Judge Block does not want to be a rubber stamp on this chump change settlement with the SEC-Cioffi & Tannin

8/3/2019 Judge Block does not want to be a rubber stamp on this chump change settlement with the SEC-Cioffi & Tannin

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UNITED STATES DISTRICT COURTEASTERN DI ST RI CT OF NEW YORK

1

XUNITED STATES SECURITIES ANDEXCHANGE COMMISSION,

08-CV-02457 (FB)

P l a i n t i f f ,

- a g a i n s t -U n i t e d S t a t e s C o u r t h o u s eB r o o k l y n , New Y o r k

RALPH CIOFFI, e t a l . ,M o n d a y , F e b r u a r y 1 3 , 2 0 1 210:00 a.m.

D e f e n d a n t .

X

TRANSCRIPT OF CIVIL CAUSE FOR C I V I L HEARINGBEFORE THE HONORABLE FREDERIC BLOCKUNITED STATES SENIOR DIS TRI CT JUDGE

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

F o r t h e P l a i n t i f f : SEC URI TIE S AND EXCHANGE COMMISSION100 F S t r e e t , N.E.W a s h i n g t o n , D.C. 20549BY:JOHN D. WORLAND, ESQ.RICHARD HONG, ESQ.

F o r t h e D e f e n d a n t : HUGHES HUBBARD & REED, LLPOn e B a t t e r y P a r k P l a z aNew Y o r k , New Y o r k 1 0 0 0 4BY:EDWARD J.M. LITTLE, ESQ.

MARK ALAN WEINSTEIN, ESQ.

V i c t o r i a A. T o r r e s B u t l e r , CRRO f f i c i a l C o u r t R e p o r t e r


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A P P E A R A N C E S : ( C o n t i n u e d )

F o r t h e D e f e n d a n t : BRUNE & RICHARD LLPOne B a t t e r y P a r k P l a z a34 t h F l o o rNew Yo r k , New Yo r k 10004BY:SUSAN E. BRUNE, ESQ.NINA M. BEATTIE, ESQ.

C o u r t R e p o r t e r : V i c t o r i a A. T o r r e s B u t l e r , CRRO f f i c i a l C o u r t R e p o r t e rT e l e : (718) 61 3-2607E - m a i l : V B u t l e r R P R @ a o l . c o m

P r o c e e d i n g s r e c o r d e d b y c o m p u t e r i z e d s t e n o g r a p h y . T r a n s c r i p tp r o d u c e d b y C o m p u t e r - a i d e d T r a n s c r i p t i o n .



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( I n o p e n c o u r t . )( S e n i o r J u d g e FREDERIC BLOCK e n t e r s the c o u r t r o o m at

1 1 : 0 5 a.m.)THE COURT: Good m o r n i n g .MR. WEINSTEIN: Good m o r n i n g , Y o u r H o n o r .MR. HONG: Good m o r n i n g , Y o u r H o n o r .MR. WORLAND: Good m o r n i n g , Y o u r H o no r .MR. LITTLE: Good m o r n i n g , Y o u r H o n o r .MS. BRUNE: Good m o r n i n g , Y o u r H on o r .MS. BEATTIE: Good m o r n i n g , Y o u r H o no r .THE COURTROOM DEPUTY: C i v i l c a u s e f o r a h e a r i n g ,

SEC v e r s u s C i o f f i and T a n n i n .I ask t h e p a r t i e s t o , p l e a s e , s t a t e y o u r

a p p e a r a n c e s .MR. WORLAND: J a c k Wo r l a n d f o r the S e c u r i t i e s and

E x c h a n g e C o m m i s s i o n .MR. HONG: R i c h a r d Hong f o r the SEC.MR. WEINSTEIN: Ma r k W e i n s t e i n f o r Mr. C i o f f i .MR. LITTLE: Ed L i t t l e f o r Mr. C i o f f i .Good m o r n i n g , Y o u r H o n o r .THE COURT: Good m o r n i n g .MS. BRUNE: S u sa n Br u n e f o r Mat T a n n i n .MS. BEATTIE: And N i n a B e a t t i e f o r Mr. T a n n i n .THE COURT: A l l r i g h t . I t h i n k i t ' s g o o d t h a t you

a l l came h e r e t o d a y .



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O b v i o u s l y , t h i s c a s e i s o n e o f some p u b l i c i n t e r e s t .The New York T i m e s w r o t e a m a j o r a r t i c l e o n i t a f e w d a y s a g o .Th e y a p p a r e n t l y l e a r n e d a b ou t t h e f a c t t h a t t h e r e wa s g o i n g t obe a s e t t l e m e n t , b ut t h e r e w e r e no n u m b e r s t h a t w e r e m e n t i o n e di n t h e a r t i c l e .

I s p o k e t o y o u , i f I r e c a l l c o r r e c t l y , onJ a n u a r y 2 3 r d, I t h i n k t h a t ' s t h e da t e , wh e n y o u c a l l e d t o t e l lme t h a t t h a t y o u h ad r e a c h e d t h e s e t t l e m e n t a nd t h a t y o u j u s tw a n t e d t o p a s s t h i s t h r o u g h t h e SEC C o m m i s s i o n t o g e t t h e i ri m p r i m a t u r on i t .

I t h o u g h t t h a t h a v i n g an i n f o r m a l c h a t w a s f i n e , b u tI t h o u g h t t h a t t h i s m a t t e r s h o u l d be d e a l t w i t h i n o p e n c o u r t ;t h a t t h a t w a s t h e r i g h t t h i n g t o d o.

I t o l d y o u t h a t I was a l i t t l e b i t , I g u e s s ,d i s a p p o i n t e d i n t h e f a c t t h a t y o u r e a c h e d a s e t t l e m e n t a ta l m o s t t h e e l e v e n t h h o u r , t h e t e n t h - a n d - a - h a l f h o u r . Th e c a s es e t down f o r t r i a l t o s t a r t t o d a y a n d t h e C o u r t c a r v e d o u tt h r e e w e e k s b e c a u s e t h i s c a s e w a s b a l l y h o o e d a s t h e c a s e t h a twa s g o i n g t o b e a m a j o r p r o s e c u t i o n , a m a j o r t r i a l .

