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Friday
June 27, 2008
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(856) 983-8484
(800) 636-8283
Friday
June 27, 2008
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1 APPEARANCES CONTINUED:
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MORGAN, LEWIS & BOCKIUS, LLP
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1701 Market Street
Philadelphia, PA 19103-2921
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BY: ANDREW C. WHITNEY, ESQ.
Attorneys for Leonard Becker,
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Michael R. DeLuca, Harold E. Sussman,
Jerome Miller, Warren Palitz,
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Jeffrey Steinberg
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SAUL EWING, LLP
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1500 Market Street, 38th Floor
Philadelphia, PA 19102
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BY: GREGORY G. SCHWAB, ESQ.
Attorneys for BDO Seidman, LLP
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DECHERT, LLP
Cira Center
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2929 Arch Street
Philadelphia, PA 19104-2808
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BY: MICHAEL L. KICHLINE, ESQ.
Attorneys for J.P. Morgan Chase Bank; J.P.
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Morgan Securities, Inc.; J.P. Morgan
Chase & Co.; Bear Stearns & Co., Inc.;
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Bear Stearns Financial Products, Inc.;
Bear Stearns Asset Backed Securities, Inc.;
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Morgan Stanley & Co., Incorporated; Morgan
Stanley Dean Witter & Co.; Morgan Stanley
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ABS Capital I, Inc.; and Morgan Stanley
Mortgage Capital, Inc.
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HARKINS CUNNINGHAM, LLP
2800 One Commerce Square
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2005 Market Street
Philadelphia, PA 19103
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BY: ELIZABETH M. CHACHIS, ESQ.
(Via Telephone)
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Attorneys for Blank Rome, LLP
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INDEX
WITNESS
PAGE
VICTOR HONG
EXAMINATION BY MR. COREN.............5, 161
EXAMINATION BY MR. SCHWAB...............154
EXAMINATION BY MR. CURTIS...............154
E X H IB ITS
EXHIBIT
PAGE
Exhibit S-74.....................................141
Exhibit S-75.....................................141
11 Exhibit S-76.....................................145
Exhibit S-77.....................................146
12 Exhibit S-78.....................................147
13 Exhibit S-79.....................................148
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15 EXHIBITS PREVIOUSLY MARKED AND REFERRED TO:
16 Exhibit S-1.......................................67
Exhibit S-3.......................................79
17 Exhibit S-17......................................83
Exhibit S-18......................................84
18 Exhibit S-19.....................................132
Exhibit S-20.....................................139
19 Exhibit S-52.....................................121
Exhibit S-53.....................................123
20 Exhibit S-54.....................................128
Exhibit S-55.....................................139
21 Exhibit S-61.....................................150
Exhibit S-62.....................................152
22
23 REQUESTS TO PRODUCE:
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Page 45, Line 13
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17 ALSO PRESENT:
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Mr. Lee Bitman
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Expert Legal Video Productions
6 East Kings Highw ay
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Haddonfield, NJ 08033
(856) 354-6000
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the record.
A.
Victor Hong, H-O-N-G.
Q.
And, Mr. Hong, my name is Steve Coren. I
represent the Trustee, George Miller, in connection
with litigation pending in the Court of Common Pleas
of Philadelphia County, Pennsylvania.
THE VIDEOGRAPHER: We're now going off
the video record, 8:13.
(Brief pause.)
THE VIDEOGRAPHER: 8:14, back on the
video record.
BY MR. COREN:
Q.
Before the phone rang, I introduced myself
as counsel for the Trustee. You are here today to
give testimony under oath in connection with
litigation brought by Trustee Miller against your
former employer and others. If at any time you
don't understand a question, you want me to repeat
it, please tell me. It's important that you
understand the question and that you are in fact
attempting to honestly answer the question that I
have posed.
If at any time during the day you recall
something that you hadn't remembered earlier, please
feel free to tell me. You can go back at any time
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A.
Price verification.
Q.
And when you say price verification, what
does that mean?
A.
Providing independent opinion about the
market representativeness of trading inventory
valuations.
Q.
And what types of -- when you say trading
inventory, what do you mean?
A.
Mortgage and asset-backed securities.
Q.
And when you say price evaluation, what do
you mean?
A.
Valuation by -- by whom? It would be -there are various parties that are involved in
valuation of any given trading position. Are you
talking about my role or somebody else's role?
Q.
Yes, your role, please.
A.
My role is to assess independently if
trader marks are at fair market value.
Q.
And a trader mark is the value of a
particular asset that is set by the trader?
A.
Yes.
Q.
Have you ever testified before?
A.
Not that I can recall. Not that I can
recall.
Q.
And can you tell me what preparation, if
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that you would like and correct any answer you made
or supplement any testimony that you gave. If you
think it appropriate, please feel free to tell us
and we'll give you that opportunity. Is that fair,
sir?
A.
Yes.
Q.
Where do you currently reside?
A.
222 East 34th Street, New York City.
Q.
And by whom are you presently employed?
A.
J.P. Morgan.
Q.
And for how long have you been employed by
J.P. Morgan?
A.
Since June of '06.
Q.
And what is your position with J.P. Morgan?
A.
Valuation risk management.
Q.
And are you an officer at J.P. Morgan?
A.
Can you be more -- can you define that?
Q.
Well, do you have a title, vice president,
something like -A.
Executive director.
Q.
Executive director? And so, you are the
executive director of risk management or valuation
risk management?
A.
Valuation risk.
Q.
And what does that department do?
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not to answer?
MR. CURTIS: I would instruct him not
to answer.
Q.
But for the instruction of counsel, could
you identify the documents that you reviewed in
preparation?
A.
I believe so.
Q.
Do you recall the quantity of documents?
A.
Not specifically.
Q.
More than 10?
A.
As I can recall, likely more than 10.
Q.
Okay. Did you speak with any of your
former colleagues at Credit Suisse in connection
with this deposition?
A.
Yes.
Q.
And with whom did you speak?
A.
Jane Tang, Steve Kelly, Michael Sopher, Dan
Ezra.
Q.
What was Dan's last name?
A.
Ezra. Gail Lee. Those are names that I
can recall.
Q.
And when did you have these discussions
with those five former colleagues who were at Credit
Suisse?
MR. WEINBERG: That's a discussion
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A.
No.
Q.
Do you recall anything they said about your
name having been in that Wall Street Journal
article?
A.
Nothing specific.
Q.
Did you speak with the Wall Street Journal
reporter?
A.
I received a phone call from the Wall
Street Journal reporter.
Q.
And did you speak to him?
A.
Yes.
Q.
And what did you tell him?
A.
I said that I had nothing to say regarding
the article.
Q.
Did he call you before it was published?
A.
Yes, he did.
Q.
And did he ask you to comment on what was
about to be published?
A.
Yes, he did.
Q.
Do you recall what he asked you?
A.
He asked, if I recall correctly, if I had
any knowledge this year regarding an article that he
was going to write.
Q.
And you told him you had no comment?
A.
Yes.
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June 27, 2008
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Q.
Would you please give me your educational
background.
A.
University of Chicago, MBA, 1985;
University of Wisconsin, BA, 1981; and then Lane
Technical High School, 1977.
Q.
How old are you?
A.
49 and a half.
Q.
Any degrees beyond your MBA?
A.
CFA and then, that's a designation, plus
FRM, which is financial risk management.
Q.
CFA is what?
A.
Chartered financial analyst.
Q.
And when did you receive that designation?
A.
I believe in 1992.
Q.
And the other one you identified?
A.
I believe it was 2006.
Q.
Would you please give us your employment
experience after you received your MBA from
University of Chicago.
A.
Sure. I came out of the University of
Chicago in June of 1985, started in a training
program at Chemical Bank, resigned that to take a
job at Salomon Brothers in 1985.
Q.
Would you just briefly describe what your
positions were at Chemical Bank and Salomon
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1
Brothers.
A.
At Chemical Bank, I was just a trainee. 2
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Q.
Training for what?
4
A.
Sales and trading.
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Q.
And at Salomon Brothers?
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A.
Government bond trader.
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Q.
Were you actually a trader for Salomon
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Brothers?
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A.
Yes.
Q.
And you were trading government bonds? 10
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A.
Yes.
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Q.
Were you trading any other types of
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securities?
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A.
No.
Q.
And for how long did you hold your position15
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as a bond trader at Salomon Brothers?
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A.
Until the beginning of 1988.
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Q.
And what did you do next?
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A.
I joined Security Pacific out in Los
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Angeles, California.
Q.
And what was your position with Security 21
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Pacific?
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A.
Government bond trader.
Q.
For how long did you hold that position? 24
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A.
I believe until October of 1988.
Page 16
A.
Not of which I knew.
Q.
Well, what was the purpose of structuring
those financings?
A.
For sale to institutional investors.
Q.
And for how long did you do that?
A.
I did that for about a year.
Q.
And what did you do next?
A.
I joined Kidder Peabody in 1991.
Q.
And what did you do at Kidder Peabody?
A.
A government bond salesperson.
Q.
And for how long did you hold that
position?
A.
Until I believe August of 1992.
Q.
And what did you do after that?
A.
Bear Stearns recruited me at the end of
1992.
Q.
And what was your position at Bear Stearns?
A.
Fixed income research.
Q.
And what did the -- what did your position
involving fixed income research entail while at Bear
Stearns?
A.
Covering the treasury mortgage-backed
securities markets.
Q.
And what did you do, when you say covering,
what do you mean?
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1
Q.
And what did you do next?
2
A.
I took a position at Continental Bank in
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Chicago to be a government bond trader.
4
Q.
And how long did you hold that position?
5
A.
Until I believe, I think it was September
6
of 1989.
7
Q.
And what did you do after that?
A.
I decided to make a career change and took 8
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a position with a lease finance firm to be a lease
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finance analyst.
11
Q.
What firm was that?
12
A.
Forsythe MacArthur.
13
Q.
Located where?
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A.
Skokie, Illinois.
15
Q.
And tell me what the nature of that
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position was.
A.
It was structuring, analyzing and marketing 17
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lease finance transactions.
19
Q.
And what type of lease finance transactions
were being structured and marketed, leases of what? 20
A.
Typically computer and telecom equipment. 21
22
Q.
And were they being securitized and
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securities marketed and sold?
24
A.
Not of which I knew.
25
Q.
I'm sorry?
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June 27, 2008
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A.
Identify relative value trade opportunities
and publish research.
Q.
And were these mortgage-backed securities
conventional mortgages, subprime mortgages or both?
A.
Typically, they would be agency mortgages,
Fannie Mae, Freddie Mac, Ginnie Mae.
Q.
And were you involved in structuring pools
of those mortgages and valuing the securities that
resulted?
A.
I was not involved in structuring. When
you say valuing, what do you mean, in what sense?
Q.
Well, you were involved in pricing of those
securities?
A.
No. I was a price taker, not a price
maker.
Q.
And what does that mean, price taker?
A.
I was not assigning values for any books
and records or any other purposes. I was -- part of
my role was to determine if some securities offer
particular relative value opportunities that would
enable trade ideas to be marketed to clients.
Q.
For how long did you hold that position?
A.
Four years.
Q.
Now, in that position while you were at
Bear Stearns, did you become familiar with how
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Q.
Let me dial forward to 1992 and then the
four years you spent at Bear Stearns. Tell me what
you learned about the methodologies used to value
mortgage-backed securities while you were in that
position for four years.
A.
I learned about prepayment modeling and
also the types of securities that could be
structured from mortgage loan pools.
Q.
Anything else that you can recall?
A.
No, not right now.
Q.
While you were at Bear Stearns, did you
have familiarity with the valuation of subprime
mortgage-backed securities?
A.
Not that I recall.
Q.
When was the first time that you had some
familiarity or involvement with valuation issues
involving subprime mortgage-backed securities?
A.
At CS First Boston.
Q.
Let me back up while you're still at Bear
Stearns and talk a little bit about the
methodologies that you learned for the valuation of
mortgage-backed securities. You identified
prepayment modeling. What did you mean by that?
A.
Understanding how underlying home borrowers
may elect to refinance their mortgages either
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of the security?
A.
Not necessarily.
Q.
When the security is an interest-only strip
and no interest and principal repayment, would my
statement be correct?
A.
Could you repeat that?
Q.
Yes. If the security, if the security that
we are addressing is a right only to receive
interest, can we agree that the -- there is an
inverse relationship between the prepayment speed
and the value of that security in the sense that the
faster the prepayment speed, the lower the value of
the interest-only mortgage-backed security?
A.
Yes.
Q.
Did you actually work with models while you
were at Bear Stearns, valuation models?
A.
Yes, we applied valuation models.
Q.
Was there a standard type model that was
used at Bear Stearns, or was this something that
Bear Stearns had prepared on its own?
MR. CURTIS: Objection to form.
Q.
You can answer the question.
A.
Could you repeat that, please?
Q.
Sure. Do you know who developed the models
that you utilized while at Bear Stearns on issues of
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was at CS First Boston?
A.
Yes.
Q.
When did you start at CS First Boston?
A.
In late 1996.
Q.
