Eugene Helm Testimony 1104

126 Helm - Direct - Coombe 1

E U G E N E

J.

H E L M,

2

having been duly sworn by the Clerk of the Court, was

3

examined and testified as follows:

4

DIRECT EXAMINATION

5

BY MS. COOMBE:

6

Q

Good afternoon.

7

A

Good afternoon.

8

Q

Could you please introduce yourself to the ladies

9

and gentlemen of the jury?

10

A

Sure.

11

Q

Mr. Helm, could you please tell us about your

12 13 14 15 16 17

My name is Eugene Helm.

educational background? A

I have an MS -- excuse me, a BS in mathematics

from Fairfield University. Q

Have you ever worked for Wright Investors'

Services or The Winthrop Corporation? A

Actually, I was employed by The Winthrop

18

Corporation, parent company of Wright Investors' Services,

19

and I was there for 22 years.

20

Q

Where is Wright Investors' Services located?

21

A

At this time, Milford, Connecticut.

22

Q

Did it used to be located someplace else?

23

A

Bridgeport, Connecticut.

24

Q

When did the company move?

25

A

2000, year 2000, May of 2000.

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

127 Helm - Direct - Coombe 1

Q

When did you leave Wright Investors' Services?

2

A

June of 2009.

3

Q

What was your position when you resigned?

4

A

President.

5

Q

How long were you the president?

6

A

From 2002 through 2009.

7

Q

Did you hold any other positions while you were at

8

Wright Investors' Services?

9

A

A number of them actually, yes.

10

Q

Could you tell us what they were?

11

A

Controller, Senior Vice President, Chief Financial

12

Officer, Treasurer, member of the Board of Directors of The

13

Winthrop Corporation and Wright Investors' Services, Inc.,

14

and the Vice President and Treasurer of its related

15

broker/dealer affiliate, Wright Investors' Services

16

Distributors, Inc.

17

Q

What were your duties and responsibilities when

18

you were president of The Winthrop Corporation doing

19

business as Wright Investors' Services?

20

A

They were two separate legal entities, but all the

21

employees that worked for The Winthrop Corporation provided

22

services to Wright Investors' Services so, the activity as a

23

registered investment advisor occurred at Wright Investors'

24

Services and the employees were working for The Winthrop

25

Corporation technically, but doing business for, working for

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128 Helm - Direct - Coombe 1

Wright Investors' Services on a leased basis.

2

Q

So, were you President of both companies?

3

A

Correct.

4

Q

Well, what were your duties and responsibilities?

5

A

I was responsible for the trust investment

6

services division that provides outsourced investment

7

management to community bank trust departments across the

8

country.

9

responsibilities.

That was the most significant of my I was also the Chief Financial Officer

10

responsible for financial statement preparation, and in

11

addition to that, I managed the IT department, information

12

technology, human resources, the portfolio administration

13

group, and I think that's it.

14 15

Q

What kind of company was The Winthrop Corporation?

But I want to focus now on Wright Investors' Services.

16

A

Okay.

17

Q

What kind of company was it?

18

A

It was a registered investment advisory firm.

19

Q

Was Wright an investment bank?

20

A

No.

21

Q

Did Wright have any clients which were union

22

pension funds?

23

A

Yes.

24

Q

While you worked for Wright, did the company grow

25

or shrink over time?

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129 Helm - Direct - Coombe 1

A

Both.

2

Q

Can you tell us about that?

3

A

When I started my employment with the firm in

4

1987, it had roughly $4.2 billion in assets under

5

management.

6

I believe in 1998 it had gone down for a period and then

7

rose back up to $4.2 billion in assets under management, and

8

over the ensuing probably four or five years, it went down

9

to as low as $1.7 billion in assets under management, and

And it ebbed and flowed over a period of time.

10

from roughly $18 million in revenue down to, oh, about eight

11

or nine million dollars in revenue annually.

12

Q

Did Wright ever have to layoff any employees?

13

A

Yes.

14

Q

When did that occur?

15

A

A number of times throughout my tenure at Wright

16

Investors' Services, but the most recent layoffs were in the

17

years 2000, 2001 through 2004, I believe.

18

Q

Can you give us the idea of what the number of

19

employees was at the beginning of that time period versus

20

the end?

21

A

There was roughly a hundred forty-five employees

22

at the beginning of that time frame and roughly forty-five

23

at the conclusion of the layoffs.

24 25

Q

I want to direct your attention to the time period

of 2004, 2005 and 2006.

Are you familiar with how Wright

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130 Helm - Direct - Coombe 1

paid its employees at that time through The Winthrop

2

Corporation?

3

A

Yes.

4

Q

What was the form of payment used?

5

A

You mean checks versus direct deposit?

6

Q

Correct?

7

A

Direct deposit.

8

Q

Are you familiar with the bank that The Winthrop

9

Corporation used to do payroll?

10

A

Yes.

11

Q

What was the name of that bank?

12

A

JP Morgan Chase.

13

Q

And where was the branch located that The Winthrop

14 15

Corporation used for payroll? A

We made our deposits at the branch on The Post

16

Road in Milford, and that's where I also went for signature

17

guarantees and things of that nature.

18

the relationship predated our move from Bridgeport to

19

Milford if the branch, technically speaking, from the bank's

20

perspective was Bridgeport or Milford.

I'm not sure since

21

Q

In any event, it was a branch in Connecticut?

22

A

Yes, it was.

23

Q

Did Wright ever hire Senator Bruno?

24

A

Yes.

25

Q

Who took credit for introducing Senator Bruno to

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131 Helm - Direct - Coombe 1 2 3

Wright? A

There were people in the firm, Robert Smith and

Ken Singer, who each seemed to take responsibility for that.

4

Q

Did you ever meet Senator Bruno?

5

A

No.

6

Q

Was it possible for all Wright employees to

7

interact with Senator Bruno?

8

A

Not to my knowledge.

9

Q

Why not?

10

A

To my knowledge, he never visited the offices in

11

Connecticut and the relationship was fairly tightly

12

controlled by Al Meric, Peter Donovan and Ken Singer.

13 14

Q

Did a reporter from the New York Sun ever contact

you about Senator Bruno?

15

A

Yes.

16

Q

When did that occur?

17

A

2003, I believe.

18

Q

What did you tell the reporter about Senator

19

Bruno's dealings with customers over which he would have

20

influence as a state official?