We h a v e a h i s t o r y o f b e i n g h e r e o n a n u m b e r o fo c c a s i o n s and I t o l d y o u f o l k s t h a t i n t h e F e d e r a l Co u r t , w h e nwe c a r v e o u t t h r e e w e e k s o r t h e b e t t e r p a r t o f a m o n t h t o t r ya s e r i o u s c a s e a n d t h e c a s e i s s e t t l e d a t a l mo s t t h e e l e v e n t hh o u r , w e h a v e a l m o s t a w h o l e m o n t h t h a t now c r e a t e s a v o i d i nt h e C o u r t ' s c a l e n d a r , and i t ' s v e r y h a r d t o g e t a c a s e t o f i l l



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i n o n s h o r t n o t i c e .I f y o u f o l k s w e r e i n t h e r e v e r s e s i t u a t i o n y o u w o u l d

s a y : 'We c a n ' t g o t o c o u r t , J u d g e . How c a n y o u t e l l t o us g ot o c o u r t o n o u r c a s e w i t h t wo t o t h r e e w e e k s n o t i c e ? '

You w o u l d b e t h e f i r s t o n e s t o c o m p l a i n a n d y e t , y o up u t me i n t h a t p o s i t i o n t o h a v e t o l o o k f o r o t h e r w o r k t o dod u r i n g t h e m o n t h o f F e b r u a r y . I e x p r e s s e d my d i s p l e a s u r e w i t ht h a t a n d y o u h e a r d me s p e a k a b o u t t h a t i n f o r m a l l y a nd I amt e l l i n g y o u t h a t a g a i n . And wh e n i t c o me s t o c i v i l c a s e s , Ic a r e f u l l y m o n i t o r t h e m t o ma k e s u r e a s b e s t I c a n t h a t t he s et y p e s o f g l i t c h e s do n o t h a p p e n .

I a l s o t o l d t h a t y o u w h en i t c o me s t o c r i m i n a lc a s e s , I d o n ' t m a k e a n y s u c h c o mm e n t s b e c a u s e w h e n a p e r s o n ' sl i b e r t y i s a t s t a k e a n d a t t h e e l e v e n t h h o u r t h e y w a n t t op l e a d g u i l t y , I am n o t g o i n g t o i n t e r f e r e w i t h t h a t . I c a nu n d e r s t a n d t h e hu ma n d i m e n s i o n wh en i t c o me s t o t h a t t y p e o f at h i n g , b u t h e r e ? A f e w h u n d r e d t h o u s a n d d o l l a r s , t h e wa y t h i st h i n g we d e d u c e s i t s e l f ? Y o u c o u l d n o t h a v e d o n e t h i s e a r l i e rs o t h a t t h e C o u r t c o u l d h a v e f o u n d o t h e r w o r k t o do t o j u s t i f ymy $ 1 7 3 , 4 0 0 a n n u a l s a l a r y ? Wh a t t o o k y o u s o l o n g ?

L e t me a l s o s a y t h i s : I l o o k e d a t t h e c o m p l a i n t .Y o u a l l e g e t h e r e t h a t t h e i r a c t i v i t y c a u s e d $ 1 . 8 b i l l i o n o fi n v e s t o r s ' l o s s e s a n d y e t , wh e n a l l i s s a i d a n d d o n e , t h i sc a s e i s b e i n g s e t t l e d f o r -- r e l a t i v e l y s p e a k i n g -- chumpc h a n g e .



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So , w h a t ' s g o i n g on? I h a v e t o s s e d out a l o t oft h i n g s h e r e and I am o b v i o u s l y m a k i n g you a c c o u n t a b l e b e c a u s eI t h i n k t h e r e ' s p u b l i c i n t e r e s t i n a l l of t h e s e t h i n g s . So,wh o w a n t s to s t a r t f i r s t and v o l u n t e e r to f i r s t say why i t wast h a t you t o o k so l o n g to s e t t l e the c a s e ? And y o u ' r e g o i n g toh a v e to s p r e a d on the r e c o r d , I j u s t got the p a p e r s , w h a t thet e r m s of the s e t t l e m e n t a r e .

Who w a n t s to go i n t o the l i o n ' s den h e r e ?MR. WORLAND: W e l l , Y o u r H o n o r .THE COURT: Y o u ' r e the b r a v e s o u l .MR. WORLAND: Y e s , Y o u r H o n o r .THE COURT: You a r e ?MR. WORLAND: J a c k Wo r l a n d f o r the SEC.THE COURT: A l l r i g h t , Mr. W o r l a n d .MR. WORLAND: Y o u r H o n o r , as we m e n t i o n e d

p r e v i o u s l y , t h i s s e t t l e m e n t i s c e n t e r e d on a s e c t i o n 17(a)c l a i m f r o m the '33 A c t . I t ' s b a s i c a l l y a -- i t ' s an o n - s c i e n t e r - b a s e d f r a u d c h a r g e; n e g l i g e n c e . I t i s p u r s u a n tt o t h a t t h a t we h a v e :

D i s g o r g e m e n t of an a m o u n t of $700 ,000 f o rMr. C i o f f i , a p e n a l t y of a h u n d r ed t h o u s a n d d o l l a r s f o rMr. C i o f f i ;

D i s g o r g e m e n t f o r Mr. T a n n i n of $ 2 0 0 , 0 0 0 and ap e n a l t y of $ 5 0 , 0 0 0 d o l l a r s .

T h e r e a s o n i t d o e s n ' t r e f l e c t the h a r m do n e to



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i n v e s t o r s i s b e c a u s e the SEC d o e s not sue f o r d a m a g e s . We suef o r the mo n e y w h i c h we f e e l t h e y w e r e e n r i c h e d by as a r e s u l to f t h e i r a c t i o n s .

I n a d d i t i o n to the d i s g o r g e m e n t , and p e n a l t i e s , andt h e i n j u n c t i o n , t h e r e w i l l be a f o l l o w - o n a d m i n i s t r a t i v ep r o c e e d i n g in the SEC w h e r e b y Mr. T a n n i n w i l l t a k e a t w o - y e a rp e r i o d w h e r e he w i l l not p a r t i c i p a t e in the s e c u r i t i e si n d u s t r y and Mr. C i o f f i w i l l t a k e a t h r e e - y e a r p e r i o d .

THE COURT: Is t h a t w h a t you a g r e e d u p o n or i s t h a tw h a t you are a n t i c i p a t e h a p p e n i n g ?

MR. WORLAND: T h a t has b e e n a g r e e d u p o n , Y o u r H o n o r .THE COURT: So, t h e y w i l l be p e r m i t t e d to r e t u r n to

t h e s e c u r i t i e s i n d u s t r y and do b u s i n e s s as in the p a s t ,h o p e f u l l y l e g a l l y , a f t e r two y e a r s or t h r e e y e a r s as the c a s emay be.

MR. WORLAND: Yes, Y o u r H o n o r .Th e y h a v e a -- i t ' s b a s i c a l l y a r i g h t to r e - a p p l y

and a s s u m i n g t h e y h a v e n ' t d o n e a n y t h i n g w r o n g i n the i n t e r i mo r s o m e t h i n g e l s e has come up, t h e y w i l l b e . ..

THE COURT: S o r t of l i k e a l a w y e r b e i n g s u s p e n d e df o r a p e r i o d of t i m e .

MR. WORLAND: Yes, Y o u r H o n o r .THE COURT: You h a v e to a p p l y to the bar to get

r e a d m i t t e d .MR. WORLAND: I t ' s v e r y s i m i l a r to t h a t .



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THE COURT: T e l l me why i t t o o k so l o n g f o r t h i s tom a t e r i a l i z e .

When we w e r e h e r e in the p a s t , we s p o k e v e r ys e r i o u s l y a b o u t i t and you c o n v i n c e d me t h a t t h i s was g o i n g tobe a r e a l t r i a l , and t h i s was s e r i o u s s t u f f , and I s o r t ofr e l a t e d to the c a s e a c c o r d i n g l y .

