:12,

3607:16, 3621:25

pursuant [1] - 3580:12

pushed [1] - 3546:14

put [20] - 3518:10,

3518:23, 3519:19,

3538:20, 3547:23,

3550:21, 3556:13,

3577:6, 3578:2,

3591:16, 3600:22,

3616:1, 3631:13,

3635:13, 3642:12,

3650:11, 3652:16,

3655:3, 3672:16

puts [3] - 3519:8,

3565:24, 3600:21

putting [1] - 3607:22

Pw [2] - 3614:7,

3617:7

PwC [2] - 3612:18,

3614:12

Q

qualifications [1] -

3619:12

qualified [1] - 3565:4

quality [22] - 3530:16,

3530:18, 3532:19,

3576:3, 3581:13,

3581:15, 3583:11,

3593:1, 3593:4,

3617:3, 3644:16,

3647:23, 3647:24,

3656:10, 3665:25,

3666:6, 3667:3,

3667:12, 3673:25,

3677:1, 3677:5

quarter [3] - 3551:7,

3554:24, 3625:1

quarterly [4] - 3539:9,

3550:16, 3555:18,

3589:21

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 186 of 194 PageID: 19048
quarters [3] - 3557:8,

3557:10, 3558:10

quartile [1] - 3529:9

questioning [1] -

3525:3

questionnaire [6] -

3535:15, 3535:16,

3567:11, 3567:14,

3567:18, 3569:15

questionnaires [1] -

3579:13

questions [9] -

3520:22, 3544:5,

3593:8, 3593:10,

3603:15, 3615:21,

3657:10, 3657:16,

3661:9

quid [1] - 3520:24

Quite [1] - 3571:7

quite [8] - 3528:13,

3562:1, 3572:7,

3585:4, 3592:16,

3662:8

quo [1] - 3520:24

quote [1] - 3520:19

R

R.M.R [1] - 3514:24

raise [2] - 3556:22,

3660:16

raised [4] - 3517:8,

3534:12, 3534:13,

3556:24

range [4] - 3596:8,

3597:11, 3600:13,

3604:15

rare [3] - 3571:1,

3659:1, 3667:14

rate [1] - 3667:21

rather[2] - 3538:10,

3663:11

rating [1] - 3553:22

ratings [1] - 3554:14

ratio [18] - 3546:6,

3583:18, 3586:4,

3596:9, 3596:12,

3596:16, 3596:21,

3597:5, 3597:20,

3598:18, 3631:7,

3631:8, 3631:11,

3651:10, 3672:10,

3672:19, 3675:14,

3675:22

rationale [2] - 3673:8,

3673:9

ratios [2] - 3597:8,

3628:18

re [2] - 3582:8,

3612:25

re-does [1] - 3582:8

re-review [1] -

3612:25

reach [1] - 3577:3

read [18] - 3522:16,

3541:4, 3558:11,

3573:9, 3590:14,

3590:15, 3590:16,

3590:24, 3604:11,

3611:25, 3646:22,

3655:10, 3671:25,

3673:19, 3675:1,

3675:2

readily [1] - 3541:14

reading [2] - 3540:25,

3541:1

real [15] - 3559:5,

3566:2, 3574:6,

3585:23, 3609:16,

3650:11, 3656:13,

3664:24, 3666:16,

3667:2, 3667:12,

3671:19, 3674:13,

3675:19

realistic [1] - 3665:22

reality [6] - 3565:23,

3566:2, 3576:5,

3673:16, 3677:19

realized [1] - 3671:25

really [24] - 3534:13,

3538:9, 3557:22,

3563:6, 3569:12,

3585:25, 3606:14,

3609:9, 3634:6,

3643:15, 3650:19,

3656:4, 3660:14,

3661:5, 3661:11,

3664:19, 3665:14,

3667:6, 3667:7,

3668:7, 3670:18,

3672:6, 3672:22

realm [2] - 3521:15,

3521:18

reason [14] - 3576:4,

3591:17, 3600:1,

3606:23, 3607:9,

3609:6, 3613:19,

3614:22, 3615:10,

3654:9, 3662:10,

3664:18, 3676:10

reasonable [30] -

3574:7, 3574:25,

3576:1, 3583:1,

3583:2, 3583:4,

3584:20, 3596:8,

3597:11, 3600:13,

3602:11, 3602:13,

3603:1, 3604:15,

3607:13, 3612:21,

3612:22, 3616:17,

3629:20, 3632:22,

3636:4, 3636:5,

3640:16, 3641:2,

3647:19, 3655:24,

3657:1, 3674:5,

3677:23

reasonableness [1] -

3671:14

reasons [11] -

3556:13, 3562:11,

3583:2, 3584:23,

3592:22, 3602:9,

3606:7, 3606:22,

3617:15, 3631:17,

3639:13

receipt [1] - 3574:19

receive [29] - 3528:10,

3530:4, 3530:17,

3531:8, 3532:2,

3553:12, 3554:23,

3554:25, 3573:19,

3581:14, 3593:15,

3604:25, 3606:17,

3608:22, 3616:21,

3624:1, 3624:4,

3627:12, 3627:22,

3629:2, 3629:10,

3636:2, 3638:6,

3638:23, 3639:24,

3641:8, 3654:4,

3656:25, 3674:1

received [29] -

3517:10, 3519:24,

3524:17, 3524:18,

3530:14, 3551:13,

3551:14, 3569:13,

3583:7, 3594:11,

3613:11, 3622:14,

3628:5, 3636:17,

3636:21, 3637:8,

3637:11, 3637:14,

3637:25, 3638:16,

3639:15, 3640:2,

3640:5, 3644:15,

3644:17, 3649:16,

3655:7, 3656:10

receives [10] -

3528:18, 3528:25,

3539:9, 3581:20,

3585:14, 3585:15,

3598:6, 3637:22,

3639:25, 3672:24

receiving [7] - 3527:1,

3609:13, 3634:8,

3653:22, 3654:3,

3665:24

recent [7] - 3526:11,

3551:18, 3552:5,

3635:3, 3643:4,

3643:5, 3650:20

recently [1] - 3625:7

recess [1] - 3568:17

Recess [1] - 3625:2

recitation [1] - 3587:5

recognition [2] -

3617:12, 3631:20

recognize [19] -

3526:1, 3527:22,

3531:3, 3534:23,

3536:14, 3536:18,

3547:2, 3549:20,

3553:3, 3555:11,

3569:4, 3586:15,

3599:5, 3603:8,

3610:23, 3628:1,

3633:11, 3643:9,

3648:18

recognizes [1] -

3637:1

recognizing [1] -

3528:19

recollection [5] -

3540:24, 3541:11,

3560:20, 3560:23,

3600:25

recommend [2] -

3559:4, 3566:12

recommendation [2] -

3539:19, 3554:1

recommendations [1]

