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Filed: New York County Clerk 05/11/2012 Index No FILED: NEW YORK COUNTY CLERK 05/11/2012 INDEX NO. 600469/2009 NYSCEF DOC. NO. 151 RECEIVED NYSCEF: 05/11/2012 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK WALKER, TRUESDELL, ROTH & ASSOCIATES, Index No. 600469/2009 INC., Trustee of Greenwich Sentry, L.P. Litigation Trust, Plaintiff, vs. GLOBEOP FINANCIAL SERVICES LLC, CITCO FUND SERVICES (EUROPE) BV, CITCO (CANADA) INC., PRICEWATERHOUSECOOPERS LLP, and PRICEWATERHOUSECOOPERS ACCOUNTANTS N.V., Defendants. AMENDED COMPLAINT OF LITIGATION TRUSTEE Plaintiff Walker, Truesdell, Roth & Associates, Inc., Trustee of the Greenwich Sentry, L.P. Litigation Trust, by its undersigned attorneys, for its complaint, alleges the following upon information and belief, except as to information about itself, which is alleged upon personal knowledge: NATURE OF THE CASE 1. This action asserts claims against the following service providers of Greenwich Sentry, L.P. (“Fund”), for breaches of duties owed to the Fund: (i) GlobeOp Financial Services LLC, Citco Fund Services (Europe) BV, and Citco (Canada) Inc. (collectively, “Administrator Defendants”), and (ii) PricewaterhouseCoopers LLP and PricewaterhouseCoopers Accountants N.V. (the Fund’s auditors). 2. The Fund was a “feeder fund” that invested its assets with Bernard Madoff’s (“Madoff”) firm, Bernard L. Madoff Investment Securities, LLC (“BLMIS”). The Fund was among various Madoff feeder funds affiliated with the Fairfield Greenwich Group (“FGG”). Other FGG-affiliated Madoff feeder funds included Greenwich Sentry Partners L.P. and Fairfield Sentry Limited. On December 11, 2008, it was publicly disclosed that Madoff, acting through BLMIS, had operated a Ponzi scheme, and Madoff was arrested that day. 3. The Fund sustained substantial losses in connection with its investments with BLMIS. Had defendants not engaged in the wrongful conduct complained of herein, the Fund would have avoided losses. Among other things, the Fund would have (i) redeemed its investments with BLMIS prior to Madoff’s arrest (as it had partially done on various occasions); and (ii) ceased further investments with BLMIS. 4. The Fund was not a culpable participant in the Ponzi scheme, and did not know of the scheme prior to its December 11, 2008 disclosure. On November 19, 2010, the Fund filed a petition pursuant to Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (“Bankruptcy Court”). 5. The Administrator Defendants breached duties to the Fund by, among other things, failing to conduct adequate due diligence, accurately calculate the Fund’s net asset value, and maintain accurate financial books and records. At the same time, the defendants collected fees calculated on the basis of inflated net asset value. 6. PricewaterhouseCoopers LLP and PricewaterhouseCoopers Accountants N.V., as the Fund’s outside auditors, failed to perform audits of the Fund in accordance with Generally Accepted Auditing Standards (“GAAS”) promulgated by the professional organization American Institute of Certified Public Accountants (“AICPA”), and improperly issued “clean” or unqualified audit opinions with respect to the Fund’s financial statements. PricewaterhouseCoopers LLP and PricewaterhouseCoopers Accountants N.V. had a heightened - 2 - duty to go behind the mere numbers reported by the Fund’s single manager, BLMIS, who held as custodian all of the Fund’s assets, lacked transparency, was riddled with conflicts of interest, purported to consistently generate positive results even in down markets, and purportedly was audited by a tiny, storefront accounting firm. 7. By failing to properly discharge their duties to the Fund, defendants have caused substantial damages to the Fund, including damages sustained by the Fund in connection with its investments with BLMIS. VENUE AND JURISDICTION 8. Venue is proper in this Court. Plaintiff designates this County as the place of trial pursuant to CPLR § 509. 9. This Court has jurisdiction over the defendants pursuant to CPLR §§ 301 and 302(a). Defendants do business within the State, and their acts have had consequences in the State. Defendants derive substantial revenues from interstate or international commerce. THE PARTIES Plaintiff 10. Plaintiff Walker, Truesdell, Roth & Associates, Inc. is Trustee of the Fund’s Litigation Trust, which was established in connection with the Fund’s Chapter 11 reorganization plan. The plan was confirmed by the Bankruptcy Court (Honorable Burton R. Lifland) on December 22, 2011, in In re Greenwich Sentry, L.P. and Greenwich Sentry Partners, L.P., Case No. 10-16229 (BRL) (Jointly Administered) (Bankr. S.D.N.Y.). Plaintiff maintains its offices at 380 Lexington Avenue, New York, New York. - 3 - The Administrator Defendants 11. Defendant GlobeOp Financial Services LLC (“GlobeOp”) is a limited liability company organized under the laws of Delaware and registered to do business in New York. GlobeOp has its principal place of business at 450 Mamaroneck Avenue, Harrison, New York. a. GlobeOp served as the Fund’s administrator from October 31, 2003 through August 10, 2006. b. GlobeOp’s parent, GlobeOp Financial Services S.A. (“GlobeOp S.A.”), is currently the subject of an $840-plus million cash offer by a unit of SS&C Technologies Holdings Inc., which offer (485 pence for each of GlobeOp S.A's 107.69-plus million shares) has been recommended to GlobeOp S.A.'s shareholders by its independent directors. 