chepiga reply decl., exhibit 102 · 9 10-cv-3229(bsj)(mhd) 10 -----x 11 12 continued videotaped...

Chepiga Reply Decl., Exhibit 102

Case 1:10-cv-03229-KBF Document 243-13 Filed 04/12/13 of 24

Fabrice Tourre February 17, 2011New York, NY

1-800-FOR-DEPOAlderson Reporting Company

Page 1

1 UNITED STATES DISTRICT COURT

2 SOUTHERN DISTRICT OF NEW YORK

3 ---------------------------------------x

4 SECURITIES AND EXCHANGE COMMISSION,

5 Plaintiff,

6 vs.

7 FABRICE TOURRE,

8 Defendant.

9 10-CV-3229(BSJ)(MHD)

10 ---------------------------------------x

11

12 Thursday, February 17, 2011

13 9:35 a.m.

14

15 Videotaped deposition of FABRICE TOURRE,

16 at the offices of Allen & Overy, LLP, 1221 Avenue

17 of the Americas, New York, New York, before

18 Christina Diaz, a Certified and Registered

19 Professional Reporter and Notary Public within and

20 for the State of New York.

21

22

23

24 REPORTED BY:

25 Christina Diaz, RPR, CSR, CLR




Page 8

1 F. Tourre

2 Securities and Exchange Commission.

3 MS. ROGERS CHEPIGA: Pamela Chepiga from

4 Allen & Overy.

5 MR. RHYS DAVIES: Andrew Rhys Davies;

6 Allen & Overy.

7 MR. O'NEIL: Brandon O'Neil; Allen &

8 Overy.

9 F A B R I C E T O U R R E,

10 having been duly sworn by a Notary

11 Public, was examined and testified as

12 follows:

13 MS. ROGERS CHEPIGA: Mr. Reisner, before

14 we begin, we had a discussion about deeming

15 parts of this deposition to be confidential;

16 and we will at the end of the deposition

17 review with you what portions might be needed

18 to be confidential and go to the magistrate

19 to obtain an appropriate order.

20 MR. REISNER: Yes. As I told you off

21 the record, I don't believe there is an

22 appropriate basis in this case for the

23 designation of materials as confidential.

24 We had actually proposed a

25 confidentiality stipulation and order early




Page 124

1 F. Tourre

2 meetings.

3 Q. Did the salespeople arrange those

4 meetings between Paulson and ACA at your request?

5 A. It may have been my request or David

6 Gerst's request. I don't remember specifically.

7 Q. You were aware those meetings were

8 taking place at or around the time the meetings

9 between ACA and Paulson did take place, right?

10 A. Yes.

11 Q. Was the purpose of the meetings between

12 Paulson and ACA for the two of them to discuss the

13 composition of the reference portfolio for AC1?

14 MS. ROGERS CHEPIGA: Objection.

15 A. Which meeting, Mr. Reisner?

16 BY MR. REISNER:

17 Q. The meetings that generally took place

18 between Paulson and ACA in the January, February

19 2007 time frame.


21 A. Yes. The purpose of the meetings were,

22 amongst other things, to discuss the Abacus '07-AC1

23 portfolio.

24 BY MR. REISNER:

25 Q. In fact, the reference portfolio for




Page 125

1 F. Tourre

2 Abacus 2007-AC1 was selected together by ACA and

3 Paulson, correct?


5 A. No. It was selected by ACA.

6 BY MR. REISNER:

7 Q. I'm handing you what previously has been

8 marked as Egol Exhibit 9. I will ask you to take a

9 moment to look at it.

10 For the record, it's a series of e-mail

11 exchanges. The earliest exchange which starts at

12 the bottom of the first page of the exhibit is

13 between you, Mr. Tourre, and Daniel Sparks on May

14 8, 2007.

15 The subject is, "Post on Paulson and

16 Abacus '07-AC1," and then there is an exchange that

17 follows. So why don't you just take a moment to

18 look at the document.