21

A

In general terms, my recollection of that

22

conversation, and this predates any investigation, and it

23

came to me out of the blue because the receptionist did not

24

know who to route the call to, so I took it, I believe the

25

reporter was asking the nature of Mr. Bruno's relationship

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132 Helm - Direct - Coombe 1

with the firm and I expressed it as business development and

2

trying to alert us to opportunities that we might be

3

qualified for as an investment advisor.

4

Q

Did you make any statements about Senator Bruno's

5

dealings with customers over which he would have influence

6

as a state official?

7

A

I believe I stated that we were not managing money

8

for New York State affiliated entities and, in general

9

terms, that was not my understanding of Mr. Bruno's

10

activities.

So, I don't remember the exact conversation,

11

but I would have certainly stated that I did not believe he

12

was making such introductions for us.

13

Q

Have you had an opportunity to review the article?

14

A

No, not recently.

I know you showed me something

15

about October 13th and I think I saw it on the web recently

16

about four or five weeks ago.

17

MS. COOMBE:

18

THE COURT:

19

MS. COOMBE:

21

THE COURT:

23

Certainly.

(Pause in proceedings.)

20

22

May I have a moment, your Honor.

May I approach, your Honor? Please.

BY MS. COOMBE: Q

I'm showing you what's been marked as Government's

24

Exhibit GC-40 just for you to look at and when you're done,

25

let me know.

It is not admitted into evidence.

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133 Helm - Direct - Coombe 1

A

Okay.

(Witness complies.)

2

MS. COOMBE:

3

THE COURT:

4

MS. COOMBE:

5

THE COURT:

7

MS. COOMBE:

8

MS. COOMBE:

14 15

There are not, I don't believe. Thank you, your Honor.

Your Honor, may I approach?

THE COURT:

Thank you.

BY MS. COOMBE: Q

Mr. Helm, were you quoted -- were you quoted in an

article published by the New York Sun? A

I believe -- I don't remember the exact words.

16

was quoted in the article.

17

exact words, but that's the general sense of what I

18

communicated, yes.

19

I am

going to retrieve the exhibit, thank you.

11

13

Just want to see if there are any

(Pause in proceedings.)

9

12

Please.

materials left from the previous witness.

6

10

May I approach, your Honor?

Q

I

I don't know if those are my

Are there any quotations regarding whether Senator

20

Bruno had any dealings with customers over which he would

21

have influence as a state official?

22

A

In the article there is, yes.

23

Q

What -- did you have any personal knowledge about

24

whether Senator Bruno had any dealings with customers over

25

which he would have influence as a state official?

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134 Helm - Direct - Coombe 1 2

A

5 6 7 8

The only information I had was communicated

to me by my colleagues.

3 4

No.

Q

Who were your colleagues that communicated that to

A

Primarily Peter Donovan, the CEO of Winthrop

you?

Corporation and Wright Investors' Services. Q

After the article was published, did Mr. Donovan

have any reaction to the article?

9

MR. LOWELL:

10

THE COURT:

11

14

MR. LOWELL:

I am a little premature twice now.

One sentence short. A

Yes.

Mr. Donovan told me that --

15

MR. LOWELL:

16

THE COURT:

17

Probably get there in the next

sentence.

12 13

Objection, calls for a conclusion.

reaction.

Objection, your Honor. No.

That's "yes" or "no."

18

THE WITNESS:

19

THE COURT:

20 21 22

Q

Her question was did he have any

Yes, he did.

All right.

What's the next question?

What was his reaction? MR. LOWELL:

Objection, your Honor, hearsay and

Mr. Donovan is coming.

23

THE COURT:

What is the basis of the offer, in

24

light of the hearsay objection?

25

MS. COOMBE:

Your Honor, the Government offers it

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135 Helm - Direct - Coombe 1

as a co-conspirator's statement.

2

THE COURT:

All right.

I'm going to -- I am going

3

to permit the testimony subject to connection, in light of

4

my obligations under Gainey.

5

subject to connection.

6

BY MS. COOMBE:

7 8 9

Q

You may proceed.

Mr. Helm, can you tell us what Mr. Donovan's

reaction was? A

Mr. Donovan expressed discomfort or

10

dissatisfaction to me.

11

had --

12 13

Therefore, it's admitted

MR. LOWELL:

His statement was that Mr. Bruno

Oh, wait.

I'm sorry.

Mr. Donovan --

did Mr. Donovan say somebody else spoke?

14

THE WITNESS:

Mr. Donovan told me that Mr. Bruno

15

was upset at the article and, in the future, such inquiries

16

should be directed to Mr. Bruno and his spokesperson.

17

MS. COOMBE:

18

THE COURT:

19 20 21

May I approach, your Honor? Please.

BY MS. COOMBE: Q

I'm showing you what has been marked as GC-35. MS. COOMBE:

And your Honor, I apologize, I need

22

to go back and check my list, I think this has not been

23

admitted yet and so I jumped the gun on approaching.

24

THE COURT:

25

MS. COOMBE:

All right. Mr. Lowell (indicating).

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

Mr. Lowell,

136 Helm - Direct - Coombe 1

do you have any objection to GC-35?

2

MR. LOWELL:

No.

3

MS. COOMBE:

Your Honor, the Government offers

4

GC-35 -- in fact, the parties do -- pursuant to stipulation.

5

THE COURT:

6

MR. LOWELL:

7

THE COURT:

8

MS. COOMBE:

10

THE COURT:

12

That is so. Thank you.

Admitted.

(Government Exhibit GC-35 received.)

9

11

That's so?

May I approach, your Honor. Please.

BY MS. COOMBE: Q

Mr. Helm, I am now showing you what's been marked

13

and admitted into evidence as GC-35.

Mr. Helm, I'd like to

14

direct your attention to the fourth page of this exhibit.

15

A

Okay.

16

Q

Do you see that there are -- is a list of client

17

names and then dates?

18

A

Yes.

19

Q

And there's some money listed there, amounts?

20

A

Yes.

21

Q

It says at the top, "6/30/03 or opening MV."

22

you what MV refers to?

23

A

Market value.

24

Q

The next column says "E-S-T annual fees"?

25

A

Estimated annual fees.

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

Do

137 Helm - Direct - Coombe 1 2 3

Q

Do you know what the next two columns would be

for, those amounts? A

Yes.