October 3, 1996 ring a bell?
A.
Yes.
Q.
Was that your start date?
A.
Yes.
Q.
And is it correct that you were employed by
CS First Boston from October 3, 1996, through June
30, 2004?
A.
Yes.
Q.
Now, what CS or Credit Suisse entity did
you work for? And if there was more than one, tell
me which ones you worked for.
A.
Can you be more specific?
Q.
Yes. As I understand it, there are a
number of legal entities that are operated by Credit
Suisse. Do you know which ones you worked for?
A.
I wouldn't know the details of it.
Q.
So, as far as you were concerned, it was
just Credit Suisse First Boston?
A.
(Witness nods head in the affirmative.)
Q.
Yes?
A.
Yes.
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A.
A book that was a compilation of articles 1
and various contributors, and the coordinator of 2
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that book is Frank Fabozzi.
4
Q.
Do you recall the name of that book?
5
A.
Not specifically.
Q.
Was that a book coauthor by Steve Mann? 6
7
A.
Don't recall.
8
Q.
Did you read Mr. Fabozzi's book?
9
A.
Yes.
10
Q.
Do you still use that book today?
11
A.
No.
Q.
Are there any other books or publications 12
that you have used in your career concerning the 13
valuation of mortgage-backed securities that you 14
15
considered authoritative?
16
A.
There are so many articles that are written
17
that nothing stands out in my mind.
Q.
Have you read any books on the subject 18
other than the one you identified that Mr. Fabozzi 19
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authored?
21
A.
Not that I recall.
Q.
Now, I think you indicated you were at Bear22
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Stearns for four years; is that correct?
24
A.
Yes.
25
Q.
And am I correct that your next position
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Q.
And where did you physically work during
the period of time you were employed by Credit
Suisse First Boston?
A.
Initially at Park Avenue Plaza, and then at
11 Madison Avenue.
Q.
Always in Manhattan?
A.
Yes, but I did do some work in London.
Q.
And for how long were you at Credit Suisse
in London?
A.
During 2000, 2001, I was making regular
trips to London, but not specifically domiciled out
of there.
Q.
All right. Did you hold the same position
during your entire tenure at Credit Suisse First
Boston?
A.
No.
Q.
What was the first position you held?
A.
I was the head of the mortgage price
verification group.
Q.
And how many employees were in the mortgage
price verification group?
A.
It varied over time.
Q.
Give me an estimate.
A.
I believe it got to as large as like about
six to eight people, six to eight persons.
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Q.
Six to eight?
1
A.
Yes.
2
Q.
Okay. And what did that group do?
3
A.
Assisted me in the valuation review of the
4
firm's fixed income trading positions.
5
Q.
And when you say fixed income trading
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positions, what do you mean?
7
A.
RMBS, ABS, CMBS, CDO, leverage loans, high 8
yield debt, investment grade corporate debt, repo
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finance, interest rate derivatives.
10
Q.
Now, were you valuing these various
11
investments that were held or owned by Credit
12
Suisse?
13
A.
Yes.
14
Q.
So, the investments that you have
15
identified that you were valuing were in the
16
inventory of Credit Suisse and maintained on its
17
balance sheet; is that correct?
18
A.
Yes.
19
Q.
All right. Let me back up and you gave us
20
a bunch of initials. We need to further describe
21
them for the record. RMBS, residential
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mortgage-backed securities?
23
A.
Yes.
24
Q.
ABS, asset-backed securities?
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one month?
A.
Yes.
Q.
And what was your position for that one
month?
A.
Analyst in CMBS research.
Q.
CM?
A.
BS.
Q.
Was that considered a promotion?
A.
No.
Q.
Why did you change positions from the head
of the mortgage price verification group to an
analyst?
A.
I was asked to consider a role back in
research.
Q.
And who asked you to consider that?
A.
Gail Lee and -- yeah, that was it, yeah.
Q.
Did you consider that a demotion?
A.
No.
Q.
Did your salary change in connection with
that change in position?
A.
No, no.
Q.
Were you still heading up a group of
individuals in connection with that change of
position?
A.
No.
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A.
Yes.
Q.
CMBS, what did that stand for?
A.
Customer mortgage-backed securities.
Q.
CDO?
A.
Collateralized debt obligations.
Q.
Leveraged loans?
A.
Loans to corporations.
Q.
Investment grade corporate debt?
A.
Investment grade bonds which corporations
issued.
Q.
Repo finance?
A.
Facilities where we would finance
securities for customers.
Q.
And I think you said interest rate
derivatives?
A.
Yes. Could be interest rate swaps, could
be some exotic credit derivatives.
Q.
Now, for how long were you the head of the
mortgage price verification group of Credit Suisse
First Boston?
A.
Until I believe the end of May of '04.
Q.
Well, you left the company a month later,
correct?
A.
Uh-huh.
Q.
Did you have a different position for that
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Q.
Did some event occur which resulted in that
change of position to your knowledge?
A.
Could you be more specific?
Q.
Yes. I'm wondering why it was, after
spending a number of years as the head of a group
involving mortgage price verification, that you
moved to an analyst position. Did something happen
to cause that move?
A.
I was unhappy with Willy Pest and Ed
Valencia, my managers.
Q.
And why is that?
A.
Whenever I raised valuation concerns, they
tended to criticize the work by my team and me.
Q.
Give me those names again.
A.
Ed Valencia, Willy Pest.
Q.
Spell Valencia.
A.
V-A-L-E-N-C-I-A.
Q.
And the other individual?
A.
Willy Pest.
Q.
Willy P-E-S-T?
A.
Yes.
Q.
And what was Mr. Valencia's position at CS
First Boston?
A.
He was the head of mortgage product
control.
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Q.
And how about Willy Pest, what was his
position?
A.
He was the manager for product controllers
in product control.
Q.
Now, you had indicated that whenever you
raised valuation questions or concerns, you were
criticized by Mr. Valencia and Mr. Pest. Do you
recall that testimony?
A.
Do I recall saying that just now?
Q.
Yes.
A.
Yes, I do.
Q.
And tell me if you could more specific in
terms of what types of valuations that you would
make that would be criticized by Mr. Valencia or Mr.
Pest.
A.
Could you repeat the question?
Q.
Yes. I'm trying to get a further
amplification of the valuations that your group
derived that were then criticized by Mr. Valencia
and Mr. Pest which caused you to want to leave your
director position in that group.
A.
Yes.
MR. CURTIS: Objection to form.
Q.
Go ahead.
THE WITNESS: Pardon? Never mind.
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Q.
CMBS positions which who held?
A.
Andy Kimura.
Q.
And is that an employee of Credit Suisse?
A.
Yes.
Q.
And what CMBS positions did Andy Kimura
hold?
A.
I believe some positions in a deal, it was
CSFB 97-C1.
Q.
And what was that?
A.
It was a commercial mortgage transaction
that First Boston had created in 1997.
Q.
And did that in any way involve
mortgage-backed securities?
A.
Yes.
Q.
And did it involve subprime mortgage-backed
securities?
A.
No.
Q.
And tell me what that was about where you
derived values that were lower than Mr. Kimura and
you were criticized as a result.
A.
I came up with an estimated value which I
believed to be -- which was lower than where the
trader was marking.
Q.
How much lower?
A.
Approximately 40 percent lower.
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Q.
A.
Yes, go ahead.
I'm sorry. Could you repeat the question?
MR. COREN: Mr. Court reporter.
(The reporter read the pending
question.)
A.
My price verification of mortgage trading
positions.
Q.
And is it correct that you were coming up
with prices that were lower than what others in the
organization were pricing mortgage-backed securities
at?
A.
Yes.
Q.
And is it also correct that you were
pointing out that your group disagreed with the
pricing determinations made by others within Credit
Suisse and it was your disagreement that was
criticized by your superiors?
MR. CURTIS: Objection to form.
Q.
You may answer.
A.
Yes.
Q.
Give me some examples that you can recall
where your group had determined that mortgage-backed
securities should have been priced lower than what
others at Credit Suisse were pricing them at.
A.
CMBS positions which Andy Kimura held.
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Q.
And did you detail your valuation
disagreements in any writing?
A.
Yes, I did.
Q.
And if I were to try to find that writing,
what would I look for?
A.
Communications to Andy Kimura, the CMBS
traders.
Q.
Do you recall the date?
A.
No, not exactly.
Q.
Can you recall the month or the year?
A.
Most likely, March or April of 2004.
Q.
All right. And when you criticized the
valuations and derived a value which was 40 percent
lower, what was the reaction of your superiors?
A.
They questioned my work.
Q.
Could you be more specific?
A.
They asked if I knew if my valuation was
accurate.
Q.
And did you believe your valuation was
accurate?
A.
Yes.
Q.
And did you defend your valuation to your
superiors?
A.
Yes.
Q.
And then what, if any, response did you get
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A.
Let me think. It's difficult to recall
exactly what he said.
Q.
Give me your impression or best sense of
what he said.
MR. WEINBERG: Objection to form.
Q.
You can answer.
MR. WEINBERG: You want in substance
his best recollection?
MR. COREN: Yes.
A.
To leave the matter alone.
Q.
He told you to leave it alone?
A.
As I recall.
Q.
Did you feel as though he was threatening
or pressuring you?
A.
Yes.
Q.
And did you leave the matter alone?
A.
Can you be more specific?
Q.
Well, when you elevated your disagreements
about valuation and the fact that you were told not
to share those disagreements with regulators or
auditors and then you were told by Valencia's boss
to leave it alone, did you feel as though Mr.
Valencia's boss was also threatening or pressuring
you not to disclose your valuation disagreements
with auditors or regulators?
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Q.
Were you told not to discuss it with
auditors or regulators?
A.
Yes.
Q.
And who told you that?
A.
Willy Pest and Ed Valencia.
Q.
And did they tell you that on more than one
occasion?
A.
Yes.
Q.
On how many occasions?
A.
I recall more than one.
Q.
And when they -- when you felt threatened
or pressured not to disclose your disagreements as
to value with auditors or regulators, did you
communicate that to anyone else within CS First
Boston?
A.
I elevated to Dan McHugh.
Q.
Spell that.
A.
Dan and then M-C capital H-U-G-H.
Q.
And what position did Dan McHugh have at CS
First Boston?
A.
He was Ed Valencia's manager.
Q.
And what did Mr. McHugh say in response
when you told him that you were being threatened or
pressured not to disclose valuation disagreements
with auditors or regulators?
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A.
I'm sorry. Just there were so many layers
that I perceive in your question.
Q.
Let me try it again. You elevated to Mr.
Valencia's boss the fact that you were being
threatened or pressured not to discuss disagreements
over valuation with auditors or regulators, correct?
A.
Yes.
Q.
And you felt as though Mr. McHugh, who was
Mr. Valencia's boss, was also pressuring you or
threatening you not to disclose those valuation
disagreements with auditors or regulators, correct?
A.
Yes.
Q.
And in light of that what you perceived to
be threat or pressure from Mr. McHugh, what if
anything did you do?
A.
I recall discussing my wish to take a
sabbatical or to leave the firm and to find a
different position with HR.
Q.
Who did you discuss that with at HR?
A.
Stephanie Diamond.
Q.
Diamond?
A.
Yes. And I believe Liarne Edmunds.
Q.
I'm sorry. The last?
A.
Liarne Edmunds.
Q.
Liarne Edmunds?
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A.
Spelled L-I-A-R-N-E.
Q.
And what did -- they were in the HR
department?
A.
Yes.
Q.
And what did they say?
A.
They said that they perceived that Willy
and Ed were not being supportive of the work that I
did.
Q.
Well, did they say it was okay to take a
leave of absence or a sabbatical?
A.
I don't recall them saying yes or no, but
they knew that I wanted to discuss the matter with
HR.
Q.
And was that close in time to when you left
your director position and moved over to being an
analyst about a month before you left the company?
A.
Yes.
Q.
Did you share your valuation concerns and
the threats and pressure that had been made against
you with any other individuals at the company?
A.
Can you repeat the question?
Q.
Sure. You have identified the fact that
you felt threatened and pressured by Valencia, Pest,
Valencia's boss, Dan McHugh, and that you then went
to the HR department, expressed your dissatisfaction
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A.
Not that I recall specifically.
Q.
Well, did you understand from what he said
that if you disclosed disagreements about
valuations, that you would be fired; is that what
you understood?
A.
Yes.
THE WITNESS: Can I take a break?
MR. WEINBERG: Sure.
MR. COREN: Take five.
THE VIDEOGRAPHER: We're now going off
the video record. It's now 9:01.
(Brief recess.)
THE VIDEOGRAPHER: We're now back on
the video record. It's now 9:21.
BY MR. COREN:
Q.
Mr. Hong, before our break, you were
providing some testimony concerning your group's
disagreements with valuation determinations made by
a particular trader that you identified as Andy
Kimura. In what group was Mr. Kimura?
A.
Mortgage trading.
Q.
And did Mr. Kimura trade subprime
mortgages?
A.
Not that I recall.
Q.
And you I think had indicated at one point
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A.