19 So the e-mail that you send on May 8th,

20 the earliest mail on the document is to Daniel

21 Sparks.

22 Who is Daniel Sparks?

23 A. At that time he was head of the mortgage

24 department.

25 Q. So organizationally he headed the




Page 244

1 UNITED STATES DISTRICT COURT

2 SOUTHERN DISTRICT OF NEW YORK

3 ---------------------------------------x

4 SECURITIES AND EXCHANGE COMMISSION,

5 Plaintiff,

6 vs.

7 FABRICE TOURRE,

8 Defendant.

9 10-CV-3229(BSJ)(MHD)

10 ---------------------------------------x

11

12 CONTINUED VIDEOTAPED DEPOSITION OF

13 FABRICE TOURRE

14 Friday, February 18, 2011

15 New York, New York

16 9:26 a.m.

17 Continued videotaped deposition of

18 FABRICE TOURRE, at the offices of Allen & Overy,

19 LLP, 1221 Avenue of the Americas, New York, New

20 York, before Christina Diaz, a Certified and

21 Registered Professional Reporter and Notary Public

22 within and for the State of New York.

23

24 REPORTED BY:

25 Christina Diaz, RPR, CSR, CLR




Page 250

1 F. Tourre

2 F A B R I C E T O U R R E,

3 having been duly sworn by a Notary

4 Public, was examined and testified further as

5 follows:

6 EXAMINATION CONTINUED

7 BY MR. REISNER:

8 Q. Mr. Tourre, I'm going to ask you some

9 additional questions concerning the Abacus 2007-AC1

10 transaction.

11 Did Paulson ultimately purchase

12 protection on the AC1 reference portfolio?

13 A. They did purchase protection on that

14 portfolio, yes.

15 Q. Was Paulson's purchase of protection on

16 that portfolio effected through a CDS between

17 Goldman Sachs and Paulson?

18 A. Several credit default swaps between

19 Goldman Sachs and Paulson.

20 Q. So the purchased protection was effected

21 through a series of credit default swap

22 transactions between Goldman Sachs and Paulson,

23 correct?

24 A. Yes.

25 Q. What was the total dollar value of the




Page 324

1 F. Tourre

2 MR. REISNER: Okay.

3 BY MR. REISNER:

4 Q. Have you had an opportunity to review

5 the exhibit before you?

6 A. Yes.

7 Q. Does this document refresh your

8 recollection that you had direct contact with

9 representatives of ABN in connection with ABN's

10 super-senior swap CDS transaction relating to the

11 AC1 portfolio?


13 A. Yes. This is an e-mail I sent to people

14 at ABN Amro copying the salesperson at Goldman

15 Sachs International.

16 BY MR. REISNER:

17 Q. What was the purpose of your April 5,

18 2007 e-mail to Mr. Newmark?

19 A. Just providing information on the

20 contemplated swap transaction.

21 Q. Was the purpose to encourage ABN to

22 engage in this transaction?


24 A. It was just to provide information on

25 the specific nature of the transaction we were




Page 325

1 F. Tourre

2 discussing.

3 BY MR. REISNER:

4 Q. Were you providing that information to

5 encourage ABN to participate in the transaction?

6 MS. ROGERS CHEPIGA: Objection. Asked

7 and answered.

8 A. I have answered the question. It's to

9 provide information to the potential counterparty

10 we would be transacting with.

11 BY MR. REISNER:

12 Q. So your purpose was just to provide

13 information without any other purpose, correct?


15 A. Yes.

16 BY MR. REISNER:

17 Q. Under the Summary of Terms, the first

18 item listed is, "Reference Portfolio: Abacus

19 2007-AC1 (see attached)."

20 Did you review the summary of terms in

21 this e-mail before you sent it to Mr. Newmark?

22 A. I don't remember. The summary of terms?

23 Where do you see the summary of terms?

24 Q. In the middle of the e-mail, Summary of

25 Terms.




Page 336

1 F. Tourre

2 sentence of that e-mail is, "I had a long call with

3 Dean Atkins before ABN agreed to do the

4 intermediation for ACA. So he knows the trade."

