: : : : : : : Plaintiff : : : : : : : : ANSWER OF BANK J. SAFRA (GIBRALTAR) LIMITED. Banque Jacob Safra (Gibraltar) Limited, answering the Complaint:

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SULLIVAN & CROMWELL LLP 125 Broad Street New York, New York 10004 (212) 558-4000 Attorneys for Defendant Bank J. Safra (Gibraltar) Limited UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X In re BERNARD L. MADOFF INVESTMENT SECURITIES LLC, Debtor - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X IRVING H. PICARD, Trustee for the Liquidation of Bernard L. Madoff Investment Securities LLC, Plaintiff v. VIZCAYA PARTNERS LIMITED and BANQUE JACOB SAFRA (GIBRALTAR) LTD. a/k/a BANK J SAFRA LIMITED, Defendants - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X SIPA LIQUIDATION No. 08-01789 (BRL) Adversary Proceeding No. 09-01154 (BRL) ANSWER OF BANK J. SAFRA (GIBRALTAR) LIMITED Defendant Bank J. Safra (Gibraltar) Limited ( BJSG ), formerly known as Banque Jacob Safra (Gibraltar) Limited, answering the Complaint

1. Denies knowledge or information sufficient to form a belief as to the truth of the allegations of paragraph 1, except admits the allegations of the fifth sentence on information and belief. 2. Denies the allegations of paragraph 2, except admits that the Trustee purports to bring claims under the statutory provisions enumerated therein and that the Trustee purports to seek the relief described therein. 3. Admits the allegations of paragraph 3. 4. Denies the allegations of paragraph 4. BJSG does not consent to entry of final orders or judgments by the Bankruptcy Judge. 5. Admits the allegations of paragraph 5. 6. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 6, except admits on information and belief that Mr. Madoff was arrested on December 11, 2008, and that the United States Securities and Exchange Commission filed a complaint against Madoff and BLMIS. 7. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 7, except respectfully refers the Court to the Order dated December 12, 2008, for a complete and accurate statement of its contents. 8. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 8, except respectfully refers the Court to the application filed by the Securities Investor Protection Corporation ( SIPC ) referred to in paragraph 8 for a complete and accurate statement of its contents. -2-

9. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 9, except respectfully refers the Court to the Order dated December 15, 2008, for a complete and accurate statement of its contents. 10. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 10, except respectfully refers the Court to the Orders dated December 23, 2008, and February 4, 2009, for complete and accurate statements of their contents. 11. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 11, except admits on information and belief that Madoff pled guilty at a plea hearing on March 12, 2009 (the Plea Hearing ) and respectfully refers the Court to the transcript of the Plea Hearing for a complete and accurate statement of its contents. 12. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 12. 13. Admits the allegations of paragraph 13. 14. Admits the allegations of paragraph 14. 15. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of subsections (a) and (c) of paragraph 15. The remaining allegations of paragraph 15 state legal conclusions to which no response is required. 16. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 16, except admits on information and belief that BLMIS conducted an investment advisory business (the IA Business ) from offices at 885 Third Avenue, New York, New York. -3-

17. Admits the allegations of paragraph 17. 18. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 18, except admits that BJSG as custodian for Vizcaya received regular monthly statements on behalf of Vizcaya purporting to show the securities, options, and government securities that were owned in, or had been traded through, Vizcaya s account with BLMIS, and admits on information and belief that Madoff stated at the Plea Hearing that he never purchased any of the securities he claimed to have purchased for customer accounts. 19. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 19. 20. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 20, except admits on information and belief that Madoff stated at the Plea Hearing that he never purchased any of the securities he claimed to have purchased for customer accounts. 21. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 21, except admits on information and belief that Madoff stated at the Plea Hearing that he operated the IA business as a Ponzi scheme and that he never purchased any of the securities he claimed to have purchased for customer accounts. 22. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 22. 23. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 23, except admits that when BLMIS made -4-

payments to Vizcaya, Vizcaya had received statements from BLMIS showing gains in Vizcaya s account with BLMIS. 24. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 24. 25. Admits the allegations of paragraph 25. 26. Denies the allegations of paragraph 26, and avers that Bank J. Safra (Gibraltar) Limited is a banking institution with its registered address at 57/63 Line Wall Road, Gibraltar. 27. Denies the allegations of paragraph 27, except admits that BJSG, as custodian for Vizcaya, executed a customer agreement (the Customer Agreement ), trading authorization, and option agreement with BLMIS on behalf of Vizcaya, each dated March 23, 2005 (together, the Account Agreements ), and respectfully refers the Court to the Customer Agreement for a complete and accurate statement of its contents. 28. Denies the allegations of paragraph 28, except admits that between January 2002 and December 11, 2008, BJSG or Banque Safra-France S.A., as custodian for Vizcaya and upon receipt of Proper Instructions from Vizcaya (as defined in the respective custody agreements), transferred $327,250,000 through 26 separate wire transfers from Vizcaya s custodial accounts to an account at JPMorgan Chase, New York, for the benefit of account no. 140 081 703, for further credit to a/c 1FR083-3-0. 29. Respectfully refers the Court to the Account Agreements for complete and accurate statements of their contents, admits that BJSG, as custodian for Vizcaya and upon receipt of Proper Instructions from Vizcaya, transferred funds through wire transfers from the custodial account in Vizcaya s name at BJSG to a -5-