T h e n , at the l a s t m i n u t e , you p u l l e d the p l u g .MR. WORLAND: W e l l , Y o u r H o n o r , i t i s a s e r i o u s

m a t t e r and i t was g o i n g to be a s e r i o u s t r i a l .As we got i n t o the p r o c e s s o f , you k n o w , d e a l i n g

w i t h the s umma r y j u d g m e n t mo t i o n , i t was s o r t of p o s t - wh e n wew r o t e Y o u r H o n o r in S e p t e m b e r at y o u r r e q u e s t , a r e p o r t ons e t t l e m e n t d i s c u s s i o n s .

A f t e r t h a t , we b r i e f e d the -- b a s i c a l l y , the J a n u si s s u e and the s c h e m e l i a b i l i t y i s s u e . T h a t was p e n d i n g . Wep ut t o g e t h e r our p r e - t r i a l p a p e r s and d u r i n g the c o u r s e oft h a t , d i s c u s s i o n s s o r t of r e - e m e r g e d .

An d was some r e l u c t a n c e on the d e f e n d a n t s ' p a r t ,i n i t i a l l y , to t a k e a t i m e o u t ; the t h r e e - y e a r or the t w o - y e a r ,an d i t was j u s t a p r o c e s s of s t a r t i n g .

Th e mo n e y was not t h a t f a r a p a r t f ro m w h e r e we e n d e dup , but the t i m e b a r s w e r e . I t was b a s i c a l l y a p r o c e s s ofb r i n g i n g t h e m t o g e t h e r .

O nc e we got the d e a l --THE COURT: R i g h t .

V i c t o r i a A. T o r r e s B u t l e r , CRRO f f i c i a l C o u r t Re p o r t e r


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MR. WORLAND: O nc e we g o t t h e d e a l , we go t t h r o u g ht h e SEC Commis s io n p r o c e s s v e r y q u i c k l y .

THE COURT: W e l l , b e c a u s e I s p o k e t o y o u ; I s a i d ,y o u h a v e t o come t o c o u r t h e re .

I i ma g i n e t h a t t h a t s o r t o f m o t i v a t e d y o u t o g e t t h ef i n a l c o n s e n t .

MR. WORLAND: Y e s , Y o u r Ho n o r , i t d i d .THE COURT: B e c a u s e y o u s p o k e t o me o n t h e p h o n e a nd

y o u j u s t h i t me o u t o f t h e c l e a r b l u e an d I was j u s t t r y i n g t ot a l k t o y o u i n a p r a c t i c a l , c o m m o n - s e n s e way.

Bu t y o u k n o w , i f y o u wo u l d h a v e t o l d me i nS e p t e m b e r t h a t y o u r e a l l y h a v e come p r e t t y c l o s e t o a g r e e i n gt o t h e d o l l a r f i g u r e , I w o u l d h a v e s c h e d u l e d a b a c k - u p t r i a l .T h a t ' s w h a t I w o u l d h a v e d o n e .

Y o u h a v e t o b e s e n s i t i v e t o t h a t . T h i s i s ac a u t i o n a r y t a l e ; i n t h e f u t u r e y o u h a v e t o b e a w a r e o f t h a t .We t r y t o t a k e o u r j o b s s e r i o u s l y .

MR. WORLAND: I u n d e r s t a n d , Y o u r H o n o r .THE COURT: I'm g o i n g t o f e e l v e r y g u i l t y f o r g o i n g

t o A r u b a n ow f o r t h e n e x t t w o w e e k s ; r i g h t ?Do you w a n t t o s a y a n y t h i n g , Ms. Br u n e , f r o m y o u r

q u a r t e r ?Ms. B e a t t i e ?MS. BRUNE: W e l l , Y o u r H o n o r , I t h i n k t h a t w h a t t h e

l a w y e r f o r t h e SEC h a s s a i d i s c o r r e c t i n t h a t i t t o o k o u r



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m o t i o n f o r s umma ry j u d g m e n t t o f o c u s t h e SEC o n t h e l e g a lw e a k n e s s e s o f i t s c a s e .

I n a d d i t i o n , we r e l a t i v e l y r e c e n t l y c o m p l e t e d e x p e r td i s c o v e r y , e x p e r t d e p o s i t i o n s , a n d I t h a t t h i n k t h a t l i k e w i s ef o c u s e d t h e SEC o n t h e l i t i g a t i o n r i s k s .

I t h i n k t h o s e t wo f a c t o r s b r o u g h t t h e SEC t o t h ep o i n t w h e r e we w e r e a b l e t o r e a c h a n a g r e e m e n t .

THE COURT: So , y o u ' re s u g g e s t i n g t h a t I ma y r u ni n t o y o u i n A r u b a n e x t w e e k .

MS. BRUNE: I f I c o u l d w o r k t h a t o u t , Y o u r H o n o r ,t h a t w o u l d b e v e r y n i c e .

THE COURT: W e l l , y o u p r o b a b l y a l l d e s e r v e a g o o dv a c a t i o n .

L e t ' s g o o v e r t h i s . I j u s t g o t t h e s e p a p e r s .Y o u ' v e a l r e a d y t o l d u s i n o p e n c o u r t w h a t t h e d e a l i s , b u t y o uw a n t me t o s i g n o f f o n i t .

Now, o f c o u r s e , we a l l k n o w a b o u t my c o l l e a g u e ,J u d g e R a k o f f , a n d e v e r y t h i n g t h a t h a p p e n e d i n a c a s e t h a ta p p a r e n t l y i s mo re p r o f o u n d t h a n t h i s o n e ; r i g h t ? B u t I j u s tw o n d e r w h a t t h e r o l e o f t h e C o u r t i s wh en t h e C o u r t i s b e i n ga s k e d t o s i g n o f f a n d g i v e i t s c o n s e nt t o y o u r a r r a n g e m e n t .

I m e a n , I g u e s s n o J u d g e l i k e s t o f e e l t h a t h e o rs h e i s a r u b b e r s t a m p . So , w h a t do y o u e n v i s i o n t h e r o l e o ft h e Co u r t i s , e s p e c i a l l y wh e n y o u h a v e a n i n j u n c t i v e a s p e c t i nt h e c o n s e n t a g r e e m e n t t h a t s i m p l y s a y s : D o n ' t v i o l a t e t h e



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I j u s t h a v e t o t r y t o u n d e r s t a n d my r o l e h e r e .MR. WORLAND: Y o u r H o n o r , i n a d d i t i o n t o t h e

j u d g e m e n t , wh i c h c o n t a i n s t h e i n j u n c t i o n w i t h r e g a r d t o t h es t a t u t e -- t h e d i s g o r g e m e n t a n d t h e p e n a l t y -- t h e c o n s e n tt h a t t h e d e f e n d a n t s h a v e s i g n e d i s i n c o r p o r a t e d b y t h a t .