- 3539:14

recommending [1] -

3539:4

reconvene [1] -

3678:5

record [5] - 3527:5,

3533:11, 3538:18,

3568:6, 3630:21

records [3] - 3588:25,

3617:6, 3646:3

recreate [1] - 3562:12

red [4] - 3652:1,

3652:14, 3652:20,

3653:9

redemptions [1] -

3549:8

reduce [1] - 3631:23

reduced [5] - 3562:7,

3584:3, 3630:25,

3632:4, 3632:6

reduction [4] - 3651:9,

3651:10, 3652:2,

3652:13

reductions [4] -

3545:25, 3546:4,

3605:14, 3606:4

REED [1] - 3515:14

Reed [1] - 3530:22

refer [4] - 3531:10,

United States District Court

Trenton, New Jersey

3700

3540:10, 3548:16,

3560:16

reference [2] -

3521:10, 3523:19

referenced [3] -

3525:6, 3525:17,

3569:7

references [2] -

3540:18, 3638:6

referencing [1] -

3645:11

referred [9] - 3528:6,

3529:7, 3531:6,

3531:13, 3531:15,

3540:18, 3553:9,

3555:14, 3610:20

referring [4] - 3535:5,

3591:9, 3642:7,

3644:5

reflect [7] - 3554:14,

3591:20, 3592:1,

3610:7, 3631:15,

3634:4, 3636:6

reflected [6] -

3605:16, 3613:23,

3614:4, 3614:6,

3623:1, 3623:2

reflecting [5] -

3529:25, 3554:17,

3636:6, 3668:21,

3668:22

reflection [3] -

3517:22, 3529:23,

3633:20

reflective [4] - 3519:4,

3528:19, 3662:7,

3662:8

reflects [8] - 3548:12,

3553:22, 3553:23,

3555:23, 3569:12,

3596:17, 3610:6,

3675:3

refresh [3] - 3540:23,

3541:11, 3560:22

refreshed [1] -

3560:20

regard [3] - 3517:16,

3542:25, 3672:25

regarding [4] -

3530:17, 3573:19,

3581:14, 3593:15

regime [3] - 3635:9,

3658:5, 3672:15

registration [5] -

3531:25, 3569:16,

3582:2, 3582:3,

3601:18

regroup [2] - 3552:9,

3552:10

regular [1] - 3671:12

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 187 of 194 PageID: 19049
regularly [1] - 3619:16