I interpreted it as to the other people who
were then at -- within my group, Amir Suja, Jane
Tang, Franklin Yap, Usman Babar, Michael Sopher,
Stephen Kelly. Those names come to mind as a group
reference.
Q.
And did you speak with the members of your
group relating the criticism that you received and
the threats and the pressure that you received?
MR. CURTIS: Objection.
MR. WEINBERG: Objection to form. You
can answer.
A.
Yes.
Q.
And tell me what you recall telling the
members of your group on those subjects.
A.
I recall telling them that we just have to
do our work correctly and be able to defend our
work.
Q.
And did you tell your group that you were
told that if you discovered any additional problems
with respect to values, that you were going to be
fired?
MR. WEINBERG: Objection to form. No
foundation.
Q.
You can answer the question.
A.
Could you repeat the question?
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A.
(Witness nods head in the affirmative.)
Q.
And your group?
A.
(Witness nods head in the affirmative.)
Q.
What did you -- yes, yes?
A.
Yes.
Q.
What did you understand that to mean?
A.
That our careers were under scrutiny.
Q.
When did that conversation take place?
A.
I believe in March of '04.
Q.
And there were three of you present during
that conversation?
A.
Ed Valencia and I were in, in our office,
and we had dialed into Amir Suja on his cell phone,
who was traveling.
Q.
Did you make any notes of that
conversation?
A.
Not that I recall.
Q.
Now, when he said your -- what did you
understand when you said your careers were under
scrutiny; what did you mean by that?
A.
That we were being held accountable if we
were to uncover additional valuation concerns.
Q.
And did you understand that to mean that if
you uncovered additional valuation concerns, that
you or other members of your group would be fired?
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Q.
Sure. Did you tell your group that you
were told that if you discovered any additional
problems with respect to values that you were going
to be fired?
A.
Not in those specific terms.
Q.
Well, tell me in general what you told your
group on that subject.
A.
My group had approached me to say that they
did not feel as if their work was being supported.
Q.
Did they tell you that they felt pressured?
A.
Yes.
Q.
And who in your group approached you and
told you that they were feeling pressured on
questions of valuation?
A.
Amir Suja, that's one I recall.
Q.
And can you tell me what you recall about
that?
A.
Ed Valencia had a conversation with Amir
Suja and me expressing his unhappiness with the
discovery of valuation concerns.
Q.
And what did Mr. Valencia say in that
conversation with you and your colleague?
A.
That if we were to uncover additional
valuation issues, that we would be held responsible.
Q.
That you would be held responsible?
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June 27, 2008
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A.
Yes.
Q.
Did you take any memos or notes with you
when you left Credit Suisse?
A.
Yes.
Q.
What did you take with you?
A.
I sent some copies of some e-mails to my
personal e-mail account regarding my elevation of
the Andy Kimura valuations.
Q.
And do you still have those e-mails?
A.
I believe so.
Q.
Where are they?
A.
I may have them printed out somewhere.
MR. COREN: Would you please save
those and not destroy them from this point forward.
MR. WEINBERG: We'll consider the
request.
Q.
Anything else that you took with you?
A.
Let me think here right now.
Q.
I'm sorry?
A.
Let me think here.
THE WITNESS: Can I talk to you one
second? Is that okay?
MR. WEINBERG: He wants to consult
with me for a second.
MR. COREN: Off the record.
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K:\quantgroup.
Q.
Quantgroup?
A.
Yes.
Q.
Quantity group or just quant?
A.
Quant.
Q.
Q-U-A-N-T?
A.
Uh-huh.
Q.
Now, you had identified disagreements with
values between your group and the trader Andy
Kimura. Did you have any disagreements with any
other traders on the subject of valuation?
A.
Yes.
Q.
What other traders?
A.
Mitch Levine.
Q.
Spell the last name.
A.
L-E-V-I-N-E.
Q.
Anyone else?
A.
Michael Flannelly.
Q.
How do you spell Flannelly?
A.
F-L-A-N-N-L -- I'm sorry,
F-L-A-N-N-E-L-L-Y, I believe.
Q.
Any other traders?
A.
Aamer Abdullah.
Q.
Could you -- I'm sorry. I'm having a hard
time hearing you.
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A.
Aamer Abdullah.
Q.
Spell the last name.
A.
A-A-M-E-R, A-B-D-U-L-L-A-H.
Q.
Any other traders?
A.
Not that I recall.
Q.
How about Gary Richter?
A.
I -- I don't recall a Gary Richter.
Q.
Let's start with Mitch Levine. What did he
trade, what types of securities?
A.
Mortgage-backed securities.
Q.
And were they subprime mortgage-backed
securities?
A.
Not that I recall.
Q.
And what was your disagreement with trader
Levine on the subject of valuing mortgage-backed
securities?
A.
My team and I were unable to substantiate
the marks of some securities.
Q.
And when you say your team was unable to
substantiate the marks of some securities, does that
mean that your team came up with a different value
for those securities than what that trader had
valued the securities at?
A.
Yes.
Q.
And do you recall how -- and I take it that
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A.
Yes.
Q.
Now, your dispute or disagreement with Mr.
Levine, was that with respect to one particular
security or multiple securities?
A.
Multiple.
Q.
Tell me which securities you recall
disagreeing with trader Levine as to the valuation.
A.
I do not recall specifically.
Q.
Do you recall how many there were,
different types of securities?
A.
No.
Q.
Do you recall when, the time period when
you had these disputes or disagreements?
A.
October 2003. I'm -- yeah, about October
2003.
Q.
And did you communicate your disagreements
to Mitch Levine or anyone else?
A.
Yes.
Q.
To whom did you communicate your
disagreement as to the value?
A.
Mitchell Levine, Andy Kimura, Ed Valencia,
Sal Conti, Joanne Pace.
Q.
And do you recall what response, if any,
that you received from any of these individuals that
you have just identified to whom you communicated
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and thorough.
Q.
And did you believe your group to have been
accurate, documented and thorough?
A.
Yes.
Q.
Now, was there one particular assumption
with which you disagreed with the traders in terms
of valuation that resulted in your group coming up
with much lower values?
MR. CURTIS: Objection to form.
MR. WEINBERG: I'm sorry. Could you
have the question read back?
MR. COREN: Sure.
MR. WEINBERG: I just missed it. I'm
sorry.
Q.
Was there one particular assumption with
which you disagreed with the traders in terms of
valuation which resulted in your group coming up
with a much lower value?
A.
It could be myriad assumptions.
Q.
Do you recall that in fact your
disagreements related to the prepayment speed
assumptions that were being used in the valuation
model?
A.
I recall that at times being a discussion,
a discussion item.
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Q.
Well, what other disagreements do you
recall having in terms of the assumptions that were
being used to value these securities?
MR. WEINBERG: We're talking about Mr.
Levine's position?
MR. COREN: Correct.
Q.
Prepayment was one of the issues?
A.
Discount rate.
Q.
Right. Anything else? Loss rate an issue?
A.
Not that I recall.
Q.
In terms of your disagreement with Mr.
Kimura, do you recall what the assumptions were with
which you disagreed?
A.
Property default likelihood.
Q.
Prepayment speeds?
A.
Not that I recall.
Q.
The third one you identified, Abdullah,
tell me what you recall about that disagreement.
A.
Aamer Abdullah was trading those securities
for Mitchell Levine, his supervisor.
Q.
So, it was the same issues?
A.
Aamer Abdullah was trading the non-agency
securities portfolio on behalf of Mitchell Levine
that we had questioned.
Q.
And what, if anything, did Abdullah say to
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Q.
And did you have any disagreements with
Greg Richter about the valuation of subprime
mortgage-backed securities?
A.
Not with him, not that I recall.
Q.
Do you recall having any disagreements with
anyone else at Credit Suisse having to do with the
valuation of subprime mortgage-backed securities?
MR. WEINBERG: Objection to form.
A.
Could you repeat that question again?
Sorry.
Q.
Do you recall having disagreements with
anyone else at Credit Suisse having to do with the
valuation of subprime mortgage-backed securities?
A.
Yes.
Q.
With whom did you have those disagreements?
A.
I'm not sure if disagreement is quite the
right word. With differences that were resolved on
very subjective pricing matters.
Q.
What differences do you recall having as
relates to subprime mortgage-backed securities?
MR. CURTIS: Objection to form.
A.
On occasions there might be some residuals
that we felt we came up with different valuations
than the traders.
Q.
Is it fair to say that whenever there was a
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1
you?
2
A.
That he had left the firm, as I recall,
when we were -- right, perhaps right before we had 3
4
raised differences for the traders to explain or
5
substantiate.
6
Q.
Are you aware of any traders that were
7
fired as a result of having been determined to have
8
wrongly been setting values for securities?
9
A.
Do I know specifically and formally?
10
Q.
Do you know of any traders who have been
terminated as a result of having been determined to 11
12
set inappropriate values for securities?
A.
From my understanding, Mitchell Levine and13
14
Michael Flannelly.
15
Q.
Were both terminated for that reason?
16
A.
That was my understanding.
17
Q.
When were they terminated?
18
A.
I believe in March of '04.
19
Q.
I had asked you about a Richter and I think
20
I gave you the wrong first name. Does a Greg
21
Richter ring a bell?
22
A.
Yes.
23
Q.
And what position did Greg Richter have?
24
A.
I believe he was head of ABS principal
25
finance.
Page 57
difference or a disagreement, your group always had
a lower value than what the traders had set for the
security?
A.
No.
Q.
Sometimes you had a higher value?
A.
Yes.
Q.
Did you ever have a higher value as relates
to residual interests in subprime mortgage-backed
securities?
A.
Yes, we could, yes.
Q.
Do you recall any instances where you came
up with a higher value?
A.
I recall some residuals, yes.
Q.
Do you know who Andy Kimura reported to?
A.
Can you be more specific?
Q.
Yes. Who is Kimura's boss?
A.
At what time frame?
Q.
Any time frame you can recall. If there
was more than one, just tell me all of them.
A.
I recall that he reported to Matthew Ruppel
and that he reported to Jim Healy.
Q.
Now, was there a department or a group
known as product control while you were at Credit
Suisse?
A.
Yes.
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And what was the responsibility of that
group?
A.
To generate and report the business P and L
for the various departments of the firm.
Q.
And were you within that group?
A.
Yes.
Q.
And was the function -- well, strike that.
What role or responsibility, if any, did
the product control group have in connection with
the securitization -- let me start over. That's a
mouthful.
Tell me what responsibilities, if any, the
product control group had in connection with the
securitization and sale of subprime mortgage-backed
securities.
A.
To the degree that there were subprime
mortgage securities on the firm's balance sheet and
there was a resultant P and L, then those positions
would be reported as on the balance sheet and that P
and L be reported on the income statement.
Q.
Well, was that group for determining the
value to be placed on the subprime mortgage-backed
securities that were retained in the inventory of
Credit Suisse?
A.
No.
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Q.
What group was responsible to do that?
A.
The traders.
Q.
Well, was product control responsible to
attempt to verify the prices set by the traders?
A.
Yes.
Q.
So, as I understand the way it worked
within Credit Suisse during the period you were
there, the traders set the price of these various
securities and then product control's responsibility
was to independently look at the prices that had
been set by the traders and determine whether you
agreed or disagreed; is that correct?
A.
Correct.
Q.
All right. And if you disagreed with the
values determined by the traders with respect to
subprime mortgage-backed securities retained by
Credit Suisse, what were you supposed to do?
A.
To ask the traders to provide independently
observable market information that would
substantiate where they were marking their
positions.
Q.
And if they did that and you were not
satisfied and still disagreed with the values set by
the traders, who was responsible within the Credit
Suisse organization to determine the actual value
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Q.
How did you determine if a deal was
comparable?
A.
Maturity.
Q.
Originator?
A.
That was one consideration.
Q.
For example, if you're looking at all the
deals of one originator, they would be more likely
to be comparable?
MR. CURTIS: Objection to form.
A.
That was a starting point, but not
definitive.
Q.
What else did you look at?
A.
Generally, when we were looking at -- we'd
look at I believe FICO scores.
Q.
Anything else?
A.
Loan coupon.
Q.
That's the interest rate on the loan?
A.
(Witness nods head in the affirmative.)
Q.
Yes?
A.
Yes.
Q.
Did you find that, in general, the higher
the interest rate on the underlying loans, the
higher or faster which that pool would prepay?
A.
Generally.
Q.
And that's because people who are paying
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value?
MR. CURTIS: Objection to form.
A.
Could you repeat the question?
Q.
Yes. You indicated that it was the trader
who set the price of the securities, and the
responsibility of your group within product control
was to independently try to determine those values
and see if you could substantiate the values set by
the traders, correct?
A.
That was our role.
Q.
Right. In order to perform your role, did
you use a valuation model?
A.
Generally, we use models from Bloomberg or
Intex.
Q.
And within those models, you would import
the assumptions that you determined to be
appropriate concerning prepayment speed or discount
rate or loss rate; is that correct?
A.
We would use those inputs.
Q.
And do you know -- strike that.
Were you personally able to operate those
models?
A.
Yes.
Q.