On e o f t h e t h i n g s -- t h e r e a r e s e v e r a l t h i n g s i nt h e r e t h a t g o v er n t h e i r a b i l i t y t o s e e k r e i m b u r s e m e n t o f t h ep e n a l t y . T h e r e i s a l s o a p r o v i s i o n , t h e SEC ' s p o l i c y o nr e s t r i c t i n g d e n i a l s o f t h e c o m p l a i n t a f t e r t h e s e t t l e m e n t i sd o n e .

We h a v e , b a s i c a l l y -- t h i s s e t t l e m e n t , u n d e rY o u r H o n o r ' s c o n t i n u i n g s u p e r v i s i o n , e n d s t h e d i s c u s s i o n .We ' r e n o t g o i n g t o h a v e a p r e s s c o n t e s t de n y i n g p r o v i s i o n s o ft h e c o m p l a i n t . Th e c o n s e n t i s i n c o r p o r a t e d a n d h a s a l o t o fv e r y s p e c i f i c t e r m s i n i t .

THE COURT: A l l r i g h t . W e l l , I h a v e t o r e a d i t .Bu t o n c e a g a i n , am I j u s t a r u b b e r s t a m p h e r e o r i s

t h e r e some i n q u i r y I o u g h t t o be m a k i n g a b o u t t h e s ep r o v i s i o n s ? A b o u t t h e f a i r n e s s o f i t ? Or t h e r e a s o n a b l e n e s so f i t ? I'm n o t s o s u r e I n e c e s s a r i l y a g re e w i t h e v e r y t h i n gJ u d g e R a k o f f wr o t e , b u t w h a t s h o u l d b e t h e J u d g e ' s r o l e w h e nt h e J u d g e i s b e i n g a s k e d t o c o n s e n t t o o n e o f t h e s e t y p e s o ft h i n g s ?

So , I w o u l d j u s t l i k e t o g e t e d u c a t e d f r o m y o u rp e r s p e c t i v e a b o u t t h a t .



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MR. WORLAND: W e l l , Y o u r H o n o r , I w o u l d u r g e you tor e a d the c o n s e n t c a r e f u l l y and you w i l l see t h a t t h e r e aret e r m s b e y o n d j u s t the s t a t u t o r y i n j u n c t i o n , the d i s g o r g e m e n t ,a nd the p e n a l t y .

P l u s , we h a v e the f o l l o w - o n AP, w h i c h i s c o n t i n g e n tu p o n Y o u r H o n o r e n t e r i n g the i n j u n c t i o n .

THE COURT: D o e s a n y b o d y e l s e w a n t to e d u c a t e theC o u r t as to w h a t my r o l e s h o u l d be h e r e ?

( N o r e s p o n s e . )THE COURT: I me a n , I've got to l o o k at t h e s e p a p e r s

c a r e f u l l y , o b v i o u s l y , but I h a v e to r e a l l y get a s e n s e w h a th a v e my r e s p o n s i b i l i t y i s h e r e o t h e r t h a n j u s t to s i g n my namet o i t ; r i g h t ?

Ms. B e a t t i e , do you w i s h to say a n y t h i n g ?MS. BEATTIE: No, Y o u r H o n o r .THE COURT: Ms. B r u n e ?MS. BRUNE: Y o u r Ho n o r , y o u ' r e w e l 1 - f a m i 1 i a r w i t h

t h i s m a t t e r a n d , of c o u r s e , the f a c t t h a t t h e r e was a l r e a d y ana c q u i t t a l i n the c r i m i n a l c a s e .

THE COURT: W e l l , t h a t ' s a b i g f a c t o r . O b v i o u s l y , Ic a n a p p r e c i a t e t h a t .

S h o u l d I w r i t e J u d g e R a k o f f , you k n o w , to r e f l e c t onw h e t h e r t h e s e h u n d r e d s of t h o u s a n d s of d o l l a r s and t h e s er e l a t i v e l y s m a l l p e n a l t i e s i s a d e q u a t e or n o t ?

( N o r e s p o n s e . )



14/22

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Proceedings 14

THE COURT: I t h i n k i t ' s c o n t r o v e r s i a l as to w h e t h e rt h e C o u r t s h o u l d d a b b l e in t h a t w o r l d .

Wh a t do you t h i n k a b o u t t h a t ?MR. WORLAND: Y o u r H o n o r , on b e h a l f of the SEC,

g i v e n the s t a n d a r d s f o r w h a t p e n a l t i e s we can get -- andt h e y ' r e s t a t u t o r y -- and g i v e n our a b i l i t y to t i e p a y m e n t st h a t t h e y r e c e i v e d d u r i n g the c o u r s e of the f r a u d to thef r a u d , I t h i n k t h e y ' v e f u l f i l l e d a p u r p o s e . And I t h i n kt h e y ' r e w e l l - w i t h i n .

THE COURT: I may a g r e e w i t h y o u . I me an , i f Ir e c a l l , the c r i m i n a l r e s p o n s i b i l i t y i s s o r t of a s e p a r a t e t y p eo f s i t u a t i o n .

B u t the d o l l a r s ; I r e m e m b e r t h e y w e r e $2 m i l l i o n , i fI r e c a l l c o r r e c t l y , t h a t we w e r e t a l k i n g a b o u t C i o f f ib e n e f i t t i n g by as a r e s u l t of h i s a c t i v i t i e s . So, I g u e s st h a t the $800 ,000 i s not f a r o f f t h a t m a r k , c o n s i d e r i n g thef a c t t h a t t h e r e was an a c q u i t t a l on the c r i m i n a l c a s e .T h e r e ' s no g u a r a n t e e t h a t the j u r y w o u l d h a v e f o u n d himc u l p a b l e in the c i v i l c o n t e x t . So, t h a t ' s a m a j o r f a c t o r .

B u t I t h i n k I h a v e to r e f l e c t u p o n s ome of t h e s ef a c t o r s h e r e .

MR. WORLAND: I u n d e r s t a n d , Y o u r H o n o r .THE COURT: I j u s t w a n t e d you to h a v e the

o p p o r t u n i t y to t e l l me w h a t e v e r you t h i n k my r e s p o n s i b i l i t y i so t h e r t h a n b e i n g a r u b b e r s t a m p .



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I f y o u w a n t t o s u b m i t a d d i t i o n a l l e t t e r m e mo r a n d a t ot h a t e f f e c t , I ' l l i n v i t e t o y o u do t h a t . I'm i n c l i n e d t o s i g no f f o n i t , b u t I d o f e e l I n e ed t o be s o m e w h a t c i r c u m s p e c ta b o u t i t . S o , ma y b e y o u c a n j u s t e d u c a t e me.

I k n ow y o u a r e a n x i o u s t o g e t t h i s d o n e . So am I .Why d o n ' t y o u e a c h do t h a t ; wh y d o n ' t y o u e a c h w r i t e t o me , al i t t l e l e t t e r memo r a nd um i n l i g h t o f J u d g e R a k o f f ' s s t a n d a r d s ,w h i c h I ma y n o t t o t a l l y a g r e e w i t h .