regulations [1] -

3645:25

regulator[3] -

3657:23, 3658:14,

3658:19

regulators [4] -

3579:21, 3659:8,

3664:14, 3672:16

regulatory [13] -

3541:20, 3542:20,

3543:1, 3570:1,

3577:10, 3578:1,

3608:6, 3621:25,

3623:14, 3635:7,

3658:5, 3668:18,

3672:15

reimburse [2] -

3577:5, 3654:1

reimbursements [3] -

3579:3, 3649:24,

3653:10

reimburses [1] -

3623:7

reimbursing [2] -

3653:15, 3653:16

relate [1] - 3646:23

related [2] - 3562:20,

3610:9

relates [1] - 3646:25

relations [1] - 3660:14

relationship [18] -

3566:8, 3579:23,

3580:4, 3580:5,

3580:6, 3584:22,

3636:22, 3661:25,

3662:2, 3662:19,

3662:22, 3662:23,

3663:1, 3663:2,

3663:3, 3663:25,

3664:5, 3677:19

relationships [3] -

3528:18, 3536:25,

3662:4

relative [2] - 3574:11,

3636:24

relatively [1] - 3643:4

relevance [1] - 3649:7

relevant [13] -

3531:24, 3543:7,

3544:6, 3551:19,

3585:13, 3627:3,

3627:15, 3643:22,

3646:13, 3647:17,

3649:8, 3672:17,

3672:22

relied [6] - 3518:24,

3518:25, 3519:3,

3519:4, 3670:7,

3673:22

relief [2] - 3542:23,

3542:25

reluctant [1] - 3609:18

rely [1] - 3530:9

relying [5] - 3525:10,

3582:9, 3582:10,

3616:23, 3621:6

remains [1] - 3518:21

remember[7] -

3550:3, 3562:3,

3567:25, 3570:20,

3582:12, 3637:16,

3651:3

Remind [1] - 3544:24

reminded [3] -

3526:25, 3534:1,

3607:15

reminding [1] -

3541:18

reorganizations [1] -

3545:3

Reorganizations [1] -

3545:4

repeat [4] - 3550:25,

3573:8, 3604:10,

3616:4

repeating [1] -

3540:25

rephrase [5] -

3573:11, 3573:12,

3614:16, 3630:6,

3642:25

replace [1] - 3554:2

replacements [1] -

3539:16

replacing [4] -

3539:16, 3544:15,

3546:10, 3546:11

reply [1] - 3518:18

report [9] - 3553:6,

3553:13, 3601:6,

3643:1, 3643:12,

3646:2, 3646:7,

3646:22, 3649:10

reporter[3] - 3541:4,

3573:9, 3604:11

REPORTER [1] -

3514:25

reporting [2] -

3581:24, 3612:16

reports [11] - 3603:21,

3605:14, 3605:19,

3610:2, 3613:9,

3614:4, 3620:10,

3671:4, 3675:2,

3676:4, 3677:13

represent [4] - 3562:9,

3565:15, 3661:17,

3661:18

representative [1] -

3652:21

represented [1] -

3565:10

representing [1] -

3658:8

represents [2] -

3517:24, 3659:17

reputation [1] -

3581:3

reputational [1] -

3577:12

reputationally [1] -

3579:20

request [5] - 3552:2,

3574:20, 3588:4,

3601:16, 3619:21

requested [4] -

3527:15, 3528:8,

3529:3, 3588:5

requesting [1] -

3532:10

requests [1] - 3529:6

require [4] - 3559:7,

3581:7, 3609:10,

3671:25

required [15] -

3514:23, 3542:8,

3588:25, 3589:19,

3592:24, 3601:9,

3602:8, 3621:25,

3642:11, 3643:1,

3643:5, 3643:16,

3644:2, 3645:24,

3672:5

requirement [6] -

3570:24, 3590:5,

3594:12, 3622:25,

3638:18, 3643:4

requirements [2] -

3563:14, 3657:24

requires [3] - 3635:9,

3635:11

research [2] -

3566:18, 3566:22

Reserve [2] - 3674:9,

3674:22

resolution [1] -

3519:23

resolved [3] - 3517:9,

3517:12, 3522:2

resolving [1] - 3517:5

resources [1] -

3548:23

respect [40] - 3522:14,

3526:16, 3526:17,

3527:2, 3528:2,

3535:4, 3535:9,

3535:19, 3539:5,

3540:20, 3542:4,

3547:6, 3553:18,

3556:10, 3556:20,

3561:10, 3561:24,

3562:25, 3566:5,

3570:22, 3583:18,

3583:19, 3587:14,

3587:24, 3588:3,

3590:22, 3604:6,

3606:16, 3608:25,

3609:20, 3627:12,

3631:1, 3635:14,

3640:5, 3640:6,

3644:16, 3644:17,

3645:18, 3649:22,

3666:16

respectfully [1] -

3670:4

respective [3] -

3595:21, 3596:6,

3597:9

respond [1] - 3567:17

responded [1] -

3538:10

response [12] -

3531:13, 3532:8,

3535:17, 3538:12,

3539:23, 3542:1,

3543:20, 3562:10,

3588:4, 3635:6,

3650:23

responses [2] -

3570:2, 3604:14

responsibilities [3] -

3540:1, 3554:8,

3576:14

responsibility [11] -

3535:6, 3535:9,

3535:12, 3549:10,

3556:19, 3562:25,

3563:1, 3563:7,

3566:22, 3566:24,

3574:4

responsible [7] -

3549:4, 3564:6,

3564:10, 3573:17,

3584:16, 3588:22,

3589:6

responsive [2] -

3538:6, 3588:2

rest [2] - 3552:11,

3590:23

restate [3] - 3528:23,

3596:1, 3634:24

restructure [1] -

3652:5

restructured [7] -

3543:24, 3544:2,

3544:15, 3622:2,

3651:9, 3651:13,

3652:25

restructuring [7] -

United States District Court

Trenton, New Jersey

3701

3541:22, 3544:9,

3544:16, 3650:8,

3650:17, 3651:20,

3653:3

restructurings [2] -

3649:19, 3651:4

result [16] - 3520:11,

3546:8, 3598:10,

3614:17, 3614:19,

3621:4, 3631:17,

3632:9, 3632:22,

3652:9, 3653:3,

3654:3, 3654:7,

3654:8, 3654:18,

3663:8

resulted [1] - 3654:22

results [3] - 3549:7,

3565:6, 3640:24

resumes [1] - 3524:8

retail [1] - 3591:14

retained [6] - 3573:20,

3574:1, 3574:10,

3575:3, 3593:16,

3612:14

retaining [5] -

3528:11, 3544:15,

3574:8, 3582:22,

3614:23

retains [1] - 3528:3

retired [1] - 3616:8

revenue [5] - 3605:14,

3606:4, 3624:2,

3624:5, 3624:8

revenues [3] - 3638:2,

3639:9, 3639:25

review [36] - 3532:20,

3537:23, 3537:24,

3538:1, 3538:6,

3538:9, 3540:14,

3541:6, 3552:2,

3552:15, 3552:16,

3555:3, 3555:15,

3555:16, 3555:20,

3555:22, 3556:5,

3557:9, 3570:3,

3571:1, 3572:17,

3574:21, 3594:14,

3602:2, 3606:9,

3611:13, 3612:25,

3614:4, 3618:13,

3620:17, 3634:1,

3635:11, 3646:5,

3646:11, 3647:16,

3647:20

reviewed [7] -

3517:21, 3521:20,

3555:24, 3576:1,

3605:23, 3613:11

reviewing [16] -

3532:18, 3532:19,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 188 of 194 PageID: 19050
3535:25, 3536:17,