And do you recall in general how many
inputs there were, how many variables had to be
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inputted?
A.
No, not specifically.
Q.
Can you give me a range? And I know we
have a loss rate, we have a prepayment rate, we have
a discount rate assumptions. Anything else that is
inputted into the model?
MR. CURTIS: Objection to form.
A.
Those are the three basic ones.
Q.
Let me show you what's been marked as
Exhibit 1. You should have a book of exhibits
before you.
MR. WEINBERG: Do you want him to look
at the book or look at the original?
MR. COREN: He can look at, yes, look
at the original. It's the color presentation.
Q.
Are you familiar with materials of this
sort?
A.
Could you be more specific with your
question?
Q.
Yes. Well, let's start with Exhibit 1.
Have you seen -- while you were employed by Credit
Suisse, did you have an opportunity to review
Exhibit 1?
A.
To my recall, no.
Q.
Did you see materials of this sort before?
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1
price of the various tranches of securities that
were not going to be owned by Credit Suisse that 2
3
were either going to be sold or retained by the
4
originator of the loans in the securitization?
5
A.
I don't know.
6
Q.
Didn't Credit Suisse own all of the
7
tranches of a security in connection with a
8
securitization until they were sold; isn't that how
9
they were structured?
10
MR. CURTIS: Objection to form.
11
A.
Could you repeat the question?
12
Q.
Yes. Isn't it true that when you have a
13
securitization, Credit Suisse owns all of the
14
tranches of the security until the particular
15
tranches are sold to investors?
16
A.
Not necessarily.
17
Q.
Is that the case in some circumstances?
18
A.
It can be.
19
Q.
Well, in those circumstances, was your
group involved in price verifying the securities? 20
A.
If the securities had not been created yet,21
22
we would not price verify the securities.
Q.
Well, what if they had been created but not 23
24
yet sold?
A.
If they had been created and not yet sold 25
Q.
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Q.
Jin.
Q.
Jin?
A.
Several times a week.
Q.
And did you consider that your group in
product control and his group in risk management had
essentially the same mission, and that was to
protect the financial position of Credit Suisse and
make sure that assets that were being retained by
the company were properly valued?
MR. CURTIS: Objection to form.
Q.
Is that a fair statement?
A.
The role of valuations were the purview of
my group, not that of market risk.
Q.
But if you unearthed what you believed to
be a substantial disagreement as to value and that
the traders had set a value that you thought was
considerably higher than the value of a particular
security, it would be important for risk management
to know that; would it not?
MR. WEINBERG: Objection to form.
Q.
You can answer the question.
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Q.
And did you tell Mr. Jin of the fact that
you were being pressured and threatened as a result
of a pricing or value disagreement that we had
discussed earlier?
MR. CURTIS: Objection to form.
MR. WEINBERG: Objection to form.
Q.
You can answer that.
A.
Could you repeat the question?
Q.
Yes. We had covered at some length
earlier, and I don't intend to repeat it, the
threats and pressure that you experienced as
relating to disagreements over prices or values set
by the trading group, and I had asked you who you
shared those threats or pressure. Did you talk to
this one, who did you tell? You told me who you
elevated it to. My question is, did you bring those
issues to the attention of Mr. Jin?
MR. WEINBERG: Objection to form.
MR. CURTIS: Objection. Can I -MR. WEINBERG: You can answer.
MR. CURTIS: In what time period are
you talking about?
MR. COREN: Any, ever.
Q.
Did you ever bring those issues to the
attention of Mr. Jin?
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A.
I recall keeping risk management informed.
They were not a, as I recall, a strict service
client or reporting audience of our work, but it was
a close cooperation.
Q.
Did you get along with Mr. Jin?
A.
Yes.
Q.
And did you and Mr. Jin ever talk about any
disagreements that you had in terms of the prices
determined by your group versus the prices set by
the trading group?
A.
I kept in touch at First Boston with Bruce
on our work. Bruce was one of the persons who
arranged my hiring.
Q.
Right. Was -- oh, Bruce hired you?
A.
He was, no, he was one of the persons who
was instrumental in my hiring.
Q.
Did you know Bruce before you were hired by
Credit Suisse?
A.
No.
Q.
Excuse me?
A.
No.
Q.
And why do you say he was instrumental in
your hiring?
A.
He was a key person in the interview
process.
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A.
When I was at -- when those things
developed, Bruce had already left the firm.
Q.
I see. Did you talk to him about it at a
point in time when he was no longer at Credit
Suisse?
A.
Yes.
Q.
And where was he working at the time?
A.
RBS Greenwich Capital.
Q.
All right. And what did you tell Mr. Jin?
A.
I told Bruce that our group was -- that I
did not enjoy working for Willy and Ed, and that's
why I decided to leave product control for either
another department or for another firm.
Q.
Did you tell him that you had been
threatened and pressured not to disclose valuation
disagreements to auditors or regulators?
A.
I don't recall.
Q.
Were you fired by Credit Suisse?
A.
No.
Q.
Where did you go after you left Credit
Suisse?
A.
WestLB, the German bank.
Q.
And for how long did you stay there?
A.
Two years.
Q.
And where did you go after that?
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A.
J.P. Morgan.
Q.
Were you ever at Bear Stearns?
A.
In 1992 late to -Q.
I'm sorry. After you left Credit Suisse,
did you go back to Bear Stearns?
A.
I rejoined Bear Stearns in February of
2008.
Q.
What was your position with Bear Stearns in
February of 2008?
A.
Managing director, mortgage price
verification.
Q.
Was that a similar position that you held
at Credit Suisse?
A.
Yes.
Q.
And how large was your group that you
directed at Bear Stearns?
A.
I did not have any direct reports.
Q.
Let me -- strike that.
Do you recall when you first became
familiar with ABFS, that's American Business
Financial Services, Inc.?
A.
As I recall, when I identified loan
collateral that we were warehousing, I was asked to
price verify the loan collateral.
Q.
And that was the first time you had had any
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Q.
Now, is that precisely what you did back in
the December 2002 time frame as relates to ABFS?
A.
As I recall.
Q.
That's a yes?
A.
Yes.
Q.
Let me direct your attention -MR. WEINBERG: His answer was as he
recalls.
MR. COREN: Right. Well -A.
Yes, as I recall.
Q.
Let me direct your attention to Exhibit 17.
A.
I have that.
Q.
Exhibit 17 is a multi-page document Bates
stamped CS 097996 through 98000. Would you take a
moment and familiarize yourself with this exhibit.
Let me know when you're ready.
A.
I believe I'm ready.
Q.
Okay. Let me start at the bottom e-mail on
Exhibit 17 from Alex Smith on December 4, 2002, to
you and Mr. Jin with a copy to others, and the
subject is ABFS. Do you recall receiving that
e-mail?
A.
Yes, I do.
Q.
And if you turn to the next several pages,
was that an attachment to the e-mail? You'll see if
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Q.
Of the sort I just said?
A.
Could you repeat the question of what -Q.
Yes. Do you recall that you made a request
to receive information concerning the structure of
an ABFS securitization so that you could
independently determine the price of the various
tranches of the securities?
A.
I recall that.
Q.
Now, in the first paragraph of your e-mail,
which you wrote on December 4, 2002 at 3:49 p.m. to
Alex Smith and others, including Mr. Jin, and the
subject is ABFS, you wrote, "In our mortgage
business, we price verify our subprime residuals
inventory at 30 percent to 50 percent after loss
IRR's and still come up with substantial positive
variances over actual trader marks." What did you
mean by that?
A.
On the mortgage desk, they did have
subprime residuals in position. My group would
price test those residuals, and when we would run
prepayment and loss stresses on those residuals in
order to project their cash flows and we discounted
those cash flows at say 20 -- rather, 30 to 50
percent yields, we were able to substantiate that
the residuals were often worth at least as much or
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A.
Okay.
Q.
The first sentence is your challenging the
23 percent prepayment assumption. Your second
sentence is, "Thus, what would justify your
assumption here?" Did anyone give you information
to justify the 23 percent prepayment assumption?
A.
I don't recall the specifics of the
response.
Q.
You then go on and say, "Given the 11
percent GWAC of this ABFS collateral, could it
eventually prepay much faster, hurting the value of
the residual?" What did you mean by that?
A.
My concern was that with the high interest
rates that the underlying borrowers are paying, were
paying, that they might have opportunity to pay off
these loans and refinance with lower coupon loans
and shorten the lives of their 11 percent loans.
Q.
And that would result in the residual value
being worth even less, correct?
A.
It would reduce the value of the residual.
Q.
Yes. Now, did anyone respond to that
question about your observation that given the high
interest rates being paid by the borrowers of ABFS
and the impact that that may have on prepayment
speeds?
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A.
Could you repeat the question?
Q.
Yes. Were those the two reasons that
caused you to question why it was the traders were
valuing these ABFS loans or residual interests at
amounts that were higher than you deemed to be
appropriate?
MR. WEINBERG: Objection to form.
A.
As I recall, yes.
Q.
You continue on, "For these reasons, I am
uncomfortable with CSFB booking this ABS repo
transaction at much above 105." What did you mean
by that?
A.
I was looking for more information in order
to get me comfortable with the traders marking the
collateral above 105.
Q.
Do you recall what the traders were marking
the collateral at?
A.
Not specifically.
Q.
We're going to -- I want to show you an
e-mail with that information and see if I can
refresh your recollection, but before I do that,
your next question was, "What would you suggest as a
solution?" Correct, that was your question?
A.
Yes.
Q.
Did anyone suggest a solution?
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A.
I don't recall the specifics.
Q.
Let me direct your attention to Exhibit 18,
another series of e-mails. Now, take a moment and
familiarize yourself with that and then I'm going to
ask you some questions about that exhibit.
A.
I believe I'm familiar with it now.
Q.
Okay. I had asked you before whether you
could -- whether you recalled the attachment which
is part of Exhibit 17. You saw the structure
summary and the spreadsheet and you didn't recall,
and I'm wondering if you could take a look at S-18
and the information provided in there, including, in
particular, the 12.27 value on the residual, which
would now refresh your recollection that, in fact,
the structure summary and information attached to
Exhibit 17 is what was provided to you in connection
with your inquiry as we've been discussing.
MR. WEINBERG: You're asking whether
looking at that e-mail refreshes his recollection.
Q.
Yes, if you look at Exhibit 18 and the
information provided, does that refresh your
recollection that the structure summary and pricing
information attached to Exhibit 17 was in fact
provided to you at the time?
A.
I don't recall if this was the attachment
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Page 104
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that I received in other e-mail, and the reference
to 12.27, as I read it, was from Bruce Jin, not from 2
3
me.
4
Q.
That's right, but do you see the 12.27 -5
A.
Yes.
6
Q.
-- in the attachment to Exhibit 17? My
7
only point was, putting those two together, does it
8
refresh your recollection?
9
A.
I don't recall exactly if that was the
10
attachment that I got.
11
Q.
Do you have any reason to believe it
12
wasn't?
13
A.
No.
14
Q.
I mean, you were copied on the Jin
15
e-mail -16
A.
Yes.
17
Q.
-- which had that information, correct?
18
MR. CURTIS: Objection, foundation.
19
A.
Yeah, I was copied on the e-mail, but my
20
understanding of your question is do I recall the
21
specifics of that attachment. I don't recall the
22
specifics of the attachment.
23
Q.
Right. But do you have any reason to
24
believe that what we've attached to it wasn't, in
25
fact, attached to the e-mail you got?
A.
My recollection from what I -- from that
time is that he provided information regarding the
collateral underneath the loan securitization and
the terms of a recent comparable deal that was being
sold or has been sold in the marketplace.
Q.
Deal for ABFS?
A.
Pardon?
Q.
Relating to ABFS?
A.
I, I believe so.
Q.
And when it says -- what is Vision I? In
addition on Vision I, I see -- I see ABFS has a
dirty price of 108.36, what does that mean?
A.
I read it as, on Vision, I see ABFS has,
and I don't know -- I didn't have access to Vision,
so I don't know why Alex Smith was saying that to
me.
Q.
What was Vision?
A.
I believe Vision is a reporting system for
repo collateral that CSFB was financing.
Q.
Okay. And what's a dirty price? What does
a dirty price mean?
A.
In general bond vernacular, it means a
price of -- the value including accrued interest.
Q.
And you see there is a spreadsheet attached
to this e-mail which was sent to you? Do you see
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Page 108
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MR. CURTIS: As clarification, that's
2
not second tier loans. That's second lien loans.
3
MR. WEINBERG: You misspoke.
4
MR. COREN: Oh, I'm sorry. You're
5
right. Let me try it again.
6
Q.
You wrote. "Given how a large portion of
7
these ABFS loans are balloon or second lien loans
8
and how our own traders actually carry their own
subprime collateral inventory around 104, my sense 9
10
is that CSFB should be marking them below 104."
11
What did you mean?
12
A.
As I recall, a consideration of mine was
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14
maturities that would shorten the lives of the
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16
were not first lien but second lien, that the
17
attendant credit risk could increase the default
rates of these loans and thereby mean overall the 18
19
loan pool is shorter in value, shorter in maturity
20
and shorter -- and lower in value.