BLMIS bank account in New York, and in all other respects denies the allegations of paragraph 29. 30. Denies the allegations of paragraph 30. 31. Admits that on October 31, 2008, Vizcaya received a payment of $150,000,000 from BLMIS into a custodial account in its name at BJSG (the Transfer ). paragraph 32. response is required. 32. Admits that the Trustee purports to seek the relief described in 33. Denies the allegations of paragraph 33. 34. The allegations of paragraph 34 state legal conclusions to which no 35. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 35. COUNT ONE PREFERENTIAL TRANSFER 11 U.S.C. 547(B), 550 AND 551 36. As its response to paragraph 36, BJSG repeats, realleges, and incorporates by reference its response to paragraphs 1 through 35 as if fully set forth herein. 37. Admits the allegations of paragraph 37 on information and belief. 38. Admits the allegations of paragraph 38 on information and belief. 39. Admits the allegations of paragraph 39. 40. Admits the allegations of paragraph 40 on information and belief. 41. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 41. -6-

42. Admits the allegations of paragraph 42. 43. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 43. 44. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 44. 45. Denies knowledge and information sufficient to form a belief as to the truth of the allegations of paragraph 45. COUNT TWO TURNOVER AND ACCOUNTING 11 U.S.C. 542 46. As its response to paragraph 46, BJSG repeats, realleges, and incorporates by reference its response to paragraphs 1 through 45 as if fully set forth herein. 47. Denies the allegations of paragraph 47. 48. Denies the allegations of paragraph 48. 49. Denies the allegations of paragraph 49. DEFENSES BJSG asserts the following affirmative and other defenses and reserves its rights to assert other defenses when and if they become available. In asserting the following defenses, BJSG does not intend to suggest that matters designated herein as defenses (a) are not elements of the Trustee s prima facie case on any of the Trustee s purported claims, or (b) are not matters as to which the Trustee bears the burden of proof. -7-

FIRST DEFENSE 50. On October 31, 2008, BLMIS made a payment of $150,000,000 to and for the benefit of Vizcaya (the Transfer ) by transferring that amount to a custodial account of Vizcaya at BJSG (the Vizcaya Account ). 51. BJSG received the Transfer, and at all times held the funds that were the subject of the Transfer, solely as a banker or custodian for Vizcaya. 52. BJSG has never had dominion or control over the Transfer or the funds that were the subject of the Transfer. 53. BJSG was not a transferee of the Transfer for purposes of Section 550(a) of the Bankruptcy Code. SECOND DEFENSE 54. BJSG repeats and realleges the allegations of paragraphs 50-53 above. 55. Subject to the provisions of the Gibraltar Crime (Money Laundering and Proceeds) Act of 2007, referred to in paragraph 60 below, BJSG has at all time had a legal and contractual duty to transfer the funds in the Vizcaya Account pursuant to Vizcaya s instructions. 56. On November 3, 2008, Vizcaya transferred $78,000,000 from the Vizcaya Account to Zeus Partners Limited ( Zeus ), a company organized under the laws of the British Virgin Islands ( BVI ). 57. Also on November 3, 2008, Vizcaya transferred $65,000,000 from the Vizcaya Account to Asphalia Fund Limited ( Asphalia ), a company organized under the laws of the BVI. -8-

58. On November 28, 2008, Vizcaya transferred $2,000,000 from the Vizcaya Account to Asphalia. 59. Beginning on December 16, 2008, following Madoff s arrest, BJSG received a number of requests (the Transfer Requests ) to transfer funds out of the Vizcaya Account and accounts of Zeus, Asphalia, and Siam Capital Management Limited ( Siam ), the investment manager of Vizcaya, Zeus, and Asphalia. 60. Promptly upon learning of Madoff s arrest and the filing by the United States Securities and Exchange Commission of a related civil complaint against Madoff and BLMIS, BJSG made disclosures concerning the Transfer Requests to the Gibraltar Financial Intelligence Unit (the GFIU ) pursuant to the Gibraltar Crime (Money Laundering and Proceeds) Act of 2007. 61. On January 9, 2009, the GFIU issued a no-consent letter, indicating that it did not consent to the requested transactions to which the disclosures refer. 62. On February 3, 2009, the GFIU issued a general no-consent letter, indicating that it did not consent to the transactions requested and future transactions requested on the Vizcaya, Zeus, Asphalia, and Siam accounts. 63. On February 18, 2009, Vizcaya filed a Claim for Judicial Review in the Gibraltar Supreme Court ( Vizcaya s Claim ), which named The Attorney General for Gibraltar, for the GFIU, as the Defendant and named BJSG as an Interested Party. Vizcaya s Claim sought judicial review of the decisions by the GFIU not to consent to release of funds from the Vizcaya Account. -9-