3541:10, 3546:21,

3551:1, 3552:17,

3552:18, 3558:16,

3562:4, 3563:2,

3603:23, 3615:20,

3644:21, 3647:22

reviews [7] - 3567:15,

3608:24, 3641:20,

3644:2, 3644:12,

3644:14, 3648:23

revisions [2] -

3641:15, 3641:18

right-hand [2] -

3553:20, 3554:14

rigorous [3] - 3635:8,

3635:11, 3671:23

risk [6] - 3577:1,

3577:14, 3578:22,

3579:6, 3580:1

risks [13] - 3576:16,

3576:20, 3576:24,

3577:7, 3577:9,

3577:19, 3578:13,

3578:16, 3578:20,

3578:21, 3582:16,

3583:15

ROBERT [2] - 3515:5,

3515:13

Robert [1] - 3523:14

role [19] - 3529:5,

3535:4, 3535:19,

3535:25, 3539:2,

3542:8, 3542:11,

3548:17, 3549:2,

3549:3, 3550:17,

3551:2, 3572:9,

3658:22, 3661:8,

3664:17, 3665:15,

3677:10

roles [4] - 3531:20,

3532:18, 3539:20

ROME [1] - 3515:9

room [2] - 3550:23,

3672:18

Rosenthal [1] -

3529:12

rough [1] - 3659:11

rule [2] - 3643:5,

3673:2

rules [1] - 3645:25

rulings [1] - 3533:18

run [6] - 3565:12,

3585:9, 3651:8,

3651:12, 3665:2,

3665:7

running [2] - 3585:8,

3647:21

runs [1] - 3664:23

S

sales [2] - 3608:5,

3669:9

Sanchez [1] - 3671:10

sanctions [1] - 3646:2

SANFORD [1] -

3514:8

Santiago [1] - 3671:9

satisfactory [1] -

3575:1

satisfy [3] - 3542:24,

3574:21, 3615:13

satisfying [1] -

3638:20

savings [5] - 3648:24,

3649:5, 3653:8,

3654:22, 3654:24

saw [4] - 3591:5,

3614:10, 3662:13,

3664:3

scale [24] - 3526:18,

3584:1, 3626:7,

3626:8, 3626:10,

3626:17, 3626:21,

3627:3, 3627:7,

3627:17, 3627:18,

3627:21, 3628:7,

3628:13, 3629:5,

3629:19, 3629:24,

3630:11, 3630:22,

3631:21, 3635:22,

3636:7, 3645:19,

3673:18

scenarios [1] - 3654:2

schedule [5] - 3532:1,

3532:2, 3570:19,

3633:17, 3635:17

schedules [1] -

3634:14

Schpero [88] -

3517:14, 3517:20,

3518:5, 3518:8,

3518:17, 3518:23,

3519:3, 3519:8,

3519:18, 3519:23,

3524:7, 3524:10,

3524:16, 3525:3,

3525:25, 3527:14,

3527:23, 3530:15,

3530:24, 3531:3,

3534:9, 3534:23,

3536:12, 3538:23,

3540:10, 3541:10,

3543:8, 3544:3,

3544:10, 3546:18,

3546:20, 3547:2,

3547:10, 3547:16,

3547:20, 3549:14,

3550:15, 3552:22,

3553:3, 3555:9,

3559:24, 3560:22,

3562:13, 3566:16,

3568:2, 3568:18,

3568:23, 3570:9,

3571:15, 3573:14,

3576:16, 3578:18,

3578:19, 3581:12,

3582:13, 3582:15,

3586:12, 3588:10,

3591:9, 3592:11,

3593:21, 3594:23,

3596:4, 3598:23,

3600:14, 3602:1,

3603:3, 3603:25,

3606:8, 3608:22,

3610:15, 3612:11,

3617:22, 3619:3,

3620:8, 3625:4,

3626:6, 3627:23,

3629:18, 3636:10,

3640:8, 3642:25,

3645:2, 3646:21,

3647:11, 3648:18,

3649:12, 3655:1

SCHPERO [4] -

3516:2, 3516:2,

3524:8, 3524:14

Schpero's [5] -

3519:10, 3519:12,

3520:16, 3521:9,

3521:16

science [4] - 3595:14,

3613:25, 3617:14,

3675:5

scope [2] - 3522:2,

3594:15

screen [1] - 3603:6

SEAN [1] - 3515:12

searching [1] - 3601:3

seated [1] - 3625:3

SEC [21] - 3540:21,

3542:20, 3542:21,

3543:1, 3563:14,

3601:6, 3601:18,

3606:14, 3607:19,

3635:6, 3643:5,

3644:2, 3645:24,

3658:5, 3658:7,

3658:23, 3659:1,

3671:20, 3671:23,

3672:22, 3673:20

second [14] - 3517:12,

3535:15, 3550:21,

3552:8, 3558:4,

3558:12, 3562:3,

3564:21, 3575:24,

3603:5, 3610:17,

3619:3, 3625:9,

3654:24

secondarily [1] -

3578:7

Secondly [1] -

3522:17

secretary [1] -

3641:10

Section [1] - 3514:23

section [6] - 3535:10,

3557:25, 3558:1,

3644:25, 3645:17,

3645:21

sector [1] - 3551:10

sectors [1] - 3644:24

secure [2] - 3580:1,

3580:3

securities [3] -

3540:7, 3566:19,

3566:21

see [65] - 3519:17,

3529:14, 3535:14,

3541:6, 3542:9,

3549:19, 3552:20,

3553:10, 3553:25,

3555:16, 3558:2,

3558:15, 3560:18,

3565:7, 3565:18,

3565:19, 3565:21,

3568:1, 3570:21,

3570:24, 3571:2,

3579:13, 3585:14,

3592:19, 3593:17,

3597:22, 3600:25,

3603:17, 3603:19,

3605:11, 3607:4,

3609:14, 3616:15,

3617:9, 3618:21,

3621:13, 3621:14,

3621:15, 3623:15,

3627:13, 3627:14,

3627:17, 3627:19,

3632:13, 3638:20,

3644:24, 3648:22,

3652:12, 3657:21,

3657:22, 3659:1,

3661:18, 3661:22,

3661:23, 3661:24,

3667:9, 3670:25,

3672:4, 3676:14,

3677:5, 3677:6

See [1] - 3678:5

seeing [2] - 3598:20,

3609:10

seek [4] - 3520:18,

3520:19, 3521:1,

3521:23

seeking [2] - 3521:11,

3522:4

seem [1] - 3662:20

selected [2] - 3518:13,

United States District Court

Trenton, New Jersey

3702

3519:7

selection [2] - 3565:5,

3572:1

self [1] - 3663:4

self-defeating [1] -

3663:4

selling [2] - 3608:4,

3637:23

senior[1] - 3565:21

sense [6] - 3581:21,

3595:15, 3602:21,

3602:22, 3664:23,

3667:3

sensitivities [1] -

3631:15

sent [1] - 3567:11

Separate [1] - 3653:9

separate [10] -

3528:20, 3549:5,

3562:20, 3598:14,

3621:14, 3633:20,

3639:7, 3651:16,

3652:19

separated [1] -

3597:23

separately [5] -

3536:23, 3586:21,

3598:5, 3598:8,

3634:4

September [2] -

3551:18, 3562:6

September/October

[1] - 3668:4

series [2] - 3591:14,

3603:14

serious [1] - 3538:7

serve [1] - 3616:6

served [3] - 3520:2,

3619:4, 3659:1

service [20] - 3553:14,

3574:6, 3576:10,

3583:7, 3584:10,

3584:11, 3584:20,

3585:1, 3585:6,

3588:15, 3598:15,

3617:4, 3634:5,

3647:24, 3650:21,

3665:25, 3667:3,

3670:11, 3670:18,

3676:21

services [94] -

3528:19, 3528:20,

3528:23, 3529:1,

3530:16, 3530:18,

3531:19, 3531:24,

3532:19, 3535:18,

3536:22, 3536:23,

3537:5, 3537:7,

3537:8, 3537:11,

3538:14, 3538:23,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 189 of 194 PageID: 19051
3539:1, 3540:15,

