Excerpts from the depositions - Wall Street Journal

Case 2:11-cv-10549-MRP-MAN Document 254-1 Filed 03/28/13 Page 6 of 35 Page ID
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• Q. Now, does the market value include a valuation for potential fraud claims? [Objection]
A. I don’t believe so. Q. Why not? A. The best way I can explain it is, is that this, it’s
a security value and representing the economics on the underlying investments in
the securities. And again, I’m not a lawyer, but I just viewed fraud, fraud claims as
separate and are usually, you know, contingent upon outcomes, and highly―highly
unpredictable from a value side. So, I don’t―I don’t think the street values fraud
claims, tries to put a value on these, a fraud claim into a security.” 113:14–114:8.
Swift testified that during the negotiation and sale of securities to ML II, he had general
knowledge that AIG may have fraud claims.
• “Q. So, are you saying that you were thinking about fraud but you didn’t have a strategy?
Or are you saying that you weren’t thinking about fraud claims? [Objection] A. We had
not developed, you know, the―the strategy to go after. We had not discussed it in
any, you know, I’ll call it great length or details at all as it relates to, you know, the
securities that we were transferring at this point in time. Q. So, you had the idea but
you hadn’t discussed it at any length? A. That’s fair to say. I mean, we had an
awareness; I had a general awareness. But it wasn’t brought forward into a
coherent strategy of how we were going to approach it.” 131:16–22.
Swift testified that had AIG been transferring fraud claims to ML II, he would have wanted to
include that in the Term Sheet that was presented to the AIG Board of Directors.
• “Q. What was your role in the preparation of the Term Sheet setting forth the deal terms
for the Maiden Lane II transaction? A. I would have been working with the lawyers
that would have prepared it to document the key components.” 90:13–19.
• “Q. [W]hen the Term Sheet refers to ‘a certain pool of RMBS,’ what did you understand
that to mean? A. The asset, the RMBS assets that were backing the securities lending
obligations. Q. Is there anything in that definition that suggests to you that fraud claims
are included in the asset being transferred? A. No. Q. Is the term ‘fraud’ used? A. No.”
93:9–21.
• “Q. There is a definition of ‘RMBS Assets’. Do you see that? A. Yes. Q. Could you read
that definition into the record, please? A. ‘Collectively, the RMBS Issues listed in
Schedule A hereto for each Seller and rights to the outstanding principal thereof
and accrued interest thereon as of October 31, 2008 (for each Seller, an “Indicative
RMBS Pool”) less the dispositions thereof and the collections of principal and
interest thereon plus accrued interest thereon between October 31 and the Closing
Date.’ Q. In your opinion as the chief negotiator for AIG, is that a fair description of the
asset that was being sold to Maiden Lane II? A. Yes. Q. Is that what you understood the
asset to be? A. Yes. Q. Do you see anything in that definition of the ‘Asset’ that
suggests fraud claims are being transferred? A. No. Q. Do you believe that definition in
any way includes fraud claims? A. No. Q. Why not? A. It doesn’t say so.” 93:24–
95:7.
• “Q. Let’s turn to Schedule A, which is referred to under the definitions. . . . [I]t includes a
bracketed statement that says, ‘List of RMBS Issues in RMBS pool to come.’ Do you see
that? A. Yes. Q. What did you understand the ‘list of RMBS Issues’ to mean? A. The
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