I h a v e t o t h i n k a b o u t t h i s a l i t t l e b i t .ALL: Y e s , Y o u r H o n o r .THE COURT: I s t h e r e a n y t h i n g e l s e a n y o n e w i s h e s t o

s a y ?MR. WORLAND: Y o u r H o n o r , o n b e h a l f o f t h e S EC , I

t h i n k t h i s i s a v e r y g o o d s e t t l e m e n t . And I t h i n k t h el i t i g a t i o n r i s k s t h a t Ms. B r u n e r e f e r r e d t o we h a d i n mindb e g i n n i n g a b o u t 2009, some d a t e i n t h e f a l l .

THE COURT: Y o u h a d so me t o u g h a d v e r s a r i e s . Th e yb r o u g h t y o u do wn t o y o u r k n e e s , a p p a r e n t l y .

MR. WORLAND: W e l l , t h a t i s w h a t t h e y w o u l d l i k e t ot h i n k , b u t I k n o w mo r e a b o u t t h e c o u r s e o f t h e n e g o t i a t i o n s .

THE COURT: O k a y .A n y w a y , t h a n k y o u f o r c o m i n g h e r e . I h o p e i t h a sn ' t

b e e n t o o mu ch o f an i n c o n v e n i e n c e f o r y o u , b u t a g a i n , It h o u g h t t h a t c o n s i d e r i n g t h a t t h i s i s a c a s e w h i c h i s i n t h ep u b l i c s e c t o r , I t h o u g h t we o u g h t t o h a v e t h i s i n o p e n c o u r t



16/22

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r a t h e r t h a n h a v e i t d o n e on the t e l e p h o n e .So, w e ' l l l o o k f o r wa r d to y o u r s u b m i s s i o n s in a

w e e k . My i n c l i n a t i o n i s to s i g n o f f on i t , but I do w a n t tor e f l e c t on the i s s u e s I h a v e j u s t r a i s e d h e r e i n c o u r t .

ALL: T h a n k y o u .MR. WORLAND: Y o u r H o n o r , c o u l d we h a v e u n t i l the

2 1 s t b e c a u s e the 2 0 t h , a w e e k f r o m t o d a y , i s a F e d e r a lh o i i d a y .

THE COURT: Yes. I am m o r e c o n c e r n e d c o n c e p t u a l l yw i t h a b o u t a w e e k ' s t i m e . The 2 1 s t i s f i n e .

T h a n k you v e r y mu ch.

ALL: T h a n k you v e r y mu ch , Y o u r H o n o r .

(WHEREUPON, the p r o c e e d i n g s w e r e a d j o u r n e d . )

V i c t o r i a A. T o r r e s B u t l e r , CRRO f f i c i a l C o u r t Re p o r t e r


17/22


18/22

A l l W o r d // US SEC v C i o f f i , et al 1

$ accountable [ij - 6:2 big [11-13:20acquittal pi -13:19, 14:17 billion pi-5:22, 11:10$173,400 [i]-5:20$200,000 [1] - 6:23

Act[i]-6:17actions [i]-7:3activities [1] -14:15

bitpi-4:14, 15:9BLOCK [ 2 ] - 1:14, 3:2blue [1]-9:9$50,000[11-6:24

$700,000[11-6:20 activity [1] - 5:22addition [3] - 7:4, 10:3, 12:2brave [1] - 6:10briefed [1] - 8:14$800,000[1]-14:16 additional [1] -15:1 bringing [1] - 8:23

adequate [1] -13:24 Brooklyn ni -1:6dequate [1] -13:24 Brooklyn ni -1:6adjourned [1] -16:14 brought pj -10:6, 15:18administrative [1] - 7:5 Brune [4]-3:22, 9:21,13:16, 15:15

'33 [11-6:17'we [1] - 5:3

adversaries [1] -15:17ago [1] - 4:2agree pi -12:20, 14:10, 15:8

BRUNE pi - 2:4, 2:6, 3:9, 3:22, 9:24,10:10, 13:17

business [1] - 7:13o agreed pi - 7:9, 7:11 Butler[i]-2:17agreeing di-9:12 BY pi -1:21, 1:24greeing di-9:12 BY pi -1:21, 1:24

agreement pj -10:7, 10:25 BY:SUSAN [1] - 2:608-CV-02457 [1] -1:4 aided [1] - 2:20

al [1]-1:908-CV-02457 [1] -1:4 aided [1] - 2:20

al [1]-1:9 caided [1] - 2:20al [1]-1:91 ALAN [1] -1:251 ALAN [1] -1:251.8[2]-5:22, 11:10100 [1]-1:2010004[2]-1:24, 2:610:00 [11-1:8

ALL[3]-15:10, 16:5, 16:12allege [11-5:22allowed [1]-11:2almost [3]- 4:16, 4:23, 4:24amount [1] - 6:20ANDpj -1:4, 1:19annual [1] - 5:20anticipate [ij - 7:10anxious [1] -15:5

calendar [1] - 4:25carefuliy[3]-5:10, 13:2, 13:11carve [1] - 4:22carved [1J - 4:17case [17]-4:1, 4:16, 4:18, 4:23, 4:25,

11:05 [i]-3:3


5:4, 5:24, 6:5, 7:14, 8:6, 10:2, 10:18,13(1] -1:817(a [1]-6:16


13:19, 14:17, 15:24cases pi - 5:9, 5:13

ALL[3]-15:10, 16:5, 16:12allege [11-5:22allowed [1]-11:2almost [3]- 4:16, 4:23, 4:24amount [1] - 6:20ANDpj -1:4, 1:19annual [1] - 5:20anticipate [ij - 7:10anxious [1] -15:5 CAUSE[1]-1:14

caused [1] - 5:22cautionary [1] - 9:16centered [1] - 6:16change pi - 5:25, 11:11charge [1] - 6:18chat[i] -4:11chump [2] - 5:24,11:11chump-change [1] -11:11Cioffi [8]-3:12, 3:18,3:19, 6:21, 6:22,

7:8, 11:16,14:14

2 anyway [1] -15:22AP m-13:5CAUSE[1]-1:14caused [1] - 5:22cautionary [1] - 9:16centered [1] - 6:16change pi - 5:25, 11:11charge [1] - 6:18chat[i] -4:11chump [2] - 5:24,11:11chump-change [1] -11:11Cioffi [8]-3:12, 3:18,3:19, 6:21, 6:22,

7:8, 11:16,14:14

2(11-14:132009m-15:162012 [11-1:820549 [1]-1:2020th [11-16:721stpi-16:7, 16:1023rd [1] - 4:7

apart [1] - 8:21appearances ni - 3:14applyp]-7:17, 7:23appreciate [1] -13:21arrangement [1] -10:21article pi - 4:2, 4:5Arubapj-9:20, 10:9aspect [1] -10:24assuming [1] - 7:18aware ni - 9:16