3541:11, 3541:12,

3541:15, 3543:9,

3547:21, 3548:2,

3548:6, 3548:9,

3548:15, 3548:21,

3549:10, 3550:10,

3566:16, 3567:2,

3567:4, 3567:8,

3567:15, 3572:3,

3572:10, 3572:15,

3574:6, 3574:11,

3576:3, 3576:17,

3581:13, 3581:15,

3581:19, 3583:11,

3583:12, 3583:15,

3583:20, 3584:12,

3585:1, 3585:8,

3585:16, 3586:19,

3586:20, 3586:21,

3587:2, 3587:6,

3587:8, 3588:3,

3588:11, 3588:18,

3589:7, 3589:17,

3589:19, 3591:1,

3592:1, 3592:23,

3593:4, 3593:11,

3594:16, 3597:2,

3598:8, 3600:5,

3600:7, 3610:9,

3621:1, 3623:3,

3623:19, 3627:20,

3633:22, 3634:12,

3634:14, 3634:16,

3634:25, 3635:1,

3644:16, 3647:23,

3656:21, 3656:22,

3672:20, 3676:18

Services [3] -

3621:21, 3623:7,

3623:22

servicing [1] -

3623:17

serving [1] - 3617:1

session [1] - 3665:3

sessions [4] -

3539:10, 3552:13,

3663:19, 3663:20

set [5] - 3570:14,

3570:18, 3591:13,

3628:5, 3666:19

setting [3] - 3632:18,

3633:4, 3658:11

seven [3] - 3557:10,

3558:9, 3635:7

seventh [1] - 3522:3

several [6] - 3555:14,

3577:8, 3592:22,

3593:21, 3594:24,

3602:1

shared [3] - 3628:14,

3629:23, 3630:11

Shared [3] - 3621:21,

3623:6, 3623:22

shareholder [4] -

3623:17, 3634:16,

3634:22, 3643:16

shareholders [8] -

3564:24, 3608:7,

3640:17, 3641:3,

3649:6, 3656:1,

3656:14, 3656:15

sharing [3] - 3622:20,

3623:1, 3623:2

Shearman [1] -

3658:17

sheet [1] - 3557:1

sheets [1] - 3517:10

SHERIDAN [1] -

3514:17

shift [7] - 3530:15,

3578:18, 3581:12,

3594:23, 3600:14,

3636:10, 3640:8

Shifting [3] - 3610:1,

3621:20, 3655:1

short [1] - 3672:1

shortly [1] - 3655:4

shot [1] - 3674:13

show [7] - 3561:25,

3563:13, 3606:3,

3607:4, 3612:20,

3621:10, 3630:21

showing [8] - 3611:2,

3649:4, 3649:14,

3650:4, 3651:22,

3651:25, 3652:1,

3652:7

shown [2] - 3607:6,

3607:7

shows [1] - 3648:23

side [12] - 3538:13,

3538:19, 3540:11,

3553:20, 3588:6,

3588:10, 3589:22

side-by-side [5] -

3538:13, 3538:19,

3540:11, 3588:6,

3588:10

sides [1] - 3525:11

sift [1] - 3601:19

signed [3] - 3520:12,

3520:15

significance [1] -

3556:14

significant [34] -

3537:17, 3539:2,

3539:7, 3542:12,

3542:23, 3543:12,

3544:1, 3544:22,

3549:2, 3551:4,

3552:19, 3554:3,

3556:9, 3559:10,

3561:16, 3563:9,

3574:18, 3576:25,

3577:7, 3577:20,

3577:23, 3579:8,

3579:16, 3579:23,

3610:8, 3621:4,

3624:13, 3624:18,

3636:2, 3640:4,

3651:9, 3651:10,

3656:11, 3666:10

significantly [1] -

3579:17

similar [7] - 3550:1,

3583:20, 3587:12,

3587:13, 3588:6,

3600:4

similarly [2] - 3645:12,

3659:5

Similarly [1] - 3668:12

simple [1] - 3624:15

simply [2] - 3534:10,

3623:13

Simply [1] - 3540:25

single [1] - 3651:5

singular[1] - 3565:13

sits [1] - 3664:22

sitting [1] - 3541:16

situated [1] - 3548:24

situation [2] - 3566:3,

3609:13

SIVOLELLA [1] -

3514:3

six [7] - 3551:24,

3552:7, 3635:7,

3650:14, 3667:20,

3670:13, 3670:17

six-year [1] - 3650:14

size [1] - 3581:3

sizeable [1] - 3582:20

sizes [1] - 3627:11

sleeve [3] - 3551:16,

3562:18, 3653:2

sleeves [5] - 3540:5,

3588:23, 3651:6,

3651:14, 3653:2

slides [1] - 3628:5

small [4] - 3582:21,

3603:5, 3621:3,

3676:5

socializing [1] -

3662:1

sold [1] - 3671:8

solely [1] - 3652:20

someone [2] -

3657:23, 3674:21

sometime [1] -

3670:22

sometimes [9] -

3531:13, 3600:20,

3610:20, 3621:13,

3629:3, 3637:13,

3650:22, 3663:15,

3676:22

somewhat [4] -

3522:18, 3600:4,

3603:5, 3677:3

sorry [30] - 3522:11,

3532:24, 3534:24,

3540:22, 3544:15,

3544:24, 3545:20,

3547:23, 3549:2,

3549:16, 3552:16,

3560:18, 3578:19,

3591:12, 3592:13,

3595:2, 3610:19,

3616:4, 3624:3,

3633:2, 3634:3,

3634:11, 3642:7,

3643:15, 3649:1,

3650:3, 3654:1,

3665:10, 3667:11,

3675:4

Sorry [6] - 3550:23,

3550:24, 3552:23,

3568:25, 3604:13,

3642:12

sort [2] - 3582:6,

3628:16

sought [1] - 3639:15

source [2] - 3543:5,

3669:16

sources [1] - 3604:25

speaking [7] -

3538:23, 3566:16,

3588:18, 3595:20,

3596:5, 3597:8,

3600:10

special [7] - 3552:1,

3555:14, 3555:20,

3555:22, 3556:5,

3557:9, 3570:25

specific [32] -

3522:15, 3528:11,

3529:2, 3529:10,

3531:24, 3535:7,

3535:11, 3535:25,

3551:15, 3556:12,

3558:18, 3560:25,

3561:14, 3563:1,

3565:16, 3566:19,

3570:22, 3584:17,

3587:18, 3588:20,

3599:21, 3601:10,

3608:6, 3611:3,

3613:2, 3628:17,

3628:20, 3628:21,

3633:22, 3635:23,

United States District Court

Trenton, New Jersey

3703

3646:12, 3654:15

Specifically [1] -

3561:10

specifically [13] -

3522:9, 3538:10,

3562:17, 3583:5,

3588:5, 3588:8,

3595:10, 3610:16,

3614:5, 3618:12,

3630:10, 3634:21,

3648:6

specifics [4] -

3558:19, 3562:4,

3565:20, 3570:20

spend [1] - 3658:18

spending [2] - 3657:7,

3657:8

spent [6] - 3537:16,

3559:10, 3615:20,

3658:5, 3662:11,

3668:6

spirit [1] - 3589:21

split [2] - 3580:10,

3580:13

sponsor [5] - 3535:8,

3566:3, 3579:5,

3597:25, 3598:12

sponsored [2] -

3565:13, 3576:9

sponsoring [1] -

3576:25

sponsors [3] -

3565:12, 3577:25,

3609:19

spread [14] - 3528:2,

3528:21, 3573:24,

3573:25, 3582:19,

3582:25, 3583:6,

3583:12, 3583:19,

3584:17, 3585:22,

3621:18, 3634:7,

3653:24

spreads [1] - 3585:22

spring [8] - 3526:6,

3591:11, 3591:12,

3591:22, 3591:23,

3611:20, 3613:3,

3616:8

stage [2] - 3576:13,

3577:6

stamp [1] - 3549:15

stand [2] - 3524:9,

3622:9

standard [1] - 3607:3

standpoint [1] -

3674:19

start [9] - 3517:2,

3575:22, 3579:1,

3579:2, 3600:16,

3621:17, 3626:6,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 190 of 194 PageID: 19052
3635:3, 3644:3