12. Defendant Citco Fund Services (Europe) BV (“Citco Europe”) is a limited liability company. Citco Europe became the Fund’s administrator on August 10, 2006, pursuant to an agreement of that date. Citco Europe has also served as administrator for other FGG Madoff-feeder funds, including Greenwich Sentry Partners, L.P. (pursuant to an agreement dated August 10, 2006) and Fairfield Sentry Limited (pursuant to an agreement dated February 20, 2003). 13. Defendant Citco (Canada) Inc. (“Citco Canada”) is a corporation which, by delegation of Citco Europe, became a sub-administrator of the Fund on August 10, 2006. Defendants Citco Europe and Citco Canada are part of Citco Group. (Citco Europe, Citco Canada and Citco Group are sometimes collectively referred to herein as “Citco”). The PricewaterhouseCoopers Defendants 14. Defendant PricewaterhouseCoopers LLP (“PwC Canada”) is a limited liability partnership. PwC Canada was the Fund’s outside accountant and auditor for the years ending December 31, 2006, and 2007. PwC Canada also served as the accountant and auditor for other - 4 - FGG Madoff-feeder funds, including Greenwich Sentry Partners, L.P. (for the years ended December 31, 2006 and 2007); and Fairfield Sentry Limited (for the years ended December 31, 2006 and 2007). Fairfield Sentry Limited’s 2007 financial statements, audited by PwC Canada, reported assets of over $7.27 billion). 15. Defendant PricewaterhouseCoopers Accountants N.V. (“PwC Netherlands”) is a public limited liability company. PwC Netherlands served as the Fund’s outside accountant and auditor for the year ending December 31, 2005 (having replaced Berkow, Schecter & Company LLP of Stamford, Connecticut ); it also served as the auditor for other FGG Madoff-feeder funds, including Fairfield Sentry Limited (for the years ended December 31, 2002, 2003, 2004, and 2005), and Fairfield Sigma Limited (for the years ended December 31, 2003, 2004, and 2005). 16. Defendants PwC Canada and PwC Netherlands are member firms of PricewaterhouseCoopers International Limited (“PwC Int’l”). PwC Int’l and its member firms sometimes refer to themselves as “PricewaterhouseCoopers” or “PwC.” In addition to the various FGG-related funds described above, PwC also acted as auditor for other Madoff feeder funds, including (i) Optimal Multiadvisors Ltd.-Strategic US Equity Series, (ii) Thema International Fund, (iii) Plaza Investments International Ltd., (iv) Kingate Euro Fund, Ltd., (v) Kingate Global Fund, Ltd., and (vi) Defender Ltd. Additionally, PricewaterhouseCoopers Accounting Services Limited served as registrar, transfer agent, and administrator for another Madoff feeder fund, Zeus Partner Limited; and PwC has served as auditor for GlobeOp S.A. SUBSTANTIVE ALLEGATIONS 17. The Fund is a private investment limited partnership organized under Delaware law. The Fund commenced operations in January 1993, and operated as a “feeder fund,” investing assets with BLMIS. As of November 2008, the Fund’s records from BLMIS showed that the Fund had approximately $314 million invested with BLMIS. - 5 - 18. The Fund’s general partner was paid a management fee of 1% of each limited partner’s capital account and was allocated 20% of the Fund’s net realized and unrealized capital appreciation. The general partner had three directors, including Brian Francoeur, the managing director of Citco Fund Services (Bermuda) Limited, which was an affiliate of Citco Europe and Citco Canada. In 1994, Mr. Francoeur qualified as a chartered financial accountant; from 1995 to 1997, he was employed by the accounting firm Ernst & Young. 19. BLMIS purportedly engaged in an options trading strategy described as a “split- strike conversion strategy.” The Fund’s offering memorandum dated August 2006 describes the split-strike conversion strategy as follows: The establishment of a typical position entails (i) the purchase of a group or basket of equity securities that are intended to highly correlate to the S&P 100 Index, (ii) the purchase of out-of-the- money S&P 100 Index put options with a notional value that approximately equals the
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