21
Q.
Now, you said that, "And our own traders
22
actually carry their own subprime collateral
inventory around 104." Who is our own traders, is 23
24
that Credit Suisse traders?
25
A.
Other CSFB traders.
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Q.
And when you say carry their own inventory,
is that subprime collateral that is in the inventory
of Credit Suisse and reported on the Credit Suisse
balance sheet?
A.
Yes.
Q.
So, you then say, "My sense is that Credit
Suisse should be marking them below 104." So, you
were telling Mr. Giordano and others that you
thought that the ABFS loans were worth even less
than the other subprime collateral that was on
Credit Suisse's books; is that correct?
MR. WEINBERG: Objection to form.
MR. CURTIS: Objection.
MR. WEINBERG: You can answer.
A.
Could you repeat the question?
Q.
You were telling Mr. Giordano and others
that you thought that the ABFS loans were worth even
less than the other subprime collateral that was on
Credit Suisse's books; is that correct?
A.
As I recall, yes.
Q.
Now, when you thought they should be marked
at -- under 104, what was Mr. Giordano or others
pricing them at at that time? And perhaps you have
to look to the first page of Exhibit 18.
MR. WEINBERG: You're asking whether
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correct?
A.
I don't know.
Q.
Let's turn to the first page of Exhibit 18.
At the bottom, Mr. Giordano responds to you on
December 4, 2002, at 4:54 p.m., copied to a number
of individuals, the subject is ABFS, "Victor: As
far as the cash out the door is concerned, a 108
mark versus a 104 makes no difference. We advance
at the lower of 97 percent of market or 97 percent
of par." What did you understand that to mean?
A.
Per my recollection, my understanding was
that whether the loans were marked at 104 or 108 in
this price verification and marking exercise was not
going to affect the proceeds that would be advanced
to the client.
Q.
So, you understood it to mean no matter
what value was placed on it, it didn't matter
because Credit Suisse was going to advance less
money than that value because they were going to
advance less than par?
A.
Could you repeat that?
Q.
So, you understood it to mean that no
matter what the value was placed on it, it didn't
matter because Credit Suisse was going to advance
less money than the par value of the loans?
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him to be saying?
A.
That the -- my understanding is that his
concern regarding valuations for risk measurement
purposes was the appropriateness of assumptions that
drove the valuation of the residual rather than the
investment grade pieces of the securitization.
Q.
Right. And were you aware that ABFS
retained the residual interests in the subprime
loans that it originated and that were securitized
by Credit Suisse?
A.
I had no reason to know either way.
Q.
Now, the residual portion is the, on the
hierarchy of the securities, that is the one that is
at the bottom of the priority list, correct?
A.
Can you be more specific?
Q.
Sure. You have what you referenced here as
investment grade securitization proceeds, which is
something different than the residual interest,
correct?
A.
Yes.
Q.
And the residual interest in the various
tranches of the securitization is at the bottom. It
gets repaid last, correct?
A.
Generally, yes.
Q.
And it's the riskiest of the tranches of
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Q.
So, that would be, the residual would be
12.27 percent above the par value of the underlying
subprime loans? That's what 12.27 means, above par?
A.
That would -- the value, the price on that
residual is not easy to interpret because typically
residuals do not have an assigned par amount. So,
to say that it's 12.2 percent above par value is -it's not as easy to translate to say it's a par
value because often residuals have very little par
value, if any, to them.
Q.
Well, isn't it just a mathematical
calculation? If I go to the spreadsheet and
multiply 12.27 times the value of the underlying
mortgage loans, that's going to be the value of the
residual?
A.
Your question to me, if I recall, was
whether, about the residual being 12 points above
the -- 12 points on top of the par value of the
loans, as I think I heard it, it's -- how would I
describe it?
Q.
Well, here's -- I thought it was a simple
mathematical calculation. Tell me if I am wrong.
A.
My interpretation of what Bruce says to
Tony Giordano is that the value of the residual that
Tony had projected was 12.27, and that the total
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June 27, 2008
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A.
Yes.
Q.
Isn't that merely $379,996,978 times 12.27
percent; doesn't that derive that number, $46
million and change?
A.
Do you have a calculator?
Q.
I have a telephone which has a calculator.
A.
That's fine.
Q.
I'm happy to see what my telephone says.
Mr. Dormont is giving you his telephone calculator.
I'm doing it as well. 379 -A.
That's the way the math works out.
Q.
So, in order to what -- strike that.
What Mr. Jin was saying, when we go back to
Exhibit 18, was that Tony's group was valuing this
residual interest at 12.27 percent of the actual
pool of subprime loans that are included in the
securitization; is that correct?
MR. CURTIS: Objection to form.
MR. WEINBERG: Objection to form.
He's asking whether that's how you understood it at
the time.
A.
I don't recall how I understood it at the
time.
Q.
Well, is that how you understand it now
when you look at the spreadsheet and the e-mail?
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A.
That's how I understand that spreadsheet
now.
Q.
Okay. And Mr. Jin continues on, "This
compares," meaning his residual value of 12.27, he
says, "This compares with roughly 1 to 2 points that
the desk normally assigns for the value." I'm
sorry?
MR. WEINBERG: I think you misspoke.
I'm sorry.
Q.
Is that percent or point, PT?
A.
I don't know.
Q.
It means the same thing, doesn't it?
A.
If you price effectively all the
securitization charges at par, it would be -- it
could be the same, but you'd have to talk to Bruce
Jin.
Q.
All right. What he says is, "This
compares," this being 12.27 value set by Tony and
his group, "compares with roughly 1 to 2 points that
the desk normally assumes for the value of the
residual held on our book." What did you understand
that to mean?
A.
Then or now?
Q.
Well, let's first do then and then we'll do
now.
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A.
Okay. Because I don't recall exactly what
I thought back then.
Q.
Okay. Well, tell me what you think now.
A.
My interpretation of what Bruce said to
Tony is that on subprime securitizations, the
residual would come out to be worth 1 or 2 points of
par. In this example, the asset-backed finance
group in this transaction was coming up with about
12 points.
Q.
All right. Let's -- tell me the difference
in -- that difference, how that translates into
difference in the residual value. Am I correct, in
order to do that, we can do the simple mathematical
calculation of -- we did it with the 12.2 percent
and we came up with a value of $46,622,202, correct?
A.
Uh-huh.
Q.
Yes?
A.
Yes.
Q.
Uh-huhs don't work well on the transcript.
A.
Yes.
Q.
I'm not trying to be rude.
A.
No, no, no.
Q.
Now, if we wanted to use the -- what Mr.
Jin is saying Credit Suisse values the residuals
held on its book at using the 1 to 2, if we used 1,
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A.
No.
Q.
Were you involved in price verifying
subprime residual interests that were maintained on
the books of Credit Suisse in the 2002-2003 time
frame?
A.
Yes, I did price verify our firm inventory
of subprime residuals.
Q.
And did you agree with Mr. Jin, that Credit
Suisse was valuing the subprime residuals on its
books at the time between 1 and 2 percent above par?
A.
In that region, yes.
Q.
Let me direct your attention to Exhibit 52
in the book.
A.
That's another book, isn't it?
Q.
It may be a different book. Take a moment
and review Exhibit 52. Tell me when you're ready.
A.
I'm ready.
Q.
Did you interact with Kenneth Rosenberg
back in the 2002-2003 time frame?
A.
Can you be more specific by interact?
Q.
What position did Mr. Rosenberg have?
A.
I honestly don't recall.
Q.
Okay. If we start at the bottom of the
exhibit, we see an e-mail from Mr. Rosenberg,
December 10, 2002, to Mr. Giordano, subject
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1
Q.
And Exhibit 53 is the revised pricing
2
model; is it not?
3
A.
Let me first get familiar with it. Okay.
4
I'm looking at Exhibit 53.
5
Q.
Yes.
6
MR. WEINBERG: I'm sorry. What's the
7
question? I've lost it. I'm sorry.
8
Q.
53 is what was forwarded to you; is it not?
9
A.
I don't recall. I don't see anything here
10
that shows that it was specifically forwarded to me.
11
Q.
Can't you tell that what was forwarded to
12
you by Mr. Rosenberg identifies this spreadsheet
13
that has been separately marked as Exhibit 53?
14
MR. WEINBERG: If you're -- can you
15
point him to something that should indicate that
16
that might help refresh his recollection?
17
MR. COREN: Sure, yes.
18
Q.
If you look at the bottom of 52 on the
19
first page and compare that, what it describes, to
20
53.
21
A.
I read that Tony says that -- I read that
22
Tony has written that he's attached an updated
23
valuation, but I don't see it being included in an
24
e-mail to me.
25
Q.
Well, if you look right above it, he writes
Page 125
your prepayment default loss and IRR assumptions."
Right? So, you must have known -- you must have
gotten something that had assumptions?
MR. CURTIS: Objection.
MR. WEINBERG: Objection to form,
argumentative. You can answer.
A.
He -- in all honesty, I just don't see
where it was attached to this e-mail and I don't
specifically recall that Exhibit 53. It's entirely
possible that he could have said he attached it,
maybe it's something I didn't get it, maybe, and
then I just said, hey, call and talk with me.
Q.
Okay. Fair enough. You respond to what
Mr. Giordano sent to you, whether it was just an
e-mail or whether it had a spreadsheet or not, you
say to him, "Please call me regarding your
prepayment default loss and IRR assumptions. Recent
ABFS deals have spiked to 45 percent HEP." Tell me
why you sent that e-mail to Mr. Giordano.
A.
As I recall, I wanted to discuss further
his assumptions, they could have been updated
assumptions, and based on the text of this, I wanted
to have an updated discussion as to what I was
observing.
Q.
All right. Now, did you recall that he was
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Q.
Well, do you recall the sensitivity of the
model in the sense that, you know, a 10 percent
change in prepayment speeds or a 20 percent change
in prepayment speeds, what impact that would have on
the value?
A.
Do I recall specifically? No.
Q.
Do you recall in general that these models
were very sensitive and that small increases in
prepayment speeds or discount rates could result in
large decreases in the value of the residual?
A.
Generally, but not always.
Q.
Well, the relationship is not linear; it's
exponential, is it not, in the model?
A.
It can actually change directions.
Q.
Explain what that means.
A.
If you have a lot of existing prepayment
penalties on the loans, the -- that would otherwise
expire if the borrowers do not prepay, if you have
relatively front-loaded prepayments, in some
situations you can actually have the residual
increase in value.
Q.
Well, if you take out the issue of
prepayment penalties, then what I said would be
correct; would it not?
A.
As a general concept, but I don't know if
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the time?
A.
I don't recall specifically from then, but
I -- I don't recall specifically whether it was
received then. I don't -- I don't say that I didn't
receive it. I just don't recall it.
Q.
All right. Do you recall that in fact you
received some information concerning ABFS's actual
prepayment experience?
A.
I see that I got the e-mail, but I don't
recall the specifics of it.
Q.
Based on the information that was provided
to you -- strike that.
Assuming this information was provided to
you with this e-mail, would that justify the use of
a 23 percent prepayment speed in your view?
MR. WEINBERG: Objection to form.
A.
I don't know when this data snapshot was
created in relation to when the mock securitization
was done.
Q.
Well, there is a date on here. Created
November 9, 2002?
A.
Okay.
Q.
That's Bates stamp page CS 006417.
A.
Okay. So, it's dated as of November 2nd.
Q.
And then you may see a November 1 date on
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others.
A.
Uh-huh.
Q.
Does that give you a better piece of
information in terms of when it was created?
A.
I see it was contemporaneous. Okay. So,
the question, your question is?
Q.
Did the information contained in Exhibit
4 -- 54 with respect to the ABFS prepayment history
in your view justify use of a 23 percent prepayment
speed in valuing ABFS residuals?
A.
I don't know what the scale is on the left
side. So, I wouldn't know.
Q.
Can't you answer the question merely by
looking at the graph which is CS 006416?
MR. WEINBERG: Could you just repeat
the question so we can have it in mind?
Q.
The question is, can't you answer the
question merely by -MR. WEINBERG: No, no, I meant the
prior -- what do you want, how do you want him to
interpret this? That's what I'm trying to find out.
Q.
Does the information contained in Exhibit
54 in your view justify the use of a 23 percent
prepayment speed when determining the value of ABFS
residuals?
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A.
As I said, I don't know what the scaling of
2
this is.
3
Q.
All right. So, you need more information?
4
A.
Yes.
5
Q.
Did you ever come to conclude that it was
6
appropriate to use 23 percent to value -- a 23
percent prepayment speed to value ABFS residuals? 7
8
A.
I do not recall agreeing to use 23 percent
9
EGP.
10
Q.
All right. In fact, you believed that a
much higher prepayment speed needed to be used to 11
12
value ABFS residuals, correct?
13
A.
As I recall, I identified information
showing on comparable deals, perhaps ABFS deals,14
15
that 45 may have been experienced.
16
Q.
And, therefore, in your view it would have
17
been more appropriate to use a prepayment speed
18
closer to 45 percent than to 23 percent, correct?