5 Who is Dean Atkins?

6 A. He is -- I mean, he was an employee at

7 ABN Amro.

8 Q. And in or about May of 2007, did you

9 have a long call with Dean Atkins concerning ABN's

10 participation in a trade involving the Abacus

11 2007-AC1 portfolio?


13 A. Looking at this e-mail, it looks like I

14 did, although I don't remember that call.

15 BY MR. REISNER:

16 Q. Do you remember anything about your long

17 call with Dean Atkins?


19 A. No.

20 BY MR. REISNER:

21 Q. Do you recall the purpose of your call

22 with Dean Atkins of ABN?

23 A. No.

24 Q. Was the purpose of the call with Dean

25 Atkins to encourage ABN to participate in the




Page 371

1 F. Tourre

2 A. As an analyst, yes.

3 Q. Did there come a time in 2004 that you

4 transferred to the structured products correlation

5 trading desk at Goldman Sachs?

6 A. Yes. Sometime in July 2004 I

7 transferred into the -- I guess the CDO desk to

8 focus on structured product synthetic CDOs.

9 Q. At the time you joined the structured

10 products correlation trading desk, had the first

11 Abacus transaction already been structured?

12 A. Yes.

13 Q. By whom had that been structured?

14 A. By Jonathan Egol.

15 Q. Directing your attention to the

16 2004-2007 time frame when you worked on the

17 structured products correlation trading desk, did

18 that desk have Goldman Sachs in-house counsel

19 assigned to cover the desk?

20 A. Yes, it did.

21 Q. And who were the individuals who covered

22 your desk?

23 A. From Goldman Sachs legal departments, we

24 had Darren Littlejohn and Tim Saunders covering our

25 desk.




Page 372

1 F. Tourre

2 Q. Did your desk at the same time frame

3 have compliance coverage?

4 A. Yes. It did have compliance coverage.

5 Q. Who was your compliance coverage?

6 A. The main people who were our compliance

7 coverage were Jennifer Lin and Jordan Hrovath.

8 Q. And in the same time frame, 2004 to

9 2007, did your desk use outside counsel on a

10 regular basis?

11 A. Any time we were structuring synthetic

12 CDO transactions, we used outside counsel, yes.

13 Q. And what outside counsel did you

14 principally use in that time frame?

15 A. We principally used McKee Nelson and a

16 law firm that became McKee Nelson sometime in 2004

17 or 2005.

18 Q. Who were the individuals at McKee Nelson

19 with whom your desk coordinated?

20 A. There were three main individuals at

21 McKee Nelson who focused on the Abacus-type

22 transactions. The partner at McKee Nelson was

23 Larry Isaacson. And the associates who were

24 focused on those transactions were David Gerst,

25 until early 2006; and another lady, I believe named




Page 373

1 F. Tourre

2 Arianne West, although I'm not 100 percent sure.

3 Q. Did there come a time when you had a

4 conversation with David Gerst about his potentially

5 joining your desk?

6 A. Yes. To the best of my recollection

7 towards the end of 2005 David Gerst and I discussed

8 his potential move to Goldman Sachs to start -- to

9 work on our desk.

10 Q. What, if anything, did you do to enable

11 him to move to Goldman Sachs?

12 A. I organized meetings with the key

13 decision-makers in the department to push for his

14 recruitment.

15 Q. Why did you do that?

16 A. Because I thought it was a good idea to

17 have somebody with a legal background on the desk.

18 Q. When did Mr. Gerst join your desk?

19 A. To the best of my knowledge and

20 recollection, sometime in early 2006.

21 Q. Turning your attention to March of 2007,

22 was there a mortgage capital committee at Goldman

23 Sachs?

24 A. Yes. There was a mortgage capital

25 committee at Goldman Sachs.




Page 380

1 F. Tourre

2 A. To the best of my knowledge, it did.

3 Q. Did anyone from your desk attend that

4 meeting?