start-up [2] - 3579:1,

3579:2

starting [5] - 3551:6,

3576:24, 3618:6,

3644:14, 3650:19

STATE [1] - 3514:14

statement [7] -

3531:25, 3601:13,

3601:14, 3601:16,

3601:18, 3618:3,

3622:9

statements [10] -

3532:4, 3569:16,

3579:15, 3581:23,

3581:24, 3582:3,

3582:4, 3589:3,

3640:3

STATES [1] - 3514:1

statistics [1] - 3669:7

stays [1] - 3556:23

stems [1] - 3609:15

step [5] - 3568:15,

3595:19, 3676:12,

3676:15, 3677:10

stepping [1] - 3657:6

Sterling [1] - 3658:17

stick [1] - 3545:5

still [7] - 3524:10,

3566:1, 3568:18,

3609:21, 3625:4,

3638:22, 3642:20

stip [1] - 3520:22

stipulation [8] -

3520:12, 3520:15,

3521:15, 3521:18,

3521:19, 3521:22,

3522:17, 3523:4

Stock [1] - 3562:5

stop [2] - 3603:14,

3645:2

strains [1] - 3663:8

strategic [2] -

3541:21, 3543:5

Strategic [1] - 3605:1

STREET [1] - 3514:14

Street [4] - 3659:13,

3659:22, 3660:12,

3660:24

strike [1] - 3614:15

strongly [1] - 3572:12

structure [13] -

3548:14, 3557:23,

3564:2, 3564:18,

3564:19, 3564:23,

3608:6, 3624:19,

3628:15, 3631:22,

3652:9, 3652:10,

3672:12

structured [4] -

3551:12, 3597:25,

3665:12, 3666:19

structures [2] -

3544:18, 3630:24

studies [5] - 3550:12,

3550:14, 3605:2,

3605:3, 3627:17

study [7] - 3603:11,

3605:17, 3607:4,

3610:12, 3612:19,

3621:15, 3624:20

sub [135] - 3528:4,

3528:21, 3532:2,

3535:17, 3535:18,

3536:24, 3537:11,

3538:14, 3539:3,

3539:4, 3539:5,

3539:7, 3539:11,

3539:14, 3539:15,

3539:16, 3539:18,

3542:2, 3542:9,

3542:14, 3543:10,

3544:17, 3546:12,

3546:13, 3546:15,

3552:7, 3552:13,

3554:2, 3559:8,

3560:5, 3563:3,

3563:16, 3563:23,

3564:5, 3564:7,

3564:8, 3564:16,

3564:18, 3564:22,

3565:6, 3566:9,

3566:11, 3566:17,

3567:2, 3567:3,

3567:7, 3567:12,

3567:13, 3567:17,

3569:10, 3569:14,

3570:2, 3570:7,

3570:10, 3570:13,

3570:23, 3571:3,

3571:6, 3571:16,

3571:25, 3572:11,

3572:17, 3572:21,

3572:23, 3572:25,

3573:3, 3573:4,

3573:15, 3573:18,

3573:21, 3575:4,

3578:6, 3578:8,

3578:22, 3578:25,

3579:4, 3579:8,

3579:10, 3579:12,

3579:18, 3582:10,

3582:20, 3584:15,

3584:22, 3585:15,

3586:22, 3587:9,

3587:15, 3587:25,

3588:7, 3588:19,

3588:20, 3589:10,

3590:4, 3590:9,

3590:23, 3591:21,

3591:25, 3592:2,

3592:23, 3593:4,

3593:6, 3594:5,

3594:7, 3594:9,

3594:11, 3605:13,

3606:3, 3608:23,

3608:25, 3609:2,

3609:3, 3609:8,

3609:12, 3609:18,

3633:14, 3633:21,

3633:23, 3633:24,

3637:10, 3644:18,

3646:24, 3650:24,

3651:17, 3651:19,

3651:24, 3652:24,

3653:16, 3653:21,

3654:1, 3656:23,

3666:21

Sub [3] - 3589:25,

3590:25, 3592:3

Sub-Administration

[3] - 3589:25,

3590:25, 3592:3

sub-administration

[5] - 3590:4, 3590:9,

3590:23, 3591:25,

3605:13

sub-administrator

[14] - 3586:22,

3587:9, 3588:19,

3588:20, 3589:10,

3591:21, 3592:2,

3592:23, 3593:4,

3593:6, 3594:5,

3594:7, 3594:9,

3594:11

sub-administrators

[1] - 3656:23

sub-advisor[35] -

3528:4, 3528:21,

3536:24, 3537:11,

3546:12, 3546:13,

3554:2, 3559:8,

3560:5, 3567:12,

3567:13, 3570:13,

3572:11, 3573:3,

3573:4, 3573:18,

3578:25, 3579:8,

3579:10, 3579:18,

3582:20, 3585:15,

3594:5, 3608:25,

3609:2, 3609:8,

3609:12, 3633:23,

3633:24, 3637:10,

3651:24, 3653:16,

3653:21, 3654:1,

3656:23

sub-advisors [57] -

3535:17, 3535:18,

3538:14, 3539:3,

3539:4, 3539:5,

3539:7, 3539:11,

3539:14, 3539:15,

3539:16, 3539:18,

3542:2, 3542:9,

3542:14, 3543:10,

3546:15, 3552:7,

3552:13, 3563:16,

3563:23, 3564:5,

3565:6, 3566:9,

3566:11, 3566:17,

3567:3, 3567:7,

3567:17, 3569:14,

3570:10, 3570:23,

3571:3, 3571:6,

3571:16, 3571:25,

3572:21, 3572:23,

3572:25, 3573:15,

3573:21, 3575:4,

3578:6, 3578:8,

3578:22, 3579:12,

3582:10, 3584:22,

3587:15, 3608:23,

3609:3, 3609:18,

3644:18, 3650:24,

3651:17, 3651:19,

3666:21

sub-advisors' [1] -

3579:4

sub-advisory [22] -

3532:2, 3544:17,

3563:3, 3564:7,

3564:8, 3564:16,

3564:18, 3564:22,

3567:2, 3569:10,

3570:2, 3570:7,

3572:17, 3584:15,

3587:25, 3588:7,

3605:13, 3606:3,

3633:14, 3633:21,

3646:24, 3652:24

subcontract [2] -

3563:18, 3563:23

subject [5] - 3547:12,

3632:7, 3638:4,

3646:2, 3670:21

subpar[5] - 3559:25,

3560:5, 3560:15,

3561:12, 3561:16

subpoena [1] - 3520:2

subsequent [1] -

3587:15

subsidiary [6] -

3548:14, 3610:10,

3621:3, 3622:3,

3622:24, 3623:18

substantial [1] -

3572:15

substantially [1] -

3572:10

substantive [4] -

United States District Court

Trenton, New Jersey

3704

3540:3, 3542:18,

3558:6, 3620:5

successful [1] -

3577:2

sudden [1] - 3621:16

suddenly [1] -

3668:24

suffice [1] - 3522:19

sufficient [5] -

3519:20, 3529:18,

3615:21, 3629:20,

3646:13

suggest [3] - 3641:15,

3641:17, 3650:25

suggested [2] -

3573:22, 3602:18

suggestion [4] -

3665:22, 3666:12,

3668:21, 3677:14

suggestions [1] -

3677:13

suit [3] - 3580:7,

3580:15, 3580:16

suits [1] - 3670:9

Sullivan [1] - 3668:19

summaries [1] -

3570:4

summarize [7] -

3526:11, 3526:16,

3539:2, 3543:18,

3552:11, 3569:18,

3599:9

summarized [1] -

3538:16

summarizes [4] -

3526:12, 3526:13,

3644:3, 3644:12

summarizing [4] -

3536:22, 3536:23,

3570:7, 3612:1

summary [22] -

3526:13, 3527:2,

3537:4, 3537:10,

3540:11, 3543:9,

3547:5, 3547:6,

3549:24, 3553:4,

3553:19, 3554:10,

3556:18, 3558:19,

3558:20, 3569:7,

3569:8, 3569:10,

3587:1, 3588:17,

3644:9, 3672:1

summer[1] - 3591:23

superb [1] - 3619:11

supervising [2] -

3539:3, 3542:2

supplemental [1] -

3535:3

supplied [1] - 3644:10

support [2] - 3549:24,

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 191 of 194 PageID: 19053
3550:10