19
MR. CURTIS: Objection to form.
20
A.
My, as I recall, I was asking for the front
21
office to substantiate its views. I had my views.
22
And I don't recall if I definitively said it has to
23
be there. Plus, I was simply providing an
24
independent opinion.
Q.
Well, I'm asking you about your independent 25
Page 133
when you're ready.
MR. COREN: Could you move that book
perhaps?
MR. WEINBERG: You want this book?
MR. COREN: No, I just wanted to get
it out of the camera.
A.
I'm ready.
Q.
I think we have to start with the second
page of this exhibit. It's an e-mail from Kenneth
Rosenberg, December 11, 2002, to Anthony Giordano
with copies of -- copies to a number of individuals.
The subject is ABFS Valuation. He writes, "Below
please find the residual valuation for the ABFS pool
in our warehouse facility at various prepayment
speeds and discount rates." And it then goes on and
identifies prepayment speeds, as you can see along
the top, and discount rates on the left axis, and
then, depending on the discount rate and prepayment
speed, it has a value for the residual interest. Do
you recall receiving a copy of this e-mail?
A.
Vaguely.
Q.
Let me turn to the next page, and if we
start at the bottom, Bates stamp page CS 006410,
it's an e-mail from you to Mr. Giordano. The
subject is ABFS Valuation. And the e-mail was sent
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A.
If I remember correctly, he was the head of
ABS principal finance.
Q.
Is that a pretty high position in the
company?
A.
Could be.
Q.
Was he higher than you in the corporate
hierarchy?
A.
Yes.
Q.
Was he someone to whom you reported from
time to time?
A.
No.
Q.
Do you know to whom Mr. Richter reported?
A.
Don't recall.
Q.
All right. There's another e-mail which
you sent. It's at the top of the page, also
December 11, 2002, the subject ABFS Valuation, and
you wrote, "The reason why I ask where Greg would
price the collateral or residual is because the 20
percent or lower IRR's which you are assuming seem
very generous given where CSFB actually creates and
marks its own subprime residuals inventory." What
did you mean by that?
A.
It was a restatement of my -- or rather
it's analogous to my statement regarding the 50 to
30 percent IRR's that we would use to price this,
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In this mock securitization process, we -I looked at the assumptions of their projected
securities tranches that might be created from them,
and I compared them to my understanding of where
other positions, other comparable positions in the
firm would either be marked or tradable, and on the
basis of IRR alone, it seemed inconsistent, and I
wanted to ask if there were other considerations
that I should have that would resolve the
inconsistency, and that otherwise, besides new
information regarding prepayments and defaults that
I could incorporate, I had doubts about what was the
securitizable sale value of the collateral which we
were warehousing.
Q.
And as you sit here today, as far as you
can recall, nobody ever persuaded you that your
position was not appropriate with respect to your
disagreement on the values?
MR. CURTIS: Objection to form.
Q.
Is that correct?
A.
I don't recall anybody showing information
to refute my observations.
Q.
Okay. Now, who are you sending this e-mail
to that we've just gone over?
A.
Anthony Giordano was a member of the
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A.
I do not recall this.
Q.
As you can see, this is relating to the
same $380 million gross value of collateral example
that we spoke of before lunch?
MR. CURTIS: Objection to the form and
foundation.
Q.
Do you see how the assumptions have changed
and now it's running using a 25 percent prepayment
speed and a 25 percent discount rate and a 30
percent prepayment speed and a 30 percent discount
rate and it shows you the impact on the residual
value; do you see that?
MR. WEINBERG: Objection to form.
A.
I see the tail that says that here.
Q.
Is this the type of exercise that you were
undertaking back in December of 2002 in order to
price verify the ABFS collateral?
A.
I don't recall seeing this, so I don't
know, I can't answer to this specifically.
Q.
I'm going to show you -MR. COREN: Is this marked or not?
MR. DORMONT: No, it's not.
MR. COREN: Let's mark it. We wanted
to mark at least one new exhibit. What number are
we at?
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A.
Not that I recall.
2
Q.
Is this -- would you see these types of
3
sales points materials as part of your
4
responsibilities or not?
5
A.
No.
6
Q.
And you see this has a date in the upper
7
right-hand corner, February 24, 2003. So, it's
about two months after that series of e-mails that 8
we've been looking at which were in December of 9
10
2002, correct?
A.
Are you talking about, asking if the time 11
12
elapse is correct?
13
Q.
Yes.
14
A.
Sure.
MR. WEINBERG: He's asking you if 15
16
February is two months after December.
MR. COREN: Yes, it was a rhetorical 17
18
question.
MR. WEINBERG: That seems to be the 19
20
question.
21
A.
I don't recall.
22
Q.
Fair enough. You got me.
23
If you see on this sales point for a $400
million securitization identified as ABFS Mortgage 24
Loan Trust 2003-1, you see the pricing speed that's25
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not to go forward with that securitization?
THE WITNESS: Could we take a one -MR. WEINBERG: You're asking about at
the time?
MR. COREN: Well, my first question
would be, were you aware of it at the time, and then
my next question would be, did you ever become aware
of it.
MR. WEINBERG: Answer the first
question first.
Q.
Did you know it at the time?
A.
At the time, I learned that a
securitization was -- did not proceed.
MR. WEINBERG: And with respect to the
second question, you should exclude anything you may
have learned from counsel in connection with
preparing for the deposition.
A.
Okay. So, what was the second question
again?
Q.
Well, the first question was, you did
apparently learn at the time that a planned
securitization did not proceed, correct?
A.
Yes.
Q.
And how did you learn that?
A.
As I recall, through market research.
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Q.
And what do you recall having learned?
A.
The details, I don't recall.
Q.
Do you recall who told you that the planned
securitization would not proceed?
A.
I don't recall who.
Q.
Were you told why Credit Suisse had decided
not to proceed with the planned securitization?
A.
Not that I recall.
MR. WEINBERG: Do you want to talk?
THE WITNESS: I just wanted, just real
quick.
MR. COREN: Sure. We're going to go
off the record.
THE VIDEOGRAPHER: It is now 1:57.
We're going off the video record.
(Brief recess.)
THE VIDEOGRAPHER: We're now back on
the video record, 2:01.
BY MR. COREN:
Q.
Is there something you wanted to clarify or
to provide any information after speaking with your
counsel?
A.
No, I'm fine.
Q.
Direct your attention to Exhibit 61. This
is a two-page document from the files of Credit
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A.
Do not recall.
Q.
Do you see above that Mr. Keane responds to
you on July 7, 2003, at 7:18 a.m., "Tony should be
able to assist you," and he copies Anthony or Tony
Giordano. Do you see that?
A.
I see that, yes.
Q.
Did you ever have a discussion with Tony
Giordano to find out what had actually happened
relating to the ABFS securitization?
A.
Not that I recall.
Q.
Direct your attention to Exhibit 62. This
is an e-mail, July 7, 2003, from you to a number of
individuals, and you wrote, "Meghan spoke with me
this morning and indicated that ABFS has reduced
this line very recently via some whole loan sales in
the 105-ish region. This seems in line with
prevailing informal quotes for subprime home equity
collateral and helps us to get comfortable with the
mark and liquidity of this collateral. In a couple
of weeks, product control will be requesting a mock
securitization analysis of this collateral, probably
using subordination levels similar to those of ABFS
2002-4." Do you know whether that ever happened?
A.
Don't recall.
Q.
Do you recall your last involvement in
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BY MR. SCHWAB:
Q.
Mr. Hong, good afternoon. My name is
Gregory Schwab. I'm with the firm of Saul Ewing and
I represent BDO Seidman in this matter. I just have
a brief statement for the record.
I would like to note that BSO has asserted
that this action as to BDO is subject to mandatory
arbitration. BDO accordingly has filed with the
Court a petition to compel arbitration which
currently is pending. My appearance today on behalf
of BDO is subject to and without waiver of BDO's
position as asserted in the petition.
I just have perhaps one question for you,
Mr. Hong, which is, in connection with your work
that you testified to regarding ABFS transactions,
did you ever have occasion to speak with anyone at
BDO Seidman?
A.
Not that I can recall.
MR. SCHWAB: Okay. That's all I have.
BY MR. CURTIS:
Q.
Good afternoon, Mr. Hong. I'm Doug Curtis,
as you know. I'd like to go over a few of the areas
that you were questioned on earlier just to get some
additional information from you.
First, you testified earlier today about
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A.
Generally, yes.
Q.
And what did those relate to? Did those
relate to a mark in a warehouse line?
A.
It was relating to potential assumptions
for estimating what type of securities could be
carved from a pool of loans that we were
warehousing.
Q.
At one point you were asked about the work
that you did in connection with the ABFS
securitization, and I just wanted to ask you a few
clarifying questions about that. The so-called ABFS
securitization was a mock securitization that you
were looking at; is that right?
A.
Yes.
Q.
And that was as part of an internal
exercise, correct?
A.
Purely.
Q.
It did not relate to a future
securitization, correct?
MR. COREN: I'm going to object to the
form. Perhaps you can lead your witness a little
bit less.
MR. CURTIS: You can object to the
form.
A.
Could you ask the question again?
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Q.
The work that you did did not relate to a
future securitization, correct?
A.
To my knowledge, our work was not
incorporated into any future securitization.
Q.
Did you have any understanding that the
work you were doing was being done in connection
with a pending securitization for ABFS?
A.
To my knowledge, our analysis was strictly
for product control use.
Q.
Okay. You indicated that you did not
specifically recall what information was provided to
you in response to certain questions that you raised
in December of 2002. Do you recall that testimony?
A.
No.
Q.
No, you don't recall that testimony?
A.
No, I don't recall that.
Q.
Okay. Well, in connection with questions
that you raised in December of 2002 about certain
ABFS assets, do you recall whether or not this
matter was -- the questions you raised were left
unresolved?
A.
Generally, the questions that I raised
regarding price verification were resolved.
Q.
Do you recall whether or not the ABFS
questions that you were raising were an exception to
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Q.
So, ABFS -- let's clarify. ABFS securities
were traded on the asset-backed desk?
A.
Yes.
Q.
And what desk were the securities traded on
that you were discussing -- that you were discussing
in connection with Mr. Kimura, Mr. Levine and Mr.
Abdullah?
A.
Could you repeat the question?
Q.
What desks did Mr. Kimura, Levine and
Abdullah trade on?
A.
The mortgage desk.
Q.
Which is different from the asset-backed
security desk?
A.
Yes.
Q.
The valuations that you were discussing in
connection with Mr. Kimura, Mr. Levine and Mr.
Abdullah, did they relate to ABFS-related I/O
residuals in any way?
A.
Not that I recall.
Q.
And the securities that you were valuing
there, they were securities that were carried on
Credit Suisse's books, correct?
A.
Yes.
Q.
Did you ever work with valuations that were
being provided to the issuers of the securities in
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dates?
2
A.
No.
Q.
You discussed certain instances where you 3
had questions and concerns about marks, and you 4
5
named traders, including Andy Kimura, Mitchell
Levine and Aamer Abdullah. Do you recall your 6
7
testimony about those individuals?
8
A.
Yes, I do.
9
Q.
What kinds of securities were at issue in
10
those instances?
A.
Residential mortgage-backed securities. 11
12
Q.
Were they subprime mortgages?
A.
Typically, prime, including federal agency13
14
mortgage securities.
Q.
They were not ABFS, ABFS securities; were15
16
they?
17
A.
Not that I recall.
18
Q.
Do you recall what desk or desks the
securities at issue in those instances were traded 19
20
on?
A.
A separate desk, the asset-backed desk. 21
22
Q.
I'm sorry. What was traded on the
23
asset-backed desk?
24
A.
The -- you were asking about ABFS
25
securities?
Page 161
these instances?
A.
Could you repeat the question?
Q.
In connection with the instances you
discussed -A.
Yes.
Q.
-- were you looking at valuations that
were, to your understanding, being provided to the
issuers of those securities?
A.
No, not that I recall.
Q.
Did you ever feel threatened or pressured
regarding your price verification work on
ABFS-related securities?
A.
No, not that I recall.
Q.
Did you ever feel threatened or pressured
with respect to any work you did in connection with
price verification for subprime mortgage-related
securities?
A.
No, not that I recall.
MR. CURTIS: I have no further
questions.
BY MR. COREN:
Q.
Mr. Hong, in response to Mr. Curtis's
questions, you had indicated to him that you thought
that your concerns or questions regarding the
pricing of the ABFS collateral that you and I spent
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Q.
15 or 50?
A.
A few minutes.
Q.
A few minutes. Turn to Exhibit S-62.
A.
I'm reading it.
Q.
This is your e-mail on July 7, 2003, right?
A.
Uh-huh.
Q.
Yes?
A.
Yes.
Q.
You say, "In a couple of weeks, product
control will be requesting a mock securitization
analysis of this collateral, probably using
subordination levels similar to those of ABFS
2002-4. Please keep us updated on new
developments." Can we agree that it hadn't been
resolved as of July 7, 2003?