I believe those are calculations based on a

4

percentage payout to Mr. Bruno of either a certain

5

percentage based on the life of the account, based on his

6

start date, which is the third column, headed with July '01.

7

Q

And does this reflect the names of clients Wright

8

credited Senator Bruno with referring and the dates that

9

they became Wright clients?

10

A

Yes.

11

Q

And is that information also contained in other

12

pages of GC-35?

13

A

Yes.

14

Q

Focusing again now on page 4 which we were looking

15

for at of GC-35, do you have an understanding of what the

16

purpose was of creating this particular kind of chart?

17

A

My understanding is it was meant to calculate how

18

much Mr. Bruno was entitled to under his various

19

arrangements over the period of his engagement with Wright

20

Investors' Services and whether he was paid an amount that

21

was in excess or less than that.

22 23 24 25

Q

When you mean (sic) in excess or less than that,

what do you mean? A

He started his relationship with The Winthrop

Corporation and Wright Investors' Services as a solicitor

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138 Helm - Direct - Coombe 1

and I believe that called for certain payout of the revenues

2

he was helpful in obtaining for the firm, and I believe

3

there was a percentage based on year one, year two and year

4

three.

5

understanding or the calculation of those percentages based

6

on the length of the relationship.

7

Q

And these percentages are meant to reflect that

So even after Senator Bruno became a salaried

8

employee, did Wright still check to see what the salary was

9

if he had been paid on commissions?

10

A

Salary plus bonuses, yes.

11

MS. COOMBE:

12

THE COURT:

13 14 15

May I approach, your Honor? Please.

BY MS. COOMBE: Q

Mr. Helm, I am going to give you what's been

marked as GC-4, GC-5, GC-11 and GC-12.

16

A

Okay.

17

Q

And I believe that each one of those are referral

18

agreements and each one has a schedule A or other portion

19

that identifies the percentage agreement that Wright

20

Investors' Services and Senator Bruno had at the time.

21

I would just like to go through those with you.

22

If we could look first at GC-4, schedule A,

23

please.

24

Senator Bruno was to be paid at this time, Mr. Helm?

25

And

A

And can you tell us what the percentages that

On the first year of the relationship, 10 percent;

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

139 Helm - Direct - Coombe 1

the second year of our relationship, 10 percent; and the

2

third year of a relationship 10 percent.

3

Q

And if we could look at GC-5 now, please, the

4

third paragraph.

And is there a reference there to

5

increasing one of the percentages to an additional 5 percent

6

in the first year?

7

A

Yes, there is.

8

Q

So then it would be 15 percent for the first year

9 10 11 12

and then 10 percent and then 10 percent? A

To add an additional -- fourth paragraph, sorry.

To add an additional 5 percent in the first year, yes. Q

All right.

And let's look now at GC-11 and if we

13

could look at the third page, please, does this indicate

14

what the percentages would be?

15 16 17

A

Yes.

First year, 20 percent; second year,

15 percent; third year, 15 percent. Q

And if we could look at the paragraph underneath

18

that, does that provide for any additional percentages

19

during the life of the client's relationship with Wright?

20

A

It does.

It says, "Expected that payments after

21

the third year of investment management will be at the rate

22

of 10 percent of fees paid by the client to Wright."

23

Q

Okay.

And if we could please look at GC-12.

If

24

we could look at Schedule A, which is the third page, and

25

that indicates percentages of 20 percent the first year,

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

140 Helm - Direct - Coombe 1

15 percent the second year and 15 percent the year after

2

that, followed by the 10 percent, is that correct?

3

A

Yes.

4

Q

And what period of time do those percentages

5

cover?

6

A

For accounts established after 12/1/1995.

7

Q

Okay.

8 9 10 11 12 13

Is that defined at the top of schedule A?

And if we could look at Schedule B, please,

what are those percentages? A

It states that they are referral fees to be paid

for Joseph Bruno for accounts existing prior to 12/1/95. Q

And those are 25 percent for the first year, then

20 percent and then 10 percent for the years after that? A

14

That's correct. MS. COOMBE:

Your Honor, the Government offers

16

MR. LOWELL:

Judge, can we consult for a moment?

17

THE COURT:

15

GC-6.

18

(Pause in proceedings.)

19

MR. LOWELL:

20

THE COURT:

21

24 25

No objection, sir. No objection, the Exhibit, GC-6, is

admitted in evidence.

22 23

Certainly may.

(Government Exhibit GC-6 received.) MS. COOMBE:

Thank you.

May I approach again,

your Honor? THE COURT:

Please.

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141 Helm - Direct - Coombe 1 2

BY MS. COOMBE: Q

Mr. Helm, I'm showing you what's been admitted as

3

Government's GC-6.

I'd like to direct your attention to the

4

second to last paragraph -- I'll try to do a better job

5

counting from here on -- and do you see it says, "I would

6

very much appreciate it if you would ask Alex to produce

7

checks for Mr. Bruno as soon as possible after the billings

8

are done.

9

am sure we are billing the culinary workers, so that would

This is very important to this relationship and I

10

be the first check to go out and the other account will

11

probably be billed very shortly."

12

handwritten note in the margin?

And do you see a

13

A

I do.

14

Q

It appears to say very I-M-P-T?

15

A

Yes.

16

Q

Do you recognize that handwriting?

17

A

I do.

18

Q

Who's is it?

19

A

Al Meric.

20

Q

Why was it important to the relationship that --

21

MR. LOWELL:

22

his importance or Mr. Meric's?

23

THE COURT:

24 25

I am sorry, I object.

Is she asking

Do you want to clarify the question?

BY MS. COOMBE: Q

What was your understanding of why it was very

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

142 Helm - Direct - Coombe 1

important to Wright's relationship with Senator Bruno that

2

he be paid as soon as possible?

3

A

Because the compensation was important to

4

Mr. Bruno and there was a sense of urgency in the firm to

5

get that compensation to him as quickly as possible.

6

Q

Did anyone other than Mr. Helm -- sorry, you're

7

Mr. Helm.

8

again.

9 10

THE COURT:

13

A few more minutes and you're gonna

get to a break, so hang in there.

11 12

Did anyone ever -- take a deep breath and try

MS. COOMBE: Q

Thank you, your Honor.

Did anyone else other than Mr. Meric ever express

that same issue with you, Mr. Helm?

14

A

Yes.

15

Q

Who?

16

A

Peter Donovan and Ken Singer.

17

MR. LOWELL:

18

continuing objection?