CAUSE[1]-1:14caused [1] - 5:22cautionary [1] - 9:16centered [1] - 6:16change pi - 5:25, 11:11charge [1] - 6:18chat[i] -4:11chump [2] - 5:24,11:11chump-change [1] -11:11Cioffi [8]-3:12, 3:18,3:19, 6:21, 6:22,

7:8, 11:16,14:143

apart [1] - 8:21appearances ni - 3:14applyp]-7:17, 7:23appreciate [1] -13:21arrangement [1] -10:21article pi - 4:2, 4:5Arubapj-9:20, 10:9aspect [1] -10:24assuming [1] - 7:18aware ni - 9:16 CIOFFI [1] -1:9circumspect [1] -15:3

B circumstances [ij -11:934th [11-2:5 B CIVIL (2j-1:1434th [11-2:5civil [4]-3:11, 5:9, 11:18, 14:19

6 back-up [1] - 9:13 claim [1] - 6:17ballyhooed [1] -4:18 claims [ - 1 3 -11:19allyhooed [1] -4:18 claims [ - 1 3 -11:19

613-2607[1]-2:18 bar[i] - 7:23bars [1] - 8:22ciearni - 9:9closep] - 9:12

based [1] - 6:18 colleague [1] -10:177 based [1] - 6:18 colleague [1] -10:177 Battery [2] -1:23, 2:5 coming [1] -15:22be.. (11-7:19 comments [1] - 5:13

718(11-2:18 BEATTIE [41 - 2:7, 3:10,3:23, 13:15 Commission [3] - 3:16, 4:9, 9:2718(11-2:18Beattie [3] - 3:23, 9:23, 13:14 COMMISSION pj -1:4, 1:19

A BEFORE [1]-1:14 common [1] - 9:10beginning [1] -15:16 common-sense (1] - 9:10eginning [1] -15:16 common-sense (1] - 9:10behalf pj -14:4, 15:13 compared [1] -11:10a.mp] -1:8, 3:3

ability pi -12:7, 14:6 benefitting [1] -14:15best[i] - 5:10complain [1] - 5:5complaint[3]-5:21, 12:9, 12:14

able [1]-10:7accordingly [1] - 8:6 better[i]-4:22beyond [ij -13:3

completed [1] -10:3Computer[i]-2:20

V i c t o r i a A . T o r r e s B u t l e r , CRRO f f i c i a l C o u r t R e p o r t e r


19/22

A l l W o r d // US SEC v C i o f f i , et a l .

Computer-aided [1] - 2:20computerized [1] - 2:19conceptually [1 ] -16:9concerned [1] -16:9consent [10]-9:6, 10:21, 10:25, 11:3,

11:17, 11:22, 12:4,12:14, 12:22, 13:2considering [2] -14:16, 15:24contains [1]-12:3contest [1] -12:13context [1] -14:19contingent[l] -13:5Continued [1] - 2:2continuing [1] -12:12controversial [1 ] -14:1convinced [1] - 8:4correct [1] - 9:25correctly [2] - 4:6, 14:14course [5] - 8:16, 10:17, 13:18, 14:7,

15:20COURT [34]-1:1, 3:4, 3:21, 3:24, 6:10,

6:12, 6:14, 7:9, 7:12, 7:20, 7:23, 8:1,8:25, 9:3, 9:8, 9:19, 10:8, 10:12, 11:7,11:10, 11:14, 11:17, 12:16, 13:7,13:10, 13:16, 13:20, 14:1, 14:10,14:23, 15:11, 15:17, 15:21, 16:9

Court's [i]-4:25Courthouse [1] -1:6courtroom [1] - 3:2COURTROOM [1] -3:11creates [1] - 4:24criminal [4] - 5:12,13:19, 14:11, 14:17CRR[1]-2:17culpable [1] -14:19

D.C[1] - 1:20dabble [1] -14:2damages [2]-7:1,11:13date [2]-4:7, 15:16days [1] - 4:2deal [3]- 8:24, 9:1, 10:15dealing [2]-8:10, 11:23dealt [1]-4:12deduces [1] - 5:18Defendants -1:10, 1:23, 2:4defendants [1] -12:5defendants' [1] - 8:18d e n [1] - 6:8denials [1] -12:9denotes [1]-11:3denying [1] -12:13depositions [1] -10:4DEPUTY[1]-3:11deserve [1 ] -10:12difference [1]-11:19dimension [1] - 5:16disappointed [1 ] - 4:15discovery [1] -10:4discussion [1] -12:12

discussions [2] - 8:13, 8:17disgorgement [7] - 6:20, 6:23, 7:4,

11:6, 11:15, 12:4, 13:3displeasure [1] - 5:7D1STRICT[3]-1:1,1:1, 1:15dollarm - 9:13dollars [5]-5:17, 6:21, 6:24, 13:23,14:13done [8] -5:18, 5:23, 6:25, 7:18, 9:14,

12:10, 15:5, 16:1down [2]-4:17, 15:18during [3] - 5:7, 8:16, 14:7

E-mail [1 ] - 2:19EASTERN m-1:1E d [1] - 3:19educate^] -13:7, 15:4educated [1] -12:24EDWARD [1]-1:24effect [1] -15:2eleventh [3]- 4:16, 4:23, 5:14emerged [1]-8:17employ [1]-11:23ended [1] - 8:21ends [1]-12:12enriched [1] - 7:2entering [1] -13:6enters [1] - 3:2envision [1] -10:23especially [1 ] -10:24E S Q [6] -1:21, 1:21, 1:24, 1:25, 2:6, 2:7etm -1:9Exchange^] - 3:16EXCHANGE [2]-1:4, 1:19expert [2]-10:3, 10:4expressed [1] - 5:7

fact[4]- 4:3, 4:15, 13:18,14:17factor [2] -13:20, 14:19factors [2] -10:6,14:21fairness [1] -12:19fall m-15:16familiar [1] -13:17far[2]-8:21, 14:16FB[1]-1:4February [2]-1:8, 5:7Federal [2]-4:21,16:7few [2] -4:2, 5:17figure [1] - 9:13fill [1] - 4:25final m - 9:6fine[2]-4:11, 16:10first [3]-5:5, 6:4Floor[i] - 2:5focus [1]-10:1

focused [1] -10:5folks (2 ] - 4:21, 5:2follow [2 ] - 7:5, 13:5follow-on [2 ] - 7:5, 13:5FORm-1:14forward [1] -16:2fraud [3]-6:18, 14:7, 14:8FREDERIC [2] -1:14, 3:2fulfilled [1] -14:8future [1 ] - 9:16

given [2] -14:5, 14:6glitches [1]-5:11govern [1] -12:7guaranteep] -14:18guess [3]-4:14, 10:22, 14:15guilty [2] - 5:15, 9:19

H

half [1] - 4:16hard [1] - 4:25harmp] - 6:25heard [1] - 5:8HEARING [1]-1:14hearing [1] -3:11history [1] - 4:20hit[l] - 9:9holiday [1 ] -16:8HONG [3]-1:21, 3:6, 3:17Hong [1] - 3:17Honor[32] - 3:5, 3:6, 3:7, 3:8, 3:9, 3:10,