supposed [1] - 3660:5

surface [1] - 3559:10

surprise [2] - 3519:25,

3617:9

suspect [2] - 3520:3,

3591:18

sustained [1] - 3592:8

Sustained [1] - 3541:5

SWEETSER [1] -

3515:4

switching [1] -

3547:20

Switching [1] -

3543:12

sworn [1] - 3524:8

system [2] - 3635:5,

3635:12

SZAFERMAN [1] -

3515:3

T

T.Rowe [6] - 3561:23,

3562:5, 3565:14,

3565:17, 3667:9

tab [24] - 3524:24,

3526:2, 3526:3,

3527:21, 3532:22,

3534:24, 3536:12,

3549:12, 3549:17,

3552:21, 3552:24,

3555:9, 3568:3,

3568:6, 3568:23,

3568:25, 3582:13,

3586:12, 3598:23,

3603:3, 3610:14,

3627:23, 3643:6,

3648:1

Tab [2] - 3569:1,

3610:20

table [4] - 3523:18,

3656:17, 3658:14,

3658:25

tabs [1] - 3525:20

talented [1] - 3656:16

talks [2] - 3646:22,

3669:15

tax [4] - 3581:24,

3602:24, 3604:7,

3637:14

teachers [1] - 3671:8

team [3] - 3546:13,

3663:15, 3663:23

teams [1] - 3539:15

tech [1] - 3549:2

technology [2] -

3549:1, 3589:4

tens [1] - 3578:2

term [7] - 3572:6,

3596:9, 3621:13,

3626:8, 3636:11,

3636:15, 3637:17

terms [16] - 3529:24,

3532:18, 3539:6,

3540:18, 3541:21,

3551:7, 3551:25,

3583:14, 3615:12,

3615:13, 3619:3,

3645:16, 3648:24,

3649:15, 3666:17,

3676:24

terrific [1] - 3656:2

test [10] - 3596:14,

3596:25, 3636:20,

3638:8, 3638:12,

3638:21, 3639:14,

3656:4, 3656:13,

3673:1

testified [16] - 3518:9,

3519:24, 3530:1,

3530:17, 3537:6,

3540:25, 3572:14,

3581:14, 3587:19,

3633:22, 3640:22,

3641:6, 3655:20,

3665:22, 3669:25,

3675:18

testify [5] - 3585:23,

3612:5, 3614:21,

3649:9, 3649:10

testimony [9] -

3517:21, 3519:12,

3522:20, 3547:12,

3569:8, 3569:23,

3630:3, 3649:2,

3665:18

testing [1] - 3607:23

text [1] - 3643:22

themselves [3] -

3567:3, 3567:7,

3670:6

theory [1] - 3520:21

therefore [4] -

3548:25, 3566:10,

3626:13, 3659:8

They've [2] - 3635:13,

3642:18

they've [7] - 3529:7,

3532:4, 3535:13,

3598:13, 3634:20,

3634:24, 3635:4

thinking [3] - 3517:25,

3518:16, 3676:1

thinks [2] - 3663:6,

3673:12

third [1] - 3584:22

third-party [1] -

3584:22

thoughtful [2] -

3663:9, 3669:23

thoughts [1] - 3668:7

thousand [2] -

3642:21, 3672:21

threaten [1] - 3667:13

three [14] - 3517:8,

3553:11, 3558:24,

3566:18, 3566:23,

3606:7, 3625:7,

3651:6, 3651:14,

3651:16, 3653:1,

3657:7, 3658:19,

3670:20

three-day [1] -

3670:20

throughout [4] -

3532:21, 3653:9,

3655:20, 3667:24

timeframe [1] - 3545:6

Title [1] - 3514:23

today [11] - 3520:1,

3521:11, 3522:22,

3524:18, 3541:16,

3543:22, 3544:12,

3609:21, 3610:7,

3616:20, 3651:3

together[8] - 3518:10,

3518:24, 3519:8,

3519:19, 3597:23,

3600:21, 3600:22,

3673:4

took [1] - 3661:12

top [7] - 3525:5,

3566:9, 3618:7,

3644:5, 3649:18,

3649:25, 3670:11

topic [1] - 3594:1

total [24] - 3546:5,

3575:6, 3583:18,

3586:4, 3596:9,

3596:12, 3596:13,

3596:15, 3596:21,

3597:24, 3598:18,

3598:20, 3603:18,

3607:14, 3631:7,

3651:23, 3651:24,

3652:3, 3652:23,

3653:7, 3675:14,

3675:22

totally [3] - 3636:8,

3649:8, 3665:12

track [1] - 3537:20

trade [2] - 3535:10,

3566:23

traded [2] - 3535:10,

3605:11

trades [1] - 3637:13

trading [1] - 3540:7

trailed [1] - 3559:1

train [1] - 3633:2

transcribed [2] -

3516:7, 3524:4

transcript [3] -

3521:16, 3523:20,

3524:2

transfer [1] - 3549:3

transferred [1] -

3623:18

transparency [1] -

3617:4

treasury [1] - 3548:23

treat [1] - 3605:12

tremendous [2] -

3661:22, 3670:18

TRENTON [1] -

3514:15

trial [5] - 3516:7,

3522:3, 3522:21,

3524:4, 3533:7

TRIAL [1] - 3514:20

tried [1] - 3675:1

tries [3] - 3569:18,

3633:11, 3675:9

trivialize [1] - 3675:4

troubled [3] - 3593:3,

3622:13, 3622:15

troubling [1] - 3666:4

true [3] - 3514:23,

3583:22, 3631:24

truly [1] - 3670:10

trust [3] - 3521:3,

3521:4, 3563:22

Trust [19] - 3518:7,

3519:8, 3538:15,

3538:24, 3540:16,

3541:12, 3543:10,

3547:21, 3548:2,

3548:7, 3548:9,

3563:17, 3567:5,

3574:12, 3581:20,

3589:7, 3645:6,

3649:4, 3654:23

trustee [27] - 3529:5,

3534:13, 3534:14,

3538:1, 3552:14,

3554:20, 3573:7,

3577:15, 3581:6,

3604:22, 3615:25,

3619:7, 3619:10,

3619:11, 3619:23,

3620:16, 3626:20,

3654:8, 3656:5,

3662:14, 3662:15,

3664:13, 3665:14,

3668:4, 3668:5,

3668:11, 3677:11

trustees [43] - 3518:7,

3518:13, 3519:7,

3520:9, 3520:14,

United States District Court

Trenton, New Jersey

3705

3520:20, 3520:24,

3521:2, 3521:4,

3523:19, 3530:9,

3530:10, 3530:13,

3538:4, 3538:17,

3552:12, 3554:8,

3566:12, 3570:14,

3570:16, 3571:5,

3574:16, 3590:21,

3612:14, 3615:10,

3616:23, 3618:12,

3620:17, 3622:5,

3632:24, 3633:25,

3640:19, 3641:14,

3641:17, 3646:8,

3647:15, 3660:18,

3664:3, 3665:1,

3670:19, 3670:24,

3670:25, 3674:1

Trustees [2] -

3540:17, 3541:19

trustees' [2] - 3529:8,

3529:24

truth [2] - 3517:15,

3519:18

truthful [1] - 3618:17

try [18] - 3542:15,

3543:18, 3570:20,

3599:9, 3599:21,

3601:19, 3602:17,

3605:9, 3617:11,

3663:2, 3663:9,

3666:14, 3668:25,

3669:1, 3670:4,

3675:8, 3675:9,

3676:12

trying [12] - 3559:10,

3559:11, 3560:24,

3562:11, 3586:6,

3627:16, 3633:7,

3633:10, 3652:5,

3660:3, 3662:9,

3663:14

turn [29] - 3524:23,

3524:24, 3527:21,

3528:25, 3530:15,

3532:22, 3536:12,

3549:12, 3549:14,

3549:18, 3552:21,

3555:9, 3563:16,

3568:2, 3568:23,

3581:6, 3582:13,

3586:12, 3598:23,

3603:3, 3610:14,

3610:16, 3627:23,

3643:6, 3644:19,

3645:8, 3645:13,

3648:1, 3648:6

turned [1] - 3559:5

Turning [1] - 3534:22

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 192 of 194 PageID: 19054
turning [2] - 3525:25,