64. Vizcaya s Claim included an application for urgent consideration seeking interim relief in the form of an injunction requiring the GFIU to grant consent to permit the release of funds from the Vizcaya Account for the purpose of allowing Vizcaya to pay its legal advisors in Gibraltar, the BVI, and the United States and to pay for its legitimate expenses. 65. On February 20, 2009, the Gibraltar Supreme Court issued a declaration that GFIU immediately grant consent allowing the transfer of $350,000 from the Vizcaya Account to Vizcaya s solicitors account for the purpose of payment of legal expenses in Gibraltar, the BVI, and the United States, with liberty to apply to withdraw further amounts in the future. 66. On February 20, 2009, Vizcaya transferred $350,000 from the Vizcaya Account to Vizcaya s solicitors. 67. On April 16, 2009, Vizcaya filed a second application in the Gibraltar Supreme Court seeking release of additional funds from the Vizcaya Account for the purpose of allowing Vizcaya to pay its legal advisors in Gibraltar, the BVI, and the United States and to pay for its legitimate expenses. 68. On April 20, 2009, the Trustee filed an application in the Gibraltar Supreme Court for an order that the Trustee be added as an Interested Party to the Judicial Review proceedings, on the grounds that the Trustee claims to be entitled to the funds that are the subject matter of the proceeding. 69. On April 21, 2009, the Gibraltar Supreme Court issued a declaration that GFIU immediately grant consent allowing the transfer of a further $350,000 from the Vizcaya Account to Vizcaya s solicitors account for the purpose of -10-

payment of legal expenses in Gibraltar, the BVI, and the United States and to pay outstanding amounts due to PricewaterhouseCoopers Accounting Services Limited for litigation support and other administrative expenses, with liberty to apply for the purposes of seeking further funds. 70. On April 27, 2009, Vizcaya transferred $350,000 from the Vizcaya Account to Vizcaya s solicitors. 71. On May 14, 2009, Vizcaya filed an application in the Supreme Court of Gibraltar seeking payment of the remaining funds in the Vizcaya Account to the Supreme Court of Gibraltar. 72. The Trustee and BJSG consented to the application referred to in the preceding paragraph. 73. On May 28, 2009, the Supreme Court of Gibraltar entered an Order requiring BJSG to transfer all the funds then remaining in the Vizcaya Account to the Gibraltar Supreme Court pending further order and without prejudice to the rights of the parties (the May 28, 2009 Order ). 74. On May 28, 2009, in accordance with the May 28, 2009 Order, BJSG transferred all the funds then remaining in the Vizcaya Account, in the amount of $10,020,591.05 plus accrued interest, or a total of $10,030,684.68, to the Gibraltar Supreme Court. 75. BJSG is not holding any funds that were the subject of the Transfer for the account of Vizcaya. -11-

THIRD DEFENSE 76. BJSG repeats and realleges the allegations of paragraphs 50-75 above. 77. If the Trustee seeks to recover from BJSG any funds that have been transferred to, or for the benefit of, any person other than Vizcaya, each of whom is referred to herein as a Remote Transferee, then such Remote Transferee is a necessary and indispensable party. 78. Each Remote Transferee claims an interest in any funds that have been transferred to or for the benefit of such Remote Transferee, such that disposing of any claim with respect to such funds will impair or impede the Remote Transferee s ability to protect such interest, and will leave BJSG subject to a substantial risk of incurring double or inconsistent obligations because of the interest. 79. The Trustee has failed to join any Remote Transferee as a party to this proceeding. 80. If the Trustee seeks to recover from BJSG any funds that have been transferred to, or for the benefit of, any Remote Transferee, then the Trustee has failed to join a necessary and indispensable party. 81. If the Trustee seeks to recover from BJSG any funds that have been transferred to, or for the benefit of, any Remote Transferee, then the Trustee has failed to comply with the requirements of Fed. R. Civ. P. 7019(c), as made applicable by Fed. R. Bankr. P. 7019. FOURTH DEFENSE 82. BJSG repeats and realleges the allegations of paragraphs 50-81 above. -12-

83. The Court is an inconvenient forum for this dispute and a more appropriate forum is available to the parties in another jurisdiction. relief may be granted. costs. Dated New York, New York July 9, 2009 FIFTH DEFENSE 84. The Complaint fails to state a claim against BJSG upon which WHEREFORE, BJSG demands judgment dismissing the Complaint, with /s/ Robinson B. Lacy Robinson B. Lacy (RL8282) Jeffrey T. Scott SULLIVAN & CROMWELL LLP 125 Broad Street New York, New York 10004 Telephone (212) 558-4000 Facsimile (212) 558-3588 Attorneys for Defendant Bank J. Safra (Gibraltar) Limited -13-