19

THE COURT:

Judge, will you just give me a

I certainly will, but I want to

20

clarify.

21

what the foundation was that I just heard, and I was writing

22

something, so I apologize to the attorneys.

23

so the record is clear.

24

conversations with whom?

25

I know what the objection was, I wasn't certain

MS. COOMBE:

Let me just ask

He was just referring to

Mr. Donovan.

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

143 Helm - Direct - Coombe 1 2

THE COURT:

How about the

other -- who else?

3

MS. COOMBE:

4

THE COURT:

5

MS. COOMBE:

6

That I've already done.

Mr. Meric. Mr. Meric. Mr. Meric was first and then

Mr. Donovan.

7

THE COURT:

All right.

Is the Government's offer

8

relative to statements by Mr. Meric also under 801 as

9

previously stated with respect to Mr. Donovan?

10

MS. COOMBE:

11

THE COURT:

Yes, your Honor. Then I make the same ruling subject to

12

the requirements of Gainey.

13

subject to connection.

14

All right.

I am admitting the statements

Why don't I -- since I've interrupted

15

ya, why don't we go ahead and take a 15-minute break, until

16

ten of.

Jury is excused until ten of.

17

(Short recess taken at 2:36 PM.)

18

(Court reconvened at 2:53 PM.)

19

MR. LOWELL:

20

THE COURT:

21

MR. LOWELL:

Point of inquiry, sir? Yes. If either of us makes objections or

22

either of us cites to a case, is it appropriate -- would you

23

have us cite to the number or, as Miss Coombe, did call it

24

the co-conspirator exception when there's so many others

25

there?

I know you don't want me to make speeches, just want

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

144 Helm - Direct - Coombe 1

to get the rule right.

2

THE COURT:

My preference, I think, is to cite to

3

the number, and we'll apologize in advance if I've got to

4

ask you what the subject matter of that is, but I am pretty

5

good even on the numbers.

6

MR. LOWELL:

So my preference is the number.

But -- okay.

Even on that one, you

7

know, the actual title of the exception is called statement

8

by a party opponent or party admission, it has five

9

subsections, one of which is that.

10

and I do sometimes, I would name it by its general category.

11 12

So, even if I need help,

THE COURT: did that.

13

And you would be okay with me if you

That's what I'm saying. MR. LOWELL:

You can understand my concern about

14

blurting out co-conspirator statement, it's not what it

15

sounds to a lay person, not what it means.

16

of mine.

17

THE COURT:

I understand.

That's a concern

As I think everybody

18

can discern at this point, what I really want is just

19

objection and no speech.

20

objection, I'll ask.

21

(Jury present at 2:54 PM.)

22

THE COURT:

23

MS. COOMBE:

24 25

If I need to know the basis of the

Proceed, please. Yes, your Honor.

BY MS. COOMBE: Q

Good afternoon again, Mr. Helm.

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

145 Helm - Direct - Coombe 1

A

2 3

MS. COOMBE:

Your Honor, at this time, the

Government offers Exhibits GC-33 and GC-34.

4 5

Good afternoon.

MR. LOWELL:

A moment, your Honor (Pause.)

No

objection.

6

THE COURT:

Admitted.

7

(Government Exhibits GC-33 and GC-34

8

received.)

9

MS. COOMBE:

10

THE COURT:

11 12 13

16

Please.

BY MS. COOMBE: Q

Mr. Helm, I am handing you what's been marked as

Government Exhibits GC-33 and 34?

14 15

May I approach, your Honor?

MS. COOMBE: Q

Could we please look at GC-33?

This is an electronic mail message from yourself

to a man's name that I would not try to pronounce?

17

A

Kruitbosch.

18

Q

Kruitbosch, and it states, "Please include a bonus

19

of $24,300 for Joe Bruno in the next direct deposit.

20

represents 25 percent of first year estimated fees on the

21

new 36 million fixed income account he and Ken developed."

22

And there's some handwritten notes.

23

then looks like HRK27.

24 25

A

This

One says Laborers 190,

Do you recognize that?

HRK27 is Harold Kruitbosch, he is the man at

Wright responsible for payroll, and I believe, but I am not

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

146 Helm - Direct - Coombe 1

certain, who wrote the Laborers 190, but that might also be

2

Harold as well.

3

Q

I would like to look now at GC-34.

This is an

4

electronic mail message from Mr. Donovan to Mr. Kruitbosch

5

is that correct?

6

A

Yes, it is.

7

Q

And it says, "Harold, effective immediately,

8

please reduce Joseph Bruno's salary to one hundred thirty

9

annual rate from the current $132,000 annual rate.

10

to him today.

Peter."

11

salary cuts before February of 2004?

I talked

Had other employees been subject to

12

A

Yes.

13

Q

Who had been subject to the earlier cuts?

14

A

To my knowledge, virtually everybody in the firm.

15

Q

Was Senator Bruno subject to the earlier cuts?

16

A

Not that I recall.

17

Q

Who decided that Senator Bruno should be exempt

18

from the earlier cuts?

19

A

Peter Donovan.

20

Q

Do you have an understanding of why Mr. Donovan

21

decided that Senator Bruno should be exempted from the

22

earlier cuts?

23 24 25

A

Mr. Donovan stated that Mr. Bruno's contributions

to the firm were critical. Q

Did you ever suggest that Senator Bruno should not

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

147 Helm - Direct - Coombe 1

be exempt from the earlier cuts?

2

A

Yes.

3

Q

Why?

4

A

Because I felt it was appropriate that if he was

5

an employee that he be subject to the same pain that all

6

other employees were experiencing.

7 8 9 10 11 12 13 14 15

Q

What is your understanding of what Wright

Investors' Services paid Senator Bruno to do? A

To make referrals and introductions to prospective

clients on behalf of the firm. Q

What did Senator Bruno offer to Wright regarding

that? A

I have no direct knowledge.

I don't understand

the question. Q

What was Senator Bruno able to bring to the table

16

for Wright but made him good at doing what you just

17

described?

18

A

I was not personally involved in his efforts.

My

19

understanding was based on some things that I read in the

20

press and people's proscription inside the firm.

21

make calls on behalf of the firm.

22 23 24 25

Q

He would

Are you aware whether there was a particular kind

of client that he focused on? A

We were largely -- Wright managed money for three

different types of clients, and on the institutional side,

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

148 Helm - Cross - Lowell 1

which is where Mr. Bruno's activities were focused, a

2

primary focal point was union business, yes.