3:20, 6:9, 6:11, 6:15, 7:11, 7:16, 7:22,8:8, 8:12, 9:7, 9:18, 9:24, 10:10,11:5,11:12, 12:2, 13:1, 13:6, 13:15, 13:17,14:4, 14:22, 15:10, 15:13, 16:6,16:12

Honor's [1]-12:12HONORABLE [1]-1:14hope [1] -15:22hopefully [1] - 7:14hour[4]-4:16, 4:24, 5:14HUBBARD [1] -1:23HUGHES [1] -1:23human [1] - 5:16hundred [2]-5:17, 6:21hundreds m-13:23

ice [11-11:4imagine [1] - 9:5imprimatur^] - 4:10inclination [1] -16:3inclined m -15:2inconvenience p]-15:23incorporated [2] -12:5,12:14industry [ 2 ] - 7:8, 7:13



20/22

A l l W o rd // US SEC v C i o f f i , et al 3

informal [1]-4:11 looked [1] - 5:21 onesm - 5:5informally [i]-5:8 losses [1] - 5:23 open [4]-3:1, 4:12, 10:15, 15:25injunction [4] - 7:5, 12:3, 13:3, 13:6injunctive pj -10:24, 11:24

opportunity [1] -14:24ordering [1] -11:5

injunction [4] - 7:5, 12:3, 13:3, 13:6injunctive pj -10:24, 11:24 M opportunity [1] -14:24ordering [1] -11:5inquiry [1] -12:18 oughtpj-12:18, 15:25nquiry [1] -12:18 oughtpj-12:18, 15:25interest [2]-4:1, 6:3interfere [1] - 5:15interim [1] - 7:18investors [1] - 7:1investors'[1] - 5:23invite [1] -15:2involved [1] -11:11issue [2]-8:15issues [1] -16:4itself [1] - 5:18

interest [2]-4:1, 6:3interfere [1] - 5:15interim [1] - 7:18investors [1] - 7:1investors'[1] - 5:23invite [1] -15:2involved [1] -11:11issue [2]-8:15issues [1] -16:4itself [1] - 5:18

mail [1]-2:19major[4]-4:2, 4:19, 14:19 P

interest [2]-4:1, 6:3interfere [1] - 5:15interim [1] - 7:18investors [1] - 7:1investors'[1] - 5:23invite [1] -15:2involved [1] -11:11issue [2]-8:15issues [1] -16:4itself [1] - 5:18

MARK[1] - 1:25mark p] - 3:18, 14:16Mat [1]-3:22materialize [1] - 8:2matter[3]-4:12, 8:9, 13:18mean [5]-10:22, 11:2, 11:18, 13:10,

14:10memoranda [1] -15:1

papers [4] - 6:6, 8:16, 10:14,13:10Park [2] -1:23, 2:5part p]-4:22, 8:18participate m - 7:7parties [1) - 3:13pass [i]-4:9pastp]-7:13, 8:3

J memorandum [1] -15:7 payments [1] -14:6J mentioned pj - 4:4, 6:15 penalties [3] - 7:4, 13:24, 14:5million [1] -14:13 penalty [6)- 6:21, 6:24, 11:6, 12:4, 12:8,

J .M [1]-1:24 mind [1] -15:15 13:4Jack [2]- 3:15, 6:13 minute [1] - 8:7 pending [1] - 8:15January [1] - 4:7 Monday [1] -1:8 period p] - 7:7, 7:8, 7:21Janus [11-8:14 money [2] - 7:2, 8:21 permission [1] -11:3jobs [1] - 9:17 monitor [1] - 5:10 permitted m - 7:12JOHN [1]-1:21 month [3] - 4:22, 4:24, 5:7 person's m - 5:13Judge[8]-3:2, 5:3, 10:18, 10:22, 12:21, morning [9] - 3:4, 3:5, 3:6, 3:7, 3:8, 3:9, perspective [1] -12:25

12:22, 13:22, 15:7 3:10, 3:20,3:21 phone [1] - 9:8JUDGE [1]-1:15 motion p] - 8:11,10:1 Plaintiff [2] -1:5, 1:19judge [1]-11:19 motivated [1] - 9:5 Plaza pj-1:23, 2:5Judge's [1] -12:21 plead [1] - 5:15udge's [1] -12:21 plead [1] - 5:15judgement [1] -12:3 N plug [1] - 8:7judgmentp] - 8:11, 10:1 plus [1]-13:5udgmentp] - 8:11, 10:1 plus [1]-13:5jurisdiction [1] -11:20jury [1] -14:18justify [1] - 5:19

N.Em -1:20name [1]-13:12necessarily [1] -12:20

point[i] -10:7policy [1] -12:8position [1] - 5:6post[i]-8:11practical m - 9:10pre [1] - 8:16pre-trial [1] - 8:16press [1] -12:13prettym-9:12

Kneed [2]-11:17, 15:3negligence m - 6:18


kind pj -11:24knees [1] -15:18

negotiations [1] -15:20NEW [1]-1:1New [6]-1:6, 1:24, 2:6, 4:2next pj-9:20, 10:9


L nicem-10:11NINA[l]-2:7Nina m-3:23no n [1] - 6:18non-scienter-based [1] - 6:18notice [2] - 5:1, 5:4number [1] -4:20numbers m - 4:4

previously [1] - 6:16proceeding [1] - 7:6

lastm - 8:7lawp]-11:1, 11:3, 11:25lawyerp] - 7:20, 9:25learned [1] - 4:3legal [1]-10:1legally [1] - 7:14

nicem-10:11NINA[l]-2:7Nina m-3:23no n [1] - 6:18non-scienter-based [1] - 6:18notice [2] - 5:1, 5:4number [1] -4:20numbers m - 4:4

proceedings [1] -16:14Proceedings [1] - 2:19process [4]- 8:10, 8:20, 8:22, 9:2produced [1] - 2:20profound [1] -10:19prosecution [1]-4:19provision [2]-11:24, 12:8

letter pj -15:1, 15:7liability ni - 8:15

0 provisions [2] -12:13, 12:19public [3]-4:1, 6:3,15:25liberty [1] - 5:14 pulled [1] - 8:7

light [1] -15:7 obviously [5[-4:1, 6:2, 11:2, 13:11, purpose [1] -14:8likewise [1] -10:4 13:20 pursuant [1] - 6:18lion's [1] - 6:8 occasions [1] - 4:21 put p] - 5:6, 8:16litigants [1] -11:18 OF[2]-1:1, 1:14itigants [1] -11:18 OF[2]-1:1, 1:14 Qitigation pj -10:5, 15:15 official m - 2:18 QLITTLE [3] -1:24, 3:8, 3:19 once [3] - 8:24, 9:1, 12:17LLP pi-1:23, 2:4look [3]-5:6, 13:10, 16:2