5 MR. REISNER: Objection. Foundation.

6 You may answer.

7 A. To the best of my knowledge, Jonathan

8 Egol and David Gerst attended that meeting.

9 BY MS. ROGERS CHEPIGA:

10 Q. Did you attend that meeting?

11 A. No.

12 Q. You have been asked a number of

13 questions in this deposition about the flip book

14 for Abacus 2007-AC1.

15 Do you recall that?

16 A. Yes.

17 Q. Was the flip book for Abacus 2007-AC1

18 reviewed by in-house counsel or external counsel at

19 Goldman Sachs?

20 A. It was customary practice for those flip

21 books to be reviewed by in-house counsel.

22 Q. And was -- were you the person on the

23 desk who interfaced with in-house counsel?

24 MR. REISNER: Objection to form.

25 A. Typically David Gerst would be the




Page 381

1 F. Tourre

2 person interacting with our in-house counsel on

3 this topic.


5 Q. Was the flip book for Abacus 2007-AC1

6 reviewed by Goldman Sachs compliance?


8 Foundation.

9 A. It was customary practice for the

10 compliance department to review such document.


12 Q. And who coordinated with compliance on

13 the flip book reviews?


15 Foundation.

16 A. It was customary practice for David

17 Gerst to coordinate with the compliance department

18 to do that.


20 Q. You were also asked a number of

21 questions in the depositions about the term sheets

22 for Abacus 2007-AC1.

23 Was the final term sheet for Abacus

24 2007-AC1 to your knowledge reviewed by in-house

25 counsel at Goldman Sachs?




Page 382

1 F. Tourre


3 Foundation, vague.

4 A. It was customary practice for our

5 in-house counsel to review such term sheet.


7 Q. And whose responsibility was it to

8 coordinate with in-house counsel on that review?

9 A. Usually David Gerst would have the

10 interactions with our legal department on term

11 sheets.

12 Q. And did compliance at Goldman Sachs

13 review the term sheet for Abacus 2007-AC1?


15 Foundation.

16 A. It was customary practice for our

17 compliance department to review such term sheets as

18 well.


20 Q. I believe you were asked a number of

21 questions in your deposition about the offering

22 circular for Abacus 2007-AC1. Do you recall that?

23 A. Yes. I recall being asked questions

24 about it.

25 Q. Who prepared the offering circular for




Page 383

1 F. Tourre

2 Abacus 2007-AC1?

3 A. It's our external counsel, McKee Nelson,

4 who prepared the documents.

5 Q. Did you coordinate with McKee Nelson on

6 that?


8 A. David Gerst would have been coordinating

9 with McKee Nelson.


11 Q. Directing your attention to 2007, did

12 anyone suggest to you that any additional

13 disclosures were required in the Abacus 2007-AC1

14 flip book?


16 Leading.

17 A. Not that I can recall.


19 Q. In 2007, did anyone suggest to you that

20 any additional disclosures were required in the

21 Abacus 2007-AC1 term sheet?

22 MR. REISNER: Same objection.



25 Q. In 2007, did anyone suggest to you that




Page 384

1 F. Tourre

2 any additional disclosures were required in the

3 Abacus 2007-AC1 offering circular?


5 Leading.


7 MS. ROGERS CHEPIGA: I have no other

8 questions.

9 MR. REISNER: I just have a couple of

10 follow-up questions.

11 FURTHER EXAMINATION

12 BY MR. REISNER:

13 Q. Directing your attention to Egol Exhibit

14 2, the memo to the mortgage capital committee,

15 Ms. Chepiga asked you to identify the

16 responsibilities of the individuals who are cc'd on

17 that memo, correct?

18 A. Yes.

19 Q. Did you tell any of those individuals

20 the extent to which Paulson was involved in the

21 selection of the reference portfolio for Abacus

22 2007-AC1?


24 A. Again, there is an assumption that

25 Paulson had a role in the selection process, which


chepiga reply decl., exhibit 102 · 9 10-cv-3229(bsj)(mhd) 10 -----x 11 12 continued videotaped...

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