3 4 5

Q

connections through his official position with unions? A

6 7

Are you aware of whether Senator Bruno had any

I am not aware of that, no. MS. COOMBE:

time.

8

THE COURT:

9

MR. LOWELL:

10

CROSS-EXAMINATION

11

BY MR. LOWELL:

12 13

Your Honor, that's all I have at this

Q

Cross-examination. Thank you, your Honor.

Good afternoon, Mr. Helm.

My name's Abbe Lowell,

I am one of Mr. Bruno's attorneys?

14

A

Good afternoon.

15

Q

Picking up where Ms. Coombe just left off, the

16

kinds of clients that you understood Mr. Bruno might help

17

Wright with you phrased as "institutional clients," correct?

18

A

Correct.

19

Q

So the phrase "institutional clients" would be a

20

good characterization to generally describe the kinds of

21

clients Wright and Mr. Bruno would be discussing?

22

A

Correct.

23

Q

Among institutional clients, there are different

24 25

kinds of institutional clients, is that right? A

Correct.

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

149 Helm - Cross - Lowell 1 2

Q

One might be pension funds under the Taft-Hartley

Act, correct?

3

A

That's correct.

4

Q

And some might not have anything to do with

5

unions, correct?

6

A

That's correct.

7

Q

And they'd all be fairly and accurately described

8

as institutional, correct?

9

A

Yes.

10

Q

And that's distinct from, I guess, individual?

11

A

Correct.

12

Q

Now you said to Ms. Coombe some moments ago what

13

your role in the company was, so as to Mr. Bruno, I want to

14

make sure I understand who the correct Wright Investors'

15

Services individual is.

16

negotiated or met with Mr. Bruno in the beginning to

17

determine whether this was a good relationship, is that

18

right?

19

A

Not at the beginning nor at any other time.

20

Q

So that would not be you?

21

A

Correct.

22

Q

That would be either Mr. Meric or Mr. Smith?

23

A

No.

You were not the person who

Mr. Donovan primarily after -- John Wright

24

was the CEO up until his death in 1996.

25

became the CEO.

Peter Donovan

Al Meric was engaged by the firm as head of

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

150 Helm - Cross - Lowell 1

sales and marketing for a period of that time.

2

retired sometime in the 1997 to 1999 time frame, at which

3

time Peter Donovan became and he was the CEO, decision

4

maker, but he also became, as I understood it, responsible

5

for the Joe Bruno relationship.

6

Q

Okay.

I believe he

Do you happen to know from your knowledge

7

who actually met with Mr. Bruno in the beginning to discuss

8

the possibility of his coming to work?

9 10

A

I have seen after-the-fact memorandums, and it was

Al Meric and Ken Singer, I believe.

11

Q

Okay.

But not you?

12

A

Not me.

13

Q

And then, after those meetings occurred, in some

14

of the documents Miss Coombe showed you, in terms of the

15

arrangement that was made, the financial arrangement, that's

16

not you either, correct?

17

A

That's correct.

18

Q

That would be some other Wright official?

19

A

That's correct.

20

Q

And in terms of what the arrangement should say

21

and what it shouldn't say in terms of the legal aspects,

22

that's not you either?

23

A

That's correct.

24

Q

That would be Helen George in Wright Investors?

25

A

Or Judy Corchard, depending on the time frame, was

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

151 Helm - Cross - Lowell 1 2

the Chief Compliant Officer of the firm or not. Q

So that's not an area you're familiar with.

In

3

terms of evaluating how he did make the referrals or the

4

calls or the meetings that opened the door for Wright, again

5

not your subject, correct?

6

A

Correct.

7

Q

That would be Ken Singer or somebody else?

8

A

Ken Singer and Peter Donovan, correct.

9

Q

As to what Wright said to institutional clients or

10

anybody else concerning the presentations that were made,

11

again not your area?

12 13

A

Well, on the trust investment services, that was

my area.

14

Q

With Mr. Bruno?

15

A

No, never with Mr. Bruno.

16 17 18

He was not involved in

that line of business. Q

I am sorry.

I am only ask questioning with

respect to Wright Investors' Services and Mr. Bruno.

19

A

Sorry.

20

Q

So, as to those presentations and what was

21

presented to potential clients, not your area?

22

A

Correct.

23

Q

And in terms of evaluating from the time of 1994

24

to when you started answering questions of Ms. Coombe as to

25

how much he should be paid and what was the nature of

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

152 Helm - Cross - Lowell 1

whether he was performing, you weren't involved in that

2

process of evaluation at the time, were you?

3

A

I was not involved in the process of setting

4

Mr. Bruno's compensation.

I was, as a senior member of the

5

firm's management, involved in discussions about general

6

compensation levels for different employees, whether such

7

employees should be retained as a result of the various

8

layoffs we had.

9

Q

That was later on?

10

A

That would have been actually, in the layoff case

11 12 13

in particular, from 2002 through 2004. Q

Right.

And you're aware that Mr. Bruno had a

financial arrangement with Wright since 1994?

14

A

Oh, yes, of course.

15

Q

All right.

16

So for the first eight years, you're

not involved in that process?

17

A

That's correct.

18

Q

I think you were shown and still should be in

19

front of you GC-35, which was the list of potential -- of

20

Wright customers.

21

MR. LOWELL:

And if you would put, John, please,

22

GC-35 on the screen and go to the next -- that's it.

23

you highlight -- sorry enlarge that screen.

24 25

Q

Would

Thank you.

So you identified this as an internal document

that was a Wright document that listed what is called Bruno

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

153 Helm - Cross - Lowell 1

accounts as of the date January 2005, is that accurate?

2

A

That's correct.

3

Q

You were asked questions about whether or not you

4

ever saw Mr. Bruno in the Connecticut offices.

5

recall the question?

Do you

6

A

Yes.

7

Q

And you answered you didn't?

8

A

I did not.

9

Q

Did Mr. Bruno need to be in the Connecticut

10

offices in order to make contact with any of those

11

individuals so they might consider Wright Investors'

12

Services?

13

A

No.

14

Q

Indeed, if he was sitting in the offices in

15

Connecticut, might not be a very good way to get in touch

16

with the people if he knew them from New York or other

17

places, correct?

18

A

That, to me, is not a "yes" or "no" answer, so

19

it's a "maybe."