One p] -1:23, 2:5one[4]-4:1, 10:19, 12:6,12:22 quartern] - 9:22



21/22

A l l Word // US SEC v C i o f f i , et al 4quickly [1] - 9:2

Rraised [1] -16:4Rakoffpi-10:18, 12:21,13:22Rakoff's [1] -15:7RALPH [1]- 1:9ratherp] -16:1re[2]-7:17, 8:17re-apply [1] - 7:17re-emerged [1] - 8:17reach [1] -10:7reached p j - 4:8, 4:15read [2]-12:16, 13:2readmitted [1] - 7:24real [i]-8:5reallyp]-9:12,11:17,13:11reason [2]-6:25, 11:21reasonableness [1] -12:19received [1] -14:7recently [1] -10:3record [1]-6:6recorded [1] - 2:19REED [1]-1:23referred [1] -15:15reflect [4]-6:25, 13:22, 14:20, 16:4regard [1]-12:3reimbursement [1] -12:7related p] - 8:6relatively [3]-5:24, 10:3, 13:24reluctance [1] - 8:18rememberp) -14:13reportpi - 8:12Reporter[2]-2:17, 2:18request [1] - 8:12response [2]-13:9, 13:25responsibility [3] -13:12, 14:11, 14:24restricting p] -12:9resultp] - 7:2,14:15retain [1] -11:20return p] - 7:12reverse p] - 5:2rich p)-11:16Richard pj -3:17RICHARD pj -1:21, 2:4risks [2]-10:5, 15:15role [5]-10:20, 10:23, 12:1, 12:21, 13:8rubberp] -10:23, 12:17,14:25runp] -10:8

ssalary [1] - 5:20scheduled p] - 9:13schemep] - 8:15scienter pj - 6:18SEC [14]-3:12, 3:17,4:9, 6:13, 7:1, 7:6,

9:2, 9:25,10:1, 10:5, 10:6, 11:13,

14:4, 15:13SEC ' s pi -12:8section p i - 6:16sector [1] -15:25SECURITIES p i -1:4, 1:19securities p j - 7:7, 7:13Securities p ] - 3:15se e pi -13:2seekp] -12:7SENIOR [1]-1:15Seniorp] - 3:2sense [2] - 9:10, 13:11sensitive [1] - 9:15separate p j -14:11September [2] - 8:12, 9:12serious [4]-4:23, 8:5, 8:8, 8:9seriously p] - 8:4, 9:17setp] - 4:17settle [1] - 6:5settled p ] - 4:23, 5:24settlement [10] - 4:4, 4:8, 4:15, 6:7,

6:16, 8:13, 11:11, 12:9, 12:11, 15:14settling [1] -11:18several p]-12:6shortp] - 5:1sign [6]-10:16, 10:21, 11:20, 13:12,

15:2, 16:3signed p] -12:5silly p]-11:24similar [1] - 7:25simply [1] -10:25situation p] - 5:2, 14:12small p] -13:24so-called p j -11:23somewhat p ] -15:3sort[6]-7:20, 8:5, 8:11, 8:17, 9:5,

14:11soul [1]-6:10speaking p] - 5:24specific p i -12:15spread [1] - 6:6stake p i - 5:14stamp p i -10:23, 12:17,14:25standard [1] -11:23standards p i -14:5, 15:7start pi -4:17, 6:4starting p] - 8:20state pj-3:13STATESp]-1:1, 1:4, 1:15States [1] -1:6statute p i -12:4statutory p] -13:3, 14:6stenography [1] - 2:19stop [1] -11:18Street p i -1:20stuffp]-8:5submissions p] -16:2submitp] -15:1substantial [1] -11:8sue [4]-7:1, 11:13,11:15

suggesting p j -10:8summary p j - 8:11, 10:1supervision p] -12:12Susan p j - 3:22suspended [1] - 7:20

Ttale[i]-9:16Tannin [6] - 3:12, 3:22, 3:23, 6:23, 7:6,

11:16Telep] - 2:18telephone [1] -16:1tenth [1] -4:16tenth-and-a-half p] - 4:16terms pj -6:7, 12:15, 13:3THE [35] -1:14, 3:4, 3:11, 3:21, 3:24,

6:10, 6:12, 6:14, 7:9, 7:12, 7:20, 7:23,8:1, 8:25, 9:3, 9:8, 9:19, 10:8, 10:12,11:7, 11:10, 11:14, 11:17, 12:16, 13:7,13:10, 13:16, 13:20, 14:1, 14:10,14:23, 15:11, 15:17, 15:21, 16:9

they've p] -14:8thousand p)-5:17, 6:21thousands p] -13:23three [6]-4:18, 4:22, 5:4, 7:8, 7:14,

8:19three-year [2] - 7:8, 8:19tie [1] -14:6today p]-3:25, 4:17, 16:7together p i - 8:16, 8:23took [4]-5:20, 6:5, 8:1, 9:25Torres [1]-2:17tossed pi -6:1totally p] -15:8tough [1] -15:17Transcript [1] - 2:19TRANSCRIPT[1]-1:14Transcription p] - 2:20trial [6]-4:17, 4:19, 8:5, 8:9, 8:16, 9:13try p]-4 :22, 9:17, 12:1trying p j - 9:9two [6] - 5:4, 7:6, 7:14, 8:19, 9:20, 10:6two-year p] - 7:6, 8:19typep]-5:16,14:11types p]-5:11, 12:22

uunderp] -11:8, 12:11UNITED [3]-1:1, 1:4, 1:15United [1]-1:6upp]-7:19, 8:22, 9:13urge [1J-13:1

Vvacation p] -10:[email protected] p j - 2:19



22/22

A l l W o rd // US SEC v C i o f f i , et al 5versus p) - 3:12Victoria [1] - 2:17violate [3] -10:25, 11:2, 11:25void [1] - 4:24volunteer [1] - 6:4

wwants [2] - 6:4, 6:8Washington [1] -1:20weaknesses [1]-10:2week pj -10:9, 16:3, 16:7week's [1] -16:10weeks [4] -4:18, 4:22, 5:4, 9:20WEINSTEIN [3] - 1:25, 3:5, 3:18Weinstein p] - 3:18well-familiarp] -13:17well-within p] -14:9whereby [1] - 7:6WHEREUPON pj-16:14whole [1] - 4:24wintertime p] -11:4wish [1] -13:14wishes p]-15:11wonder p] -10:20WORLAND [26]-1:21, 3:7, 3:15, 6:9,

6:11, 6:13, 6:15, 7:11, 7:16, 7:22,7:25, 8:8, 9:1, 9:7, 9:18, 11:5, 11:8,11:12, 11:15, 12:2, 13:1, 14:4, 14:22,15:13, 15:19, 16:6

Worland [3]-3:15, 6:13, 6:14world [1] -14:2write [2] -13:22, 15:6wrote [3] - 4:2, 8:12, 12:21

Yyear[4] - 7:6, 7:8, 8:19years [2]-7:14YORK [1]-1:1York[6j-1:6, 1:24, 2:6, 4:2

V i c t o r i a A. Torres B u t l e r , CRR

Documents

Judge Block does not want to be a rubber stamp on this chump change settlement with the SEC-Cioffi & Tannin