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Silvana Worldwide vs. Kingate Global w/Kingate financials

Silvana Worldwide vs. Kingate Global w/Kingate financials

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Published by mrspanstreppon
Lawsuit filed against Kingate Global. Exhibits include Kingate offering memorandum & audited financial statements
Lawsuit filed against Kingate Global. Exhibits include Kingate offering memorandum & audited financial statements

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Published by: mrspanstreppon on Jul 27, 2009
Copyright:Attribution Non-commercial

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05/11/2014

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Joel H. Bernstein (JB-0763)Christopher J. Keller (CK-2347)Javier Bleichmar (18-0435)Stefanie J. Sundel (SS-8168)
LABATON SUCHAROW LLP
140 BroadwayNew York, New York 10005Telephone: (212) 907-0700Facsimile: (212) 818-0477
Attorneysfor Silvana Worldwide Corp.
and
Proposed Counsel for
the
Class
UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK
SILVANA WORLDWIDE CORP.,
on
Behalf
of
Itself and all Others Similarly Situated,Plaintiff,
v.
Civil No.09 Civ. 5470
)
))
))))
)
CLASS
ACTION COMPLAINT
KINGATE MANAGEMENT LIMITED; )FIM LIMITED; FIM ADVISERS LLP; )FIM (USA) INCORPORATED; )PRICEWATERHOUSECOOPERS; )PRICEWATERHOUSECOOPERS BERMUDA; )CITI HEDGE FUND SERVICES, LIMITED; )BANK OF BERMUDA LIMITED; )GRAHAM
H.
COOK; JOHN E. EPPS; CARLO )GROSSO; FEDERICO M. CERETTI; MICHAEL )
G.
TANNENBAUM; and CHRISTOPHER )WETHERHILL, )Defendants.
)
)
---------------
)
JURY TRIAL DEMANDED
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TABLE OF CONTENTS
NATURE OF THE ACTION..........................................................................................................1JURISDICTION AND VENUE......................................................................................................3PARTIES.........................................................................................................................................4CLASS ACTION ALLEGATIONS................................................................................................8SUBSTANTIVE ALLEGATIONS.................................................................................................9A. Madoff’s Massive Ponzi Scheme.............................................................................9B. Kingate Global’s Information MemorandumAnd Audited Financial Statements........................................................................12C. The SIPA Trustee’s Complaint..............................................................................13D. Obvious Red Flags Should Have Alerted Defendants...........................................14E. KML And The FIM Defendants ProfitedFrom Millions Of Dollars In Fees..........................................................................21F. Citi Hedge Falsely Reported The Fund’s Value....................................................22G. The Individual Defendants’ Culpable Conduct.....................................................23H. Allegations Regarding PwC...................................................................................241. GAAS Requirements................................................................................242. PwC Acted Improperly.............................................................................283. PwC Disseminated False Audit Reports To Plaintiff And The Class.......314. Plaintiff Justifiably Relied on PwC’s Audit Opinions..............................32COUNTS I VI............................................................................................................................32JURY TRIAL DEMANDED.........................................................................................................37PRAYER........................................................................................................................................37
 
 Plaintiff, individually and on behalf of all others similarly situated, by its attorneys,alleges the following upon information and belief, except for those allegations as to itself, whichare alleged upon personal knowledge. The allegations are based on counsel’s investigation,complaints filed by the United States Government and Securities and Exchange Commission(“SEC”), reports and interviews published in the press, and information obtained by Plaintiff andPlaintiff’s counsel.
NATURE OF THE ACTION
1.
 
Plaintiff’s claims arise from the massive fraud perpetrated by Bernard L. Madoff (“Madoff”) through his investment firm Bernard L. Madoff Investment Securities LLC(“BMIS”). As the world learned on December 11, 2008, Madoff and BMIS controlled billions of dollars in investments which purportedly earned stable returns. In truth, these returns wereentirely fictitious and part of the largest Ponzi scheme in history. The fraud orchestrated byMadoff and BMIS—facilitated by the reckless, grossly negligent, and fraudulent conduct of Defendants here—cost investors an estimated $64.8 billion based upon the reported value of thousands of BMIS client accounts as of November 30, 2008.2.
 
On March 12, 2009, Madoff pled guilty to eleven felony counts of fraud, perjury,theft, and international money laundering in a criminal proceeding brought by the United StatesAttorney’s Office for the Southern District of New York. In his plea allocution, Madoff statedthat, “for many years up until my arrest on December 11, 2008, I operated a Ponzi schemethrough the investment advisory side of my business, Bernard L. Madoff Securities LLC…. As Iengaged in my fraud, I knew what I was doing [was] wrong, indeed criminal.”3.
 
Plaintiff invested with Madoff and BMIS indirectly through Kingate Global Fund,Ltd. (“Kingate Global” or the “Fund”), one of the so-called “feeder funds” into Madoff’s

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