3613:9

turnover [1] - 3666:10

TWEED [1] - 3515:12

twice [2] - 3519:9,

3592:19

two [36] - 3517:4,

3517:9, 3518:8,

3518:9, 3519:24,

3521:9, 3522:2,

3526:15, 3527:3,

3557:11, 3557:25,

3558:21, 3576:23,

3584:11, 3584:12,

3585:9, 3587:6,

3587:17, 3588:15,

3605:23, 3612:12,

3614:1, 3618:8,

3632:6, 3633:20,

3634:11, 3640:21,

3649:12, 3651:6,

3653:1, 3655:21,

3658:21, 3664:11,

3664:18, 3665:5,

3672:24

type [8] - 3551:8,

3579:25, 3600:7,

3603:5, 3657:23,

3659:22, 3669:5,

3670:2

types [12] - 3538:23,

3540:15, 3541:12,

3543:15, 3544:25,

3545:3, 3551:12,

3561:13, 3576:20,

3581:18, 3583:15,

3627:5

typical [2] - 3631:22,

3658:14

typically [10] -

3544:18, 3559:2,

3565:11, 3570:21,

3571:2, 3579:4,

3585:11, 3592:19,

3601:8

Typically [1] - 3633:18

U

U.S [2] - 3514:17,

3514:25

U.S.C [1] - 3514:23

ultimate [8] - 3536:3,

3564:1, 3574:24,

3586:7, 3596:25,

3621:18, 3632:11,

3672:7

ultimately [14] -

3539:18, 3548:18,

3552:19, 3562:2,

3564:6, 3564:9,

3574:18, 3589:6,

3596:20, 3602:10,

3612:16, 3631:5,

3632:17, 3673:13

unaudited [1] -

3579:16

Under [3] - 3526:3,

3573:14, 3573:16

under [19] - 3521:22,

3524:10, 3526:2,

3534:24, 3536:24,

3541:19, 3558:21,

3563:1, 3568:18,

3572:3, 3577:5,

3583:1, 3597:3,

3623:6, 3623:17,

3625:4, 3631:21,

3637:8

under-performance

[1] - 3558:21

underlying [2] -

3566:8, 3583:3

underneath [1] -

3525:5

understood [2] -

3548:9, 3613:24

undertaking [1] -

3579:25

unfortunately [1] -

3573:23

unhappiness [1] -

3546:13

unhappy [1] - 3666:25

UNITED [1] - 3514:1

universe [1] - 3632:8

university [1] - 3669:6

unless [2] - 3530:13,

3559:5

unreasonable [2] -

3620:13, 3620:22

unrelated [1] - 3609:8

unusual [1] - 3579:12

up [34] - 3520:3,

3521:8, 3530:22,

3539:17, 3540:5,

3546:19, 3551:17,

3561:25, 3568:4,

3568:5, 3570:14,

3570:18, 3576:24,

3579:1, 3579:2,

3583:22, 3590:19,

3591:13, 3603:6,

3608:5, 3612:16,

3631:11, 3631:25,

3632:1, 3632:25,

3636:12, 3644:3,

3650:19, 3653:15,

3658:11, 3666:19,

3670:13, 3672:23

upcoming [1] - 3526:8

update [1] - 3553:13

updated [4] - 3541:20,

3551:20, 3555:4,

3555:17

updates [2] - 3552:4,

3582:3

upper [1] - 3637:24

urging [1] - 3591:18

utilized [1] - 3611:17

V

valuation [3] - 3540:6,

3540:7, 3572:4

Value [1] - 3557:13

value [3] - 3576:17,

3588:21, 3588:22

variable [2] - 3638:2,

3639:25

various [19] - 3525:20,

3531:19, 3532:18,

3538:10, 3540:14,

3550:17, 3572:3,

3577:5, 3578:16,

3592:15, 3597:3,

3601:4, 3631:1,

3633:6, 3637:24,

3644:8, 3654:16,

3655:7

vast [1] - 3656:2

vastly [1] - 3635:5

versus [5] - 3551:11,

3584:14, 3585:22,

3650:6

viability [1] - 3578:8

viable [1] - 3577:6

view [9] - 3518:14,

3519:11, 3555:24,

3564:18, 3564:22,

3577:20, 3618:8,

3618:18, 3638:9

viewed [3] - 3517:14,

3624:8, 3670:10

viewpoint [2] -

3673:11, 3674:20

viewpoints [2] -

3659:24, 3675:3

views [7] - 3519:9,

3530:3, 3553:14,

3553:23, 3553:24,

3650:24, 3668:6

violating [1] - 3608:11

virtually [2] - 3542:25,

3630:20

visits [1] - 3539:10

volatility [1] - 3635:13

voluminous [1] -

3569:13

vote [3] - 3529:22,

3640:23, 3640:25

voted [5] - 3640:8,

3640:12, 3641:5,

3646:19, 3647:11

voting [2] - 3527:16,

3529:19

Vs [2] - 3514:5, 3514:9

W

wait [1] - 3657:13

waiting [1] - 3560:18

waivers [2] - 3649:24,

3650:9

waiving [2] - 3653:15,

3653:23

walk [2] - 3551:22,

3551:24

Wall [4] - 3659:13,

3659:22, 3660:12,

3660:24

ways [7] - 3571:22,

3576:23, 3614:3,

3628:13, 3628:14,

3660:18, 3664:12

weeds [2] - 3677:12,

3677:14

week [2] - 3520:3,

3522:3

weekly [3] - 3539:8,

3589:21, 3658:6

weeks [2] - 3667:21,

3670:13

weigh [2] - 3675:9,

3675:25

weighs [1] - 3640:19

weighted [1] -

3640:20

whatever's [1] -

3551:19

whatnot [1] - 3580:12

whole [9] - 3517:25,

3548:25, 3560:3,

3577:17, 3581:7,

3581:22, 3589:17,

3663:11, 3672:14

wide [1] - 3564:3

willing [1] - 3584:23

wish [2] - 3518:18,

3573:10

Witness [5] - 3536:17,

3546:21, 3558:16,

3562:4, 3603:23

witness [14] - 3518:6,

3519:13, 3524:8,

3530:23, 3546:23,

3547:13, 3560:8,

3573:6, 3595:23,

United States District Court

Trenton, New Jersey

3706

3612:3, 3630:3,

3649:2, 3657:11,

3661:10

WITNESS [90] -

3534:16, 3534:18,

3545:7, 3545:14,

3545:17, 3554:16,

3554:19, 3554:25,

3557:2, 3557:5,

3557:7, 3557:12,

3557:16, 3557:19,

3557:23, 3558:11,

3558:14, 3558:17,

3560:24, 3561:3,

3568:8, 3568:16,

3568:19, 3575:15,

3578:23, 3579:2,

3580:2, 3582:17,

3583:5, 3594:6,

3594:10, 3594:18,

3600:17, 3600:19,

3600:24, 3601:7,

3604:13, 3607:19,

3607:21, 3608:2,

3612:8, 3614:19,

3616:12, 3616:14,

3616:19, 3618:11,

3618:18, 3624:23,

3639:21, 3642:15,

3642:17, 3642:19,

3646:25, 3650:18,

3651:15, 3651:18,

3651:22, 3652:7,

3652:13, 3652:18,

3653:6, 3653:14,

3653:20, 3654:6,

3657:18, 3658:1,

3658:3, 3659:19,

3659:25, 3660:7,

3660:9, 3661:16,

3662:23, 3664:9,

3664:22, 3665:10,

3665:17, 3665:21,

3666:4, 3667:19,

3667:25, 3669:11,

3669:13, 3669:20,

3671:18, 3673:13,

3675:1, 3676:8,

3677:18, 3678:2

women [1] - 3661:19

wondering [3] -

3544:5, 3676:3,

3676:5

Worcester[1] -

3668:20

words [5] - 3571:21,

3608:5, 3622:22,

3626:10, 3638:16

works [3] - 3569:18,

3615:22, 3628:15

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 193 of 194 PageID: 19055
world [2] - 3660:15,

3666:16

worse [1] - 3528:6

Wow [1] - 3534:17

wrapper [9] - 3563:9,

3637:17, 3638:3,

3638:8, 3638:12,

3638:15, 3638:23,

3640:1, 3640:5

writings [3] - 3521:2,

3521:5, 3521:6

written [1] - 3645:3

Y

year [40] - 3526:23,

3531:8, 3535:25,

3537:20, 3550:2,

3550:4, 3551:7,

3557:15, 3558:25,

3567:12, 3570:21,

3571:4, 3572:18,

3575:25, 3578:11,

3578:15, 3587:17,

3592:19, 3593:17,

3603:18, 3611:2,

3611:10, 3611:15,

3629:1, 3629:2,

3629:4, 3629:8,

3640:9, 3642:11,

3643:1, 3643:12,

3646:19, 3647:11,

3650:14, 3657:2,

3657:5, 3667:24,

3668:3, 3668:25

years [51] - 3521:9,

3522:2, 3528:12,

3530:5, 3530:6,

3534:11, 3543:13,

3543:16, 3545:1,

3545:16, 3545:20,

3547:17, 3552:5,

3553:11, 3553:12,

3557:11, 3558:21,

3558:24, 3560:2,

3565:8, 3565:10,

3577:24, 3592:16,

3609:16, 3614:3,

3614:7, 3616:6,

3617:3, 3619:4,

3621:1, 3630:24,

3634:17, 3635:3,

3635:8, 3643:5,

3650:20, 3655:8,

3658:5, 3658:19,

3662:6, 3662:12,

3664:11, 3666:6,

3668:5, 3668:9,

3668:10, 3668:20,

3668:21, 3669:25,

United States District Court

Trenton, New Jersey

3707

3670:17

yesterday [11] -

3517:5, 3518:9,

3522:7, 3524:16,

3525:3, 3526:23,

3531:6, 3531:10,

3532:8, 3570:5,

3615:17

Yesterday [2] -

3523:17, 3550:15

York [1] - 3661:1

Young [4] - 3612:14,

3612:18, 3618:11

Z

zone [1] - 3667:5

Case 3:11-cv-04194-PGS-DEA Document 269 Filed 03/31/16 Page 194 of 194 PageID: 19056