MR. WEINBERG: I'm sorry, what hadn't
been resolved?
Q.
The questions you were asking and the
disagreements you were having about valuation
assumptions.
MR. WEINBERG: The questions he was
asking back in December?
MR. COREN: Right.
A.
To my recall, it would seem that there was
resolution.
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Q.
Well, tell me how it was resolved. What
was the resolution?
A.
In general with price verification, if
there's a question by price verification analysts,
the -- one of the most objective tools is to see
where the positions are being sold and using that
data point to either get comfortable with the mark
or to revise the mark.
Q.
Well, you were talking about the value in
connection with whole loan sales, not
securitizations, correct?
MR. WEINBERG: So, what period, what
time period are you asking?
MR. COREN: Well, his e-mail is
referring to -MR. WEINBERG: Are you asking about
the time of the e-mail?
MR. COREN: Yes.
Q.
In the 105-ish region, that's not a
securitization, that's a whole loan sale, correct?
A.
It's a sale of loans in raw form.
Q.
Right. Meaning not a securitization,
correct?
A.
Correct.
Q.
Meaning no residual interest was created or
42 (Pages 162 to 165)
(856) 983-8484
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valued, correct?
A.
No, none was created.
Q.
Or valued?
A.
If it's not -Q.
I guess if you didn't create it, you can't
value it, correct?
MR. CURTIS: Well, objection. Let him
answer.
A.
If it's not created, there's nothing to
value.
Q.
Okay. So, as of this point in time, you
have no idea what valuation assumptions were being
utilized by Credit Suisse with respect to a
potential securitization of ABFS subprime mortgages,
correct?
A.
Could you repeat the question?
Q.
So, at this -- as of this point in time,
you have no idea what valuation assumptions were
being utilized by Credit Suisse with respect to a
potential securitization of ABFS subprime mortgages,
correct?
A.
Correct, I would have no reason or need to
know.
MR. COREN: I have nothing further.
THE VIDEOGRAPHER: Anybody else?
Friday
June 27, 2008
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C ERT IFIC A T E
I, ROBERT T. TATE, a Certified Court
Reporter, Certified Realtime Reporter and Notary
Public, do hereby certify that prior to the
commencement of the examination,
VICTOR HONG
was duly sworn by me to testify to the truth,
the whole truth and nothing but the truth.
I do further certify that the foregoing is
a true and accurate transcript of the stenographic
notes of testimony taken by me at the time, place
and on the date hereinbefore set forth.
I do further certify that I am neither a
relative nor employee nor attorney nor counsel of
any of the parties to this action, and that I am
neither a relative nor employee of such attorney or
counsel and that I am not financially interested in
this action.
_______________________________
ROBERT T. TATE, C.C.R., C.R.R.
Certificate No. XI00887
Date: June 28, 2008
Page 167
MR. COREN: Thank you very much.
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THE VIDEOGRAPHER: It is now 2:23. We
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3 are concluded with the videotape deposition of
4 Victor Hong.
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Aamer 48:23 49:1
54:19,22 159:6
abbreviated 81:8
abbreviation 98:6
abbreviations 81:8
95:12
Abdullah 48:23 49:1
54:17,19,22,25
159:6 160:7,10,17
ABFS 68:6 69:3
78:20 79:1 80:23
81:12,17,23 83:2
83:21 85:5,12 86:3
87:22 88:16 91:16
92:16 93:10,23
94:9 98:5 99:23
100:4 103:16,19
104:6,8,11,13
105:21 106:7
107:9,17 109:6
112:7 113:12,21
122:1,8 125:18
126:6,13,17
128:12 130:8,10
130:24 131:7,12
131:14 132:2
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135:16 136:22
138:13 139:17,22
140:17 142:24
143:6,11,18
144:22 146:5,16
147:15 148:2,8,19
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161:25 162:23
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117:15 122:10
129:7 136:1
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arbitration 154:8,9
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area 136:4
areas 154:22
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arrange 82:1
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134:10,15 137:1
139:22 142:24
143:17,18,23
144:1,2,10,16
145:6 148:19,21
148:24 149:1,13
149:22 150:4,7
151:11,14,22
152:9,21 155:14
156:10,12,12,19
157:2,4,7 164:10
165:20,22 166:14
166:20
securitizations 80:11
119:5 141:15
143:6,11 144:22
144:24 145:3,11
146:5 147:11,15
155:6 165:11
securitization/sale
151:5
securitize 68:12
securitized 15:22
112:9
security 14:19,21
20:5,10,21 21:1,3
21:7,7,11,13 34:16
50:17 51:4 57:3
63:13,15 69:16
70:7,14 74:22
160:13
see 22:6 41:8 65:11
66:8 67:25 68:3
77:3 83:25 100:20
102:4 103:8,19
104:11,11,13,24,25
105:6,7 110:21
116:8,25 117:8
120:14 121:24
122:6 123:9,23
Friday
June 27, 2008
Page 180
124:8 125:7
128:18,18 129:9
129:25 130:5
133:16 139:20
140:2,7,12,14
142:2,6,23,25
143:1,3 144:4
146:21 151:19
152:2,5,6 165:5
seeing 11:14 90:11
140:18 145:18
146:18 148:3
seeking 91:12
seen 67:21 128:21
141:8,24 145:16
146:16,21 147:1,2
147:25 148:10
Seidman 2:9 154:4
154:17
seller 97:20
send 151:7,9
sending 137:23
senior 61:18 62:6
sense 17:11 21:11
36:3 105:24 106:9
107:6 127:2
sensitive 127:8
sensitivity 127:1
sent 45:6 46:12
84:18 104:25
125:14,19 133:25
135:15
sentence 93:2,4
sentences 88:17
separate 159:21
separately 123:13
139:7
September 15:5
158:21
series 79:7 91:22
101:3 132:25
142:8 155:18
seriously 111:12
service 75:2
Services 1:5 5:9
78:21 81:3 108:25
servicing 96:25
97:18,23,25
sessions 9:11
set 8:20 34:15 50:21
50:24 52:1,15,18
52:23 55:12 57:2
59:4,8,11,23 66:5
66:8 69:13,25
73:16 74:20 75:9
76:12 80:21
118:18 162:24
168:12
setting 52:9 55:8
(800) 636-8283
(856) 983-8484
106:4 118:7,9
123:6,7 124:3
148:1 159:22
164:16
sort 67:17,25 68:4
85:1 146:22
151:16
Source 141:11
so-called 156:11
speak 10:12,16 12:6
12:10 42:6 134:21
154:16
speaking 110:14
150:21
specific 12:5 18:4
20:12 22:20 24:16
29:3 30:12 33:16
34:24 36:17 41:4
43:5 57:15 67:18
68:2,24 74:3
112:15 121:20
128:1
specifically 10:9
11:16 23:5 25:11
40:1 51:8 55:9
67:2 79:4 100:18
120:18 123:10
125:9 126:24
127:6 129:2,3
139:10 140:19
141:10 157:11
162:7
specifics 72:10 90:16
93:7 94:13 101:1
102:21,22 129:10
speed 20:25 21:10,12
53:21 63:12,17
65:5 66:17 89:23
126:20 129:15
130:10,24 131:7
131:11,17 132:3
133:19 140:9,10
142:25
speeds 54:15 93:25
96:9 126:10,15
127:3,4,9 133:15
133:16 143:5,10
spell 5:25 29:16
35:17 48:15,19
49:2
Spelled 38:1
spend 163:22
spending 29:5
spent 19:2 161:25
spiked 125:18 126:6
spoke 140:4 152:13
spread 62:17,20
spreads 62:17 122:3
spreadsheet 84:2
101:10 104:24
105:1 115:12
116:4,19 117:25
118:1 123:12
125:15 128:14
spreadsheets 22:10
Square 2:19
stamp 103:12 116:5
129:23 133:23
141:7,24 146:14
147:24 148:7
151:1
stamped 83:14
stand 27:2
standard 21:18
stands 23:17
Stanley 2:16,16,16
2:17
start 24:3,7 49:8
58:10 67:20 79:13
83:18 88:11
121:23 133:8,23
started 13:21
starting 64:10
state 5:25
statement 21:5
58:20 74:15
135:24 154:5
states 128:2
stay 77:23
Stearns 2:14,15,15
16:15,17,21 17:25
18:5,10 19:2,11,20
21:16,19,20,25
22:15,18,23 23:23
78:2,5,6,8,16
145:20,25 146:6
Steinberg 2:6
stems 111:17,24
stenographic 168:10
Stephanie 37:20
Stephen 42:4
Steve 6:3 10:17 23:6
STEVEN 1:17
stop 132:13
strategy 80:11
strats 103:15
Street 1:16 2:3,8,12
2:20 7:8 11:12,15
11:20 12:3,6,9
141:15
stresses 85:21
strict 75:2
strictly 69:8 157:8
strike 58:7 66:20
72:1 78:18 117:12
129:12 138:8
144:19 148:17
stringent 86:6
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June 27, 2008
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85:24 88:22,23
131:21
suggest 60:18 100:22
100:25
suggested 39:1
Suisse 3:4,4,4,5,7,9
3:10,10,11 10:13
10:24 11:6 24:13
24:19,22 25:3,8,14
26:13,17 27:19
31:16,24 32:3 45:3
47:9,20 56:6,12
57:24 58:24 59:7
59:17,25 60:2
65:14,17 67:22
68:4 69:10,20 70:2
70:6,13 71:3,12
72:22 74:11 75:18
77:5,18,21 78:4,13
87:23 88:2 89:1,2
89:8 106:24 107:3
107:3,7 109:18,24
110:11 112:10
119:24 121:4,9
134:25 136:10,15
136:25 141:7,23
143:6,11 146:6,14
147:18,24 148:7
148:13,15,18,23,25
150:6 151:1 155:2
155:5,6 158:9,14
162:24 166:13,19
Suisse's 65:24 82:4
107:11,19 160:22
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Suite 1:16,23
Suja 42:2 43:15,19
44:13
sum 82:23
summarize 62:5
summary 101:10,15
101:22 105:1
122:1,8 139:21,24
summer 148:20,25
superiors 31:17
33:14,23 34:1 47:2
supervisor 54:20
supplement 7:2
60:19
supplied 91:3
support 158:15
supported 43:9
supporting 158:25
supportive 38:7
supposed 59:17
61:15,25 72:7
sure 13:20 21:24
38:22 40:8 43:1
47:17 53:12 56:16
(800) 636-8283
71:15,19 74:4,12
79:10 81:15 99:9
112:16 123:17
128:19 142:14
146:25 150:12
153:7
Sussman 2:5
swaps 27:16
swear 5:17
sweep 80:21
sworn 1:12 5:19
168:7
system 62:3 104:18
S-1 4:16
S-17 4:17 84:7
S-18 4:17 101:11
S-19 4:18
S-20 4:18 139:25
S-3 4:16
S-52 4:19
S-53 4:19
S-54 4:20
S-55 4:20
S-61 4:21
S-62 4:21 164:3
S-74 4:10
S-75 4:10
S-76 4:11
S-77 4:11
S-78 4:12
S-79 4:13
T
T 4:8 168:1,1,2,21
tail 140:14
take 13:22 34:8
37:16 38:9 40:7,9
44:8 45:2,5 49:25
71:14,17 73:14
79:11 82:19 83:14
97:21 101:3,11
111:11 121:15
127:22 128:19,22
143:25 145:16
149:2
taken 1:13 46:11
168:11
taker 17:14,16
talk 19:20 45:21
68:25 75:7 76:14
77:3 118:15
125:12 139:8
150:9
talked 72:2
talking 8:15 54:4
76:22 114:6
138:10 142:11
165:9
Tang 10:17 42:3
(856) 983-8484
138:2
tape 46:6 95:2,5
132:16,20
Tate 1:23,23 5:15,16
5:16 168:2,21
team 29:13 41:9
47:24 49:17,19,21
50:1,5 68:8,11,14
68:20 69:2 141:19
Technical 13:5
telecom 15:21
telephone 2:21 117:6
117:8,9
tell 6:19,25 7:3 8:25
11:18 12:12 15:15
18:13 19:2 24:14
30:12 32:18 35:6
39:10,15,19 42:13
42:18 43:1,6,10,16
51:6 54:18 57:19
58:12 73:4 74:1
76:1,15 77:9,14
81:10 84:12 90:10
115:22 116:6
119:3,10 121:16
123:11 125:18
144:1 163:9,13
165:1
telling 42:13,15
107:8,16 111:11
113:9
tells 124:2
tended 29:13
tenure 25:14
term 1:2 5:12 80:11
terminated 55:11,15
55:17
terms 30:13 41:19
43:5 46:20 50:12
53:6,16 54:2,11
62:11 65:23 75:8
104:4 130:4
144:22 158:3
test 71:2 85:20