There are a variety of ways to be a

20

salesperson, particularly in institutional business.

21

Q

And isn't face-to-face a very good way?

22

A

Absolutely.

23

Q

Maybe the best?

24

A

If you can obtain that, yes.

25

Q

Okay.

Thank you.

Now, along the way of -- I'm

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

154 Helm - Cross - Lowell 1

sorry.

And then, in terms of the actual meetings and the

2

presentations that were made for any potential client, you

3

never attended any with Mr. Bruno?

4

A

Not -- that's correct.

5

Q

So somebody else would be the best person to ask

6

what was said, correct?

7

A

That's correct.

8

Q

And then in conversations as to whether there

9

should be any change in the nature of the relationship of

10

Mr. Bruno, from being a consultant to an employee or any

11

other configuration, you were not the person involved in

12

those decisions either?

13

A

I was not involved in those discussions.

14

Q

Would you refer back on your desk, please, to

15

GC-6.

16

would you highlight the paragraph that Ms. Coombe

17

highlighted, which is the one with the handwriting that says

18

very important.

19

And would you please put on the screen GC-6.

And

You see -- you were asked questions about that.

20

This is a memorandum from Al Meric to you concerning the

21

matters that are expressed.

22

A

Yes.

23

Q

Okay.

Do you see that?

Now I'd like you to take that one off and

24

show the first paragraph, please.

Doesn't the memo begin,

25

"In a meeting with Ken, we discussed the fact that Joe Bruno

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

155 Helm - Cross - Lowell 1

has done an excellent job in referring prospective clients

2

to us and has referred to us a substantial client in the

3

south who we expect to meet with at the International

4

Foundation when we are there and later at a formal meeting

5

in March.

6

cetera.

Mr. Bruno will probably make the trip," et

Do you see that?

7

A

I do.

8

Q

Were you at that meeting?

9

A

I do not believe so, no.

10

Q

But you got a copy of the memo?

11

A

The memo was addressed to me, yes.

12

Q

And do you have any doubt that it occurred as

13

said?

14

A

I have no way of knowing that.

15

Q

You do understand that Mr. Meric is expressing to

16

you that Mr. Bruno has done an excellent job?

17

A

Yes.

18

Q

You indicated that there came a time for

19

reductions for all employees and you suggested Mr. Bruno,

20

too?

21

A

That's correct.

22

Q

And you were shown a document, GC-34.

23

It's still

in front of you, I think, sir.

24

A

Yes, I have it.

25

Q

And in this memo, what's happening is there's a

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

156 Helm - Cross - Lowell 1

reduction of 30 some odd percent to Mr. Bruno?

2

A

That's correct.

3

Q

So he did get a reduction?

4

A

That's correct.

5

Q

Now, in the conversations that you had leading up

6

to talking to a member of the media in 2003 with your

7

colleagues at Wright Investors' Services, did you ever have

8

a conversation in which you were directed or yourself

9

directed anybody not to disclose the relationship with

10

Mr. Bruno?

11

A

No.

12

Q

When the reporter called you on the phone and

13

found you through, I think you said, the switchboard, you

14

answered his questions, right?

15

A

That's correct.

16

Q

Was there a standard operating direction at Wright

17

that if anybody were to ask about Mr. Bruno, it was not

18

appropriate to say that he is somebody who is working with

19

us on Taft-Hartley accounts?

20

A

No.

21

Q

And you came to understand --

22

A

Can I clarify that answer?

Other than the

23

conversation that I related to Ms. Coombe earlier, in which

24

after the New York Sun article came out, I was told by the

25

CEO, Peter Donovan, that such inquiries should be referred

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

157 Helm - Cross - Lowell 1

back in the future to Mr. Bruno and his spokesperson.

2

you consider that instruction not to discuss it, then,

3

that's why I'm qualifying my answer.

4

Q

As to that answer, as to that period, as to that

5

article, you were describing parts of Mr. Bruno's

6

relationship with Wright, correct?

7

A

That's correct.

8

Q

And not -- that was in an article.

9

So if

You did come

to read that article?

10

A

Yes.

11

Q

It wasn't about business of Wright, it was about

12

legislators having Part Time -- and outside jobs, correct?

13

A

Correct.

14

Q

And do you remember the issue that Mr. Bruno,

15

according to Mr. Donovan, raised was whether or not it was

16

more appropriate for the Senate staff to respond to issues

17

about the rules of the Senate and his employment than it

18

would be for Wright; do you remember that?

19

A

I do not remember that.

My recollection was --

20

mine was based on a conversation with Peter Donovan.

21

not believe he made those statements, no.

22 23

Q

I do

Anyway, as between you and Mr. Donovan, who's the

one that talked to Mr. Bruno?

24

A

Mr. Donovan.

25

Q

You never did?

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

158 Helm - Cross - Lowell 1

A

I never did.

2

Q

So it would be Mr. Donovan who would know what

3

Mr. Bruno said better than you?

4

A

Correct.

5

Q

Now, talking about this article, while we're on

6

the subject, Mr. Hammond, the author of the article got you

7

on the telephone you said?

8

A

Correct.

9

Q

And subsequently, an article was written that

10

quoted you in some part?

11

A

Correct.

12

Q

Did you have the opportunity then or since then to

13

think about whether or not you said to Mr. Hammond more than

14

was in the article?

15

A

That conversation was six years ago and it

16

predated any investigation, so it was not something that I

17

was highly alert to.

18

question.

19 20

Q

So I don't know the answer to that

Let me show you something to see if it refreshes

your recollection.

21

A

Okay.

22

Q

It has been previously marked as DX, Defense

23 24 25

Exhibit, C-58. MR. LOWELL:

Judge, it's the same series that's

been identified as the notes of the interview.

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

159 Helm - Cross - Lowell 1 2

Q

Now, don't read this outloud, please, sir, but

would you look at the first half of the first page?

3

A

Sure.

4

Q

Read it to yourself in the context we're asking

5

and then look up so I know you're done.

6

A

(Witness complies.)

7

Q

Okay.

Okay.

Does that refresh your recollection that

8

you had more to say to the reporter than appeared in the

9

article?

10

A

Yes.

11

Q

And specifically, do you now recall one of the

12

things you talked about was the nature of the presentation

13

that Mr. Bruno made to potential clients and what he was

14

saying to them?

15

A

Yes.