134:11 162:22
tested 136:18
testified 5:20 8:22
154:15,25 158:8
testify 168:7
testimony 6:15 7:2
30:8 40:17 157:13
157:15 159:7
163:6 168:11
testing 62:4,4 72:9
72:14 81:21
text 84:7,13 122:19
125:22
Thank 153:16,17
167:1
thin 98:8,18,20
thing 118:12
things 77:1
think 7:3 15:5 23:22
27:14 36:1 40:25
41:5 45:18,20
55:19 79:12 98:19
103:6 108:13
115:19 118:8
119:3 124:3 133:8
136:14 144:6,20
third 54:17
thorough 53:1,3
thought 74:20 107:9
107:17,21 115:21
119:2 134:14
161:23 162:2
threat 37:14
threatened 34:13,19
35:11,23 37:5
38:23 39:6,25
41:10 47:3 76:2
77:15 161:10,14
threatening 36:13,23
37:10
threats 38:19 42:8
52:17,21,24 76:11
76:14 158:15,24
three 9:10 44:10
67:8
three-hour 9:11
THURMOND 1:18
141:2
Tian 79:18
tier 106:2
tiered 105:21
time 6:17,23,25
18:13 19:15 25:2
25:22 38:14 47:20
48:25 51:12 57:17
57:18 62:21 71:3,3
76:21 77:4,7 78:25
80:6,14 81:11,15
81:25 83:2 88:25
101:24 103:24
104:2 107:23
108:13 114:3
117:21,23 121:4
121:10,19 128:19
128:22 129:1
135:10,10 142:11
145:20,25 146:21
146:21 147:1,1
149:4,6,11,12,21
163:6,22,23,24
165:13,17 166:11
166:17 168:11
times 9:10 53:24
74:7 115:13 116:1
117:2
timing 20:22
title 7:18
today 5:15 6:14
23:10 137:15
153:5,9 154:10,25
158:8 162:1
Today's 5:3
told 12:24 34:20,22
35:1,4,23 36:11,19
36:21 39:20 42:19
43:2,6,13 72:6
76:15 77:10 82:14
144:20 150:3,6
162:1
Tom 81:5
Tony 81:5 108:4
110:23 114:20,23
115:24,25 118:18
119:5 123:21,22
152:3,4,7
Tony's 117:14
tools 165:5
top 115:18 116:8
133:17 135:15
total 115:25 139:19
totally 111:2
touch 75:11
track 82:11
tradable 137:6
trade 17:1,21 40:22
49:9 103:21
160:10
traded 159:19,22
160:2,4
trader 8:18,19,20
14:6,7,16,23 15:3
32:23 34:3,15
39:22 40:19 46:13
48:9 49:14,22 50:2
50:13,21,23,24,25
51:7 52:8 66:4
72:8 85:16
traders 33:7 41:13
48:11,13,22 49:4
53:6,16 55:4,6,10
56:24 57:2 59:2,4
59:8,11,15,18,24
60:8,25 61:3,7
66:9 69:13 72:4,16
72:18 73:16,20
74:20 82:8 87:9,14
87:15,17 88:1,19
99:22 100:3,14,16
105:22 106:8,21
106:23,24,25
132:8 136:1
147:13,20 159:5
trading 8:5,7,14 14:4
Friday
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14:10,12 26:5,6
31:6 40:21 54:19
54:22 61:19 62:7
75:10 76:13 90:5
96:25 97:6,10
138:11
trainee 14:2
training 13:21 14:3
tranche 69:21
134:16
tranches 69:5,11
70:1,7,14,15 84:23
85:7 112:22,25
137:3
transaction 32:10
80:20,20 88:21
100:11 119:8
transactions 15:18
15:19 22:3,16
154:15
transcript 119:19
168:10
translate 89:21
95:23 115:8
translates 89:13,22
95:17,25 110:25
119:11
traveling 44:14
treasury 16:22
trial-and-error 144:7
triggered 105:9
trips 25:11
true 70:12 144:18
168:10
Trust 142:25 148:8
Trustee 1:4 5:8 6:4
6:14,16
truth 168:7,8,8
try 33:4 34:8 37:3
65:1 66:7 73:15
94:6 99:18 106:5
113:18
trying 30:17 41:8
73:20 119:21
130:21
Tuckerton 1:24
turn 83:24 84:1,7
91:14 109:3 128:9
132:10,23 133:22
144:15 164:3
turned 116:17
120:25
turning 82:9
two 73:4 77:24 88:16
99:21 100:2 102:7
139:20,20 142:8
142:16
two-page 141:6
150:25
(800) 636-8283
(856) 983-8484
unearthed 74:18
unhappiness 43:19
158:9
unhappy 29:9
University 13:3,4,19
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unlawful 128:3
unresolved 73:22
157:21 158:5
unusual 158:2
upcoming 11:5
updated 122:2,3,3,9
123:22 124:1,10
125:21,23 164:13
upper 141:11 142:6
urgency 110:15,17
111:3
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use 22:4 23:10 61:25
62:24 63:12,17
65:6,20 66:12,13
66:19 82:12 87:11
91:19 92:1 95:12
119:23 129:14
130:9,23 131:6,8
131:17 132:2
135:25 141:19
157:9
uses 136:11,24
Usman 42:3 138:1
usually 147:12
utilized 21:25 166:13
166:19
V
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Vaguely 133:21
Valencia 29:10,15,16
30:7,14,19 35:5
38:23 39:14 43:18
43:21 44:12 51:21
158:11,16,19
Valencia's 29:22
35:21 36:21,23
37:4,9 38:24
valid 90:19,23 91:11
91:13 92:1 94:22
validate 162:18
valuation 7:15,22,24
8:12,14 18:7,20
19:12,16,21 21:16
21:17 22:24 23:14
26:4 29:12 30:6
33:1,17,19,22 34:2
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36:24 37:6,10
38:18 39:7,11,16
40:18 43:14,20,24
44:22,24 48:11
161:11,16 165:3,4
verified 82:2 86:18
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62:12 68:17,22
69:5,9,24 70:22
71:10 73:15 78:24
81:23 84:17,23
85:13 86:12 121:6
140:17 155:5,9
verifying 69:12
70:20 82:3 87:18
87:24 121:2
vernacular 104:22
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versus 75:9 109:8
126:21 138:24
148:9
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Victor 1:13 3:15 4:3
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80:10 95:6 109:6
122:9 124:1
132:16,21 139:6
167:4 168:6
video 3:19 5:2,3 6:8
6:11 40:11,14 46:2
46:6 71:21,24 95:1
95:5 132:15,20
150:15,18 153:22
153:25
VIDEOGRAPHER
5:1,21 6:7,10
40:10,13 46:1,5
71:20,23 94:25
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150:14,17 153:21
153:24 166:25
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videotape 1:12 5:13
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132:21 167:3
view 60:14 129:15
130:9,23 131:16
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Vision 103:19 104:10
104:11,13,14,17,18
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29:17
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waiver 154:11
Wall 11:12,15,20
12:3,6,8 141:15
want 6:18 30:20 36:7
67:12 71:16,17
72:12 88:21 92:8
95:11,12 100:19
Friday
June 27, 2008
Page 183
130:20,20 132:13
133:4 147:6 150:9
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88:18 119:23
125:20,22 133:5
134:12 137:8
140:23 150:10,20
156:10 163:13
wants 45:23
warehouse 133:14
136:22 156:3
warehousing 78:23
137:14 156:7
Warren 2:5
wasn't 102:12,24
103:4 145:8
way 32:12 59:6
61:22 68:16
112:11 114:4
117:11 144:8,9
160:18
week 74:7
weeks 9:8 152:20
164:9
weighted 97:3,5
98:14,16
weighting 63:23,25
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40:8 41:24 42:10
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54:4 56:8 63:3
67:12 68:1 69:14
71:15,17 74:3,24
76:6,18,20 79:8
83:7 84:3,10,15
92:22 94:1 100:7
101:18 103:1,10
103:23 105:4,13
106:3 107:12,14
107:25 113:25
114:17 117:19
118:8 123:6,14
124:3,8,11 125:5
129:16 130:15,19
132:11 133:4
140:13 142:15,19
143:19 145:1
146:9 149:3,9,14
150:9 153:12
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164:16,21 165:12
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we've 46:25 101:17
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Willy 29:9,15,19,20
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Wilmer 1:13 3:1 5:5
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44:1,3 45:21 46:3
63:2 64:18 71:14
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149:2 150:10
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Witter 2:16
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101:11 138:13
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words 87:9
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year 5:4 12:22 16:6
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006416 130:14
006417 129:23
03 158:21
04 27:21 44:9 55:18
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08055 1:24
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097999 116:5
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1
1 3:8 67:10,20,23
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135:16
11:13 95:1
11:29 95:5
11:39 124:22
12 115:17,18 119:9
139:6
12.2 115:7 119:14
12.27 101:13 102:2,4
114:15,24 115:2,3
115:13,25 116:1
116:24 117:2,15
118:4,18
12/10/02 122:1,8
12:28 132:14
121 4:19
1225 1:2 5:12
123 4:19
128 4:20
13 4:24 88:10,12,21
88:22,23 89:3,5,10
90:10,19,23 91:1,4
92:2 122:5
132 4:18
139 4:18,20
141 4:10,10
145 4:11
146 4:11
147 4:12
148 4:13
15 164:1
150 4:21
1500 2:8
152 4:21
154 4:5,6
161 4:4
161641 141:7
1617 1:20
165435 146:14
165459 146:15
17 83:11,13,19 84:14
95:8 101:9,16,23
102:6 103:9,10
105:10 116:5
1701 2:3
1717 1:16
18 84:9,11 101:2,20
103:6,10,11,12
105:12,19 107:24
108:1 109:3
117:14 122:5
180 1:24
19 132:10,11,24
139:16
19th 1:20
19102 2:8
19103 1:17 2:20
19103-1895 1:21
19103-2921 2:3
19104-2808 2:12
1977 13:5
1981 13:4
1985 13:3,21,23
1988 14:17,25
1989 15:6
1991 16:8
1992 13:14 16:13,16
19:1 78:3
1996 24:4,5,10
1997 32:11
2
2 46:7 89:12 92:25
95:2,9 118:5,19
119:6,25 120:4
121:10 122:3
2nd 129:24
2:01 150:18
Friday
June 27, 2008
Page 184
2:07 153:22
2:09 153:25
2:23 167:2
20 85:23 110:9
124:22 127:3
135:18 136:6,12
139:14 148:1
20th 139:17
2000 25:10
2001 25:10 143:7,12
2002 79:18 80:9 83:2
83:19 85:10 95:9
103:14 109:5
110:22 120:15
121:25 128:11
129:21 133:10
134:1 135:16
139:6,16 140:16
142:10 143:7,12
155:19 157:13,18
2002-2003 62:21
121:4,19 145:19
145:24
2002-4 152:23
164:13
2003 51:14,15 142:7
143:7,12 146:16
148:1,10,20,25
151:21 152:3,12
164:5,15
2003-1 142:25
2003-2 148:9
2004 24:11 33:11
2005 2:20
2006 1:2 5:12 13:16
2008 1:10 5:4 78:7,9
168:23
222 7:8
23 89:12,21 91:19
92:9 93:3,6 95:10
95:13,24 96:7
126:1,21 129:15
130:9,23 131:6,6,8
131:18 132:3
143:1
24 142:7
25 140:8,9
27 1:10
27th 5:4
28 168:23
2800 2:19
2929 2:12
3
3 24:5,10 79:6 95:6
96:23 122:4
132:16 148:1
151:21
3:49 85:10
(800) 636-8283
30 24:11 85:14,23
86:13,19,24 87:25
88:19 89:14,20,23
90:12 95:17,25
96:9 126:10,17
135:25 136:3
140:9,10
30th 158:21
34th 7:8
354-6000 3:20
365584 151:1
3710 1:16
379 116:11 117:10
38th 2:8
399 1:13 3:1 5:5
4
4 83:19 85:10 95:9
103:13 109:5
110:8 130:8
132:21
4:54 109:5
40 32:25 33:13 50:10
45 4:24 89:14,20,24
95:18 96:1,10
125:18 126:6,10
126:14,17,17,20
131:15,18 132:3
49 13:7
5
5 1:23 4:4 97:11
110:22 120:15
50 50:18,20 85:14,23
86:13,19,24 87:11
87:25 90:12
122:14 135:24
136:3,17 164:1
52 121:12,16 123:18
53 123:1,4,8,13,20
125:9
54 128:9,9,24 130:8
130:23
55 139:4,4
5585 151:1
565 3:14
Friday
June 27, 2008
Page 185
74 141:1,2,3,6
75 141:22,23
76 145:15
77 146:12,13
78 147:23
79 4:16 148:6
8
8 97:2,5 98:13 110:9
139:1
8.25 138:7
8.5 96:24
8:12 1:14
8:13 5:21 6:8
8:14 6:10
800 1:25
83 4:17
84 4:17
856 1:25 3:20
9
9 129:21
9:01 40:11
9:21 40:14
9:31 46:2
9:36 46:6 110:22
97 109:9,9
97-C1 32:8
98000 83:14
983-8484 1:25
6
6 3:19
61 150:24
62 152:11
636-8283 1:25
642 141:7
67 4:16
7
7 1:4 79:18 152:3,12
164:5,15
7:18 152:3
(856) 983-8484
(800) 636-8283