16

Q

Does it refresh your recollection that you said to

17

him that "Mr. Bruno's attempts is to describe the nature of

18

our service and to have plan sponsors take a look and see if

19

there's a fit," or words to that effect?

20 21 22

A

Yes.

But I thought that was reflected in the

article as well. Q

Okay.

And did you tell the reporter that you

23

thought Mr. Bruno's work included being aware of looking for

24

opportunities and seeing if that made sense for them to get

25

involved?

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

160 Helm - Cross - Lowell 1 2 3

A

Yes.

It makes sense.

That's what I would have

said under the circumstances. Q

And in the article itself, that you were asked

4

about, your own quote, Ms. Coombe asked you about whether or

5

not the article said something about -- let me read it.

6

Something about "customers over which he would have

7

influence as a state official."

Do you remember that?

8

A

Yes.

9

Q

Now, does this document actually reflect that what

10

you said to the reporter was having influence over the plan

11

sponsor --

12

MS. COOMBE:

13

THE COURT:

14

we talking about now?

15

MR. LOWELL:

Objection. Well, I don't know.

All right.

What document are

I am asking, having

16

refreshed his recollection, and let me take the document

17

from him so --

18 19 20 21

THE COURT:

Okay.

BY MR. LOWELL: Q

Do you remember you used the expression "plan

sponsor"?

22

A

No, I do not.

23

Q

Would that be a more accurate way to describe who

24 25

a client was? A

Depending on the client, yes.

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

161 Helm - Cross - Lowell 1

Q

Do you remember talking to the reporter and making

2

the statement that there was no State money involved in the

3

clients of which Wright and Bruno were talking or having a

4

relationship?

5 6 7

A

I remember making the statement that Wright was

not managing money for the State of New York, yes. Q

And did you remember talking to the reporter and

8

talking about that there had been situations, to make sure

9

that there would not be a conflict with him?

10

A

I don't recall that specifically, no.

11

Q

You don't remember giving the statement?

Let me

12

ask you:

13

and he wrote those notes down and he wrote them down on the

14

day, would that be, in your opinion -- sorry, would that be,

15

in your view, a way that would best describe what you said

16

to him that day?

17 18

If a reporter took notes of what was said that day

THE COURT: Q

Sustained.

Do you remember about whether you discussed and

19

told the reporter anything about that Mr. Bruno didn't have

20

to work a set number of hours?

21

A

Yes, I believe so.

22

Q

And do you remember telling the reporter that

23

Mr. Bruno had made clear to Wright that his duties in the

24

Senate were his priority and would always take precedence

25

and that Wright understood that?

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

162 Helm - Cross - Lowell 1

A

I don't recall that statement.

2

Q

Do you recall whether or not you said to the

3

reporter that his job was to gather -- sorry, to try to

4

gather new clients?

5 6 7

A

In general terms, yes, that's how I characterized

Mr. Bruno's role. Q

And do you remember telling the reporter just how

8

Wright had Taft-Hartley clients to the tune of $2 billion in

9

management at the time?

10

A

I don't recall that, no.

11

Q

Nevertheless, you remember that there was more

12

that you said to the reporter than quotes that appeared in

13

the article?

14

A

Sure.

15

Q

In terms of how you understand the way plan

16

sponsors would become clients of Wright Investors' Services,

17

did you understand the process by which institutional

18

clients made the decision to hire Wright investor?

19

A

Yes.

20

Q

Did you understand that that included that

21

somebody would make an initial introduction and then Wright

22

would have to do something?

23

A

It was not always pursuant to an initial

24

introduction, but it was typically a lengthy process because

25

of the nature and importance of the activities being

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

163 Helm - Cross - Lowell 1

discussed.

2

Q

And Wright would have to present itself and show

3

that it knew what it was doing and show it had merit and

4

show its performance?

5

A

Yes.

6

Q

Would that be part of the process?

7

A

Yes.

8

Q

Now, in terms of how any employee at Wright got

9

paid, including consultants, including referral agents,

10

including Mr. Bruno, was that anything that Mr. Bruno ever

11

told Wright how to do?

12

A

I have no knowledge of that.

13

Q

Do you know whether it was important to him one

14

way or another how he was paid, whether it was by check,

15

whether it was by wire, whether or not it was given to him

16

in person; do you have any idea?

17

A

To Mr. Bruno or to other people?

18

Q

Right, to Mr. Bruno.

19

A

I do not.

20

Q

Did that ever come up in any conversations you

21 22 23 24 25

ever had with your colleagues? A

I was instructed by Mr. Donovan to characterize

his compensation as salaries and bonuses. Q

In terms of the methodology of which it was paid,

not how it was characterized internally to Wright.

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

164 Helm - Cross - Lowell 1 2 3 4

A

No.

The compensation, when we want -- all

employees were subject to direct deposit without exception. Q

And you don't know whether or not that had any

significance to Mr. Bruno or not?

5

A

I do not.

6

Q

And do you know as to what you just said as to how

7

things were characterized in the internal documents, files

8

of Wright, did Mr. Bruno have anything to say about how you

9

kept his columns, what column descriptions said, what the

10

name, the document Miss Coombe showed you, did he have

11

anything to do with that?

12

A

To me, no.

13

Q

Those are Wright's documents, not his?

14

A

Correct.

15 16

MR. LOWELL:

I had no conversations with Mr. Bruno.

If you could give me one second,

please, Judge.

17

THE COURT:

18

MR. LOWELL:

19

Certainly. Maybe 15 or 16 seconds.

(Pause in proceedings.)

20

MR. LOWELL:

Judge, as a matter I would ask this

21

witness, it's beyond the scope, and so I would just not

22

release him from his subpoena and ask him on direct what the

23

question was.

24

prefer.

25

It's up to the Court.

I don't know how you

I don't mind keeping him. THE COURT:

Let me make certain I understand what

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

165 Helm - Cross - Lowell 1

you're asking.

You're seeking to ask this witness something

2

which is beyond the scope of direct.

3

MR. LOWELL:

4

THE COURT:

5

Correct. That you would ask him yourself were

he your witness.

6

MR. LOWELL:

7

THE COURT:

Correct. To the extent that we don't spend a

8

significant amount of time doing that, I urge you to do as

9

you're proposing so that we finish with this witness.

10

MR. LOWELL:

11

THE COURT:

12 13

Thank you.

That's why I asked, sir.

Go ahead.

BY MR. LOWELL: Q

One topic.

There came a time in your role at

14

Wright that you had interaction with the Securities and

15

Exchange Commission, is that correct?

16

A

When you say "interaction" --

17

Q

I am sorry.

There came a time recently, in 2008,

18

that you had exchanged -- conversations, interaction with

19

the Securities and Exchange Commission, correct?

20 21 22 23

A

Pursuant to an examination they did in the spring

of 2008, correct. Q

And that came after there had been publicity about

Mr. Bruno's relationship with Wright Investors' Services?

24

MS. COOMBE:

Objection.

25

MR. LOWELL:

I'm sorry.

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

166 Helm - Cross - Lowell 1

Q

When did -- how -- sorry.

2

Strike the question.

Can you place that interaction as to whether it

3

occurred before or after any articles appeared about any

4

investigation?

5

MS. COOMBE:

6

THE COURT:

7

MS. COOMBE:

8

THE COURT:

9

issue.

11

Go ahead.

12

BY MR. LOWELL:

14

What's the nature of the objection? Relevance. I'll allow him to answer that question

and we'll take it one question at a time as I assess that

10

13

Objection.

But your objection is overruled as to that question.

Q

Did you know whether it came before or after any

publicity about the investigation?

15

A

It came after.

16

Q

And the understanding you had was what was the SEC

17

doing?

18

MS. COOMBE:

19

THE COURT:

20

A

Objection, relevance. Overruled.

The SEC stated that they were conducting a routine

21

examination of the company as a registered investment

22

advisor.

23

Q

And when they did that, did they have any focal

24

point concerning Mr. Bruno's relationship with Wright

25

Investors' Services?

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

167 Helm - Cross - Lowell 1

MS. COOMBE:

2

THE COURT:

3 4 5

A

on the document request, that Mr. Bruno's relationship --

7

THE COURT:

10

Your

The SEC did not state so, but it appeared, based

MS. COOMBE:

9

We're okay on this question.

objection's overruled.

6

8

Objection, relevance.

A

Objection. Overruled.

-- that Mr. Bruno's relationship with the firm was

a focal point of the examination. Q

And they looked at the -- as you understand it --

11

the documents concerning his relationship, including the

12

disclosure forms and other documents, is that true?

13

MS. COOMBE:

14

THE COURT:

15 16

Objection, relevance. Sustained.

BY MR. LOWELL: Q

At the end of that SEC's review, did you

17

understand what the SEC said to Wright Investors' Services

18

about their review?

19

MS. COOMBE:

20

THE COURT:

21 22 23 24 25

Objection, relevance. Sustained.

You've gone as far as I am

gonna allow you to go to pursue that area. MR. LOWELL:

I can't ask his understanding of

whether or not Wright was told anything about that. THE COURT:

I understand exactly what the question

is, I understand exactly what area you're seeking to inquire

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

168 Helm - Redirect - Coombe 1

into and I have now sustained the objections.

2

permit you to go there.

3

MR. LOWELL:

4

THE COURT:

I will not

Can I ask one last question? Go ahead.

I will let you ask one last

5

question, we will see if there's an objection and how I rule

6

on it.

7

BY MR. LOWELL:

8 9

Q

Go ahead.

Was Wright ever sanctioned by the SEC for its

relationship with Mr. Bruno?

10

MS. COOMBE:

11

THE COURT:

12

MR. LOWELL:

13

THE COURT:

14

REDIRECT-EXAMINATION

15

BY MS. COOMBE:

16 17 18

Q

Objection, relevance. Sustained. No other questions, Judge. Miss Coombe.

Mr. Helm, what caused the decrease in Wright's

revenues beginning in 2000? A

There was a combination of events, including loss

19

of client accounts and the general market decline at that

20

time, and since the firm was paid as a percentage of the

21

money it managed for clients, as that money went down in

22

value, our fees also went down commensurately.

23

Q

Were there any issues regarding the quality of

24

Wright's investment products after the death of the

25

founder -- let me back up and ask you a foundation question.

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

169 Helm - Redirect - Coombe 1 2

Are you -- who was the founder of Wright Investors' Services?

3

A

John Winthrop Wright.

4

Q

And did he pass away?

5

A

In March of 1996.

6

Q

Did his death have any effect on the quality of

7 8 9 10 11

the investment products offered by Wright? A

He was the Chief Investment officer prior to his

death and the prime individual in the firm responsible for investments and his departure left a vacuum. Q

Mr. Lowell asked you about the nature of the

12

presentation process being on the merits.

13

complain to Mr. Donovan about using Senator Bruno vis-a-vis

14

the competition on the merits?

15

A

Did you ever

I -- during the reviews of personnel, as we were

16

going through layoffs, I had argued consistently that

17

Mr. Bruno should be terminated.

18

Mr. Bruno personally.

19

culture of the firm, in my judgment, was predicated on

20

retention of employees, particularly those who had

21

long-standing relationships with the firm, and we were in

22

the process of laying off colleagues who had been with us

23

for, in some cases, more than two decades, and I thought it

24

was inappropriate to retain a Part Time -- employee while we

25

were laying off such individuals.

It had nothing to do with

My view was that as one of the -- the

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY

170 Helm - Redirect - Coombe 1

Q

Was there any other reason?

2

A

I did not think, as a general statement and

3

philosophy, that we should compete on the basis of personal

4

connections like that, but we should compete on the basis of

5

professional relationships.

6

MS. COOMBE:

7

THE COURT:

8

MR. LOWELL:

9

I have nothing further, your Honor. Anything further? No, sir.

subpoena.

10

THE COURT:

11

THE WITNESS:

12

THE COURT:

13 14 15 16

And he is released from the

He has released you from the subpoena. Thank you.

You are excused.

Next witness,

please. (Witness was excused.) MS. COOMBE:

The Government calls Alex Smith.

(Pause in proceedings.)

17

THE CLERK:

18

Please raise your right hand.

19

state and spell your name for the record.

20 21

THE WITNESS:

THE COURT:

23

MS. COOMBE:

25

Do you -- sorry.

Please

Alex Smith, S-M-I-T-H.

(Witness duly sworn.)

22

24

Mr. Smith, come right down here.

Miss Coombe. Thank you, your Honor.

A L E X

S M I T H,

having been duly sworn by the Clerk of the Court, was

THERESA J. CASAL, RPR, CRR UNITED STATES DISTRICT COURT - NDNY